Gurus On Marketing

Technological advances have resulted in the creation of global
markets and globally standardised products. Such global markets
provide opportunity for organisations to reap economies of scale in
production, distribution and marketing.
In economics there is a concept called ‘demonstration effect’. According
to this concept, there is a strong desire to emulate Western ways.
Before World War II only a very few people in underdeveloped countries
had much contact with the living standards of the Western World.
All this began to change as American and European films began to
be shown in numerous countries in the world. In addition to these
films, magazines with photos and advertisements began to circulate
widely and this created aspirations to live like westerners.
Finally, the development of air travel has enormously increased
tourism to Latin America, Asia and Africa. Since the time when Levitt
published his article technology (telephony, television) has made significant
advances in linking countries together.
Homogenisation of the markets meant the end of multinational
companies and the beginning of global companies. The differences
between the two are as follows:
The multinational corporation operates in a number of countries
taking into consideration local preferences and demand.
The global corporation operates as if the entire world is a single
homogenised market. This means selling standard products everywhere
and selling them in the same way. Such standardisation of
products means achieving economies of scale and reduction of
production costs. Such a strategy leads to achieving efficiency in
production, distribution and marketing.
THREE THEODORE LEVITT 53