Globalization and Hospitality Industry реферат 2010 по международным отношениям , Сочинения из Международные отношения

Globalization and Hospitality Industry реферат 2010 по международным отношениям , Сочинения из Международные отношения

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Table of content

Table of content

Introduction 1. Globalization and its definition

2. Globalization and Hospitality Industry

3. Challenges brought by Globalization

3.1 Globalizing marketing 3.2 Global promotion

3.3 Global advertising

3.4 Global e-marketing

3.5 Global pricing 3.6 Global ethics

4. Strategies and tends toward Globalization




World maps define national boundaries, but those lines belay the

increasingly clear nature of the global economy. As recently as 30 years ago the

international enterprise was a relatively rare phenomenon, and the term

multinational was seldom heard (Gomes, 1991). Today, many companies have

transcended the multinational phase and operate as trans-national or global

companies. These labels reflect a major shift in the structure of the world market

for goods and services - a shift to a competitive framework that has far-reaching

impacts for almost all industries. Experts have predicted that by the year 2015,

global corporations will control approximately half of the world’s assets.

Сompanies are in the process of internationalizing the production of a vast array of

manufactured goods, with mega-companies controlling factories all over the world.

Globalization has become an umbrella word for a number of political,

sociological, environmental and economic trends which present challenges on a

worldwide scale. The world as it was known long time ago, does not exist any

longer, now we experience “shrunk" world (Dr. M.Cho, 2005). The globalization

of business and lifestyles is characterized by communicating over vast distances in

foreign languages, frequent travel to overseas countries, dealing in many

currencies, and coping with a variety of political and social systems, regulatory

environments, cultures and customs. While these aspects of globalization are easy

to identify, understanding the underlying current and future trends can be

problematic. Analysis, however, reveals that a number of issues are reshaping the

global hospitality industry, although there are clearly some complex questions that

are still to be resolved:

• International expansion with common product and brand position;

• Sales and marketing programs that fully capture global economies of


• Organizational structures that allow global delivery of services with

local operational control;

• Cross-border employee training to support operations (Cline R.S.


Globalization is typified by the rapid movement of people, information and

capital across national borders worldwide in ways that would have been difficult to

envision not too many years ago. Yet 'globalization,' accepted though it is as a

fashionable force, is a big concept requiring careful definition. As many experts

you as many definitions you will get, therefore in this paper I will challenge to

point out different definition of globalization and what is behind it. This paper will

outline such issues as globalization vs. Internationalization and its difference.

Globalization has huge influence on Hospitality Industry, and it brought lots of

challenges, consequently Hospitality Industry should and does keep up with rigid

business by defining strategies and tends toward Globalization.

1. Globalization and its definition

In order to understand globalization, after defining it, we should have a look

at how it got started. “During the 1970s the word “globalization” was never

mentioned in the pages of the New York Times. In the 1980s the word cropped up

less than once a week, in the first half of the 1990s less than twice a week - and in

the latter half of the decade no more than three times a week. In 2000 there were

514 stories in the paper that made reference to “globalization”; there were 364

stories in 2001 and 393 references in 2002.

Based on stories in the New York Times, the idea of being “anti-

globalization" was not one that existed before about 1999. Turning from the

newspaper to the internet, “globalization” brings up 1.6m links through the use of

the Google search engine, and typing in “anti-globalization" brings up 80,000


Type in globalization and inequality and there are almost 500,000 references,

700,000 references to globalization and environment, almost 200,000 links to

globalization and labour standards, 50,000 references to globalization and

multinationals, and 70,000 references to globalization and cultural diversity and

search of globalization and the IMF yields 180,000 suggestions.

The search for better and cheaper ways of doing business always seems to be

an unstoppable force that drives multinationals to locales that offer the greatest

“incentives" - subsidies, low taxes, low wages, and easy access to markets" (S.

Fischer, 2003).

These locales almost never include the home country whose very success

has made it unattractive due to high wages and societal protectors such as labour

unions which struggle for working rights and employment law.

With such vast variety of product, companies need to keep customers’

loyalty, thus forced to go internationally. People nowadays aggressively travel,

therefore expecting to find known product or service worldwide. Business world

works in a jungle way - “either you have dinner or you are dinner”.

What is Globalization?

There are nearly as many definitions of globalization as authors who write

on the subject. One review, by Scholte, provides a classification of at least five

broad sets of definitions:

Globalization, as internationalization.The “global" in globalization is

viewed “as simply another adjective to describe cross-border relations between

countries.” It describes the growth in international exchange and interdependence.

Globalization, as liberalization.Removing government-imposed restrictions

on movements between countries.

Globalization as universalization.Process of spreading ideas and

experiences to people at all corners of the earth so that aspirations and experiences

around the world become harmonized.

Globalization as westernization or modernization.The social structures of

modernity (capitalism, industrialism, etc.) are spread the world over, destroying

cultures and local self-determination in the process.

Globalization as deterritorialization. Process of the “reconfiguration of

geography, so that social space is no longer wholly mapped in terms of territorial

places, territorial distances and territorial borders.” (Najam, A., Runnalls, D.,

Halle, M., 2007)

Values can play a role in defining globalization. A definition of globalization

as "Americanization" or, perhaps, the "McDonaldization," of the world presents

globalization as a process driven by American consumer culture that rolls over

other cultures. On the other hand, another definition of globalization highlights its

cross-cultural impact, taking into account the nature of globalization as a way

cultures interact and learn from each other. Globalization is the acceleration and

intensification of interaction and integration among the people, companies, and

governments of different nations (Rothenberg, L.E., 2002-2003).

The term “globalization” is widely used to describe the increasing

internationalization of financial markets and of markets for goods and services.

Globalization refers above all to a dynamic and multidimensional process whereby

national resources become more and more internationally mobile while national

economies become increasingly interdependent. (OECD’s Handbook on Economic

Globalization Indicators, p.11cited by C.S. Carson (2006)).

Out of all these definitions the one which state that Globalization is the

system of interaction among the countries of the world in order to develop the

global economy and refers to the integration of economics and societies all over

the world, involving technological, economic, political, and cultural exchanges,

which made possible largely by advances in communication, transportation, and

infrastructure, is the most common one. Having in mind different areas of business,

we can define globalization in a dissimilar way, but no matter how it is described,

globalization will drive us toward something innovate and unexplored, which we

will have to face and deal with.

2. Globalization and Hospitality Industry

The hospitality industry is by nature an international one. As international

trade and business expand, there is little question but that international linkage will

become even more important for the industry in such competitive business

environment. Defining the international hotel industry is not an easy mission.

Broadly, the international hotel industry can be defined as an industry that exports

hospitality services and generates export income. In a sense the hotel industry has

always been international, because most hotels have received foreign guests at one

time or another. As the industry has evolved over the years, its structure has

become increasingly more complex with respect to range, ownership, management,

and affiliation. There are many models one may observe, such as independently

owned and operated properties; properties that are independently owned and

operated with chain affiliation; chain-owned and-operated properties;

independently owned, chain-operated properties; franchised properties; referral

group properties and others (Gee, 1994).

Table 1. Characteristics of Globalization in Tourism (Feige 1998: 111) ECONOMY

Horizontal and vertical integration strategies of tourism enterprises

Foreign investment in hotels and tourist attractions ("global tourism markets")

Global players and strategic alliances (air companies, hotels, tour operators) Global tourism management

Global competition of holiday resorts


Global booking systems

Standardized technologies in transport systems


Global tourist: uniform traveller behaviour

Creation of "global tourist village"


Tourism as "global syndrome of ecology problem"

Climate changes and their effects on destinations


Increasing importance of international tourism organizations

Necessity for global coordination and regulation of passenger circulation

Sustainable development as quality and dominant idea.

Most of sub industries of hospitality industry were influenced by

globalization. Here are some examples:

Hotels: in the period between 1980 and 1998 the global accommodation

capacity increased from 8 to 15.4 million beds. The largest increase took place in

Europe, it accounts for 38.5 percent and is followed by the USA accounting for

33.5 percent. In the nineties most hotels, around 70,000, were opened in south

Asia, a 45 percent growth was achieved in East Asia and in the Pacific Ocean. Six

Continents Hotels has established strategic partnerships with 47 global air carriers.

Radisson Hotels, which are part of Carlson Group travel companies, expanded

with the help of international strategy based on SP with local hotels worldwide,

such as Edwardian Hotels in Great Britain and Movenpick in Switzerland (Tipurić

2002: 212).

Tour operators: global distribution network of tour operators and travel

agencies is one of the most consolidated businesses. The German TUI, former

Preussag, features on the list of the largest corporations. Preussag entered the

European travel market only in 1997 when it purchased TUI, the biggest German

tour operator. One year later it bought Thomas Cook and Carlson UK and in May

2000 the major British tour operator Thomson. Due to anti-monopoly regulations

Preussag was forced to sell Thomas Cook. C&N Touristik was founded in 1998

when the German company Karlstadt Quells decided to start cooperation between

its TO NUR Touristic Gmbh and Lufthansa's charter air company Condor

Flugdienst Gmbh. They purchased Thomas Cook, whom they were forced to sell,

if it wanted to overtake Thomson. They decided to stop using the name C&N since

Thomas Cook sounds better (Klančnik 2003: 55). In addition, in the year 2000 TUI

formed a strategic partnership with the French tour operator Nouvelles Frontierres

by purchasing 13 percent of its shares. It also entered into a SP with the leading

Italian tour operator Alpitour by buying 10 percent of its shares (Tipurić 2002,


The air travel industry: air companies are merging worldwide. The five

major alliances are: Star Alliance, Oneworld, Wings, Qualifier and Global Sky

Team. Everything started with the appearance of hubs offering services to millions

of passengers from smaller emissive markets, such as Frankfurt and Vienna.

Deregulation, the measure allowing flights out of the domestic country, made it

possible for air companies to fly from everywhere and in all directions which is the

most evident proof of globalization (V. Peric, 2005)

Globalization has positive and negative impacts on the Hospitality Industry.

Table 2. Positive and Negative Impacts on the Hospitality Industry



Positive Negative

Exposure to different cultures: Due to

globalization the managers of the Hospitality industry are able to learn about different cultures-as they get to

mingle with people from various walks of life - and

thus, increase their knowledge.

Language Barriers: Due to globalization, the

hospitality industry can employ people from different countries - as it is usually cheaper - they may

sometimes have problems in communicating with

customers. Many customers get quite irate as a result of


Larger Market: Due to globalization the

customer base has increased greatly. People travel not

only for holidays, but business, health and various other

purposes too. Thus, this has increased the market for the hospitality industry, which gets its major income from

international travellers.

Cultural Barriers: As there are people from

various cultures, one needs to be careful not to offend

them. What is acceptable by one culture may be

frowned upon by another.

Boosts the economy: Visitors come in and

spend money - multiplier effect - and foreign exchange

increases. Thus it is of great value to the economy as globalization helps to pump in money into the country.

Events/Disasters in other countries: A disaster

or even taking place in one country may affect other

countries also. As an example, the financial crisis makes less people want to spend money or travel; due

to increase in terrorism some visitors yet are not ready

to travel to certain countries.

Technology Advancement: Since one wants to attract as many tourists as possible, hospitality

organizations constantly need to upgrade and improve

their product and services

Seasonal Employment: During peak periods, a lot of jobs are available but as soon as tourists go back

the jobs disappear as well and after local population has

no income.

Promote creativity: Organizations are

constantly thinking of new and creative ideas to attract

more tourists.

Increasing use of technology to communicate:

Due to international barriers, there has been a steady

increase in the use of technology for communication

(through the internet, voice recording). This removes the human touch.

More Job Opportunities: Due to globalization,

more visitors coming and thus more people are needed

to serve and cater to their needs. So, with the advent of globalization, there are a lot of more jobs available for

people within the hospitality industry.

Developing countries: Countries that are

unable to keep up with the advancement in technology

tend to lose out. (E.g. Africa does not have the infrastructure or technology as yet to welcome a large

amount of foreign visitors, though it does have a lot of

natural attractions. To increase the flow, it would have

to improve conditions; otherwise tourists have a vast sea of areas to choose from).

Boosts the Travel Industry: Due to

globalization more people move around, to facilitate

this, the travel industry needs to grow as well. People

come to their destinations by air, or ship, or land use the transport services offered as well.

Increase in crime rate: With the increase in

tourists, crimes such as pick-pocketing, hustling, rape

and smuggling increase too.

Variety of International Services/Cuisines:

Since there are a lot of different visitors with various

cultures, customs, cuisines, and languages, the hospitality industry includes recipes and various other

services to cater to them. These services are available to

the local too, which makes it even better.

Bad Habits: People from other countries

sometimes influence the local youth in a bad way.

Increase in drugs and promiscuous behaviour, etc.

Environmental Depletion: Globalization

causes an imbalance in the eco system. People usually

throw their garbage around everywhere which could

cause sicknesses, to encourage more visitors, areas of greenery are cleared and wildlife killed - which is a

major cause for global warming.

Loss of cultural pride and values: To suit

customer needs one needs to change or modify various

services and product (e.g. certain dishes are changed (in taste, names become more westernized) to make them

more attractive to visitors). This, in a way, leads to the

loss of culture as one wants to become and behave like

most of the tourists.

Globalization has increased the interdependence between countries,

economies and people. Tourism has become big business and is run by great trusts.

Nevertheless, in addition to all gratuities, globalization brought lots of challenges.

3. Challenges brought by Globalization

Globalization is, in one way or another, related to or has relevance for the

many challenges world is facing today and the discontents experienced by its

population. Whether the challenge is educational, economic or political, the rise of

a global economy is rendering national economies obsolete and creating markets

that transcend national boundaries. These changes are rippling across our lives and

focusing attention on our education systems, producing economic displacement,

and engendering intense reactionary movements. As we move into the future we

can expect that national economies will become part of macro-regional economies

(European Union and North American), and that competition across these

economies will result in, among other things, upward pressures on the skill sets of

our labour force, increases in transnational labour and its movements, and

increased public health issues for all nations.

Dramatic changes of the business environment of hotel chains due to

globalisation, advances in information and communication technology, and

increased focus on shareholder value call for modern forms of marketing.

Relationship marketing and its practitioner's equivalent customer relationship

management are the promising, but disputed replies to these challenges (Medlik, S.


Dealing with world-wide globalization trends is new to all of us. Everything

is in a state of flux: demands, labour, know-how and capital are all flowing to

where the biggest hopes for future lie, with the resultant standardization of

production technologies, business strategies, marketing plans and management

styles. Although tourism production is tied to local conditions, the tourism industry

cannot avoid being affected by globalization. Tourist products, and even whole

destinations, are becoming interchangeable; continental and inter-continental

transport networks determine the direction and speed of development; distribution

channels and reservation systems are increasingly a decisive factor in success

(Muller, H. 2001).

Worldwide excess capacity in all departments of tourism-carriers,

accommodation, adventure and leisure parks, sport facilities, cultural events, etc. -

is a key driving force in globalization. Drops in tourism figures in highly

differentiated national economies (Austria, Switzerland, Germany, etc.) are largely

due to the fact that almost all national economies worldwide have discovered

tourism as a development-promoting factor and been drawn into the globalization

maelstrom through the competitive situation (A. Lockwood,, 2001).

3.1 Globalizing marketing

Formulating and implementing a global marketing strategy is a complicated

task. Expanding overseas will bring trouble sorting out the many complex issues

involved, even for those who have great experience in local markets. Good market

data on customers and competitors across the globe make the task easier. But

perceptive analysis of such data requires some managerial rethinking about

customers and competitors.

A strong argument for companies to standardize marketing was made by Ted

Levitt, who in 1983 argued that markets were globalizing because of two factors:

global communication and technology diffusion. With satellite TV broadcasts

beaming the same programs all over the world and with instantaneous global

communications, the world is moving inexorably toward greater homogeneity of

markets. At the same time, the increasing speed of technological innovation and

diffusion make today’s production soon outdated by the onslaught from global

competitors able to incorporate the latest product inventions. The joint effect of

these two forces makes product standardization not only possible but the preferred

alternative. (Johansson, J.K., 1997)

Because of the soft and impressionistic data that usually underlie a proposal

for global marketing, the global marketers need to develop and present a more

qualitative argument in favour of global approach. The focus should be the degree

to which a convergence of preferences is under way (W.J. Keggan, 2002). There

are at least three important driving points in an analysis of the global convergence

of preferences:

1. Recognize that customer preferences are dynamic and changing.

2. A major driver of changing preferences is new products on the market.

3. The new standard-setting products are first introduced and tested in

leading markets.

In addition to the analysis of common customer needs there is also need to

analyze competition. The analysis of global competitors adds a level of complexity

to the analysis of domestic-only competitors. The global competitor usually has

available a wider repertoire of competitive actions, which makes for a stronger

competitor and makes prediction more difficult. Global competitors are always a

threat to enter any local market where they at the moment might not have a

presence (Johansson, J.K., 1997).

Globalizing marketing involves global coordination of marketing activities.

It involves taking a global management perspective on the marketing operation in

any country. Most typically it involves a certain degree of marketing

standardization. There are several advantages and disadvantages of marketing


Table 3. Advantages and Disadvantages of Marketing Standardization.

W.J. Keggan (2002) Advantages Disadvantages

Cost reduction. Cost reductions gained by scale

economies constitute the primary benefits from

standardization. Because of the longer production series

there are considerable savings to be gained in manufacturing as well as purchasing.

Off-target. Standardized products, services

and promotional mix are likely to miss the exact target

in terms of customers’ preferences in any one country,

because customers in different countries have widely dissimilar tastes and needs.

Enhanced customer preference. Positive

experience with product in one country naturally

encourages a consumer to buy the same brand elsewhere.

Lack of uniqueness. Of customization or

exclusivity is one of the overriding purchase

considerations, a standardised offering is in a weak position.

Improved quality. Since additional recourses

can be focused on the product development effort and

design, the standardized product or service is likely to be

Sensitive to protectionism. Where country

makers are protected be trade barriers, local

manufacturing may be necessary and the scale benefits

more thoroughly tested. from standardization cannot be reaped.

Global customers. There are an increasing

number of global customers who demand uniform

quality and services wherever it happen to be and buy.

Strong local competitors. Globalization can

also fail simply because local competitors are capable

and manage to mount a strong defence.

Global segments. Standardization fits with the

emergence of global segments.

3.2 Global promotion

Global promotion involves a variety of activities, ranging from in-store

point-of-purchase displays and Sunday newspaper coupons to satellite TV

advertising to sponsorship of symphony orchestras and athletic events. The global

sales promotion, public relation, and publicity have also become powerful

promotional tools because of developments in global communications and the

opening up of new markets. Then there is participation in international trade fairs,

direct marketing, and personal selling, the last typically more localized, but still

important (W.J. Keggan, 2002).

Public relations professionals with international responsibility must go

beyond media relations and serve as more than a company mouthpiece they are

called on to simultaneously build consensus and understanding, create trust and

harmony, articulate and influence public opinion, anticipate conflicts and resolve

disputes. Public relations practices in specific countries can be affected by cultural

traditions, social and political contexts, and economic environment. In developing

countries, the best way to communicate might be through gongman, the town crier,

the market square, or the chief’s courts. Even in industrialized countries, there are

some important differences between PR practices. In the United States, much of

the news in a small, local newspaper is placed by means of the hometown news

release. In Canada, on the other hand, large metropolitan population centres have

combined with Canadian economic and climatic conditions to thwart the

emergence of a local press (Johansson, J.K., 1997).

Effective personal selling in a salesperson’s home country requires building

a relationship with the customer; global marketing present additional challenges

because the buyer and seller may come from different national and cultural


Sales promotion laws and usage vary around the world but may consist of

any of the following: promotional pricing tactics, contests, sweepstakes and games,

premium and specialties, dealer loaders, merchandising materials, tie-ins and

cross-promotions, packaging, trade-shows, and sponsorship (W.J. Keggan, 2002).

Table 4. U.K. Institute of Sales Promotion.

Tactic German


France U.K. Netherl




On-pack price


Yes Yes Yes Yes Yes

In-pack gift ?? ?? Yes ?? ??

Extra product ?? Yes Yes ?? ??

Money-off voucher

No Yes Yes Yes Yes

Free prize


No Yes Yes No No

KEY: Yes-legally allowed;?? - under review; No - not legally allowed.

The usage of direct mail, the most popular type of direct marketing, varies

around the world based on literacy rates, level of acceptance, infrastructure, and

culture. In countries with low levels of literacy, a medium that requires reading is

not effective. In other countries, the literacy rate may be high, but consumers are

unfamiliar with direct mail and suspicious of products they cannot see.

3.3 Global advertising

The most visible promotional activity is perhaps global advertising. Global

advertising can be defined as advertising more or less uniform across many

countries, often in media vehicles with global reach. In many cases complete

uniformity is unobtainable because of linguistic and regulatory differences between

nations or differences in media availability, but, as with products, localized

advertising can still be basically global. In contrast, multidomestic advertising is

international advertising deliberately adapted to particular markets and audience in

message and/or creative execution (W.J. Keggan, 2002).

There are several traditional problems facing the decision maker in global

advertising. One is how to allocate a given advertising budget among several

market countries. The other is the message to use in these various markets. A third

is what media to select.

But even before tackling these management decisions, the advertiser needs

to define the objectives of the advertising in the different countries. And before

doing that it is imperative that the decision maker identify what can conceivably be

expected from the global advertising effort. Thus, the logical starting point in

global advertising management is the assessment of the role of advertising in the

country markets and the alternative advertising media (Johansson, J.K., 1997).

Despite the drawbacks of standardized and translated messages, global

advertising has become an important alternative to adapted multidomestic

advertising. The technological advances in global communications, the growth of

global media, and the strength of global advertising agencies have combined to

make global advertising possible. And the possible spillovers from unified

messages and the increasing homogeneity of many markets have made global

advertising desirable. As the affluence of countries grows, new products and

services appear, and customers need more information. Advertising becomes more

important and advertising expenditures as a percentage of the GDP increase. For

the global marketer, faced with increasing spending needs in all markets, a

coordinated effort with synchronised campaigns, pattern standardization, and

unified image across trade regions is usually more effective and cost efficient than

multidomestic campaign (W.J. Keggan, 2002).

3.4 Global e-marketing

E-marketing is a term that can be used to label the potential of information

technology and the Internet, and the impact on marketing. E-marketing is perhaps

the single most important new development in technology in the entire history of

marketing, particularly the ability to leap over distance. In global marketing,

strategies and practices reflected the importance of distance. The most important

variable impacting trade behaviour is distance. However, the Internet is totally

independent of distance. For the first time in history, the world has become a level

playing field. Anyone, anywhere in the world can communicate with anyone else

in the world in real time with no premium charged for distance. E-mail is major

new communication tool that supplements fax and telephone to eliminate the

barrier distance. E-mail is a marketing communication tool that offers

unprecedented power for one-to-one message for both B2B and B2C

communication (Johansson, J.K., 1997).

The aim of marketing segmentation has always been to create a unique value

offer for as many customers as possible. Before the Internet, this meant, in

practice, creating an offer for a segment of the market that was an aggregation of

customers. Almost overnight, the World Wide Web has emerged as a powerful new

tool for accomplishing what in the past was only theoretical possibility in

marketing: creating marketing programs that target a segment as one. Another

major thrust of marketing in recent years has been relationship marketing. The

Internet has opened up immense new possibilities for creating a relationship with

global customers, potential customers, suppliers, and channel members. The end of

segmentation means that marketers can now focus on delivering value to the

individual customer (W.J. Keggan, 2002).

In addition to increasing volatility, the move from an industrial to a post-

industrial e-economy also represent the global marketer with a new set of rules.

Long established principles, such as the emphasis of retailers in “location, location,

location”, are passé. People in such rigid time prefer to buy goods via the Web,

instead of spending valuable time fighting traffic to buy these goods somewhere in

a town. Looking at the changing business principles forced by the new e-economy,

A. Rangaswamy summarized the situation in such way:

Table 5. A. Rangaswamy, “Toward a Model of eBusiness

Performance”, 1999. From To

Market share Strategic control

Technology as an enabler Technology as driver

Seller-centric market Buyer-centric markets

Physical assets Knowledge assets

Vertical integration based on size Vertical integration based on speed

Decreasing return to scale Increasing return to scale

Firm-centric marketing strategies Network-centric marketing strategies

In a similar vein, Andersen Consulting stated that the new economy will

force companies to adopt some new game plans. Among the most important


1. Secure a dominant market position as quickly as possible.

2. Form alliances based on their potential for market access and


3. Anticipate very high start-up investments.

4. Defend positions through an ongoing process of innovations.

3.5 Global pricing

Pricing globally is much trickier that pricing in the home market. The level

of price is often a minor headache compared with problems of currency

fluctuations and devaluations, price escalation through tariffs, difficult-to-access

credit risks, transfer prices, and price controls - all common issues in global

pricing. Many of the problems in global pricing concern host country institutional

limitations that constrain strategy. The problem is that of coordinating pricing

across countries, to satisfy multinational customers, without imposing a straitjacket

on local subsidiaries and illegally fixing prices for independent distributors.

The competitive analysis might be as simple as finding out what global and

domestic competitors in particular country maker charge for their products and

services. These prices tend to set the “reservation” prices in the local market, that

is, those limits beyond which firm’s product will not be considered and people will

avoid buying. The analysis can go further and attempt to isolate the differential

advantages that the firm’s product might have over these existing offerings, so-

called “perceived value" pricing (Johansson, J.K., 1997).

When a company operates in several nations, the same product might appear

on the market in different countries at widely different prices. A global customer

does not usually like to pay different prices for the same product in different parts

of the world.

3.6 Global ethics

There is a question about the extent to which the whole of ethics of

marketing thinking and practice is accepted. In many newly opened markets,

customers are not used to the way of Western marketing, and many can be

expected to voice opposition to the unabashed trumpeting of a firm’s product. It is

not just the hard-hitting advertisements that cause problems; people might find the

“everything has a price" mentally abhorrent. Certain promotional activities are

likely to become regulated as the free-to-all euphoria in the new countries recedes.

It will be important for marketers to correctly read the mood of the populace and to

not engage in practices that will stir up negative sentiments. Ethical marketing is

likely to be enforces much in some of these countries than it is in the United States

(W.J. Keggan, 2002).

The marketer in China is likely to find it difficult to protect a successful

brand from imitators, at the same time as will challenge the foreign influence of a

global brand.

4. Strategies and tends toward Globalization

Global hotel markets are expected to continue to feel pressure from

contracting economies and reduced leisure and business travel across much of the

world in 2009. However, despite declines across most major regions of the world

in 2008, operating performance in the global hotel industry remained profitable as

hoteliers focused on controlling costs and preserving the bottom line (Ernst &

Young LLP, 2009, New York).

The challenge, however, is larger than efficiency alone. It is also about

making the various components of the system work together and towards a shared

vision. As an initial step, one could envisage choosing just one area with which to

begin and establishing modalities for deep and permanent links between

institutions that are dealing with clearly related issues (Najam, A., Runnalls, D.,

Halle, M. (2007).

Besides all marketing challenges stated before, there are numbers of others,

including operating issues (labour shortages, cost containment, increased

competition), technological (interactive reservation systems, guest-room

innovations, data mining, yield management) and economic issues (dependence

upon the nation’s economy).

All these issues are challenging companies around the globe in a different

degree; therefore they are also managed in a different ways. A number of

international hotel companies have sought the economies of scale attendant to

developing single brands and products, and providing them in a uniform fashion to

as many markets around the globe as possible.

Hospitality companies that seek capital from the public marketplace (a trend

which is clearly going to continue and expand) trying to function as global

enterprises. Hotel companies expanding globally confront varying traditions,

structures and attitudes to property investment and valuation in different countries.

To compete, they must pay closer attention to the trends of globalization.

The industry must reflect the requirements of the global village in many aspects of

its operations, including food, services, amenities, staffing policies and training.


“There is little doubt that most markets in the current economic climate are

challenging at best and growth will be hard to come by most operators, “said

Michael Fishbin, National Director of Hospitality Services. “As a result, this year

we will see hotel operators continue to focus more of their energies on cost

reduction, improving operating efficiencies in their hotels, reaching out to guests

via enhanced Internet communication and strengthening their brands through an

emphasis on green principles in activities related to both development and

operations," he added.

The message today is that it is incumbent on all hotel organizations that have

aspirations to develop brand names across national boundaries to understand what

globalization means. A truly global enterprise will have the ability to react quickly

to market opportunities, no matter where they present themselves by applying

business concepts that have been proven in a context of a global undertaking.

For the larger well-established international hotel companies that have

circled the world in the quest for new opportunity, globalization has been a

strategic concept for a number of years. International hotel companies have had to

confront virtually all of the issues facing global enterprises - and in many cases

more. Unlike a manufacturer with an overseas plant, for example, a hotel company

must export its entire operating business to function in diverse cultural and

geographic settings. Hotel companies must have the capability of establishing an

entire business concept in dramatically different local environments.

In a world moving more and more towards globalization, hotel organizations

will need to communicate more quickly, operate more productively, offer their

employees greater opportunity and deliver their customers enhanced benefits

Those companies that address these issues today will be better prepared for the

global market space of tomorrow.


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