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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.
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
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
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
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
Promote creativity: Organizations are
constantly thinking of new and creative ideas to attract
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, et.al, 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
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
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.
France U.K. Netherl
Yes Yes Yes Yes Yes
In-pack gift ?? ?? Yes ?? ??
Extra product ?? Yes Yes ?? ??
No Yes Yes Yes Yes
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
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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