Glocalization of Business Activities: a “Glocal Strategy” Approach’, Detergent-Now-With-Oud-Fragrance.Html

Papers Developing a glocalisation strategy: experiences from Henkel’s product launches in the Middle East and Europe Received (in revised form): 25th September, 2014 SVEND HOLLENSEN is the author of globally published textbooks such as ‘Marketing Management’, 3rd edn (Pearson, 2014) and ‘Global Marketing’ 6th edn (Pearson, 2014). His work has also been published in numerous internationally recognised journals. He has a PhD from Copenhagen Business School, and his research interests are within relationship marketing, globalisation, global branding and the internationalisation of companies. CHRISTIAN SCHIMMELPFENNIG is Director of Executive Education at the University of Liechtenstein. He has a PhD from the University of St Gallen and his research interests lie in the area of advertising and branding strategies. Svend Hollensen Abstract The glocalisation strategy strives to achieve the slogan, ‘think globally but act locally’, through dynamic interdependence between headquarters and subsidiaries and/or local intermediaries around the world. Companies following such a strategy coordinate their efforts, ensuring local fl exibility while exploiting the benefi ts of global integration. The challenge is to balance local knowledge with global reach. In the case of Persil Abaya Shampoo (for the Middle East market) and Persil Black Gel (for the European market), Henkel chose a strategy that successfully benefi ted from the ‘economies of scope’ in the purchasing department as well as in production and packaging. But by using an adapted product communication, plus individualised packaging designs, product positioning and marketing communications for the Christian Schimmelpfennig two regions, Henkel honoured the cultural heterogeneity of its target markets and used Persil Abayas’ particular signifi cance in the Arab world to its advantage. The results document that it has been possible for Henkel’s Persil to gain competitive advantages in terms of higher market shares, with the ‘glocalisation strategy’ in the (Middle East) liquid detergent market. Keywords glocalisation, global marketing, internationalisation, standardisation, adaptation Svend Hollensen, Department of Border Region Studies, Alsion 2, DK – 6400 Sønderborg, Denmark INTRODUCTION and therefore go easy on the marketing E-mail: [email protected] With the implementation of new prod- budget, local marketing strategies promise ucts, many chief marketing offi cers must a greater success due to a better match- Christian Schimmelpfennig, Fürst-Franz-Josef-Strasse, 9490 decide whether to pursue a global or a ing of the product to customer needs. A Vaduz, Liechtenstein local marketing strategy. While global strat- so-called ‘glocal’ marketing plan combines E-mail: christian.schimmelpfen- [email protected] egies use so-called ‘economies of scope’ the advantages of both ways and therefore © HENRY STEWART PUBLICATIONS 2045-855X JOURNAL OF BRAND STRATEGY VOL. 4, NO. 3, 201–211 AUTUMN/FALL 2015 201 JJBS141_HOLLENSEN.inddBS141_HOLLENSEN.indd 220101 115/10/155/10/15 55:22:22 ppmm HOLLENSEN AND SCHIMMELPFENNIG represents a promising marketing strategy ● to analyse development in the liquid to introduce a product to the market. detergent market in order to document Basically, effi cient global marketing whether the glocalisation strategy was means identifying and satisfying global successful for Persil in the Middle East. customer needs more precisely than one’s competitors. Thus, a lot of marketing experts fi nd themselves stuck in the fol- GLOCAL MARKETING STRATEGIES lowing dilemma: due to a high cost pres- Within the fi eld of international market- sure in an increasing global market, it is ing, the debate over the extent of stan- necessary to generate cost benefi ts while dardisation or adaptation has occupied a using a global product portfolio combined signifi cant part of past research.1,2 with a global communications strategy. At Supporters of standardisation view the same time, marketing experts realise markets as increasingly homogeneous and the economic and cultural disparity of global in scope and scale and believe that clustered target markets. Consequently, the key to survival and growth is a mul- the challenge for marketing is to fi nd a tinational’s ability to standardise goods balance between a culturally adequate and services. For example, Levitt argues range of products and its commerciali- that the standardisation of the marketing sation in order to meet heterogeneous mix and the creation of a single strategy customer needs as well as the use of econ- for the entire global market offers econo- omies of scope during product develop- mies of scale in production and marketing ment and communication. Therefore, the and moreover is consistent with what he marketing has to meet the challenge of describes as the ‘mobile consumer’.3 designing the product along with its mar- On the other hand, proponents of keting as consistently as necessary while adaptation such as Kashani argue that being as individual as possible. A ‘glocal’ there are diffi culties in using a standardised strategy aligned with the contrary strate- approach and therefore they support mar- gies ‘global’ and ‘local’ seems to provide a ket tailoring and adaptation to fi t the promising way out in a lot of cases. unique characteristics (eg cultural issues) The purpose of this paper is: of different international markets.4 Following this discussion, when a com- ● to explain and discuss the concept of pany decides to begin marketing products glocalisation from a company perspec- abroad, a fundamental decision is whether tive, especially the Henkel (Persil) per- to use a standardised marketing mix with spective; a single marketing strategy in all countries, ● to develop a theoretical framework for or to adjust the marketing mix to fi t the developing a company’s glocalisation unique dimensions of each potentially strategy and refer to recent empirical unique local market. The expanded mar- results regarding glocalisation from the keting mix of seven ‘Ps’ (product, price, literature; place, promotion, people, physical evi- ● to introduce the case of Henkel’s dence, process) is often appropriate, in glocalisation strategy within Persil’s order to relate to companies that belong black liquid detergent, especially illus- to the service sector and/or have strong trated by the penetration of the Middle service elements. East market in comparison with the The decision as to whether to stan- European market; dardise or adapt should not be considered 202 © HENRY STEWART PUBLICATIONS 2045-855X JOURNAL OF BRAND STRATEGY VOL. 4, NO. 3, 201–211 AUTUMN/FALL 2015 JJBS141_HOLLENSEN.inddBS141_HOLLENSEN.indd 220202 115/10/155/10/15 55:22:22 ppmm DEVELOPING A GLOCALISATION STRATEGY as an either/or decision. Certain academics This glocalisation strategy strives to suggest that the standardisation of certain achieve the slogan, ‘think globally but act marketing mix elements (eg product) and locally’, through dynamic interdependence adapting others (eg promotion) to different between headquarters and subsidiaries. market conditions may be necessary.1,2 Organisations following such a strategy Developed by the sociologist coordinate their efforts, ensuring local fl exi- Robertson,5,6 glocalisation is a theoretical bility while exploiting the benefi ts of global concept that combines the two words ‘glo- integration and effi ciencies, as well as ensur- balisation’ and ‘localisation’. Glocalisation ing worldwide diffusion of innovation. refers to the interface between a global Principally, the value chain function and a local marketing strategy by combin- should be carried out where there is the ing dynamics of cultural homogenisation highest competence (and the most cost and heterogenisation. Whereas globalisa- effectiveness), and this is not necessarily at tion, in and of itself, stresses the omnipres- the headquarters. ence of corporate or cultural processes The two extremes in global market- worldwide, glocalisation stresses particu- ing, globalisation and localisation, can be larism of a global idea, product or service. combined into the glocalisation frame- Glocalisation is not merely another take work, as shown in Figure 1. The glocal on niche marketing, now global. Rather, strategy approach recognises that there has glocalisation also adds accuracy to the to be a balance and overlap between the present globalisation approach among standardisation versus the adaptation. This scholars and practitioners. focus of balance between globalisation and Glocalisation theory fuses relation- localisation is crucial in the development ships, balance and harmony between of a company’s glocal marketing strategy.7 cultural homogenisation and heterogeni- Consequently, successful global mar- sation, standardisation and adaptation, keting is increasingly dependent on the homogenisation and tailoring, conver- managers’ ability to: gence and divergence, and universalism and particularism. Glocalisation is impor- ● develop a global marketing strategy, tant because it questions the very model based on similarities and differences of Western cultural imperialism. From this between markets; vantage point, globalisation strengthens ● turn the heterogeneity of the target the consciousness of the world that per- markets into a competitive advantage; vades both the local and the global. This ● exploit the knowledge of the head- opposes the argument that globalisation quarters (home organisation) through is a fully homogeneous process. On the worldwide diffusion (learning) and contrary,

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