When a company decides to expand globally, one key consideration is whether to develop and market the business using a global marketing or a multidomestic strategy. With a global approach, you develop and market the same product solution universally. With a multidomestic approach, you tailor your offering to the needs of the individual markets.
Global marketing is an efficient option if your business offers a combination of products and services that are used universally, or when global customers perceive the same value and benefits. You design and develop one product or business format and market it with constant messaging. This saves money on designing new message strategies and enables you to build a global brand: Customers around the world recognize the meaning of your name and symbols. Nike has developed its global brand by marketing an image of quality, versatility and status everywhere.
The major obstacle to applying a global marketing strategy is products and messages that don't work everywhere. Products sometimes have varying usage, which requires presenting different value propositions. Laundry washing processes are performed differently around the world, for instance, which makes global marketing a challenge for detergent manufacturers. Cultural context is key as well. McDonald's and other iconic United States companies have had to avoid a constant global message emphasizing American culture in places such as the Middle East, where western and American values aren't appreciated.
The major benefit of a multidomestic approach is a targeted, customized message strategy that connects directly within each market. When countries perceive different benefits from your brand, you must communicate with each of them in a way that affects the local market. In some cases, a multidomestic strategy is used to present the impression that the business is locally adapted. Where American culture is rejected, U.S. companies try to become more local through suppliers, workers and product offerings. McDonald's has invested in developing and training farmers in less developed countries in which it operates.
The multidomestic approach is usually more expensive to implement. It takes time to research the specific needs and interests of each individual market. You then have to design and develop a message strategy for each country. Companies sometimes develop new products or distribution processes to fit each market. Multidomestic marketing also works against your ability to develop a global brand image. This means when customers around the globe interact about your product, they may have differing perceptions.