I believe that globalization is a term familiar to pretty much everyone; yet, the way people understand globalization may be quite different. On one hand, many believe that globalization is making the world smaller in a sense that local differences are replaced by global similarities. Indeed, it takes one just to travel around a bit to realize how many of the same things we do already share across the globe. The most notable examples come from globally familiar food chains such as McDonald’s and Starbucks, clothing brands such as Nike and H&M, and technology brands such as Apple and Microsoft.
On the other hand, globalization is also about facilitating the movement of people across borders and creating opportunities for a more open world. Every European citizen can experience this expansion when, for instance, driving from Belgium to the Netherlands without even noticing the border crossing. Another example comes from the ever-growing expat and minority populations in many parts of the world. As such, globalization brings about cultural diversity. Indeed, multiculturalism is considered to be a major globalization trend!
And this makes things a little more complicated for global businesses. Although companies should naturally be using global integration to globalize their brands, as in the case of coca-colonization for example, multiculturalism should not be overlooked. ‘One size doesn’t fit all’ still seems to be very relevant even for the most globally dispersed brands. As noted in one of my earlier blog posts, to operate successfully at a global scale requires a company to do it in a local way. In other words, global businesses need to think globally, but act locally, which is reflected in the notion of glocalization.
Yet, given the increasing multiculturalism within the ‘local’, today global businesses also speak about multicultural or ethnic marketing, which seeks to use the considerable opportunities of cultural diversity in every marketplace. As noted in the introduction to the book The Routledge Companion to Ethnic Marketing, ‘The globalization of marketing has brought about an interesting paradox: as the discipline becomes more global, the need to understand cultural differences becomes all the more crucial.’
Echoing the notion of business potential within multicultural realities, a recent Huffpost Business article argues that U.S. corporations might indeed be overlooking the gold mine of the multicultural consumer market in their own country. According to the statistical data cited in the article, Blacks, Hispanics and Asians represent over 30 percent of the U.S. population. Moreover, according to the Census Bureau data, today the majority of Americans under the age of one belong to a minority group. These stats imply that when failing to target multicultural consumers, American companies leave a substantial amount of potential earnings untapped.
The suggestion to emphasize multicultural marketing also comes from a recent Forbes article, in which the author argues that ‘creating a culturally inclusive brand image and talent pool is one of the most effective ways for companies to connect with new customers and expand their market share.’ Naturally, many global corporations are already tapping into these opportunities. For instance, Apple iOS 8.3 will have new racially diverse options of emojis, and cosmetics brand Estée Lauder offers foundations that come in 39 shades, multi-lingual in-store beauty advisors and ethnically diverse models across its advertising campaigns.
Notably, multicultural marketing is not possible without culturally inclusive processes and culturally diverse teams. Building on recent research at Pepperdine University, the Forbes article implies that multicultural marketing requires culturally skilled leadership, diverse employee teams (or even better adding biculturals to the workforce mix), an inclusive and diversity-friendly organizational culture, and lots of knowledgeable input.
A similar issue is the need for firms to be aware that their marketing, even if physically located in a single country as paper ads, billboards etc, is likely to cross borders and spread via the media. This possibility means that multinational firms need to consider the cultural sensitivities of countries beyond the target of the advertisements in order to avoid potential damage to brand equity elsewhere in the world.