MGT7108 – International Marketing

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Submission Date://2022

Word Count: 3300

The far-reaching impact of three radical and transformative disruptions on international marketing

1.Introduction

Nobody can deny that the global economy is undergoing a reconfiguration driven by tremendous forces and disruptive upheavals. Disruptive technologies (such as CSR, Metaverse, and AI) enable companies to change their capabilities in order to regenerate them in a way that is beneficial. Disruption, is therefore, an incremental process that encourages (or inhibits) domestic and cross-border types of commercial activity. Bowen (1953) coined the term “corporate social responsibility” to describe “the voluntary implementation and integration of social and environmental issues that are consistent with social goals and values”. Many organizations use the integration and transmission of corporate CSR policies as a clear market signal to compete more effectively and increase profits in the global marketplace with few physical or virtual boundaries (Stanaland et al., 2011). In addition, the phrase “metaverse” can be traced back to Neil Stephenson’s dystopian cyberpunk novel Avalanche (1992).

The Metaverse platform, Second Life, offers a collaborative, immersive, and open experience that allows users to build their virtual content. Anyone can create a cartoon avatar and communicate with others in various virtual environments (Schroeder, 2002). Metaverse is a large-scale and interoperable network of real-time rendered 3D virtual worlds that may be synced and constantly experienced by an effectively endless number of users, providing consumers with a sense of personal presence and data continuity.

According to Ball (2022), artificial intelligence (AI) is a technology that replaces the human role in acquiring data and performing automated analysis, requiring programs, algorithms, and systems that mimic intelligent human behaviour (Huang and Rust, 2018, Shankar, 2018). Artificial intelligence (AI) is defined as the use of computers to mimic the capabilities and behaviours of humans (Gadalla et al., 2013). MNCs will have to cultivate and emphasize strategic assets with unique competitive levers (such as AI and big data), as well as discover different survival niches and structural integrations.

2.Evaluative discussion of disruptiors2.1 CSR

First, the establishment of CSR, which is difficult or costly to imitate, helps companies gain a global competitive advantage to differentiate competitors and enhance brand reputation. (Bagnoli & Watts, 2003). However, fierce rivalry may jeopardize levels of corporate social responsibility (Branco and Villas-Boas, 2015). MNCs rarely focus their CSR efforts solely on their native market. Their global corporate socially responsible investments confer greater corporate capabilities and financial returns (Kitzmueller and Shimshack, 2012), for example, by attracting capital from socially responsible investors (Cheng et al., 2014) and increasing the attractiveness and retention of socially conscious and responsible employees (Kitzmueller and Shimshack, 2012). A good national image can safeguard brands from bad CSR signals in the context of globalization (Coombs and Holladay, 2002). Consumers’ perceptions of unfavourable national images are less solid, with higher volatility and disparities between positive and negative CSR signals. As a result, some businesses have attempted to establish a reputation for corporate social responsibility through public relations efforts or minor investments, known as “greenwashing” (Delmas and Burbano, 2011). In a globalized environment, companies may not profit equally from CSR efforts. The evaluation and impact of CSR signals for brands from different countries may range from region to country and are not the same (Madden et al., 2012). Chinese consumers may have different views on CSR than Western consumers.

2.2 Metaverse

Metaverse will evolve into a completely new international marketing platform in the future, displaying various brands in a 3D interactive digital realm and revitalizing them (Shankar et al., 2021). The Metaverse is a digital living area with a new social system connected and formed via technology methods. It is a virtual world that maps and interacts with the actual world. Hollensen et al. (2022) believes that Metaverse will not fundamentally replace the internet or the “social media” framework but will evolve into a worldwide borderless online 3D social media world. Designing and integrating new touchpoints or efficiently extending current touchpoints to global customers is a challenge for Metaverse Marketing. Metaverse provides users with a one-of-a-kind experience as well as a virtual avatar. Users can co-create their new service experience while satisfying their self-expression, identification, and social engagement (Papagiannidis et al., 2013).

2.3 Artificial Intelligence (AI)

Third, computer science researchers attempt to improve AI capabilities ranging from task automation to context awareness. AI can analyze explicit and implicit language and discourse patterns expressed by consumers in social media to understand user responses (Davenport et al., 2019). Each type of AI intelligence has its benefits, such as mechanical AI’s ability to handle standardized operations and thinking AI’s ability to give personalized customer care. On the other hand, Customers believe AI is lacking in tasks involving subjectivity, intuition, and emotion (Castelo et al., 2018; Gray, 2017), as well as AI’s capacity to recognize what makes each client distinctive (Longoni et al., 2019). Customers appear to be seeking AI that is more advanced than usual (Gray, 2017), such as zero accidents for self-driving automobiles. Advanced technologies and analytics can evaluate and identify retail consumers capturing unstructured marketing campaign data, such as heat maps and video surveillance (Kirkpatrick 2020). However, the objective of a software developer to create amazing technology may differ from the goal of a marketer to create a valuable user experience.

The effect for international marketing by the disruptors

Based on the four conceptual frameworks that redefine the nature of marketing proposed by Cavusgil and Cavusgil (2011), this report argues that the turmoil of external intense, disruptive shocks makes it crucial for multinationals to understand these environments and organizational trends better to formulate and deploy marketing strategy and advance marketing thinking effectively.

3.1 The Metaverse’s disruption

For multinational companies, the Metaverse provides a borderless new place to interact with consumers and generates an experience that improves the functionality of their products or services. One of the main attractions of Metaverses, according to Redmond (2002), is their unique functionality, which allows virtual users to have a pleasant and enjoyable shopping experience. Purchase ice skates for an avatar, for example, and then use that avatar to gain new experiences. Metaverse marketing can be utilized to achieve a variety of marketing and, ultimately, organizational goals in addition to generating sales (Saren et al., 2013). For example, the Metaverse can capture a wealth of information on internationalized users and their settings, making it a promising route for targeted marketing.

Metaverse marketing aims are to build brand awareness and image, generate new demand, drive sales, and drive consumer loyalty (Chen and Yao, 2021). Metaverse’s marketing strategy can cover numerous business functions because of its interactive content, location interactions, and design interactions. It helps multinational companies evaluate product suitability from global customers at low cost in a borderless virtual retail environment, providing a valuable reference for marketing to improve customer experience, including co-creation of experience and better service design, thereby encouraging customers and obtaining positive word of mouth and engagement (Meents and Merikivi, 2012). The Metaverse is an effective marketing medium for marketers because it allows them to generate user experiences and the “value co-creation” that this simulated experience delivers to multinationals and users.

The Metaverse has many unique features, such as human contact, emotional expression, virtual experimentation, and fantasy products. Therefore, with the virtual geographies’ globalization, companies will be able to continue to support the faster transmission of new products, ideas, and consumption patterns (Rauschnabel et al., 2022). Metaverse environments provide increased social experiences and responsive services and create opportunities for international marketing.

3.2 The CSR’s disruption

According to Cavusgil and Cavusgil (2012), corporate social responsibility will play an increasingly important role in creating the international marketing environment in the future. CSR marketing is a long-term strategic tool for global corporate image and product brand management so that multinational companies can shape their unique global image by acting in a socially responsible and acceptable manner in foreign markets (Bhattacharya et al., 2004; Mayo, 2003). From a corporate marketing perspective, corporate social responsibility has been recommended as a useful medium for developing a coherent corporate image and company reputation to earn respect and loyalty of target stakeholders (Hildebrand et al., 2011). A positive CSR record also increases global brand equity (Torres et al., 2012) and can act as a buffer against negative publicity (Klein and Dawar, 2004). Consumers’ awareness and expertise of emerging market countries are generally uncalibrated and unsteady, according to Pappu and Quester (2010). Consumers may employ aggressive CSR operations to directly and favourably affect consumers’ attitudes and views of their brands if they lack a clear perception or favourable impression of international brands (Banerjee and Wathieu, 2017). It’s worth noting that the effectiveness of CSR efforts appears to be dependent on the target market and that they’re especially effective when aimed at a more multinational audience with a stronger sense of global identity.

Consumer views of CSR have an impact on product attitudes, assessments, and intentions, as well as company evaluations (Jean et al., 2016). Consumer perceptions of corporations and product purchase intentions are effect by corporate social responsibility (Khan et al., 2015). However, consumers’ overall views of branded product quality and CSR efforts vary by location and country (Magnusson et al., 2015). Consumers with a strong global identification buy brands to reinforce their membership in the global market or their sense of belonging to a worldwide group (Hannerz, 1990). Consumers with a strong sense of global identity are more likely to respond positively and buy brands with favourable social responsibility signals.

3.3 The AI and BD’s disruption

The impact of AI on international marketing from the three aspects are used for analysis. Because AI is a sophisticated and expensive technology at the national level, its development, adoption, and application may differ depending on a country’s economic resources (Kozinets and Gretzel, 2021). Amazon’s use of AI technology to assist marketing efforts by unskilled retailers in India is an example of how AI-based human-computer interaction platforms might help developing countries reduce customer gaps (Kumar et al., 2019). AI will change the way businesses approach numerous sales-related tasks, such as lead creation and demand forecasting. Companies engaged in global marketing should adapt to local consumer preferences and marketing environments by localizing their products due to major cultural, economic, and technological differences at the regional level (Thompson and Arsel, 2004; Kjeldgaard and Askegaard, 2004). Consumers’ socioeconomic level and prevalent cultural norms can influence how they feel about the same goods worldwide.

Artificial intelligence technology can automatically evaluate text, voice, and images to incorporate heterogeneous preferences and local customer experiences in different cultures, allowing global firms to understand better and forecast unique customer behaviours (Kozinets and Gretzel, 2021). Companies use artificial intelligence to predict client preferences, generate customized products, and increase product engagement, relevance, and satisfaction (Kumar et al., 2019). Finally, AI systems frequently collect, store, and process vast amounts of personal data at the consumer level (Bradlow et al., 2017).

With contextual variations and conventions, AI is expected to predict client buying preferences and willingness to price (Shankar, 2018). AI effectively matches personal preferences with available options, making consumers feel deeply understood, either objectively or subjectively. Companies may even dramatically adjust their marketing tactics and business models based on prediction accuracy to constantly supply goods and services to clients based on data and projections about their demands. Despite AI’s ability to predict and satisfy preferences, consumers may view data capture as a form of exploitation. The data capture experience can threaten consumer ownership of personal data and make consumers feel they have lost control of their lives (Kopalle et al., 2021).

The firm’s cases

4.1 The CSR’s case

In its “Beyond Oil” commercial, BP declared that more ecologically friendly materials and equipment would be employed in oil exploration to take on more social obligations. The brand will be marketed as one that is favourable to the environment. Following the Gulf oil spill, a closer examination of the corporation revealed a discrepancy between its advertising campaigns and its environmental record. As a result, customers interpreted this as a “false” signal after hearing a lot of bad press about BP’s bad behaviour. Following this tragedy, many European consumers lost faith in their favourite brands (Landman, 2010). However, due to the price-cutting marketing for the Asian market after the disaster, the sales volume in some developing countries that are relatively lacking in the awareness of social responsibility behaviour has achieved an upward trend.

4.2 The metaverse’s case

Nikeland is the Nike brand’s virtual environment. “Nikeland” transports gamers worldwide to a virtual recreation of Nike’s global headquarters in Beaverton, Oregon. Users can also explore the Nikeland Showroom to style their avatars with virtual Nike shoes, gear, and accessories. Customers worldwide may see what the Nike headquarters in Oregon looks like and Nike’s “products” and sports without paying the cost of the products and equipment. It has the potential to promote brand exposure and test new shoe designs by giving a self-created interactive experience to customers all around the world. If new shoe designs are feasible to construct, international users can turn them into custom physical shoes. Nikeland marketing utilized the Metaverse channel to reduce the geographic distance to the borderless virtual world to provide delightful, differentiated, and personalized products and services to different consumers worldwide.

4.3 The AI’s case

We’ll wrap up with an example of AI in action. Netflix creates original content in several nations. Netflix’s global expansion is fueled by this localization effort, as its diversified offers appeal to users in different parts of the world (Smith & Telang, 2018). Furthermore, Netflix employs AI to deliver personalized movie recommendations based on people’s and other viewers’ previous viewing histories and contextual data such as frequency, location, and day of the week (Kathayat 2019). AI infers user personality characteristics based on their browsing and viewing history and then serves them personalized adverts, raising ad conversion rates by roughly 50%. (Matz et al., 2017). The virtual AI assistant sends monthly email invites to join the paid membership to potential global consumers. The AI then reacts first to identify the most promising potential customers (Power, 2017), after which the salesperson moves on to the next phase. Thanks to artificial intelligence, global consumer data has been transformed from a by-product into a fluid economic asset.

Firm’s implications and recommendations

The preceding examples serve as marketing references for international corporations. Multinational corporations must consider the complexities of different countries’ economic, political, and institutional environments when integrating CSR into international marketing strategies and adapt their operations to specific foreign market conditions to succeed in the target market (Kolk et al., 2015). When global corporations invest in emerging economies, worldwide marketing tactics must be adjusted to account because most of the social structure is loose and poor. The distribution of marketing resources and strategy adjustments in different global marketplaces must be matched to local conditions under varied institutional contexts (Eteokleous et al., 2016). For example, the Korean government’s heavy regulatory pressure will lead to short-term public relations-focused CSR marketing initiatives.

Furthermore, it is generally recognized that most consumers have limited access to intrinsic cues (such as performance, taste, and texture) of internationalized items due to regional limits. Hence, consumers are frequently compelled to rely on extrinsic cues when evaluating new products (Huber and McCann, 1982). Firms’ active participation in CSR activities can increase consumer willingness to pay for products from socially responsible firms (Trudel and Cotte, 2009). Not only that but to maximize results, CSR must be changed based on product and market variables. With appropriate CSR positioning, global managers may be able to keep pricing stable and perhaps command a premium (Chilwalo, 2016). Marketers must extend their communication efforts and interactions beyond their customers to include more distant and marginalized stakeholders, requiring managers to understand consumer impressions of their CSR activity (Prasad and Holzinger, 2013). To establish a virtuous corporate brand, CSR should be communicated to target stakeholders through marketing communication methods (van de Ven, 2008), which would lead to favourable consequences for all individuals involved in CSR activities (Lichtenstein et al., 2004).

Second, Metaverse users believe that displaying all of a product’s details and information is a critical factor influencing their experience, necessitating multinational companies to pay closer attention to how they present each product and provide enjoyable, differentiated, and personalized products services (Yeniyurt et al., 2005). The majority of participants highlighted user-friendliness, loading speed, and simplicity of navigation as important aspects that may improve the purchasing experience. Metaverse marketing must make it necessary for multinational corporations to gain access to more user data to understand the user’s environment, such as comprehending changes in our physical, emotional, and biological states. This data-driven approach is fundamentally distinct from other types of digital marketing (Dwivedi et al., 2021). The requirement to gather, store, analyze, and interpret huge volumes of data about users’ physical environments and be responsible for good search engine characteristics, security and privacy, and accessibility is a marketing challenge for multinational corporations (Cavusgil et al. 2004).

Third, AI segmentation is adaptable since it can divide the global market into several segments, each with its client’s wants and preferences. To comprehend their purchasing intentions and product happiness, multinational companies can utilize AI to automatically collect and monitor data about the market, consumer environment, product usage, and customer experience (Ng and Wakenshaw, 2017). Global firms may use AI to detect competitors in a specific need or external possibilities in a new market, as well as acquire insight into a product’s competitive edge. Unsupervised machine learning, for example, can produce marketing insights that can be utilized to find new market structures and trends worldwide. Kumar et al. (2019) consider how artificial intelligence can be used in marketing to customize interaction by creating, communicating, and delivering individualized products to clients. To improve the segmentation and targeting of global consumers and marketplaces, international firms should develop AI categorization experiences throughout the design phase. Multinational corporations can utilize AI marketing analytics to forecast product design trends and respond to specific customer preferences (Chung et al., 2009). Big data analytics informs product and service innovation and speeds up development designs to react fast to changing consumer preferences and trends (Dekimpe, 2020). The most popular types of personalized recommendation systems in marketing, for instance. Marketers need to decide which standardized, personalized, and relevant AI intelligence to use for marketing campaigns.

From the above, people are able can find satisfactory products for customers and get a competitive edge by connecting product features and customer interests. For example, Daabes and Kharbat (2017) demonstrate data mining techniques to mine customer perceptions as an alternative to marketer knowledge. In addition to this, commodity prices can also be personalized through AI combining consumers’ private personal information (Montes et al. 2019). According to De Kimpe (2020), international retailers can utilize dynamic best-response pricing algorithms that take into account consumer preferences across geographies, competitive behaviour, and supply factors. It’s vital to note that AI may not be able to deliver on all of its promises due to issues like data privacy, algorithmic bias, and ethics (Larson, 2019).

6.Conclusions

In the context of global market connection, marketing’s role is to deconstruct and then reconstruct the enterprise’s capabilities through better resource allocation (Cavusgil and Cavusgil, 2011). The destructive force of leverage needs multinational organizations’ ongoing co-evolution, adaptation, and extension in response to fast global change (Townsend et al., 2004). Marketing functions, organizations and processes have shifted from geographically diverse to structurally driven, taking on new identities and identities. A globally integrated enterprise in a constantly disrupted and changing global market, will have no choice but to tightly integrate their global operations and take the lead in market positioning, marketing control, and global communications to respond quickly to emerging opportunities and risks coordinate (Cavusgil and Cavusgil, 2011). In this way, multinational firms can differentiate themselves from other international competitors in a constantly disrupted global market.

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