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For The Greater Good

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The globalization of markets was fueled by the fall of the Berlin Wall in 1989. That event presaged the breakup of the Soviet Union, the opening of China, deregulation in India, along with free trade agreements in Latin America, Europe, and North America. Several billion new consumers entered the free market system during the 1990s. American brands—ambitious, confident, and flush with capital—soon established beachheads in the emerging economies. Local consumers, long denied access to Western brands and often victims of shoddy local imitations, were quick to try to adopt the formerly forbidden fruit.

The notion that this democratization of access to American brands is a Trojan horse for American cultural imperialism, espoused, for example, by Naomi Klein in her 2000 book No Logo, is misguided. In most product categories in most countries, there are strong local brands reflecting local tastes that coexist alongside global brands. Retailing and distribution remain largely local. And American consumers show a desire for increasing cultural variety in their life experiences, eating more often at ethnic restaurants and vacationing more often in faraway places.

In many categories, increased global demand drove costs and retail prices down, prompting global production to shift to economies with lower input costs. The manufacture of personal computer components is now concentrated in Asia. And manufacturers are constantly seeking to drive costs lower still in order to hit retail price points that will enable additional millions of poor people to buy in. As prices have fallen, Asian brands including Lenovo as well as Asus and Acer of Taiwan have gained share.

Access to PCs has been aided by the catalytic impact of One Laptop Per Child, an American nonprofit that set out to produce a $100 laptop computer for children at the bottom of the economic pyramid. Nicholas Negroponte, the founder, opened the eyes of for-profit manufacturers to this new market opportunity. While OLPC has lacked the marketing, distribution, and service networks to support its vision, Intel and other established commercial brands promise to make Negroponte’s vision a reality. Democratization of access, the opening up of new markets, remains as powerful an imperative for American marketing today as it did a century ago.

The Technological Dynamic
In addition to globalization, a second force enabling marketing to bring good quality to the masses is technology. The printing press permitted religious dissenters to reach broader audiences with their pamphlets and opinions. Five centuries later, technology-driven letter-sorting systems enabled the U.S. Postal Service to deliver cheaply hundreds of thousands of direct mail catalogs to rural America. President Franklin D. Roosevelt understood clearly the tight connection between economic freedom and political freedom. He reportedly said that if he could place one American book in the hands of every Russian, that book would be the Sears, Roebuck catalog.

Today, the Internet—supported like most of the diverse media that preceded it by brand advertising rather than subscription—is further democratizing access to markets. The ability of consumers to compare prices over the Web irons out cross-border price differences and expands trade. A poor farmer in India can check commodity prices on the Internet before he sells his crop to the local buyer. A small business owner in Guatemala can check the prices of office printers online and order one to be shipped by DHL from a retail store in Miami if the price is right.

Thanks to a progressive decline in data processing and storage costs, technology now enables marketers to offer consumers much more choice, including the ability to tailor solutions to individual needs at only slightly greater cost. American Express and Harrah’s Entertainment, both heavy investors in IT, now tailor their marketing communications to the buying patterns or sales potential of tightly defined consumer segments or, indeed, of individual consumers. Levi Strauss permits its consumers to custom-design a pair of jeans.

The interactive nature of the Internet means that customers are now engaged more than ever in the co-creation of brand meaning and the development of marketplace offerings. Procter & Gamble recently invited consumers to vote on suggested new flavors for Crest toothpaste. H.J. Heinz worked with Google to invite submissions of 30-second video ads for Heinz ketchup; over 2,000 entries were received.

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The article “For The Greater Good” was published in The American (November- December 2008, 2:6, pp72-77)

About the Authors

John A. Quelch is Senior Associate Dean for International Development and Lincoln Filene Professor of Business Administration at Harvard Business School. He also serves as a non-executive director of WPP Group plc, the world's second-largest marketing services company.

In his Marketing KnowHow blog , John presents how-to marketing advice on the ever-changing world of marketing. His writing offers topical and practical advice to markerters of any industry.

Katherine E. Jocz is a research associate at Harvard Business School. Previously, she was Vice President, Research Operations, at Marketing Science Institute.