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Complete Guide to Multidomestic Marketing Strategy

A multidomestic strategy is an international marketing approach that chooses to focus advertising and commercial efforts on the needs of a local market rather than taking a more universal or global approach.

Generalized Advantages

A multidomestic approach has the advantage of allowing organizations to develop niche markets that can cater to refined customer demands. In addition, because localized marketing is less costly than global marketing, companies can more easily increase advertising efforts, develop and test new product ideas and ultimately make a greater profit.

Potential Global Disadvantages

While there are many potential benefits to using a multidomestic strategy, there are also potential disadvantages. Some companies have implemented a multidomestic strategy and found that consumers in different countries actually prefer similar products and services, and that a more universal approach would actually be a better solution. If companies do implement a multidomestic strategy, they should keep in mind that it can lead to inconsistent marketing efforts, product quality and customer care, as well as brand recognition.

Strategic Differences

An international marketing strategy focuses on selling products and services in foreign markets. Multidomestic marketing focuses on the needs and wants of local markets, as opposed to more universal marketing approaches. A company using a multidomestic marketing strategy will have a local focus and will create messages, products and services that appeal to specific market segments.

Generalized Benefits

Multidomestic marketing has many potential benefits, including the ability to develop niche markets, increased profits and increased marketing efforts. The ability to cater to specific and refined consumer demands is one benefit of a multidomestic approach.

Trends

Companies should use a multidomestic formula to reach the needs of regional segments of a country. Multidomestic strategies can be implemented on a short-term or a long-term basis. The formula can be used to target any market, from developing to developed, and any product, from high-tech to cereal. Companies should apply a multidomestic strategy in countries where the market is rising. A multidomestic strategy can be confusing to the public and media. Customers may see a company as less successful or dishonest when they use a multidomestic marketing strategy. Multidomestic marketing requires in-depth knowledge of all the different market segments within a country. Companies must be able to create different advertisements and messages to appeal to different market segments.

In summary, using a multidomestic approach to marketing is a sound and sensible way to go about promoting a product, or any other service type, in many different countries. Companies can take advantage of this approach to cater to the needs of a specific region, rather than the wider world. While multidomestic marketing does have its detractors, it is no less beneficial to a company’s bottom line than an international marketing approach. As discussed previously in this article, using a multidomestic strategy can help companies work out what products are needed in specific countries, and also whether a product can even be sold in these countries.

Triple bottom line

The concept of Triple bottom line was originated by John Elkington in 1994, in his book “Cannibals with Forks”. The term “triple bottom line” means that an organisation endeavours to achieve the three inter-related social and environmental goals of “people, profit, planet” Social issues refer to the impact an organisation has on its employees, customers, and community. Environmental issues refer to impacts the organisation has on the natural environment, including pollution, resource depletion and deforestation. Profit refers to the financial-economic performance of an organisation, including individual, shareholder, and government impacts.

Social sustainability is associated with achieving the first goal of the triple bottom line, that the business practices promote the health and development of the society in which it is based. Traits associated with socially sustainable businesses include:

  • Avoiding harm to the rights of others.
  • Paying a fair price for workers and suppliers.
  • Being fair to and respecting the views of all the stakeholders of the business.
  • Supporting sustainable local community development.

Environmental sustainability is associated with achieving the second goal of the triple bottom line, that of taking care of the environment, including biodiversity, depletion of natural resources, sustainability of the biosphere and any other impacts on the environment.

Economic sustainability is associated with achieving the third goal of the triple bottom line, that of generating healthy profits for the company’s owners, by using economic incentives to achieve business objectives.

According to research done by the University of Queensland in 1999 with support of the United Nations Environment Programme (UNEP), there is a clear connection between environmental management and company profitability; the total environmental market in 1997 was valued at US$1.3 trillion (Fisher 1998), and United Nations reports indicate that this figure is likely to rise to US$2.8 trillion by 2005 (Mintzer 1998). In addition to environmental markets, there is also a strong body of research proving that businesses who take a triple bottom line approach to environmental management have positive public relations effects (University of Queensland 1999), as well as a higher employee satisfaction. (Jegede 2005: 17) There is a large amount of scientific literature and fact-sheets available on the triple bottom line that support many of these views.

However, while the notion of triple bottom line is receiving widespread support in business, very few companies in the world are actually acting on it (Nyati-Ramahobo 2007: 136). The failure of so many businesses to embrace the triple bottom line stems from the fact that it is still a new concept and most business still are run on traditional capitalist models. There is very little understanding on the subject, and many people interpret triple bottom line as presenting different companies with a new set of responsibilities that will negatively impact their businesses. Consequently, it is not easy for businesses to embrace or incorporate concepts such as the triple bottom line into their businesses.

Basis of triple bottom line

The basis of the triple bottom line in all business organisations is to communicate to the organisation that the coverage of all the three issues in the triple bottom line is important. The basis of the triple bottom line is the promulgation of the “people, profit and planet” in a single system. The issue of profit is not envisaged to be the only major issue in the three. Rather, it is only an extension of the other two issues, “people and planet”.

The coverage of these three is essential to the survival and growth of any business. Many companies have failed to embrace the triple bottom line approach because the implications are far reaching and the concept is not easy to implement in practice. There is a general failure of companies to execute the three and implement them as a management practice.

The majority of companies have failed to embrace the triple bottom line because they believe that the concept will affect their profitability. Under the triple bottom line approach, corporations are expected to take the need of the people into consideration such that they are able to assume their societal roles in addition to the role of making profits. There is also an expectation that the companies embrace and accommodate the environmental implications of their business practices.

The triple bottom liners recognise that the traditional capitalist models of management are not oriented towards a sustainable future. Consequently, advocates of triple bottom line suggest that companies embrace a new management approach that is oriented towards a better future for all.

Methods for achieving triple bottom line

There are many methods for achieving triple bottom line. According to Dr. David Ahmad, there exist four main methods for achieving triple bottom line. According to him, there are at least four main methods that businesses have adopted to meet their social and environmental obligations. These four methods are:

Northern social responsibility such as worker training programmes, technology sharing programmes, banking for local communities, and giving grants to not-for-profit organisations.

Southern social responsibility such as community development programmes, providing learning support, and responding to unemployment.

Northern environmental responsibility in which businesses pay attention to environmental issues in different ways. They can provide resources to aid in environmental documentation, bio-energy research, and plant, and tree planting. Northern environmental responsibility also involves the control of pollution and many other environmentally orientated activities.

Southern environmental responsibility requires businesses to integrate positive environmentalism in their business operations. This can include waste minimisation, water saving, and reduced pollution.

Each of the four methods affects a different aspect of a business. As businesses can choose any one of the above approaches, they are able to exploit the triple bottom line model to achieve all their goals.

In most cases, companies use the four methods, though they are usually not aware of it. They just adopt the best way they know to benefit themselves in the society and the quality of their operation. The four commonly accepted methods of business building are the following:

  • Evaluation of the impacts the company has on the environment and societal issues.
  • Implementation of environmental practices, which are aimed at addressing issues associated with the environment and society.
  • Implementation of societal practices to address societal issues and enhance societal effects.
  • Implementation of environmental practices to address environmental issues and enhance environmental effects.

Conclusion

The implementation of the three aspects of the triple bottom line in running a business, will result in a greater profit and a positive and productive working environment. While the triple bottom line can be adopted by any business, many businesses have, however, failed to adopt it because they believe that the concept will affect their profitability.

Even though there is widespread pressure for businesses to implement the triple bottom line in their operations, few have actually done so. This is because the concept is far-reaching and more of a “philosophy” rather than a way of achieving business objectives. Sooner or later, however, businesses will realise that the triple bottom line is a way of achieving their objectives, and they are likely to embrace it.

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