Heterogeneity of regional trading blocs and global marketing strategies

Abstract

While demand for many products has become more homogeneous across countries, cultural factors have strongly inhibited this change as well. In a multicultural world, cultural heterogeneity will continue to remain the most significant barrier to one global market. Cultures are resilient and enduring and so is the concept of global multiculturalism. At the global level, trading blocs may be viewed as a cluster of geographically close countries that share abstract and/or material culture in varying degrees. It is interesting to note that the three major regional trading blocs (i.e. the European Union, North American Free Trade Agreement, and the Association of South East Asian Nations) can be characterized by significant differences in culture. With the rapid emergence of trading blocs in the multicultural market, our paper attempts to meet several objectives. First, we discuss the growing importance and underlying motives of regional trading blocs in a multicultural setting. The level of trading arrangements between nations is described and a brief overview of the three major trading blocs is then presented. The level of heterogeneity of each trading bloc is examined with implications for market segmentation. The critical role of strategic alliances in the context of regional trading blocs is discussed next. Finally, we recommend marketing strategies for firms marketing to countries within its trading bloc as well as to countries outside its trading bloc.