Levitt (1983)

Management > Global Marketing Management > Lectures > Independent Research > Levitt > The world wants it > Global companies > Money, scarcity and scope

Money, scarcity and scope

Like the hedgehog, the one great thing about which global firms are knowledgeable, is scarcity.

Money has three qualities:

1. Difficulty of acquisition
2. Scarcity
3. Transience

Everyone wants the things that everyone else wants. This suggests that global demand will always be far greater than what the global corporation can supply. Levitt suggests that money is more important than country culture, so people will buy low cost items even if it goes against “what immemorial custom decreed was right”.

The globalization of country-related products, such as Chinese food, pizza and jazz, confirm the theory of the homogenization of tastes.

Economies of scope is the ability of a firm to produce a huge variety of customised products at a low cost but this happening effectively is improbable, as companies with narrow product lines have the lowest costs.

Marketing managers make the mistake of responding to the wants of customers, rather than understanding what the customer should really have.

Levitt argues that one can personalise the business relationship; that is, changing marketing techniques to sell the product in a way that is appealing to the client.

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