Getting a handle on globalization

by Hermione Giffard

People have always consumed things, but it is only recently that ‘consumption’ has become a topic of interest, along with the notions of consumer power and consumer excess. Indeed, the seemingly unstoppable internationalization, now know as globalization, of trade is hardly new. It was reversed only by nationalism largely after the First World War, when nations emerged with a distinct identity that they tried to define against what they were not. This is a typical sociological move, but one that had important ramifications for what people bought and consumed. Digital archives give us access, for the first time, to more newspapers than ever before. Text mining gives us the ability to search the text of these newspapers to research larger trends, like that of consumption. Although ‘buy national’ campaigns can be found, the notion of a particularly European style of consumption (particularly as against the American model, which became dominant after the Second World War) is harder to find.

Before the First World War, trade in Europe was very international. People traded frequently across what were suddenly made into national borders, which had not existed before. Awareness about origins and the corresponding consequences came only later, but one might argue that ‘buy national’ campaigns showed at least a rudimentary awareness of ‘made here’ and ‘not made here’..[1] The first ‘buy national’ campaign was perhaps part of the American Revolution. It was clear that things connected the American colonies to Great Britain, so imported goods were an easy target for political resistance. Indeed, resistance to Britain was in the first place about taxing goods. In this way, things began to take on a political profile – a trend that we see in consumer based campaigns today. The Boston Tea Party, so important in setting off the American Revolution, represented a refusal by the colonists to buy highly taxed tea from Britain. Tea was nothing if not an early global product, grown and treated exclusively in China and brought to the West via the Dutch East Indies Company and the British East India Company – tea was sent to the American colonies via Britain.[2] So goods stood in proxy for a question of political power (quite apart from anything to do with the goods themselves – this wasn’t inferior tea): the power to determine taxes. Thus we see the first awareness that individuals could, in their choices, declare their political position. Although in the case of the Boston Tea Party the choice whether or not to buy and consume tea imported from Britain was actually taken away from them because the tea was destroyed.

Figure 1: ‘The Destruction of Tea at Boston Harbor’, lithograph depicting the 1773 Boston Tea Party. Source: Wikimedia Commons
Figure 1: ‘The Destruction of Tea at Boston Harbor’, lithograph depicting the 1773 Boston Tea Party. Source: Wikimedia Commons

The idea of activist-consumers didn’t really catch on until the late twentieth century (with some exceptions, namely ‘buy national’ campaigns, which, like policies of national autarky, were attempts to extend nationalism also to goods), when consumption became a platform for ethical and environmental agitation. As a recent book on consumer activism argues: “a central feature of contemporary culture [is that]… the most common way we participate in social activism is by buying something.”[3] Indeed, environmentalism has been recruited to help locally produced (and probably more expensive) products, although their carbon footprint may in fact be larger than competing products that are shipped across the world.

Figure 2: The products sold by the RED campaign, including a red apple ipod, help support AIDS charities. Source: Red
Figure 2: The products sold by the RED campaign, including a red apple ipod, help support AIDS charities. Source: Red

The story of globalization, of local production moving to international to global commerce is well-known, but this model is far too simple. For example, globalization can have two opposed outcomes: firstly, that global companies produce products that are consumed on a global scale; these products tend to cater to the lowest common denominator so they can appeal across cultures. But, secondly, we also see the reverse trend, where global companies cater to local taste, where globalization actually leads to a reassertion of the local. But because lessons learned internationally can be thus transferred between groups of consumers, or markets, the globalization is entirely unseen.

We can see these strategies if we look at the advertising strategies adopted by different companies with global audiences. One possible advertising strategy is that adopted by Heineken, a globally successful beer company that is based in Holland. The company chose, in its advertisements, to emphasize the global, that its (high-quality) product was the same everywhere. This strategy implied that the product should not be connected to any specific group or nationality. Heineken clearly emphasized its global reach, as indicated in the advertising from 1959 below.

Figure 3: Advertisement from De Telegraaf, 19 June 1959
Figure 3: Advertisement from De Telegraaf, 19 June 1959

Why do people drink Heineken’s beer? The man on the left, who is a musician, and the man on the right, who is a very different musician, and all people who aren’t musicians but love beer. Why always Heineken’s beer? Because Americans, Italians and Irish and Frenchmen and Liberians and Islanders drink it? Not for that reason! Listen! People drink Heineken’s beer because they know for sure that there’s no more tasty beer in the world than that from Heineken! Heineken: the most often tapped, everywhere!

A word cloud, made possible by digital text mining, shows the words used in the ad above. The more frequently used words are larger, enabling us to determine the ad’s emphasis on, unsurprisingly, beer.

Figure 4: A word cloud of the text in the Heineken beer ad above produced by the author with Wordle.
Figure 4: A word cloud of the text in the Heineken beer ad above, generated by Wordle.

Another strategy is that adapted by Unilever, a consumer goods company with a global reach co-headquartered in the UK and the Netherlands. Unilever succeeded by appealing particularly to local markets. When the company tried to set up a ‘European’ research and development lab in the 1960s, for example, the new product that it developed failed in the Netherlands, leading the company to establish individual national research facilities. In a sort of reverse globalization, then multinationals can also cater to national tastes and culture (following) rather than shaping them. This requires having lots of local knowledge of the markets and about what individuals will be likely to consume. Unilever had great success when offering, in India, for example numerous small sized packages and numerous brands, the multiple price and packaging options allowing consumers to trade up or down depending on the state of the economy.[4] The company, which buys up and maintains local, well-known consumer brands in order to capitalize on consumer confidence, owns familiar brands like Axe, Dove, Knorr and Lipton. Or as the Economic Times says, Unilever India “launched a sachet blitz across such power brands as Close-Up, Pepsodent, Sunsilk, Ponds, Vaseline, Brooke Bond Taj Mahal and Bru to increase product penetration at the bottom of the pyramid.” But what the global reach of Unilever means is that lessons learned in one market, such as the developing markets of India, can effectively be transferred to other markets, such as recession-hit developed markets.

Figure 5: Unilever’s multiple price and packaging options in India. Source: Bloomberg
Figure 5: Unilever’s multiple price and packaging options in India. Source: Bloomberg
Figure 6: Unilever’s local office in India. Local market knowledge is key to Unilever’s success. Source: Live Mint
Figure 6: Unilever’s local office in India. Local market knowledge is key to Unilever’s success. Source: Live Mint

As these two examples of multinationals show, globalization can reverse the asymmetries of a small national market where usually small countries are being outweighed by larger countries, because firms can find larger markets when they go global. Indeed, the greater interest that smaller countries might show in global markets means that they might be overrepresented in that field. The Netherlands, for example, has bred a large number of international companies. This reverse asymmetry means that the Netherlands, through Heineken, for example, is in a position to influence many countries by providing the same service / product everywhere.

The effects of internationalization and nationalism on trade and consumption are not necessarily predicable. They do not follow a single model. Instead, they tend to vary by the type of good in question; different companies choose strategies that they think will be most effective in the markets that they are targeting.

[1] Breen, T. H. ‘”Baubles of Britain”: The American and Consumer Revolutions of the Eighteenth Century’. Past & Present 119 (1988): 73–104.

[2] Ellis, Markman, Richard Coulton and Matthew Mauger.Empire of Tea: The Asian Leaf that Conquered the World. Reaktion Books, 2015.

[3] Lekakis, Eleftheria J.Coffee Activism and the Politics of Fair Trade and Ethical Consumption in the Global North: Political Consumerism and Cultural Citizenship. Palgrave Macmillan, 2013; Mukherjee, Roopali and Sarah Banei-Weiser. Commodity Activism: Cultural Resistance in Neoliberal Times.NYU Press, 2012.

[4]Vijayraghava , Kala.Unilever takes HUL strategies like small packs, cheaper variants to developed markets‘ Economic Times. September 28, 2012.