How Does Diversity Gain a Competitive Marketing Advantage

How does diversity gain a competitive marketing advantage

One competitive marketing advantage gained by a diverse workforce is an increase of a company’s customer base. To get this advantage, it is necessary for organizations to hire more employees with different cultural background, assumed those have further required knowledge in, for instance, in sociopolitics. An example for this is the Joint Venture DuPont Merck, which supplied an anticoagulant drug that was labeled only in English language in the late 1990’s. A Hispanic manager realized this and translated educational materials of the drug into the Spanish language, which substantially increased sales in Hispanic countries. Nowadays, it is translated into 15 different languages and still profitable (Hart, 1997). This example shows that by understand global differences, for example in terms of culture, a greater diversity in a company’s workforce can potentially increase a customer base, which will finally result in a higher market share. Furthermore, a diverse workforce can enhance customer service. This can be achieved by the use of several assets, as for example cultural sensitivity or the knowledge of business networks. Additionally, in times of an increasing population with migrational background in developed countries, supplying goods and services to this part of the population can become a competitive marketing advantage (Karpin as cited in Nataatmadia and Dyson, 2005). According to this, the Avon Company become more profitable by involving managers with Hispanic and African-American background in marketing decisions, to let this part of population become aware to their products (Robinson and Dechant, Cox and Blake as cited in Nataatmadia and Dyson, 2005). Related to the previous example, after the managing consulting McKinsey & Company study, that included executive-board diversity in developed countries, companies based on diversity principles have 53% higher equity returns than those who...