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CH1 introduction to global marketing

Terms in this set (39)

GMS

in single country marketing, strategy development addresses two fundamental issues:
1- choosing a target market and
2-developing a marketing mix

the same two issues are at the heart of a firms GMS although they are viewed from a somewhat different perspective

global market participation
-the extent to which a company has operations in major world markets

standardization vs adaptation
-the extent to which each marketing mix element is standardized or adapted (ex executed in different ways) in various country markets

GMS has additional dimensions
1- concentration on marketing activities
-the extent to which activities related to the marketing mix (ex promotional campaigns or pricing decisions) are performed in one or a few country locations

2- coordination of marketing activities
- refers to the extent to which marketing activities related to the marketing mix are planned and executed interdependently around the globe

3- integration of competitive moves
- the extent to which a firms competitive marketing tactics in different parts of the world are interdependent

GMS can enhance the firms performance on a worldwide basis

the decision to enter one or more particular markets outside the home country depends on a companies resources, its managerial mind set, and the nature of opportunities and threats

Brazil, russia, india, china and south Africa - five emerging markets BRICS represent significant growth opportunities

Mexico indonesia, nigeria and turkey- MINTs also hold great potential

the issue of standardization vs adaptation in global marketing has been at the center of a long standing controversy among both academicians and business practitioners
leverage means some type of advantage that a company enjoys by virtue of the fact that it has experience in ore than one country

leverage allows a company to conserve resources when pursuing opportunities in new geographical markets
in other words leverage enables a company to expend less time, less effort and less money.
-

4 important types of leverage
-experience transfers
-scale economies
-resource utilization
-global strategy


1-experience transfers
-can draw upon management practices, strategies, products, advertising appeals, or sales or promotional ideas that have been market tested in one country or region and apply them in other comparable markets.

2-scale economies
-the global company can take advantage of its greater manufacturing volume to obtain traditional scale advantages within a single factory
-not limited to manufacturing. Just as a domestic company can achieve economies in staffing by eliminating duplicate positions after acquisition , a global company can achieve the same economies on a global scale by centralizing functional activities

3- resource utilization
- major strength of a global company is its ability to scan the entire world to identify people money and raw materials that will enable it to compete most efficiently in world markets

4- Global strategy
-the global companies greatest single advantage can be its global strategy. it is built on an information system that cans the world business environment to identify opportunities, trends, threats and resources
-when opportunities are identified the global company adheres to the three principles
- it leverages its skills and focuses its resources to create superior perceive value for its customers and achieve competitive advantage
-the global strategy is a design to create a winning offering on a global scale
a global strategy is no guarantee of ongoing organizational success. companies that cannot formulate of successfully implement a coherent global strategy may loose their independence
important restraining forces include
- management myopia,
- organizational culture,
-national controls and
-opposition to globalization

1-management myopia and organizational culture
-myopia is also a recipe for market disaster if headquarters attempts to dictate when it should listen. global marketing does not work without a strong local team that can provide information about local marketing conditions
-in companies where subsidiary management Knows it all there is no room for vision from the top.
-in companies where headquarters management s all knowing there is no room for local initiative or an in depth knowledge of local needs and conditions
-successful global companies have learned how to integrate global vision and perspective with local market initiative and input
-initiative and input by headquarters executives and the corresponding respect for headquarters vision by local executives leads to success

2- national controls
-control ranges from a monopoly controlling access
- tariff barriers have been removed in high income countries thanks to WTO GATT NAFTA
-non tariff barriers NTB are still in evidence
-NTBs are non monetary restrictions on cross border trade ex "buy american products"
-NTBs ave the potential to make it difficult for companies to gain access to some individual country regional markets

3-opposition to globalization
- some people think that globalization and global marketing represent a threat
-globalphobia is sometimes used to describe bad attitude towards trade agreements, global brands or company policies that appear to result in hardship for some individuals or countries while benefiting others.
- opponents are labor unions, college and university students and national and international nongovernmental organizations (NGO)