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Global Marketing-Chapter 1

Terms in this set (42)

global marketing
-the scope of activities outside the home market
-focuses on global market opportunities and threats, scope of activities is outside home-country market, think locally act globally
-WHY: to increase profits/sales
-post-WWII brought unparalleled expansion by companies going outside their home markets--led to the term (economically the entire world was touched by WWII)
-today's companies go global TO SURVIVE/thrive because competitors will enter the home market with lower costs, more experience, and better products
marketing
activity, set of institutions, and processes for creating/communicating/delivering/exchanging offerings that have values to the customers/clients/partners/society at large
-WHY: to increase profits/sales; increase the likelihood of a sale
marketing mix
the four Ps (product, price, place, promotion)
market development strategy
seeking new customers by introducing existing p/s to new market segments or geographical market
diversification strategy
creating new p/s targeting a new segment/country/region
-ex: Starbucks is adding wine bars to some of their existing shops
market penetration strategy
-existing products to existing markets
-ex: Starbucks building on existing loyalty program by introducing a smartphone app to purchase drinks electronically
product development strategy
new products to existing markets
value chain
the various activities a company performs in order to create value for customers
value equation
V = B/P
V: perceived value
B: benefits [product, price, & place]
P: price OR cost
*when cost is greater than price=negative value & vice versa
achieving market success
product/brand must measure up to a threshold of acceptable quality and be consistent with buyer behavior, expectations, and preferences
customer perceived value
create value for customers by improving benefits or reducing price
-improve the product
-find new distribution channels
-create better communications
-cut monetary and non-monetary costs and prices
competitive advantage
-when a company succeeds in creating more value for customers than its competitors do
-measured relative to rivals in given industry
globalization
broad economic process--transformation of formerly local/national industries into global industries
global industry
competitive advantage achieved by integrating and leveraging operations on a worldwide scale
-an industry is global to the extent that a company's industry position in one country is interdependent with its industry in
focus
concentration of attention on a core business/competence
single country marketing strategy
-target market strategy
-marketing mix
global marketing strategy (GMS)
a firm's blueprint for pursuing global market opportunities that address four issues:
1. standardization OR adaptation approach used
2. concentrated on a few countries OR widely dispersed throughout globe
3. guidelines for coordinating marketing activities around globe
4. integration of competitive moves

-should enhance the firm's performance on a worldwide basis
global market participation
extent to which a company has operations in major world markets
standardization globalization
developing standardized products marketed worldwide with a standardized marketing mix
-essence of mass marketing
adaptation globalization
mixing standardization and customization in a way that minimizes costs while maximizing satisfaction
-essence of segmentation
-think globally, act locally or vice versa
concentration of marketing activities
extent to which activities related to marketing mix are performed in one or a few country locations
coordination of marketing activities
extent to which marketing activities related to marketing mix are planned and executed interdependently around the globe
integration of competitive moves
extent to which a firm'S competitive marketing tactics in different parts of the world are interdependent
single-country marketing strategy
-target market strategy
-marketing mix development
ethnocentric orientation
a person who assumes that their home country is superior to the rest of the world
-indifference to marketing opportunities outside the home country (domestic companies)
-ethnocentric companies can conduct outside of their country (international companies)
-take standardized/extension approach
-centralized marketing management, see only similarities in other countries, assumes products and practices that succeed at home will be successful everywhere
international company
an ethnocentric organization that conducts business outside of their home country
standardized/extension approach
belief that products can be sold everywhere without adaptation
polycentric orientation
belief or assumption that each country in which a company does business is unique
-each subsidiary develops its own unique business and marketing strategies
-often referred to as multinational
-localized/adaptation approach
-decentralized marketing management
localized/adaptation approach
assumes products must be adapted in response to different market conditions
regiocentric orientation
a region becomes the relevant geographic unit, focus on development of an integrated regional strategy
-ex: a company that focuses on the countries of NAFTA
-integrated marketing management on a regional scale
-an improvement over polycentrism
-taking ethnocentric beliefs and expanding it to an entire region
geocentric orientation
views entire world as a potential market and strives to develop integrated global strategies
-also known as a global/transnational company
-integrated marketing management on a global scale
-retains an association with the headquarters country
-pursues serving world markets from a single country or sources globally to focus on select country markets
-leads to a combination of extension and adaptation elements
global company
pursues a strategy of serving world markets from a single country
OR
sources globally for the purposes of focusing on select country markets
-tend to retain association with a particular headquarters country
transnational companies
serve global markets and use global supply chains, resulting in a blurring of identity
forces affecting global integration and global marketing
-multilateral trade agreements are increasing (ex: NAFTA, EU)
-converging marketing needs/wants & the information revolution (growing middle class)
-transportation/ communication/technology improvements **generally has led to a decrease in costs (more people on the internet)
-product development costs
-quality
-world economic trends & political changes
-leverage
global marketing leverage
some type of advantage that a company enjoys by virtue of the fact that it has experience in more than one country
-allows conservation of resources when entering new country
-4 types: experience transfers, scale economies, resource utilization, global strategy
restraining forces affecting global integration and marketing
-management myopia (not knowing the business that you're truly part of, you can't focus simply on your product--ex: Kodak was a memory company, not a camera company, they were too short sighted)
-organizational culture
-national controls (politics, restrictions to trade, etc.)
-opposition to globalization
experience transfers leverage
a global company can leverage its experience in any market in the world; applying what it already knows to similar markets
scale economies leverage
-greater manufacturing volume used to obtain traditional scale advantages within a single factory
-finished products can be manufactured by combining components manufactured in scale-efficient plants in other countries
-opportunities to improve corporate staff quality and competence
resource utilization leverage
ability to scan the entire world to identify people/money/raw materials that will enable most effective competition in world markets
global strategy leverage
built on information system that scans world business environment for trends, opportunities, threats, and resources
restraining forces of global marketing/integration
-management myopia and organizational culture
-opposition to globalization (globaphobia)
nontariff barriers (NTBs)
nonmonetary restrictions on cross-border trade
-makes entering some countries/regions difficult
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