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Global Marketing: Chapter 1

Terms in this set (28)

Marketing
Process of planning and executing the conception pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organization goals
Global Marketing
Focuses resources on global market opportunities and threats; the main difference is the scope of activities because global marketing occurs in markets outside the organization's home country
Goals of Marketing
Surpass the competition at the task of creating perceived value for customers
The guideline of marketing
Value = Benefits/Price (Money, Time, Effort, Etc.)
•Benefits high on top, price low
Create value by:
•Better service itself
•Lower overhead by expanding internationally
•Communicate
Reasons for Global Marketing
Historically
Growth
Survival
Historically
•Globe was divided
o Local Companies
o Local Products
•Advances in transportation and technology
o Standardization of products
•Global coordination vs. Local sensitivity
Growth
•Access to new markets: potential a lot of money to be made
•Access to resources: oil, gold,
Survival
Against competitor with lower costs (due to increased access to resources)
Single Country Marketing Strategy
•Target Market Strategy
•Marketing Mix
o Product
o Price
o Promotion
o Place
Global Marketing Strategy
•Global Market Participation
•Marketing Mix Development
o 4 P's: Adapt or Standardize?
•Concentration of marketing activities
•Coordination of marketing activities
•Integration of competitive moves
...
**Global Marketing DOES NOT mean doing business in all of the 200 plus country markets
**Global marketing DOES mean widening business horizons to encompass the world in scanning for opportunity and threat
Standardization
•Developing standardized products marketed worldwide with a standardized marketing mix
•Essence of mass marketing
Adaptation
•Mixing standardization and customization in a way that minimizes costs while maximizing satisfaction
•Essence of segmentation
•Think globally, act locally
o EX: coors light: change price in brazil, promote different, upscale beer, in grocery stores mostly
The Importance of Going Global
•For U.S. companies, 70% of total world market for goods and services is outside the country
o Coca-Cola earns 75% of operating income and two-thirds of profit outside of North America
• For Japanese companies, 90% of world market is outside the country
• 94% of market potential is outside of Germany for its companies
Global Industries
•An industry is global to the extent that ...
o a company's industry position in one country is interdependent with its industry position in another country
Indicators of globalization
•Ratio of cross-border trade to total worldwide production
•Ratio of cross-border investment to total capital investment
•Proportion of industry revenue generated by companies that compete in key world regions
•HIGHER THE RATIOS THE MORE LIKELY IT IS GLOBAL
Competitive Advantage
•Success over competition in industry at value creation
•Achieved by integrating and leveraging operations on a worldwide scale
•Need value first
Focus
•Concentration and attention on core business or competence
...
Nestle is focused: We are food and beverages. We are not running bicycle shops. Even in food we are not in all fields. There are certain areas we do not touch.....We have no soft drinks because I have said we will either buy Coca-Cola or we leave it alone. This is focus.
Driving Forces Affecting global integration and global marketing
•Regional economic agreements
•Market needs and wants
•Technology
•Transportation and communication improvements
•Product development costs
•Quality
•World economic trends
•Leverage
Restraining Forces Affecting Global integration and global marketing
•Management myopia
•Organizational culture
•National controls
•Opposition to globalization
Management Orientations (EPRG Framework)
Ethnocentric Orientation
Polycentric Orientation
Regiocentric Orientation
Geocentric Orientation
Ethnocentric Orientation
-Home country is superior to others
-Sees only similarities in other countries
-Assumes products and practices that succeed at home will be successful everywhere
-Leads to a standardized or extension approach
Polycentric Orientation: Best approach and way to handle it
-Each country is unique
-Each subsidiary develops its own unique business and marketing strategies
-Often referred to as multinational
-Leads to a localized or adaptation approach that assumes products must be adapted to local market conditions
Regiocentric Orientation
-A region is the relevant geographic unit
• Ex: The NAFTA or European Union market
-Some companies serve markets throughout the world but on a regional basis
• Ex: General Motors had four regions for decades
Spain, Italy and France
Geocentric Orientation
-Entire world is a potential market
-Strives for integrated global strategies
-Also known as a global or transnational company
-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
-No specialization, good and services lower cost
Wrap Up/Key Ideas
•Need for Global Marketing
o Growth & Survival
•Gain a Competitive Advantage
o Achieved by integrating and leveraging operations on a worldwide scale
•"Think globally, act locally"
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