GLOBAL MARKETING

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GLOBAL MARKETING
Chapter 1  Introduction to Global Marketing
Overview
  • Marketing: A Universal Discipline
  •  The Three Principles of Marketing
  • Global Marketing:What It Is & What It Is Not
  • Importance of Global Marketing
  • Management Orientation & Global Marketing
  • Driving and Restraining Forces Affecting Global Integration & Global Marketing
  • Summary

Learning Objectives               
  • Understand how the world economy developed over the past decades
  • Know the impact of globalization on the marketing discipline
  • Learn about the interdependencies between management orientation & marketing performance
  • Understand the factors supporting or inhibiting international marketing activities

Marketing: A Universal Discipline
  • Marketing (1): the process of focusing the resources & objectives of an organization on environmental opportunities & needs
  • Marketing (2): a set of concepts, tools, theories, practices, procedures, & experiences
  • Although marketing is a universal discipline, marketing practice varies from country to country
The Marketing Concept (1)
  • Concept has chanced dramatically
  • 1950’s: Focus on products
  • 1960’s:
y        Focus on customer orientation
y        Development of marketing mix: product, price, place, promotion (4P’s)
  • 1990’s:
y        Focus on customer in the context of the broader external environment
z         Competition, govearnment policy & regulation
y        Focus on stakeholder value
z         employees, customers, shareholders, society
  • Today:
y        Two key tasks of marketing
z         Focus on customer & his/her environment
z         Create value for consumers & stakeholder
y        Shift towards
z         Focus on managing strategic partnerships
z         Positioning of firm in value chain to optimize value creation
y        Profit as a measure of success, not an end in itself



The Three Principles of Marketing

Key Elements of Marketing – 
1.      Customer Value

·         Goal: create customer value that is greater than the value created by competitors
·         Strategy:
y        Expand or improve product and/ or service benefits
y        Reduce the price
y        Combine these two elements
V = Value
B = Perceived Benefits – Perceived Costs
P = Price

2.      Differentiation

·         Goal: create competitive advantage through differentiation
·         Advantage can exist in any element of a company’s offer
·         One way to penetrate a new national market is to offer a superior product at a lower price.

3.      Focus

·         Goal: a concentration of attention & resources
·         Requirement to create customer value at a competitive advantage
·         A viable way for small & medium sized companies to achieve dominant position in world market
·         A clear focus on customer needs & wants







Global Marketing
  • Marketing discipline is universal but markets & customers are quite different
  • 3 domains of knowledge
y        Cross-Cultural Knowledge
y        Country/ Regional Knowledge
y        Cross-Border Transactions Knowledge
  • Need for “Global Localization”: Adjustment of global marketing strategies to local requirements
Examples of Global Marketing
Product 
Design
Canon/photocopier/McDonalds/Toyota/Ford
Brand Name
Marlboro/Coke/Pepsi/Mercedes/Caterpillar
Product Positioning
Colgate toothpaste/Unilever fabric softener
Packaging
Gillette razors
Advertising 
Strategy
Coca-cola/British Airways/Benetton
Sales 
Promotion
IBM
Distribution
Benetton/United Distillers
Customer 
Service
American Express/Hertz

Importance of Global Marketing
  • International arena is of great importance to companies maximizing growth potential
  • 75% of market potential is outside the US
  • 94% of market potential for German companies is outside of Germany
  • A large number of industries will be dominated by a handful of global companies

Management Orientation and Global Marketing (1)
·         Different Management Orientations in the Global Arena – EPRG Framework
Management Orientation & Global Marketing (2)
·         Ethnocentric Orientation:
ü  Characteristic of domestic & international companies
ü  Opportunities outside the home market are pursued by extending various elements of the marketing mix
  • Polycentric Orientation
ü  Characteristic of multinational companies
ü  Marketing mix is adapted by autonomous country managers
  • Regiocentric or Geocentric Orientation:
ü  Characteristic of global & transnational companies
ü  Marketing opportunities are pursued by both extension & adaptation strategies in global markets

Driving Forces Affecting Global Marketing
ü  Technology
ü  Regional Economic Agreements
ü  Market Needs & Wants
ü  Transportation & Communication Improvements
ü  Product Development Costs
ü  Quality
ü  World Economic Trends
ü  Leverage
ü  The Global/ Transnational Corporation

Restraining Forces Affecting Global Marketing
ü  Management Myopia & Organizational Culture
ü  National Controls & Barriers

Summary
  • Global marketing is the process of focusing resources on global marketing opportunities
  • Goal, to create customer value & competitive advantage by maintaining focus
  • Three classifications of management orientation: ethnocentric, polycentric, regiocentric, geocentric
·         Global marketing importance is shaped by a variety of driving & restraining forces