Strategic Marketing Management

Changes in the Marketing Environment Since a last decade or 2, significant changes in the marketing environment have been observed in the marketplace. These significant changes could be categorized as: supply v/s demand environment, rising expectations, innovation in technologies, globalization, increasing focus on service, fashionisation of markets, erosion of brands, micro markets, commoditization & other constraints. 

Changes in the Marketing Environment (continued…) Previously, many companies do not bother to even think about Customer needs & wants. They only concentrated on their production & specialization side. However, over time marketing managers realized the fact that understanding Customer needs, behaviors & wants are crucial for Customer satisfaction which ensures the continuity of an organization in the market. Now, every other business is trying to achieve Customer satisfaction, meet Customer expectations &...

Commoditization A process by which good that have economic value & are distinguishable in terms of attributes (uniqueness or brand) end up becoming simple commodities in the eyes of the market or consumers. Happens when a product or service becomes so common that consumers no longer differentiate between brands. Consumers buy the cheapest products. Ex, wheat, butter, eggs, milk & milk products. It is the movement of a market from differentiated to undifferentiated price competition & from monopolistic to perfect competition. The ultimate winner is the Consumer.

Fashionization Millennium consumers or Gen Y, has more buying power than parents. So the products & brands are fashionized or associated with Gen Y to capture the attention of this influential generation. Ex: Jaguar’s latest campaign which features the singer Lana Del Ray. The campaign is part of a major push from the company to regain its attraction among the young, ability to afford, spend elite. Bill Gates endorsing DUBAI for Expo 2020. Paris Hilton advt to be a DJ for an event.

Definition Global Firm A firm that, by operating in more than 1 country, gains R&D, production, marketing & financial advantages in its costs & reputation that are not available to purely domestic competitors.

Globalization It describes the process by which regional economies, societies & cultures have become integrated through communication, transportation & trade. The process by which different parts of the world interact economically, politically & culturally.

3 mechanisms for society’s integration In each society the 3 mechanisms exist, but 1 of them dominates! Culture An integrated pattern of human knowledge, belief & behavior that depends upon the capacity for symbolic thought & social learning Religion System of values, practices & norms, related to the idea of God. A composition of attitudes between God & man. Ideology System of ideas, which serve the politics, recommend public & political structure of the society & the type of relations between man & authorities

Globalization Effect Research approach Factors Systematic result of the influence of the globalization on the other factors & forces of development Globalization Effect Research approach To consider the effect of other development factors To consider the accumulated result Factors economic non economic Manifest on 2 levels General historical Formative level (social system)

Conclusions for Global Marketing factors tendencies contradictions GLOBALIZATION EFFECT globalization Global shaping of economics regionalism Conclusions for Global Marketing

Global Marketing in the 21st Century International trade is booming Many U.S. firms are successful international marketers Global competition is intensifying Global companies face several problems Companies face 6 major decisions in international marketing

6 Major decisions in International Marketing

Looking at the Global Marketing Environment The International Trade System Tariffs, quotas, embargos, exchange controls, nontariff trade barriers WTO & GATT Regional free trade zones EU NAFTA Other free trade areas

Looking at the Global Marketing Environment (continued…) Economic Environment Industrial structure Subsistence economies Raw material exporting economies Industrializing economies Industrial economies Income distribution

Looking at the Global Marketing Environment (continued…) Cultural Environment Impact of Culture on Marketing Strategy Cultural traditions, preferences, behavior Impact of Marketing Strategy on Cultures Globalization vs. Americanization

Overlooking cultural differences can result in embarrassing mistakes Overlooking cultural differences can result in embarrassing mistakes. Nike found that this stylized “Air” logo resembled “Allah” in Arabic script

Deciding Whether to Go International Not all companies need an international presence Globalization may be triggered by several factors Risk & the ability to operate globally must be carefully assessed

Deciding Which Markets to Enter Define international marketing polices & objectives & sales volume goals Decide how many countries to target Decide on the types of countries to enter

Deciding Which Markets to Enter (continued…) Screen & rank each of the possible international markets using several criteria Market size, market growth, cost of doing business, competitive advantage, risk level

Market Entry Strategies

Tokyo Disneyland is owned & operated by a Japanese development company under license from Walt Disney Co.

Deciding How to Enter the Market Exporting Direct vs. indirect Joint Venturing Licensing, contract manufacturing, management contracting, joint ownership Direct Investment Assembly facilities, manufacturing facilities

Deciding on the Global Marketing Program Standardized Marketing Mix Same basic product, advertising, distribution & other elements of the marketing mix are used in all international markets.

Discussion Question What adjustments might need to be made to the pricing, promotion, or product itself if Cracker Jack were marketed in Japan, England & Egypt?

Deciding on the Global Marketing Program Adapted Marketing Mix The marketing mix elements are adjusted for each international target market.

Deciding on the Global Marketing Program (continued…) Global Market Product Strategies Straight product expansion Marketing the product with no changes Product adaptation Altering the product to meet local conditions or the wants of the foreign market Product invention Creating new products or services for foreign markets

Deciding on the Global Marketing Program (continued…) Global Promotion Strategies Standardized global communication Advertising themes are standardized from country to country with slight modifications Communication adaptation Advertising messages are fully adapted to local markets

Guy Laroche standardizes global advertising but adapts to meet cultural differences. The Arabian version is less sensual. European Arabian

Whole-Channel Concept for International Marketing

Marketing Strategy Standardization (Global Integration Pressures) Efficiencies through integrated R&D, production, marketing Control implications Adaptation (Local Responsiveness Pressures) Buyer behavior (cultural, economic influence, brand perception--country of origin idea) Laws, regulations Local environment needs Responsiveness to local condition shifts