FMA 601 Foreign Market Analysis Module 1: Introduction to Global Marketing

Foreign Market Analysis Global Marketing www.mygbs.org

Foreign Market Analysis A market analysis studies the attractiveness and the dynamics of a special market within a special industry. It is part of the industry analysis and thus in turn of the global environmental analysis. Market research is any organized effort to gather information about target markets or customers. It is a very important component of business strategy WATCH “THE BIRTH OF EMPIRE THE EAST INDIA COMPANY” ON BBC www.mygbs.org

Marketing: A Universal Discipline Marketing is the process of focusing the resources & objectives of an organization on environmental opportunities and needs Marketing is also a set of concepts, tools, theories, practices, procedures and experiences Although marketing is a universal discipline, marketing practice varies from country to country www.mygbs.org

The Marketing Concept The concept has changed dramatically over the years The old concept: Focus on products The new concept (around 1960): Focus was a customer orientation Development of the marketing mix (4P’s): => product => price => place => promotion www.mygbs.org

FACTORS INFLUENCING INTERNATIONAL MARKETING STRATEGY Demographic/ Economic environment Technological/ Physical environment Marketing Intermediaries Information system Planning system Product Promotion Organisation system Control system Target customers Publics Suppliers Price Place Competitors Political / Legal environment Social / Cultural environment www.mygbs.org

The Marketing Concept The Strategic Concept (1990s): Focus on customer in the context of the broader external environment Competition, government policy and regulation Economic, social and technological macro forces Focus on stakeholder value employees, customers, shareholders, society www.mygbs.org

The 3 Principles of Marketing CUSTOMER VALUE COMPETITIVE ADVANTAGE FOCUS www.mygbs.org

The Three Principles of Marketing: Customer Value Goal: create customer value that is greater than the value created by competitors Strategy: Expand or improve product and/or service benefits Reduce the price Combine these two elements V = Value B = Perceived Benefits C = Perceived Costs V = B - C www.mygbs.org

The Three Principles of Marketing: Competitive Advantage 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. www.mygbs.org

The Three Principles of Marketing: Focus Focus is the concentration of attention and resources Requirement to create customer value at a competitive advantage A clear focus on customer needs and wants www.mygbs.org

Examples of Global Marketing Strategies Product Design Apple/Google/McDonalds/Toyota Brand Name Coca-Cola/Apple/BMW Product Positioning Unilever/Harley Davidson/Apple/Samsung Packaging Gillette/Apple Sourcing Toyota/Honda/Nike/Wal-Mart/Apple Innovation Apple/Google/Samsung/Tata/Foxconn Distribution IKEA/Apple/H&M Customer Service Caterpiller/Dell/Apple/Lexus www.mygbs.org

Globalization and Global Marketing The U.S. represents approximately 25% of the total world market for all products and services China is now the world’s 2nd largest economy; Japan is now number three In 2009, China became the world’s largest market for cars None of the top 15 automobile and parts companies are Chinese www.mygbs.org

Driving Forces Affecting Global Marketing Technology Culture Market Needs Cost Free Markets Peace Management Vision Strategic Intent www.mygbs.org

The World Economy - Overview Since WWII, we have seen: Emergence of global markets Integration of world economy Capital movements are the driving force Production is “uncoupled” from employment Macroeconomics of individual countries no longer control economic outcomes www.mygbs.org

The World Economy: Important Trends Economic activity will shift from West to East Aging worldwide population will demand increasing levels of productivity and efficiency Shifts and growth in consumer segments will result in changes in the global consumer marketplace Changing industry structures and emerging new models of corporate organization will be characteristic of growing global competition www.mygbs.org

The World Economy: Important Trends The demand for natural resources will continue to grow Scrutiny of global firms’ worldwide practices will increase as the reach and sale of global firms expand The economics of information will be transformed as the ubiquitous nature of information expands Talent pools have become global in nature www.mygbs.org

Richest Countries in the World GNP (PPP) (2010) United States $14,657,000 trillion China 10,085,708 trillion Japan 4,309,432 trillion India 3,060,392 trillion Germany 2,940,434 trillion United Kingdom 2,172,768 trillion Brazil 2,172,258 trillion France 2,145,287 trillion Italy 1,773,547 trillion www.mygbs.org

The Location of Population Country 2010 Pop 2000 Pop China 1,330,141,295 1,268,853,362 India 1,173,108,018 1,000,124,224 United States 310,232,863 282,338,631 Indonesia 242,968,342 213,829,469 Brazil 201,103,330 176,319,621 Pakistan 177,276,594 146,404,914 Bangladesh 158,065,841 130,406,594 Nigeria 152,217,341 123,178,818 Russia 139,390,205 146,709,971 Japan 126,804,433 126,729,223 www.mygbs.org

International Business All commercial transactions including marketing, investments, and transportation that take place between two or more countries With Foreign Market Analysis and global marketing you increase your chances of business success www.mygbs.org