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Product Strategy Standardized product Localized product Communication Strategy Standardized Communication Localized Communication Global Strategy: Uniform.

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Presentation on theme: "Product Strategy Standardized product Localized product Communication Strategy Standardized Communication Localized Communication Global Strategy: Uniform."— Presentation transcript:


2 Product Strategy Standardized product Localized product Communication Strategy Standardized Communication Localized Communication Global Strategy: Uniform product / Uniform Message Glocal Strategy: Customized product / Uniform Message Glocal Strategy: Uniform product / Customized Message Local Strategy: Customized product/ Customized Message Glocal Strategy : Customized Product / Customized Message Local Global Glocal Thinking locally, acting locally Thinking globally, acting globally Thinking globally, acting locally With Glocalization a global company’s goal isn’t to say “here is a product.” Rather, the company asks, "How can we make a product you'd like?“ The marketing, funding and infrastructure behind a product may come from a global corporation, but the local level dictates what finished form that product will take. Therefore glocalization is a bottom-up system of governance for globalization. Many of the most successful global companies have adopted an organizational approach that provides clear global strategic direction along with the flexibility to adapt to local opportunities and requirements. 1. Building a Shared Vision Clear & consistent long-term corporate mission that guides individuals wherever they work in the organization. For example Johnson & Johnson’s corporate credo of customer focus; Nestlé’s vision to make the company the “reference for nutrition, health and wellness” & Samsung’s mission to “create superior products & services, thereby contributing to a better society. Communicating visions which employees understand. 2. Broadening Perspectives By developing a cooperative mindset among region or country organizations to ensure the effective implementation of global strategies. For example Yum Brands has a structure that emphasizes its individual, including KFC, Pizza Hut, Taco Bell and Long John Silver’s, but it also has three operational units: one for the U.S. market, an international division and a separate China division covering mainland China, Thailand and KFC Taiwan because of the size and strategic importance of China. 3. Capable Managers Representatives from different countries, regions & Cultures. Emphasis on the product dimension of the product geography matrix, which means that power has shifted at least to some extent from country managers to worldwide SBUs & product line managers. To emphasize on the global/regional dimension in the country manager’s portfolio, many companies have tied the country manager’s compensation on performance globally or regionally, not just in the manager’s market 4. Internal Cooperation By transmitting ideas & information in real time or by the use of international teams/councils of managers to develop strategies. While final direction comes from headquarters, such direction is informed of local conditions. Implementation of the strategy is enhanced since local managers were involved. For example at P&G all the top officers teach in the company’s executive education programs, and act as mentors and coaches for younger managers. Marketing Strategies available for a MNC firm Maxims of Global. Glocal and Local 4 Dimensions of Glocal strategy adopted by brands ‘Though The products are Global, the Markets are Local’ Many of the most successful global companies have adopted an organizational approach that provides clear global strategic direction along with the flexibility to adapt to local opportunities and requirements. Therefore, Glocalization is the adaptation of a product for a local audience. With Glocalization a global company’s goal isn’t to say “here is a product.” Rather, the company asks, "How can we make a product you'd like?“ The marketing, funding and infrastructure behind a product may come from a global corporation, but the local level dictates what finished form that product will take. Therefore glocalization is a bottom-up system of governance for globalization

3 1. Product McDonald’s aims to create standardized product that taste same anywhere in the world. The big Mac & French fries are international features. McDonald’s has in many countries adapted the product because of religious laws and customs in a country. In Israel many McDonald’s are kosher— they do not offer dairy products and are closed on Saturdays. In India where Hindus don’t eat beef, it has come up with vegetable McNuggets & mutton based Maharaja Mac. In tropical markets guava juice, in Germany beer as well as McCroissant, chilled yoghurt drinks in Turkey, espresso & cold coffee in Italy form part of the menu Mac burgers in countries Japan – Ebi fillet-O, Hawaii- Spam McGriddle, Asia –Cheese Katsu, Indonesia & Phillipines– McSpaghetti, England – Bacon roll, India- McAloo tiki, Turkey- McTurko, New Zealand-Kiwi burger, England & Canada: McLobster, Asia- McRice 4. Place 34000 restaurant in 118 countries. McDonald's continues to focus on managing capital outlays through Strategic expansion. Long term markets like India, China, Italy and Mexico represent a growing population of the restaurant’s new additions. This type of strategy is Globalization with ‘Glocal’ focus as McDonald’s can now share ideas, global practices and human resources, across borders further enhancing its competitive advantage 2. Price For each country McDonald’s adopts a rigorous pricing policy to determine the price for a particular market. The process includes: 1) Selecting the price objective 2) determining demand 3) Estimating costs 4) Determining competitors prices, costs & offers. Its overall pricing strategy is to increase market share. In US the price of a big Mac with fries is equivalent to a Chicago worker’s 14 minutes earnings. Elsewhere it is perceived as a luxury product, for ex: in Nigeria it is equivalent to 11hours of work, In US & Japan where they were losing domestic shares, they had to lower the prices to increase revenues. McDonald’s in its official mission statement states “Being in touch with our competitors allows us to price our products correctly balancing qualities and Values. In Delhi, India, McDonald’s was looking at market penetration in 1996 & set the price looking at Nirula’s, a local food chain to find what Indians would perceive as acceptable price 6. Promotion Corporate trademarks and brands are globally uniform—including the golden arches logo and “I’m lovin’ it” tag line. McDonald’s localises its marketing communication strategy considering the enormous range of cultural and other differences with in each country. Advertisement: In UK footballer Allan Shearer, in France footballer Fabien Barthez, the image they try to convey is same, just use different personalities to get the message across cultures. In East Asia, they advertise heavily on TV ads targeted towards children. In Beijing the mascot, Ronald was paired with a female companion known as Aunt McDonald’s whose job is to entertain children. Public Relations: A feature of localization in Beijing is using Human workers as substituted by technology in US. Each restaurant employs 5-10 female receptionists to take care of children & talk to parents. This is in contrast with UK where people would be more happy to just eat their meal & leave the restaurant 3. People Before entering a country McDonald studies the labour laws, part time & flexible work schedules & then adapts to individual situations, this can be described as Glocal. McDonald’s is strongly committed in staffing locally & promoting from within. It believes the best way to stand out of crowd is to satisfy all customers, all the time. This is emphasized in the recruitment advertising & preliminary screening & is same globally. The Hamburger University in US provides training in 22 languages about standard practices to be used in restaurants worldwide. Additional training centers in Munich, Tokyo, Sydney, London & China which teach managers details of how to give performance reviews, cook food & inspect restaurant facilities to ensure optimum quality standards are met. They in turn, pass the details on to their staff 5. Process There are over 34000 restaurants in 118 countries. The procedure for making food is equal everywhere. This epitomizes Globalization. McDonald’s standard have to be met all over the world. One in two fries must measure 75mm, meat used in Big Mac weighs 45 g & is 20% fat, buns are 9.5-9.8cm in diameter & 6 cm in height. Suppliers have to meet all specifications & demand that McDonald’s sets else it vertically integrates. For example, in Russia, the beef available didn’t meet standards, so it set up its own source of supply. The kitchen layout is same everywhere. The point of purchase is standardized globally. To overcome language problems it uses pictographs that display symbols of Big Mac, French fries or colas, instead of words or numerals. Corporate goals include filling of walk-in orders within 90 seconds & not more than three-and-a-half minutes at drive-through windows 7. Physicals “To focus on consistent delivery of quality, service & cleanliness through excellence in our restaurants”. This is McDonald’s message in every franchise throughout the world. Almost all of McDonald’s non-U.S. outlets are franchised to facilitate adaptation to national environments & access to local knowhow. Customers know whatever McDonald’s they enter, the message of family environment will still be conveyed, it just depends on which part of the world as how the message is conveyed. The décor of restaurant varies across different cultures, like in China, restaurant interiors are covered with posters & slogan emphasizing family values. The traditional US value of ‘Service with a smile” is embodied in the staff at McDonald’s restaurant throughout the world & is now characterized as an expectation of the McDonald’s customer. Global standardization + Local adaptation = McDonald’s glocal strategy explained by 7Ps of Marketing

4 Nokia Nokia in India responded to local customer needs with the introduction of dust- resistant keypad, antislip grip and an inbuilt flash light for Indian rural consumers (specifically targeting truck drivers). Nokia failed to move with important trends, such as the popular dual Sim phones & stuck to its own OS while competitors left their own OS & moved to Android. It launched multi-SIM devices (C1 & C2 series) in India, after it realized its potential. They were introduced late in the market after competitors Micromax, LG and Samsung also introduced similar mobile phones. Nokia lost out on early market share but planned to introduce it in other emerging markets as well Pizza Hut The brand serving Italian delicacies has introduced a biryani called Birizza having a flavourful crust with masala gravy aimed at leveraging the strong presence of rice-eating consumer base in India. As a part of their strategy - ‘Amazing taste, astonishing value’, they want to reach out to a wider consumer base through great taste and variety at very affordable prices.. The first step in that direction was launching Magic Pan last year at a sub 50 price point. With Birizza Pizza hut aims to open doors to a whole new set of consumers KFC KFC didn’t fare well initially, the reason they didn’t offer food that suited the Indian taste bud. However over the years they have modified their menu. This helped and people have slowly accepted KFC now. KFC, a so called dedicated Chicken Restaurant, serves vegetarian food like Veg Zinger, KFC has a vegetarian thali (a mixed meal with rice and cooked vegetables) and Chana Snacker (burger with chickpeas) to cater to vegetarians. This is targeted towards the maturing Indian consumer who doesn’t mind eating vegetarian at a non veg restaurant Whirlpool Corporation Domestic appliance maker, Whirlpool incorporated specially designed agitators into its washing machines when it sold them in India. This helped Indian women wash saris without the five-foot long sari getting tangled. Whirlpool formed a joined venture with a local partner to produce the redesigned washing machine to suit local taste and culture. Whirlpool also makes its refrigerators in bright colours like red and blue as many Asian consumers placed their refrigerator in living rooms as a sign of status P&G (Glocal pricing strategy) P&G observed in China (P&G’s 6 th largest market) that 2/3rd of it’s population earns less than $25 a month. P&G devised ‘tiered pricing’ in order to serve different strata of its market and competing the local players while retaining its global brand value unchanged. Company introduced 320 gm of Tide Clean White for 23 cents as compared to 350 gm of Tide Triple Action costing 33 cents. Though Clean White version didn’t have all the attributes of Triple Action like fragrance, but its basic stain removing formula & low price swept every other brand playing in that segment. P&G, smartly used ‘Glocal’ approach which says think global but act local! Piaggio Piaggio, the iconic Italian two-wheeler re-entered the Indian market in 2012. It adapted its scooter the Vespa to suit the Indian riders and road conditions. E.g. the rear wheel structure was redesigned to facilitate easier tyre changes, the scooter is more efficient than it is in Europe (62km per litre compared to 35 in Europe), increased ground clearance, slimmer design and a lower footboard to give more legroom to Indian women who ride sitting side-saddle in the back seat Glocalization by MNCs in India Hindustan Lever Limited (HLL) Unilever has pioneered with products that address local sensitivities. Its Indian subsidiary HLL has been the leader in recognizing the tremendous opportunity lying at the bottom of the pyramid - customer base that aspires to consume products but in smaller quantities & at lesser prices. HLL literally invented the shampoo sachets - small plastic packets of shampoo for as less as INR 1/. This became such a rage among the rural consumers that many other brands started offering products such as detergent, coffee & tea powder, coconut oil & tooth paste in sachets. Even though the unit price was higher, rural consumers were able to afford to purchase smaller quantities at their convenience Facebook Facebook approached the e-market with a ‘one-size-fits-all’ strategy, but now is facing the realities of cultural difference. In the US- the country of origin – having lots of friends is culturally acceptable and even encouraged. In Japan however, having more than 50 friends indicates that you are superficial. Therefore, Facebook has lost its lead market position in Japan due to the fact that it did not understand and encapsulate culture into its mass strategy. Facebook now plans a defensive strategy and has now set up a team in Japan. This shows that a glocal strategy may be necessary even in the digital environment. It now has ‘global pages’ which allows international brands to maintain a single fan page with localized content for different users Thinking globally, acting locally

5 Understanding this segment Gillette introduced the Gillette Guard priced at just Rs15 per razor - less than 35 cents & three per cent of the top-of the-range Fusion ProGlide’s price. At Rs5 for a refill cartridge, Gillette Guard met customer expectations on safety and ease of use. Small touches like a textured handle for a firm grip to deal with thicker-than-average hair, large safety comb to reduce nicks and cuts, easy-rinse cartridges for better cleaning without running water and a hang hole for convenient storage catered to unique Indian needs An estimated 400 million customers not happy with existing market offerings provided a promising growth opportunity for Gillette. So, it focused on understanding its customers and the challenges they faced, which required spending hours visiting and interviewing consumers in order to understand the role of grooming in their lives and their needs. Gillette realised that apart from affordability, Indian customers also valued safety and ease of use. These customers' needs wouldn't be satisfied by Gillette's existing offering - most lacked running water, had to manage longer facial hair and sit on the floor while shaving. Nor were they satisfied with the existing double-razor solution as they caused frequent cuts Gillette understood Indian consumers' needs, culture and attitude towards shaving were different from those of Western consumers. Rather than lowering performance, Gillette kept the valued customer at the core of its strategy and introduced an innovative value proposition for the value-for-money customers. After failing to gain significant market share in India by selling its lower and mid-tier American razors in different packaging, It went back to the source by making significant investments in market research to better understand the needs and preferences of target consumers Gillette in India innovated by tailoring advertising and inventing a new product development process to reflect local shaving habits. P&G, Gillette’s parent brand also built an India-tailored business model. All manufacturing is done locally to further control production & supply chain costs. Only six months after launch in October 2010, the Guard crossed 50% of razor market share by volume. To distribute the product, P&G had to strengthen its network of millions of Indian kiranas, or local shops. Finally, unlike developed markets where the focus is more on digital marketing, P&G instead invested in traditional ads featuring Bollywood actors. (Glocal Product, Promotion & Distribution) The study enabled the company to understand what a car should have to meet an Indian customer's needs & threw up 41 modifications that the European Duster needed. Several changes in the car included reinforcing the suspension & offering a higher ground clearance, adding more brackets to the car's doors as they tended to be used roughly. Tuning the engine to meet the quality of the fuel in India & deliver high efficiency of at least 20 km per litre. They made the modifications with the help of a local team within 12 months Renault entered India through a joint venture with Mahindra & Mahindra, it placed high hopes on its maiden product offering Logan - a mid-sized sedan launched in 2007. But the car with its dated looks and high pricing failed in the Indian Market. Finally, Renault identified a gap in the SUV segment. They saw that there were SUVs costing Rs 20 lakh & above manufactured by global players & those priced from Rs 6 lakh to Rs 10 lakh produced by Indian companies. The company launched the Duster priced between Rs 8 lakh & Rs 12 lakh in July 2012. 24 months before launching the car they surveyed 200 families across 5 different cities in India for an ethnographic study for two months In India cars remain an aspirational product bought more for their image. This is more so with an SUV.SUVs are big, unwieldy, difficult to manoeuvre in cities, high on maintenance, and less fuel efficient. It is psychology and not economics that drives SUV buying. SUVs do provide functional benefits such as more space, off roading capabilities, more power, and flexibility of use. But many customers never go off road. Renault understood this consumer psychology. The Duster is designed with flared wheel arches, muscular body, roof rails, raised suspension and big tyres - all visual indicators to create the right image. Also, being small, it removes many limitations of a typical large SUV Before launching, Renault’s HQ in Paris discouraged certain modification & termed the proposed budget too low. The Indian team convinced them that this was needed to offer the best SUV to customers. Within months of its launch, Renault had to triple production from 7 /hour to 20 /hour. In October 2013, 1/3 cars produced at the Oragadam plant was a Duster. The Duster accounted for 86 % of Renault India's production, 81 % of its sales and 100 % of its exports. It has been able to grab 23% market share in the compact SUV segment within a year Glocalization by Gillette in India Duster success story in India

6 International Adaptation of American TV Shows 1. Metastasis (Columbia) from Breaking Bad (US) 2. Homeland (US) from Hatufim (Israel) 3. Stromberg (Germany) from US & UK’s The Office 4.Planet Homebuddies (China) from Friends (US) 5. The Theorist (Belarus) from The Big Bang Theory (US) 6. Wisteria Lane (Nigeria) from US Desperate Housewives 7. Everybody loves Kostya (Russia) from Everybody loves Raymond (US ) 8. Teach Sean (Ireland) from Cheers (US) 9. Al Shamsoon (Arab) from The Simpsons (US) 10. Pobeg (Russia) from Prison Break (US) 11. 24 India from 24 (US) 12. The Nanny (Russia) from My Wonderful Nanny (US) Indian Adaptation of foreign TV shows 1.) Comedy nights with Kapil from the British show The Kumars at No. 42 2) Life OK’s Bachelorette India from US dating show Bachelorette America 3) Jhalak Dikhla Jaa from ABC’s Dancing with the stars 4) India’s Got Talent from the Global ‘Got Talent’ format 5) Indian Idol from American Idol 6) Kaun Banega Crorepati from US Who wants to be a Millionaire 5) Big Boss from Big Brother Good Luck Charlie (Disney Channel-US) The Disney Channel sitcom Good Luck Charlie has been remade into Best of Luck Nikki by Disney Channel India. Basically, it's just a Cultural Translation of the original, with not much difference form the original plots Overspel (Adultery) (Holland) was remade as Betrayal (USA). Execs went with "Betrayal" over "Adultery" due to fears that female viewers would get turned-off by the latter while the former sounds more enticing, and plot-wise there's many ways to betray someone besides adultery Marvel Films had great interest in making Iron Man 3 a success in China, Robert Downey Junior signed up for the Chinese equivalent of Twitter called Sina Weibo. In china where many foreign websites are blocked, Robert Downey Junior Used localization to market himself & his film Iron Man 3. Downey Jr., for example, was aided by Fanstang, a company that helps celebrities and businesses to build a social presence in China For the Chinese “High School Musical” project, Disney emphasized that the overall spirit and themes of the American original would be maintained, but new (Chinese) actors were to be used and new scripts were to be written. Similarly, images and cultural references had to be adjusted so that the Chinese “High School Musical” would be properly localized for a Chinese viewership Yo Soy Betty La Fea (Columbia)went all the way to the US (Ugly Betty). Later, it even got to Russia and the rest of the CIS, where fans are convinced that it is a re-make of an original ''American'' show. Ugly Betty is the inspiration for a Bosnian variant, and possibly an Arabic version as well. There was also a quite successful German adaptation. The very-Japanese-style-horror PS2 game Siren was remade as Siren Blood Curse on PS3, along with all the changes that normally get applied to Hollywood remakes of Japanese horror (though the original Siren and its sequel did both get English releases first time round). While Siren Blood Curse is still set in a Japanese village, the all-Japanese cast of the original has been replaced with an American TV crew sent to do a documentary about the legends surrounding the area Sometimes, when there are significant cultural differences between audiences, reversioning a TV show through translation & localization of the dialogue isn’t quite enough because literal translation does not always work when it comes to humor and music. In such cases, another option is the adaptation of the TV show is to remake or redo it entirely with a new cast in the target language. They are tricky, often requiring a delicate balance of cultural localization while preserving the basic framework of the original show. In India, Remake is done internally: Because different parts of India have different official languages, successful movies in one language will often be remade in one or several other languages, for the benefit of a different audience For Married... with Children, the Russian remake is notable because the entire show was remade (except for some of the less good episodes and some that couldn't be remade for various reasons), but the show now continues with completely new episodes, some of which are co-written by writers from the original show's staff Glocalization of Media

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