1. Introduction to Global Marketing

2. 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

3. The Marketing Concept Concept has chanced dramatically 1950’s: 1960’s:
Focus on products
1960’s:
Focus on customer orientation
Development of marketing mix: product, price, place, promotion (4Ps)

4. The Marketing Concept 1990’s:
Focus on customer in the context of the broader external environment
Competition, government policy & regulation
Focus on stakeholder value
employees, customers, shareholders, society

5. The Marketing Concept Today...a new Era??? Two key tasks of marketing
Focus on customer & his/her environment
Create value for consumers & stakeholders
Shift towards :
Focus on managing strategic partnerships
Positioning of firm in value chain to optimize value creation
Profit as a measure of success, not an end in itself

6. What is Global Marketing?
How is it different from regular marketing?

7. Introduction Global Marketing Marketing
Focuses resources on global market opportunities and threats
The main difference is the scope of activities ğ global marketing occurs in markets outside the organization’s home country
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

8. Reasons for Global Marketing
Survival
Against competitors with lower costs
(due to increased access to resources)
Growth
Access to new markets
Access to resources

9. Global vs. “Regular” Marketing
scope of activities are outside the home-country market

10. Key Elements: Customer Value
Create value for customers by improving benefits or reducing price
Improve the product
Find new distribution channels
Create better communications
Cut monetary and non-monetary costs and prices
Value = Benefits/Price

11. Key Elements: Competitive Advantage
Goal: create competitive advantage through differentiation
Advantage can exist in any element of a company’s offer
It can be a real, tangible difference or a perceived difference
One way to penetrate a new national market is to offer a superior product at a lower price

12. Competitive Advantage
Success over competition in industry at value creation
Competitive advantage is created through differentiation
Achieved by integrating and leveraging operations on a worldwide scale
Competitive advantage is measured relative to rivals in a given industry
National or global competition
Transformation of formerly local or national industries into global ones ğ is part of a broader process of “globalization”

13. Globalization
“Globalization is the inexorable integration of markets, nation-states, and technologies to a degree never witnessed before
- in a way that is enabling individuals, corporations, and nation-states to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach into individuals, corporations, and nation-states farther, faster, deeper, and cheaper than ever before.”
Thomas Friedman

14. Global Industries
A global industry ğ is one in which competitive advantage can be achieved by integrating and leveraging operations on a worldwide scale (M.Porter)
An industry is global to the extent that 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

15. Degree of Industry Globalization
Source: Farrell (2004), “Assesing Your Company’s Global Potential”, HBR, 82, 12.

16. Key Elements: Focus
Goal: a concentration of attention on core business and competence
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

17. Competitive Advantage, Globalization and Global Industries
Nestlé 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.
Helmut Maucher , former chairman of Nestlé SA

18. Global Marketing: What It Is and What It Isn’t
The discipline of marketing ğ universal
Marketing practices ğ vary from country to country
An important task in global marketing:
learning to recognize the extent to which marketing plans and programs can be extended worldwide,
the extent to which they must be adapted (global localization)

19. Global Marketing: What It Is and What It Isn’t
The way a company deals with this task ğ reflection of its global marketing strategy (GMS)
Strategy development comes down to 2 main issues similar to single country marketing
Choosing a target market
Developing a marketing mix

20. Global Marketing: What It Is and What It Isn’t

21. Global Marketing: What It Is and What It Isn’t
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

22. Standardization versus Adaptation
Globalization (Standardization)
Developing standardized products marketed worldwide with a standardized marketing mix
Essence of mass marketing
Global localization (Adaptation)
Mixing standardization and customization in a way that minimizes costs while maximizing satisfaction
Essence of segmentation
“Think globally, act locally”

23. Standardization vs. Adaptation The Faces of Coca-Cola around the World
Arabic read right to left
Chinese: “delicious/ happiness”

25. The Importance of Going Global
For U.S. companies, 70% of world market potential for goods and services is outside the country
Coca-Cola earns 75% of operating income and two-thirds of profit outside of North America
For Japanese companies, 90% of market potential is outside the country
94% of market potential is outside of Germany for its companies

26. Global Auto Industry
Thousands of auto companies scattered around the globe in the early 20th century
More than 500 of those producers were in the United States
Today fewer than 20 major companies remain worldwide
Toyota is the world’s most valuable car company and is eighth largest in revenue globally

30. Management Orientations
How the company will respond to global marketing opportunities ğ will depend on management’s assumptions & beliefs about the nature of the world
The world view of a company ğ by EPRG Framework
Generally, 4 distinctive approaches dominating strategic thinking in international marketing

31. Management Orientations -EPRG Framework-
Ethnocentric:
Home country is
superior, sees
similarities in foreign
countries
Polycentric:
Each host country is
unique, sees differences
in foreign countries
Regiocentric:
Sees similarities and
differences in a world
region; is ethnocentric or
polycentric in its view of
the rest of the world
Geocentric:
World view, sees
similarities and
differences in home
and host countries
Geocentric:
World view, sees
similarities and
differences in home
and host countries

32. Management Orientations
Ethnocentric:
Home country is
superior, sees
similarities in foreign
countries
Ethnocentric Orientation
Characteristic of domestic & international companies
Opportunities outside the home market are pursued by extending various elements of the marketing mix

33. Strategic Orientation
1. Ethnocentric or Domestic Marketing Extension Concept:
Home country marketing practices will succeed elsewhere
without adaptation; however, international marketing is
viewed as secondary to domestic operations

34. Management Orientations
Polycentric Orientation
Characteristic of multinational companies
Marketing mix is adapted by autonomous country managers
Polycentric:
Each host country is
unique,
sees differences
in foreign
countries

35. Strategic Orientation
2. Polycentric or Multi-Domestic Marketing Concept:
Opposite of ethnocentrism
Management of these multinational firms place importance
on international operations as a source for profits
Management believes that each country is unique and
allows each to develop own marketing strategies locally

36. Management Orientations
Regiocentric:
Sees similarities and
differences in a world
region; is ethnocentric or
polycentric in its view of
the rest of the world
Regiocentric or Geocentric Orientation
Marketing opportunities are pursued by both extension & adaptation strategies in global markets
Characteristic of global & transnational companies
Geocentric:
World view, sees
similarities and
differences in home
and host countries

37. Strategic Orientation
3. Regiocentric:
Sees the world as one market and develops a standardized
marketing strategy for the entire world
4. Geocentric:
Regiocentric and Geocentric are synonymous with a “Global
Marketing Orientation” where a uniform, standardized
marketing strategy is used for several countries, countries in
a region, or the entire world

38. Management Orientations
In geocentric orientation:
Entire world is a potential market
Strives for integrated global strategies
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

39. Forces Affecting Global Integration and Global Marketing
Restraining Forces
Driving Forces

40. Forces Affecting Global Integration and Global Marketing
Quality: Global and domestic companies may each spend 5 percent of sales on R&D but the global company has much more revenue from its markets. Global companies “raise the bar” for all industry competitors. Nissan, Matsushita, and Caterpillar have achieved world-class quality.
World economic trends: Economic growth in key developing countries equals major market opportunities. Slowing growth in developed countries has compelled managers to look abroad. Rapid economic growth, in a country such as China, has caused policymakers to open markets to outsiders. Competition can strengthen domestic companies. Domestic companies seek more governmental protection if markets are not growing. Worldwide movement to free markets, deregulation, and privatization is another driving force. As independent private managers take over running businesses (steel, railroads, telephones, airlines, utilities, restaurants, nightclubs) from governments, they are likely to seek the best deals, regardless of the nationality of the supplier.
Leverage: A company enjoys some type of advantage by virtue of the fact that it has experience in more than one country. Experience transfers mean that a company can leverage its experience in any part of the world. It can use management practices, strategies, products, advertising appeals, or sales or promotional ideas that have been test-marketed in one country or region and apply them in comparable markets. Because Chevron has drilled for oil under all conditions and recorded them, managers with a problem know how it has been handled in the past. Scale economies can be gained in manufacturing and by centralizing functional activities. Resource utilization means that a global companies can scan the entire world to identify people, money and raw material that will enable it to compete most effectively in world markets. Rising and falling “home country” currency is not an issue as the world is full of currencies and a global company seeks financial resources on the best available terms. It uses them where there is the best opportunity to serve a need at a profit. Global strategy is a design to create a winning offering on a global scale. A global strategy is built on an information system that scans the world business environment to identify opportunities, trends, threats, and resources. When opportunities are identified, the global company leverages its skills and focuses it resources to create superior value for customers and achieve competitive advantage.
Driving Forces
Regional economic agreements
Market needs and wants
Technology
Transportation and communication improvements
Product development costs
Quality
World economic trends
Leverage
Restraining Forces
Management myopia
Organizational culture
National controls

41. Forces Affecting Global Integration and Global Marketing
Driving Forces
Regional economic agreements
Market needs and wants
Technology
Transportation and communication improvements
Product development costs
Quality
World economic trends
Leverage
Restraining Forces
Management myopia
Organizational culture
National controls
Opposition to globalization

42. Driving Forces Affecting Global Integration and Global Marketing
Multilateral trade
agreements
Converging market needs
and wants and the information revolution
Transportation and communication improvements
Product development costs

43. Driving Forces Affecting Global Integration and Global Marketing
Quality
R&D as a percent of sales
World economic trends
Global crisis
Growing middle class in China, India, Brazil, etc.
Rapid growth in China
Movement to free markets worldwide

44. Driving Forces Affecting Global Integration and Global Marketing
Leverage
Experience transfers
Scale economies
Resource utilization
Global strategy