Presentation on theme: "Understanding the Global Marketing Environment"— Presentation transcript:
1 Understanding the Global Marketing Environment Class 5
2 The Marketing Task (Controllable) Implementation Product Marketing StrategyProductPricePromotionDistributionSegmentationTargetingPositioning
3 How is a product “positioned?” PricePromotionsPlaceImplementation of Marketing Strategy
4 4 Ps - ProductProduct decisions are all decision which relate to the physical product and/or service offering, including its name, packaging, warranty, and availability. Product dimensions include:Size of the productColor(s) of productScent of the productMaterials/ composition of the productDesign of the productPackaging materialsPackage colors and package designBrand nameWarrantyAvailability of optionsCustomizing servicesAfter-sale service offeringsInventory levels
5 4 Ps - PricePrice decision are all decisions which relate to the price of the product, price negotiation, and payment terms. Pricing dimensions include:Price to end userPrice to distribution intermediariesFixed vs. negotiated pricingNegotiation policiesCredit policiesCredit chargesPayment terms (the amount of time allowed for payment and any discount given for payment on time)Volume discountsIntroductory allowancesTrade-in policies
6 4 Ps - PlacePlace (distribution) decisions are all decisions which relate to the places at which the product or service is made available to buyers and the methods by which the product or service reaches those places. Place dimensions include:Selection of geographic marketsTypes of outlets from which end-users buyLevel of competition among end-use outletsNumber of end-use outletsRequired qualifications for end-use outletsSpecific identities for end-use outletsTypes of intermediaries which service end-use outletsLevel of competition among intermediariesNumber of intermediaries which service end-use outletsRequired qualifications for intermediaries which service end-use outletsSpecific identities for for intermediaries which service end-use outletsPush v. pull policy
7 4 Ps - PromotionPromotion decisions are all decisions which relate to communication with buyers about the product or service, solicitation of purchases, and short-term purchase incentives. Promotion dimensions include:Size of advertising budget, if anySelection of all ad media (television, radio, magazines, etc.)Selection of ad vehicles (Time, Sports Illustrated, etc.)Ad SchedulingAd appealsAd executionsAd allowance (co-op advertising) programsSize of sales forceLevels of sales force compensationMethod of sales force compensationSales quotas at which commissions or bonuses activate or changeSales territory definitionsSales force selection and trainingSize of budget for consumer promotionsTypes of consumer promotions to be used.Size of budget for “trade promotions”Types of trade promotions used.
8 Creating Marketing Strategies for International Markets Standardization/GlobalizationAdaptation/LocalizationVS.
9 Global Marketing A basic strategy A global marketing strategy involves thecreation of a single strategy for aproduct, service, or company for theentire global marketA basic strategyFlexibility to adapt to local market conditions where necessary
10 Coca-Cola Global Marketing Strategy Think GlobalAct LocalGLOCAL
11 International Marketing Concepts Managers’ International OrientationInternational Marketing StrategyEthnocentric Domestic Market Extension/ StandardizedPolycentric Multidomestic Extension/ LocalizedRegiocentric Pan RegionalGeocentric GlobalizedGlobal Market Segmentation
12 Country SelectionWhich particular country markets should a firm enter?Two Common ErrorsIgnore countries with good potentialSpend too much time and effort investigating countries with poor potential
13 The Search Begins… Macrovariables Describe total market in terms of economic, social, geographic, political informationMacrovariables are especially useful for determining which countries get rejected early on!
14 Geographic Indicators Size of country, in terms of geographic areaClimatic conditionsTopographical characteristics
15 Demographic Characteristics Total populationPopulation growth rateAge distribution of the populationDegree of population density
16 Economic Characteristics Total gross national productPer-capita income (also income growth rate)Personal or household disposable incomeIncome distribution
17 GLOBAL INCOME AND POPULATION: 1995 Purchasing Power Parity Compared% ofworldGNPwith PPP% ofworldGNPGNPPerCapitaGNPPer Capitawith PPPGNPwith PPPMarketGNP(billion)World (Total) $25, $30, $4, $5,863Triad (Total) , , , ,511North America* ,253 7, , ,877Japan ,247 2, , ,636EU ,619 6, , ,502Other High Income , ,904Upper Middle Income 2,239 3, , ,604Lower Middle Income 2,403 7, , ,126Low Income , ,370*Not including Mexico
18 Standard of Living Number of people per: Life Expectancy Schooling (av. years)DoctorTVPhoneMcDonald’sChina ,000,000Hong Kong ,000Japan ,000U.S ,000Russia ,000,000Sources: WEFA, AsiaWeek, McDonald’s, The New York Times
19 Average Monthly Expenditures for Chinese Households National and Urban Areas - 1994 National Urban AreasFood (includes eating out) $22.10 $38.00SavingsClothingChild's EducationHome (includes Rent & Utilities)Daily Goods other than FoodMedical Expenses & DrugsEntertainmentSOURCE: Gallup China.
20 Developing a Marketing Strategy Situation AnalysisSegmentation and TargetingPositioningMarketing ObjectivesImplementation - Marketing MixBudget
21 Roper Starch Worldwide Global Study 40,000 consumers in 40 countriesShopping StylesDeal Makers (29%) - love the buying processPrice Seekers (27%) - place primary value on the price of the product that they are buyingBrand Loyalists (23%) - purchase name brands and remain true to themLuxury Innovators (21%) - seek new, prestigious brands
22 How the World ShopsSource: “How the World Shops,” Advertising Age, June 5, 1995, p.3.
23 Type Of Segmentation Grouping Countries Segments Within and Across Foreign Markets
25 Life StyleExhibit : Typology of European Car Market
26 International Positioning Strategies Global Positioning and Segmentation StrategiesUniversal Segment / Uniform Positioning ThemeUniversal Segment / Different Positioning ThemesDifferent Segment / Different Positioning Themes