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Understanding the Global Marketing Environment

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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 Strategy Product Price Promotion Distribution Segmentation Targeting Positioning

3 How is a product “positioned?”
Price Promotions Place Implementation of Marketing Strategy

4 4 Ps - Product Product 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 product Color(s) of product Scent of the product Materials/ composition of the product Design of the product Packaging materials Package colors and package design Brand name Warranty Availability of options Customizing services After-sale service offerings Inventory levels

5 4 Ps - Price Price decision are all decisions which relate to the price of the product, price negotiation, and payment terms. Pricing dimensions include: Price to end user Price to distribution intermediaries Fixed vs. negotiated pricing Negotiation policies Credit policies Credit charges Payment terms (the amount of time allowed for payment and any discount given for payment on time) Volume discounts Introductory allowances Trade-in policies

6 4 Ps - Place Place (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 markets Types of outlets from which end-users buy Level of competition among end-use outlets Number of end-use outlets Required qualifications for end-use outlets Specific identities for end-use outlets Types of intermediaries which service end-use outlets Level of competition among intermediaries Number of intermediaries which service end-use outlets Required qualifications for intermediaries which service end-use outlets Specific identities for for intermediaries which service end-use outlets Push v. pull policy

7 4 Ps - Promotion Promotion 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 any Selection of all ad media (television, radio, magazines, etc.) Selection of ad vehicles (Time, Sports Illustrated, etc.) Ad Scheduling Ad appeals Ad executions Ad allowance (co-op advertising) programs Size of sales force Levels of sales force compensation Method of sales force compensation Sales quotas at which commissions or bonuses activate or change Sales territory definitions Sales force selection and training Size of budget for consumer promotions Types 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/ Globalization Adaptation/ Localization VS.

9 Global Marketing A basic strategy
A global marketing strategy involves the creation of a single strategy for a product, service, or company for the entire global market A basic strategy Flexibility to adapt to local market conditions where necessary

10 Coca-Cola Global Marketing Strategy
Think Global Act Local GLOCAL

11 International Marketing Concepts
Managers’ International Orientation International Marketing Strategy Ethnocentric Domestic Market Extension/ Standardized Polycentric Multidomestic Extension/ Localized Regiocentric Pan Regional Geocentric Globalized Global Market Segmentation

12 Country Selection Which particular country markets should a firm enter? Two Common Errors Ignore countries with good potential Spend 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 information Macrovariables are especially useful for determining which countries get rejected early on!

14 Geographic Indicators
Size of country, in terms of geographic area Climatic conditions Topographical characteristics

15 Demographic Characteristics
Total population Population growth rate Age distribution of the population Degree of population density

16 Economic Characteristics
Total gross national product Per-capita income (also income growth rate) Personal or household disposable income Income distribution

Purchasing Power Parity Compared % of world GNP with PPP % of world GNP GNP Per Capita GNP Per Capita with PPP GNP with PPP Market GNP (billion) World (Total) $25, $30, $4, $5,863 Triad (Total) , , , ,511 North America* ,253 7, , ,877 Japan ,247 2, , ,636 EU ,619 6, , ,502 Other High Income , ,904 Upper Middle Income 2,239 3, , ,604 Lower Middle Income 2,403 7, , ,126 Low Income , ,370 *Not including Mexico

18 Standard of Living Number of people per: Life Expectancy Schooling
(av. years) Doctor TV Phone McDonald’s China ,000,000 Hong Kong ,000 Japan ,000 U.S ,000 Russia ,000,000 Sources: WEFA, AsiaWeek, McDonald’s, The New York Times

19 Average Monthly Expenditures for Chinese Households National and Urban Areas - 1994
National Urban Areas Food (includes eating out) $22.10 $38.00 Savings Clothing Child's Education Home (includes Rent & Utilities) Daily Goods other than Food Medical Expenses & Drugs Entertainment SOURCE: Gallup China.

20 Developing a Marketing Strategy
Situation Analysis Segmentation and Targeting Positioning Marketing Objectives Implementation - Marketing Mix Budget

21 Roper Starch Worldwide Global Study
40,000 consumers in 40 countries Shopping Styles Deal Makers (29%) - love the buying process Price Seekers (27%) - place primary value on the price of the product that they are buying Brand Loyalists (23%) - purchase name brands and remain true to them Luxury Innovators (21%) - seek new, prestigious brands

22 How the World Shops Source: “How the World Shops,” Advertising Age, June 5, 1995, p.3.

23 Type Of Segmentation Grouping Countries
Segments Within and Across Foreign Markets

24 Global Scan Segmentation Study

25 Life Style Exhibit : Typology of European Car Market

26 International Positioning Strategies
Global Positioning and Segmentation Strategies Universal Segment / Uniform Positioning Theme Universal Segment / Different Positioning Themes Different Segment / Different Positioning Themes

27 Global Positioning & Segmentation Strategies

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