0. Global Marketing Management Planning and Organization

1. Global Marketing Management
Coca Cola and Pepsi Compete World Round – Which Sign Can You Read?

2. Global Marketing Management
Disney Successfully Exports its Princesses While Barbie Fails.

3. The Nestle Way: Evolution Not Revolution
Nestle is the world’s biggest marketer of infant formula, powdered milk, instant coffee, chocolate, soups, and mineral water.
Nestle strategy can be summarized in four points:
Think and plan long term
Decentralize
Stick to what you know
Adapt to local tastes
Long-term strategy works for Nestle because the company relies on local ingredients and markets products that consumers can afford.

4. The International Marketing Task
Insert Exhibit 1.3

5. The Self-Reference Criterion and Ethnocentrism
The key to successful international marketing is adaptation to the environmental differences from one market to another.
Primary obstacles to success in international marketing:
SRC
Associated ethnocentrism
SRC is an unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions.
Ethnocentrism is the notion that one’s own culture or company knows best how to do things.

6. The Self-Reference Criterion and Ethnocentrism (continued)
Dangers of the SRC:
Failing to recognize the need to take action
Discounting the cultural differences that exist among countries
Reacting to a situation in a way offensive to your hosts
Ethnocentrism and the SRC can influence an evaluation of the appropriateness of a domestically designed marketing mix for a foreign market.
The most effective way to control the influence of ethnocentrism and the SRC is to recognize their effects on our behavior.

7. Benefits of Global Marketing
When large market segments can be identified, economies of scale in production and marketing can be important competitive advantages for global companies.
Transfer of experience and know-how across countries through improved coordination and integration of marketing activities.
Marketing globally also ensures that marketers have access to the toughest customers.
Diversity of markets served carries with it additional financial benefits.
Firms that market globally are able to take advantage of changing financial circumstances.

8. Alternative Market-Entry Strategies
An entry strategy into the international market should reflect on analysis of market characteristics such as:
Potential sales
Strategic importance
Strengths of local resources
Cultural differences
Country restrictions
Companies most often begin with modest export involvement.
A company has four different modes of foreign market entry from which to select:
Exporting
Contractual agreements
Strategic alliances
Direct foreign investments

9. Alternative Market-Entry Strategies
Insert Exhibit 11.2

10. Exporting Exporting accounts for some 10% of global activity.
Direct exporting - the company sells to a customer in another country.
Indirect exporting – the company sells to a buyer (importer or distribution) in the home country, who in turn exports the product.
The Internet
Initially, Internet marketing focused on domestic sales, however, a surprisingly large number of companies started receiving orders from customers in other countries, resulting in the concept of international Internet marketing (IIM).
Direct sales
Particularly for high technology and big ticket industrial products.

11. Contractual Agreement
Contractual agreements are long-term, nonequity association between a company and another in a foreign market.
Licensing
A means of establishing a foothold in foreign markets without large capital outlays.
A favorite strategy for small and medium-sized companies.
Legitimate means of capitalizing on intellectual property in a foreign market.

12. Contractual Agreement (continued)
Franchising
Franchiser provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management.
Two types of franchise agreements:
Master franchise – gives the franchisee the rights to a specific area with the authority to sell or establish subfranchises.
Licensing

13. Strategic International Alliances
A strategic international alliance (SIA) is a business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective
Firms enter SIAs for several reasons:
Opportunities for rapid expansion into new markets
Access to new technology
More efficient production and innovation
Reduced marketing costs
Strategic competitive moves
Access to additional sources of products and capital
Many companies also are entering SIAs to be in strategic position to be competitive and to benefit from the expected growth in the single European market.

14. Strategic International Alliances (continued)
International Joint Ventures
A joint venture is a partnership of two or more participating companies that have joined forces to create a separate legal entity.
Four Characteristics define joint ventures:
JVs are established, separate, legal entities
They acknowledged intent by the partners to share in the management of the JV
They are partnerships between legally incorporated entities such as companies, chartered organizations, or governments, and not between individuals
Equity positions are held by each of the partners

15. Strategic International Alliances (continued)
Consortia
Consortia are similar to joint ventures and could be classified as such except for two unique characteristics:
They typically involve a large number of participants
They frequently operate in a country or market in which none of the participants is currently active.
Consortia are developed to pool financial and managerial resources and to lessen risks.

16. Direct Foreign Investment
Factors that have been found to influence the structure and performance of direct investments:
Timing
The growing complexity and contingencies of contracts
Transaction cost structures
Technology transfer
Degree of product differentiation
The previous experiences and cultural diversity of acquired firms
Advertising and reputation barriers

17. The International Communications Process
Insert Exhibit 16.4

18. Legal Constraints
Laws that control comparative advertising vary from country to country in Europe.
Advertising of specific products
Control of advertising on television
Accessibility to broadcast media
Limitations on length and number of commercials
Internet services
Special taxes that apply to advertising

19. Linguistic Limitations
Language is one of the major barriers to effective communication through advertising
Translation challenges
Low literacy in many countries
Multiple languages within a country

20. Cultural Diversity
Knowledge of cultural diversity must encompass the total advertising project
Existing perceptions based on tradition and heritages are often hard to overcome
Subcultures
Changing traditions

21. Media Limitations and Production and Cost Limitations
Media limitations may diminish the role of advertising in the promotional program
Examples of production limitations:
Poor-quality printing
Lack of high-grade paper
Low-cost reproduction in small markets poses a problem in many countries

22. Media Planning and Analysis – Tactical Considerations
Local Restrictions or Lack of Availability Spawn Other Media Vehicles

23. Microsoft
Corporate Branding/Image Campaign
United States
Mexico
Japan

24. Microsoft
Korea
United States
Product Specific Advertising
France