GLOBAL
MARKETING
Chapter 1 Introduction to Global Marketing
Overview
- Marketing:
A Universal Discipline
·
The Three Principles of Marketing
- Global
Marketing:What It Is & What It Is Not
- Importance
of Global Marketing
- Management
Orientation & Global Marketing
- Driving
and Restraining Forces Affecting Global Integration & Global Marketing
- Summary
Learning Objectives
- Understand how the
world economy developed over the past decades
- Know the impact of
globalization on the marketing discipline
- Learn about the
interdependencies between management orientation & marketing
performance
- Understand the factors
supporting or inhibiting international marketing activities
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
The Marketing Concept (1)
- Concept
has chanced dramatically
- 1950’s:
Focus on products
- 1960’s:
y
Focus on customer orientation
y
Development of marketing mix:
product, price, place, promotion (4P’s)
y
Focus on customer in the context
of the broader external environment
z
Competition, govearnment policy
& regulation
y
Focus on stakeholder value
z
employees, customers,
shareholders, society
y
Two key tasks of marketing
z
Focus on customer & his/her
environment
z
Create value for consumers &
stakeholder
y
Shift towards
z
Focus on managing strategic
partnerships
z
Positioning of firm in value
chain to optimize value creation
y
Profit as a measure of success,
not an end in itself
The Three Principles of Marketing
Key Elements of Marketing –
1.
Customer Value
·
Goal: create
customer value that is greater than the value created by competitors
·
Strategy:
y
Expand or
improve product and/ or service benefits
y
Reduce the price
y
Combine these
two elements
V = Value
B = Perceived Benefits – Perceived Costs
P = Price
2.
Differentiation
·
Goal: create
competitive advantage through differentiation
·
Advantage can
exist in any element of a company’s offer
·
One way to
penetrate a new national market is to offer a superior product at a lower
price.
3.
Focus
·
Goal: a
concentration of attention & resources
·
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
Global Marketing
- Marketing
discipline is universal but markets & customers are quite different
- 3
domains of knowledge
y
Cross-Cultural Knowledge
y
Country/ Regional Knowledge
y
Cross-Border Transactions
Knowledge
- Need
for “Global Localization”: Adjustment of global marketing strategies to
local requirements
Examples of Global Marketing
Product
Design
|
Canon/photocopier/McDonalds/Toyota/Ford
|
Brand
Name
|
Marlboro/Coke/Pepsi/Mercedes/Caterpillar
|
Product
Positioning
|
Colgate
toothpaste/Unilever fabric softener
|
Packaging
|
Gillette
razors
|
Advertising
Strategy
|
Coca-cola/British
Airways/Benetton
|
Sales
Promotion
|
IBM
|
Distribution
|
Benetton/United
Distillers
|
Customer
Service
|
American
Express/Hertz
|
Importance of Global Marketing
- International
arena is of great importance to companies maximizing growth potential
- 75%
of market potential is outside the US
- 94%
of market potential for German companies is outside of Germany
- A
large number of industries will be dominated by a handful of global
companies
Management Orientation and Global Marketing (1)
·
Different Management Orientations
in the Global Arena – EPRG Framework
Management Orientation & Global Marketing (2)
·
Ethnocentric Orientation:
ü Characteristic
of domestic & international companies
ü Opportunities
outside the home market are pursued by extending various elements of the
marketing mix
ü Characteristic
of multinational companies
ü Marketing
mix is adapted by autonomous country managers
- Regiocentric
or Geocentric Orientation:
ü Characteristic
of global & transnational companies
ü Marketing
opportunities are pursued by both extension & adaptation strategies in
global markets
Driving Forces Affecting Global
Marketing
ü Technology
ü Regional
Economic Agreements
ü Market
Needs & Wants
ü Transportation
& Communication Improvements
ü Product
Development Costs
ü Quality
ü World
Economic Trends
ü Leverage
ü The
Global/ Transnational Corporation
Restraining Forces Affecting Global
Marketing
ü Management
Myopia & Organizational Culture
ü National
Controls & Barriers
Summary
- Global
marketing is the process of focusing resources on global marketing
opportunities
- Goal,
to create customer value & competitive advantage by maintaining focus
- Three
classifications of management orientation: ethnocentric, polycentric,
regiocentric, geocentric
·
Global marketing importance is
shaped by a variety of driving & restraining forces