Global Marketing Management A European Perspective

1. Global MarketingManagementA European Perspective Introduction to Global Marketing Warren J. Keegan Bodo B. Schlegelmilch

2. Overview • The Marketing Concept • The Three Key Elements of Marketing • Scope and Boundaries of Global Marketing • Importance of Global Marketing • Management Orientation and Global Marketing • Factors Supporting or Inhibiting Global Integration • Summary

3. Understanding how the world economy developed over the past decades Knowing the impact of globalization on the marketing discipline Learning about the interdependencies between management orientation and marketing performance Understanding the factors supporting or inhibiting international marketing activities Learning Objectives

4. Marketing (1): the process of focusing resources and objectives of an organization on environmental opportunities and needs Marketing (2): a set of concepts, tools, theories, practices, procedures, and experiences Although a universal discipline, marketing practice varies from country to country Marketing: A Universal Discipline

5. Concept has chanced dramatically 1950’s: Focus on products 1960’s: Focus on customer orientation Development of marketing mix: product, price, promotion, place (4P’s) The Marketing Concept (1)

6. 1990’s: Focus on customer in the context of the broader external environment E.g. competition, government policy and regulation Focus on stakeholder value E.g. employees, customers, shareholders, society The Marketing Concept (2)

7. Today: Two key tasks of marketing Focus on customer and his/her environment Create value for consumers and stakeholder 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 The Marketing Concept (3)

8. The Three Key Elements of Marketing VALUE DIFFERENTIATION FOCUS

9. Goal: create value that is greater than the value created by competitors Strategy: Expand or improve product and/ or service benefits Reduce the price Combine these two elements The Three Key Elements of Marketing - Value

10. V = Value B = Perceived Benefits – Perceived Costs P = Price The Three Key Elements of Marketing - Value V = B / P

11. Goal: create competitive advantage through differentiation Advantage can exist in any element of a company’s offer: e.g. product, price, advertising Competitive advantage should be sustainable over extended period of time BMW: Combination of superior production skills and marketing competencies The Three Key Elements of Marketing - Differentiation

12. Goal: a concentration of attention and resources Requirement to create customer value at a competitive advantage A viable way for small and medium sized companies to achieve dominant position in world market FREQUENTIS: 90% export share with air traffic control systems The Three Key Elements of Marketing - Focus

13. Marketing discipline is universal but markets and customers are quite different Three domains of knowledge relevant to international managers Cross-Cultural Knowledge Country/ Regional Knowledge Cross-Border Transactions Knowledge Need for “Global Localization”: Adjustment of global marketing strategies to local requirements Scope and Boundaries of Global Marketing

14. Activities in the international arena are of eminent importance to companies in achieving maximum growth potential E.g.: 94% of world market potential for German companies is outside of Germany Trend: A large number of industries will be dominated by a handful of global companies Importance of Global Marketing

15. Different Management Orientations in the Global Arena – EPRG Framework Management Orientation and Global Marketing (1) Polycentric Ethnocentric Regiocentric Geocentric

16. Ethnocentric Orientation: Characteristic for domestic and international companies Marketing opportunities outside the home market are pursued by extending various elements of the marketing mix Polycentric Orientation Characteristic for multinational companies Marketing mix is adapted by autonomous country managers Management Orientation and Global Marketing (2)

17. Regiocentric or Geocentric Orientation: Characteristic for global and transnational companies Marketing opportunities are pursued by both, extension and adaptation strategies in global markets Management Orientation and Global Marketing (3)

18. Driving Forces Technology Regional Economic Agreements Market Needs and Wants Transportation and Communication Improvements Product Development Costs Quality World Economic Trends Leverage Factors Supporting or Inhibiting Global Integration (1)

19. Restraining Forces Management Myopia Ethnocentric Organization Culture National Controls Factors Supporting or Inhibiting Global Integration (2)

20. Summary • Global marketing is the process of focusing resources on global marketing opportunities • Goal, to create customer value and competitive advantage by maintaining focus • Three classifications of management orientation: ethnocentric, polycentric, regiocentric, geocentric • Global marketing importance is shaped by a variety of driving and restraining forces