The Global Marketing Communications (1)

1. The Global Marketing Communications (1) Compiled by: Sunarto Prayitno

2. Introduction • International marketing is the extension of the home country marketing strategy and plan to the world. • Multinational marketing is the development of a strategy for each country that responds to the unique differences and conditions in each country.

3. Introduction • Global marketing is the integration of the internationaland multinationalapproach where the objective is to create the greatest value for customers and the greatest competitive advantage for the company.

4. 1. The 21st-Century Marketplace

5. The Future of MarketingCor Molenaar, 2002 • People may not change, but technology does. After all, technology empowers organizations to change and technology changes the relation between people and organizations. People no longer have to go work; work can also go to people. We no longer have to go shopping; the shopping can be done from home. Suddenly the home and the community are important again.

6. The Future of MarketingCor Molenaar, 2002 • We can organize our business and private matters from our own home. We can reassess our private lives, redefine the division of roles with regard to our work and our private lives, our partners and our children. There is now longer a strict division between home and work, between studying and work and between business and private life.

7. The Future of MarketingCor Molenaar, 2002 • Customers now want you to remember who they are, understand their needs and provide them with a specific product to meet these needs. The internet has changed the way customers think forever. • ‘This studies’ will help you to build your marketing strategy to attract, retain and grow profitable customers into the future.

8. Global Building BlocksCommunicating Globally, Don E. Schultz et al., 2000 The four major interrelated elements or building blocks are driving changes in the market place and thus marketing and marketing communications: • Digitalization • Information Technology • Intellectual Property • Communication Systems

9. Digitalization • The ability to convert almost all types of knowledge, information, and materials into 1s and 0s manipulate those digits through computers and electronic systems has literally changed the world.

10. Information Technology • By information technology we mean all those devices, techniques, and capabilities that allow human knowledge, data, or experience to be transferred quickly and easily between organizations or individuals around the world.

11. Intellectual Property • Historically, nations, business organizations, and individuals have been valued on the basis of their tangible assets – raw materials, land, factories and buildings, and even cash and precious metals. • Today the new wealth is knowledge, experience, understanding, and capabilities.

12. Communication Systems • Historically, communication systems have been linear, developed, organized, and delivered from a single source, whether that was a newspaper, a radio or television station, or a magazine, to masses of listeners or readers or viewers. • Communication systems, however, have changed dramatically in the last few years. In addition, many form of media have become interactive; that is audience can be both receivers and senders of messages and information.

13. The Manufacturer-Driven Marketplace Producer or Manufacturer Marketplace Consumer Consumer Consumer

14. The Manufacturer-Driven Marketplace • Most marketing history and certainly most of today’s marketing activities assume a marketplace in which the manufacturer or producer of products and services has most of the marketplace power.

15. Communications Flow in the Manufacturer-Driven Marketplace Producer or Manufacturer Media Marketplace Media Consumer Consumer Consumer

16. Communications Flow in the Manufacturer-Driven Marketplace • As shown, in the manufacturer-driven marketplace, the seller or producer or marketer has almost total control over the communication systems. • The buyer or consumer comes to the marketplace seeking goods, but the search is totally up to him or her. • The marketer or seller controls that information as it sees fit. • Thus almost all communication is outbound, and it is almost all linier in structure; that is, it flows out from seller to buyer with little or no return loop.

17. The Distribution-Driven Marketplace Manufacturer Manufacturer Manufacturer Distribution Channel Consumer Consumer Consumer

18. The Distribution-Driven Marketplace • Over the last thirty or so years, the traditional manufacturer-driven marketplace has involved into what we now call the distribution-driven marketplace. • This has come primarily as the result of retailers, distributors, whole sellers, or other forms of channel organizations gaining control of the four marketplace building blocks. • As shown, the distribution-driven marketplace is now in the center of the system. From that central location, channel control marketplace power.

19. Communication Flow in the Distribution-Driven Marketplace Manufacturer Manufacturer Manufacturer Distribution Channel Consumer Consumer Consumer

20. Communication Flow in the Distribution-Driven Marketplace • Distribution is now in the center of the marketing communication system. • Manufacturers or producers, while they still try to speak to or communicate with consumers and end users, generally trough forms of mass media, increasingly have focused their communication efforts through their distribution channels. • Thus they have become dependent on the channels to provide information about usage and purchases of their products or services by ultimate consumers or end users.

21. Communication Flow in the Distribution-Driven Marketplace • At the other end of the communication system, consumers or end users have come to rely on the channels or distribution systems to provide the products and services they wants or needs. • Being in the middle of this communication exchange system, the retailer or distributor is now the dominant element in this distribution-driven marketplace. • The communication systems that have developed in this marketplace are also generally one way and outbound. For the most part these communication system are still fairly traditional, relying on establish media system such as newspapers, radio, television, and magazines.

22. The Interactive Marketplace Manufacturer Manufacturer Manufacturer Distribution Channel Distributor Distributor Consumer Consumer Consumer

23. The Interactive Marketplace • The basic structure of this marketplace began to develop in the early 1990s, with the growth and expansion of various forms of electronic communication, such as the internet, the commercialization of the World Wide Web, and the develop of e-commerce. • As will be shown, this new marketplace will be radically different from those that have gone before. • Most important, it will, for the first time, put marketplace power in the hand of consumers rather than with traditional producers or channels.

24. Communication Flow in an Interactive Marketplace Manufacturer Manufacturer Manufacturer Media Media Media Distribution Channel Distributor Distributor Consumer Consumer Consumer

25. Communication Flow in an Interactive Marketplace • Marketing communication changes dramatically in the interactive marketplace as well. • Traditional flows of information through marketing communication now become two way rather than linear. That in itself is a major change for most marketing organizations. • As shown, the major change for the marketing organizations is that it must develop skills in responding to marketing communication inquiries from customers and prospects, not just in developing messages and information that it wants to deliver or send out to the marketplace.

26. Information Information Information Channel Channel Channel Media Media Media Media Media Marketer Historical Marketplace Twenty-First-Century Marketplace Current Marketplace Mktr Mktr Mktr Mktr Mktr Mktr Channel Customer Customer Customer Marketing Diagonal Marketing Diagonal Source: Don E. Schultz & Beth E. Barnes, Strategic Brand Communication Campaigns, NTC Business Book, 1999.

27. 2. Understanding the Global Marketplace

28. The Global Evolution of a Company Global Evolution Global Multidomestic Domestic Time The Old Model

29. The Global Evolution of a Company • As shown, the x-axis is time and the y-axis is global evolution. Based on the model, once organization grows from the domestic base to a multi-domestic organization in multiple geographies, the next step is for the organization to become a global company. • The problem is, of course, that global companies are radically different from the domestic or multi-domestic organizations that call themselves international organizations.

30. The Contextual Determinants of Global Marketing Market Development Political Stability Cultural Context Government Policy Cross-Cultural Differences Determinants of Internal Marketing Ideology-Driven Economy PLC Management Operational Context Entry Context Functional Adjustments Fear of Colonialism Infrastructure Adjustments

31. The Cultural Context • This context includes such factors as cross-cultural differences between the organization and the market in which it is operating, the level of market development, and the political stability of the region.

32. The Entry Context • This is how the organization has entered or has been allowed to enter the new market. • For example, government policy has much to do with how the organization can be structured and how it might operate in the new market. • Another important consideration is the ideology that drives the economy. That ideology can be political, religious, or perhaps simply the beliefs. • Fear of imperialism often drives countries or economies to set up specific laws and regulations that restrict the ability of the organization to grow, develop, and derive profits.

33. The Operational Context • This context includes items such as infrastructure adjustment that might be necessary for the organization to apply its operating systems or hiring practices in the new country. • It might also include functional adjustments – circumstances that cause the organization to rethink or organize the functional structures it uses both internally and externally. • Product life cycle management also has a great impact and how the organization will operate in the new economy.

34. Global Brands Global Products Global Commerce Global Account Management Global Logistics Global Managers Global Processes Global Sourcing Global Systems Integrated Global Marketing Source: Don E. Schultz & Philip J Kitchen, Communicating Globally: An Integrated Marketing Approach, NTC Business Book, 2000

35. Integrated Global Marketing • Finally, the global marketer must develop integrated systems and processes that can be applied around the world. • Inherent in a globally successful marketing approach will be the ability of the organization to develop and provide seamless, transparent products and services to customers and prospects around the world. • That will require and integrated approach that, as shown, will start with understanding of global commerce.

36. Integrated Global Marketing • This effort will require global products that are adaptable for use in multiple markets around the world. • Those products or services will need to be backed by globally recognizable brands using some type of global account management system that will be run by global managers. • The global manager will require global production, operations, and logistical processes and global systems.

37. Integrated Global Marketing • And, to succeed, this global systems will require global sourcing of ingredients, raw materials, or skilled employees along with the development of global logistical systems.

38. Global Marketing Organization There are three major forces that suggest drive the strategy of organizations competing across borders, boundaries, and cultures: • Global Integration • Responsiveness to National Environments • Administrative Heritage

39. Global Integration • The past decade or so has been an era in which global political boundaries were re-forming. • Regional blocs were emerging, technological advances were changing, the economic structure that underlay industries and competitive dynamics were reformulating the rules of the game in industry after industry. • All this forces for ‘global integration’ required companies to be more integrated and coordinated across national boundaries.

40. Responsiveness to National Environments • As any international company well understands, there are other forces that require sensitivity and responsiveness to national environments. • Most obviously, consumers differ country by country; national infrastructures differ; competitors vary market by market; and host-country governments require companies to accommodate the interest of each particular nation-state.

41. Administrative Heritage • The many aspects of a company’s past – its home company cultural, its history, the influence of specific individuals – collectively constitute a company’s ‘administrative heritage’. • It is vital that a company understand its administrative heritage for two reasons: a company’s strengths lie deeply embedded in this heritage, and a company must recognize those strengths to protect them. • But, at the same time, administrative heritage can be the biggest barrier to change.

42. Global Marketing Organization