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Global Marketing. 1. Definitions of Global Marketing1. . Individuals and organizations using a global vision to effectively market goods and services across national bounaries. — Lamb, Hair & Lamb
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1. Definitions of Global Marketing1. • Individuals and organizations using a global vision to effectively market goods and services across national bounaries.—Lamb, Hair & Lamb • The activities to plan, price, guide, and make profit in the process of goods or services flowing to the consumers or clients in more than one country. –Cateora & Graham • Global localization: Think globally and act locally.
No Export Export via Agents Sales Subsidiaries Production Abroad 2. Internationalization Process
2.1 Different Stages for Global Marketing • Domestic Marketing • Exporting Marketing • International Marketing • Multinational Marketing • Global Marketing
2.2 Management Orientation and Global Marketing Different Management Orientations in the Global Arena – EPRG Framework Polycentric Ethnocentric Regiocentric Geocentric
2.2.2 Ethnocentric & Polycentric Orientation • 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
2.2.3 Regiocentric or Geocentric Orientation • Regiocentric or Geocentric Orientation: • Characteristic for global and transnational companies • Marketing opportunities are pursued by both, extension and adaptation strategies in global markets
Deciding which markets to enter Deciding how to enter the market Deciding on the marketing program Deciding on the marketing organization 3. Major Decisions in Int’l Marketing Deciding whether to go abroad
3.1 Motives for Global Marketing • Saturated Domestic Market • Attractiveness in Global Market • Policy favoring global marketing • Deregulation in foreign market • Development of modern technology
3.2 Challenges in Going Global • Shifting borders • Unstable governments • Foreign-exchange • Corruption • Technological pirating
3.3 Criteria for Entry • Market Attractiveness • Risk • Competitive Advantage
3.4.1 Economic Environments • The World Economy – An Overview • Economic Systems • Stages of Market Development • Income and Purchasing Power Parity • Regionalisation of Markets
3.4.1.1 World Economy-Overview • World Economy has changed profoundly during the last 50 years • Emergence of global markets • Integration of world economy • Capital movements are driving force of world economy • Production is “uncoupled” from employment • Macroeconomics of individual countries no longer control economic outcomes
3.4.1.2 Economic System • Three types of economic systems • Capitalist • Socialist • Mixed • Classification based on dominant method of resource allocation • Market allocation • Command or central plan allocation • Mixed allocation
3.4.1.3 Stages of Market Development • Global country markets are at different stages of development • GNP per capita provides a useful way of grouping countries into 5 categories, including: ---- High Income: GNP per capita above € 7,960, “Post- Industrial Countries”, such as Japan, Sweden; ---- Upper Middle Income: GNP per capita between € 2,575 and € 7,960 , Malaysia; ----Lower Middle Income: GNP per capita between € 650 and € 2,575, Indonesia; ----Low Income: GNP per capita less than € 650, Bangladesh • Categories are a useful basis for • Global segmentation • Target marketing
3.4.1.4 Income and Purchasing Power • Income • Single most important indicator of market potential • Purchasing Power Parities • Comparison of goods and services that can be bought with local currency in different countries • Gross National Product (GNP) • Sum of the money values of all final goods and services produced during a year
3.4.1.5 Regionalisation of Markets • Many different forms of economic co-operation between countries • Free trade areas • Customs unions • World Trade Organisation (WTO) • Acts as mediator in global trade disputes • Ensures that trade flows are as smooth, predictable and as free as possible
3.4.2. Social and Cultural Environments • Culture as “ways of living” • Conscious and unconscious values, ideas, attitudes, and symbols that shape human behaviour • Culture is learned, not innate • Culture defines the boundaries between different groups • All facets of culture are interrelated
3.4.3. Political, Legal, And Regulatory Environments • Political environment is influenced by governmental institutions, political parties, and organisations. Risk assessment is crucial. • Legal environment consists of laws, courts, attorneys, and legal customs and practices. Countries follow either common-law system or code-law system. • Regulators environment consists of agencies, governmental and non-governmental, that enforce laws or set guidelines for conducting businesses.
3.4.4. Information TechnologyEnvironment • IT-Environment : E-Commerce; Extranet;Internet; Portals; Web Browser; World Wide Web; Virtual Reality; EDI (electronic data exchange) • How the rapid advances in ICT affect:: • additional distribution and communication channels (e-commerce) • precise targeting (segment of one), customisation and interaction • fundamentally new business models (network organisations) • empowered customers
Direct exporting Licensing Joint ventures Direct invest- ment 4. Five Models of EntryInto Foreign Markets Indirect Exporting Amount of commitment, risk, control, and profit potential
4.1 Joint Venture • Licensing: Sell rights to name brand. • Contract Manufacturing: make item in host country; manufacturer of product only. • Management Contracting: hired as Mgmt. Consultant to host company • Joint Ownership: truly partnering with a company in host country, to share expertise and mutual gains.
Product Do not change product Develop new product Adapt product Straight extension Product adaptation Product invention Do not change promotion Promotion Communi- cation adaptation Adapt promotion 5. Five International Productand Promotion Strategies Dual adaptation
>Transfer prices $ 5.1 Pricing Challenges >Price Escalation >Dumping charges >Gray markets
Seller’s international marketing headquarters Channels between nations Channels within foreign nations Final buyers 5.2 Whole-channel Concept for Int’l Marketing Seller
Export Department International Division Global Organization 6. Marketing Organization
6.1 Organization • The goal in organising for global marketing is to find a structure that enables the company to respond to relevant market environment differences • No single correct organisational structure • Leading-edge global competitors’ corporate structure is simple and flat, rather than tall and complex • Simple structures • increase the speed and clarity of communication • allow the concentration of organisational energy and valuable resources on learning, rather than on controlling, monitoring, and reporting
Review • Definitions of Global Marketing • Different Stages for Global Marketing • Major Decisions Before Going Global • Global Marketing Environments • Selecting Foreign Markets • Foreign Market Entry • Management & Organization of Global Activities
