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Global Marketing. Global or international marketing is defined as the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit. International Marketing: A Definition.
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Global Marketing M.N. Elahee
Global or international marketing is defined as the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit International Marketing: A Definition Marketing concepts, processes, and principles are universally applicable all over the world M.N. Elahee
The International Marketing Task Foreign Environment (Uncontrollables) 7 1. Competition 7. Structure of Distribution Domestic environment (Uncontrollables) Environmental uncontrollables country market A (Controllables) 1. Competition Price Product 2. Technology Target Market 5. Political- Legal Environmental uncontrollables country market B 6. Geography and Infrastructure Place or Distribution 2 .Technology Promotion 4. Culture Environmental uncontrollables country market C 3. Economy 5. Political- Legal 3. Economy 4. Culture M.N. Elahee
Reasons for Going Global: • Foreign markets with higher profit opportunities • Stagnant or shrinking domestic markets • Need larger customer base to achieve economies of scale • Keeping pace with competition • Reduce dependency on single market • Reach a larger market • Reap higher profits • Prolong the lifecycle of their products M.N. Elahee
Global Integration Forces Driving Forces • Technology • Culture • Market Needs • Costs • Free Markets and Economic Integration • Strategy and Action M.N. Elahee
Global Integration Forces Restraining Forces • Culture • Market Differences • Costs • National Controls • Nationalism • Peace vs. War/ Stability • Organization History • Domestic Focus M.N. Elahee
To be globally aware is to have: Developing a Global Awareness 1. Tolerant of Cultural Differences, and • Knowledgeable of: • (a) Culture, (b) History, (c) World Market Potential, • (d) Global Economic, Social and Political Trends M.N. Elahee
Cultural Differences When Nike learned that this stylized “Air” logo resembled “Allah” in Arabic script, it apologized and pulled the shoes from distribution. M.N. Elahee
Infrequent Foreign Marketing No Direct Foreign Marketing International Marketing Regular Foreign Marketing Global Marketing Stages of International Marketing Involvement In general, firms go through five different phases in going international: M.N. Elahee
EPRG Schema Orientation Strategic Orientation: EPRG Schema Domestic Marketing Extension (Ethnocentric) Multi-Domestic Marketing (Polycentric) Global Marketing (Regio/Geocentric) M.N. Elahee
Guided by domestic market extension concept: Domestic strategies, techniques, and personnel are perceived as superior International customers are considered as secondary International markets are regarded primarily as outlets for surplus domestic production International marketing plans are developed in-house by the international division Ethnocentric Orientation M.N. Elahee
Polycentric Orientation • Guided by the multidomestic market concept: • Focuses on the importance and uniqueness of each international market • Likely to establish businesses in each target country • Fully decentralized, minimal coordination with headquarters • Marketing strategies are specific to each country • Result: No economies of scale, duplicated functions, higher final product costs M.N. Elahee
Regiocentric Orientation • Guided by the global marketing concept: • World regions that share economic, political, and/or cultural traits are perceived as distinct markets • Divisions are organized based on location • Regional offices coordinate marketing activities M.N. Elahee
Geocentric Orientation • Guided by the global marketing concept: • The world is perceived as a total market with identifiable, homogenous segments • Targeted marketing strategies aimed at market segments, rather than geographic locations • Regiocentric and Geocentric are synonymous with a Global Marketing Orientation where a uniform, standardized marketing strategy is used for several countries, countries in a region, or the entire world M.N. Elahee
Major Decisions in Global Marketing • Deciding to go abroad • Deciding which markets to enter • Deciding how to enter the markets • Deciding on marketing programs • Deciding on marketing organization M.N. Elahee
Major International Marketing Decisions M.N. Elahee
Deciding Which Markets to Enter • Before going abroad, the company should try to define its international marketing objectives and policies. What Volume of Foreign Sales is Desired? How Many Countries to Market In? What Types of Countries to Enter? Choose Possible Countries and Rank Based on Market Size, Market Growth, Cost of Doing Business, Competitive Advantage, and Risk Level M.N. Elahee
Major Markets for the US • Canada • Mexico • Japan • China • UK M.N. Elahee
Leading Suppliers • Canada • China • Mexico • Japan • Germany M.N. Elahee
Any Question • ??? M.N. Elahee