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Chapter 4 Introduction to Global Marketing

Chapter 4 Introduction to Global Marketing. Introduction. What is Global Marketing? How is it different from regular marketing?. Introduction. Marketing

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Chapter 4 Introduction to Global Marketing

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  1. Chapter 4 Introduction to Global Marketing

  2. Introduction • What is Global Marketing? • How is it different from regular marketing?

  3. Introduction • Marketing • Process of planning and executing the conception pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organization goals • Global Marketing • Focuses resources on global market opportunities and threats; the main difference is the scope of activities because global marketing occurs in markets outside the organization’s home country

  4. Reasons for Global Marketing • Growth • Access to new markets • Access to resources • Survival • Against competitors with lower costs (due to increased access to resources)

  5. Boundaryless Marketing • Goal is to eliminate communication barriers between marketing and other business functional areas • Properly implemented it ensures that a market orientation permeates all value creating activities

  6. Fundamental Principles of Marketing Customer Value Focus Differentiation

  7. Customer Value • Goal: • create customer 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 V = B P V = Value B = Perceived Benefits – Perceived Costs P = Price

  8. Differentiation • Goal: • create competitive advantage through differentiation • Advantage can exist in any element of a company’s offer • It can be a real, tangible difference or a perceived difference • One way to penetrate a new national market is to offer a superior product at a lower price.

  9. Competitive Advantage • Success over competition in industry at value creation • Achieved by integrating and leveraging operations on a worldwide scale

  10. Focus • Goal: • a concentration of attention & resources • A viable way for small & medium sized companies to achieve dominant position in world market • A clear focus on customer needs & wants

  11. Competitive Advantage, Globalization and Global Industries • Focus • Concentration and attention on core business and competence Nestle is focused: We are food and beverages. We are not running bicycle shops. Even in food we are not in all fields. There are certain areas we do not touch…..We have no soft drinks because I have said we will either buy Coca-Cola or we leave it alone. This is focus. Helmut Maucher

  12. Globalization • Globalization is the inevitable integration of markets, nation-states, and technologies to a degree never witnessed before - in a way that is enabling individuals, corporations, and nation-states to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach into individuals, corporations, and nation-states farther, faster, deeper, and cheaper than ever before. • Thomas Friedman

  13. Global Marketing: What it is and What it isn’t NEED TO: • Search for similarities and adjust to differences

  14. The Importance of Global Marketing • For US-based companies, 75% of sales potential is outside the US. • About 90% of Coca-Cola’s operating income is generated outside the US. • For Japanese companies, 85% of potential is outside Japan. • For German and EU companies, 94% of potential is outside Germany.

  15. Standardization versus Adaptation • Globalization (Standardization) • Developing standardized products marketed worldwide with a standardized marketing mix • Essence of mass marketing • Global localization (Adaptation) • Mixing standardization and customization in a way that minimizes costs while maximizing satisfaction • Essence of segmentation • Think globally, act locally

  16. Standardization versus Adaptation

  17. Amsterdam Singapore Germany

  18. International Trade • International trade involves the exchange of goods and services between nations. • Goods and services purchased from other countries are called imports. • Goods and services sold to other countries are called exports.

  19. Why International Trade? Because nations are not self-sufficient, they find it advantageous to trade with each other. There are two types of advantages in international trade - Comparative and Absolute.

  20. Comparative and Absolute • Comparative - the value that a country gains by selling the goods it produces more efficiently than other goods. • Absolute - when a country has special natural resources or capabilities to allow it to produce a given commodity at a lower cost than any other nation in the world.

  21. GOVERNMENT INVOLVEMENT • All nations control and monitor their trade with foreign business. • All people and goods that enter the United States are search by U.S. officials. • Balance of Trade: the difference in value between exports and imports of an nation. • Positive: when a nation exports more than it imports. • Negative: imports more than exports.

  22. TRADE BARRIERS • When a nation’s government wants to limit trade, it imposes trade barriers. These are controls that restrict the flow of goods.

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