global marketing. 1. definitions of global marketing1. individuals and organizations using a global...
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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 & LambThe 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 & GrahamGlobal localization: Think globally and act locally.
2. Internationalization Process
No Export
Export via Agents
Sales Subsidiaries
Production Abroad
2.1 Different Stages for Global Marketing
Domestic MarketingExporting MarketingInternational MarketingMultinational MarketingGlobal Marketing
2.2 Management Orientation and Global Marketing
Different Management Orientations in the Global Arena – EPRG Framework
Regiocentric
Ethnocentric
Geocentric
Polycentric
2.2.1 Global Orientation
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 OrientationCharacteristic 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
3. Major Decisions in Int’l MarketingDeciding whether
to go abroad
Deciding whichmarkets to enter
Deciding how toenter the market
Deciding on themarketing program
Deciding on themarketing organization
3.1 Motives for Global Marketing
Saturated Domestic MarketAttractiveness in Global MarketPolicy favoring global marketingDeregulation in foreign marketDevelopment of modern technology
3.2 Challenges in Going Global
Shifting bordersUnstable governmentsForeign-exchangeCorruptionTechnological pirating
3.3 Criteria for Entry
Market AttractivenessRiskCompetitive Advantage
3.4 Relevant Dimensions of the Global Marketing Environment
GLOBAL INFORMATION
NEEDS
Le gal
Te chnol ogical
Regulatory
Poli ti cal
Soc ial andCultural
Ec onomic andCom pe ti ti ve
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 marketsIntegration of world economy
Capital movements are driving force of world economyProduction is “uncoupled” from employmentMacroeconomics of individual countries no longer control economic outcomes
3.4.1.2 Economic System
Three types of economic systemsCapitalist
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 DevelopmentGlobal country markets are at different stages of developmentGNP 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 segmentationTarget 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 Technology Environment
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 interactionfundamentally new business models (network organisations)empowered customers
Directinvest-ment
JointventuresLicensing
4. Five Models of EntryInto Foreign Markets
Directexporting
IndirectExporting
Amount of commitment, risk, control, and profit potential
4.1 Joint VentureLicensing: Sell rights to name brand.Contract Manufacturing: make item in host country; manufacturer of product only.Management Contracting: hired as Mgmt. Consultant to host companyJoint Ownership: truly partnering with a company in host country, to share expertise and mutual gains.
5. Five International Productand Promotion Strategies
Dualadaptation
Promotion
Product
Productadaptation
Adaptproduct
Straightextension
Do not changeproduct
Do not changepromotion
Communi-cation
adaptation
Adaptpromotion
Develop newproduct
Productinvention
5.1 Pricing Challenges
>Price Escalation
>Dumping charges
>Gray markets
>Transfer prices
5.2 Whole-channel Concept for Int’l Marketing
Seller
Seller’s internationalmarketing headquarters
Channels betweennations
Channels withinforeign nations
Final buyers
6. Marketing Organization
Export Department
International Division
Global OrganizationRUS S IA
AS IA
E U R O P E
M ID D L E E A S T
AF RIC A
US A
S O U T H
A M E R IC A
A U S T R A L IA
C A N A D A
ANT A RC T IC A
G R E E N L A N D
6.1 OrganizationThe 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 structureLeading-edge global competitors’ corporate structure is simple and flat, rather than tall and complexSimple structures
increase the speed and clarity of communicationallow the concentration of organisational energy and valuable resources on learning, rather than on controlling, monitoring, and reporting
6.2. Patterns of Int’l Organisational Development
President
Corporate Staff
Marketing Manufacturing
Foreign Subsidiaries
Research Planning Personnel
United Kingdom Mexico Germany
Finance
6.3 Patterns of Int’l Organisational DevelopmentPresident
Corporate Staff
Marketing Manufacturing
Foreign Subsidiaries
Research Planning Personnel
United Kingdom Mexico Germany
Finance
Product Divisions
Division A Division B Division C Division D
6.4 International Division Structure IIPresident
Corporate Staff
Marketing Manufacturing Research Planning PersonnelFinance
Line Management
Division DDivision A Division B Division C
International Division
1, ... nth Country Subsidiaries
6.5 Regional Management CentresPresident
Corporate Staff
Marketing Manufacturing Research Planning PersonnelFinance
Vice President International Division
International Division Staff
Marketing Manufacturing Research Planning PersonnelFinance
Area Manager Far East
Area Manager Europe
Area Manager Latin America
Area Manager Middle
Area Staff
Country Subsidiaries
Area Staff
Country Subsidiaries
Area Staff
Country Subsidiaries
Area Staff
Country Subsidiaries
6.6 Geographic StructurePresident
Corporate Staff
Marketing Manufacturing Research Planning PersonnelFinance
Far EastEurope North AmericaMiddle
East/Africa
Area Staff
1, ... nth Country
Subsidiaries
Area Staff
1, ... nth Country
Subsidiaries
Area Staff
1, ... nth Country
Subsidiaries
Area Staff
1, ... nth Country
Subsidiaries
Latin America
Area Staff
1, ... nth Country
Subsidiaries
6.7 Matrix Structure
Corporate Staff
Chief Executive Officer
Marketing Finance ResearchInternational Umbrella
CoordinationProduction
Product Division 4
Product Division 1
Product Division 2
Product Division 3
Area HQ Europe
Area HQ Europe
Area HQ Europe
Area HQ Europe
President Global S.A. (France)
Product Divisions
Product Divisions Regional Head- quarters
AdministrationFinance
Product Manager Division 4
Product Manager Division 1
Product Manager Division 2
Product Manager Division 3
Product Manager Division 4
Product Manager Division 1
Product Manager Division 2
Product Manager Division 3
Typical Country Umbrella Organizations
Country Product Markets
Review
Definitions of Global MarketingDifferent Stages for Global MarketingMajor Decisions Before Going GlobalGlobal Marketing EnvironmentsSelecting Foreign MarketsForeign Market EntryManagement & Organization of Global Activities