Contemporary issues in marketing

Facilitated by; Nisha Jayasuriya

"The best way to predict the future is to create it.“

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Peter Drucker

Major functions involved in global marketing job

LO 2

Lesson outline

• Global marketing strategies• Key concepts• Theoretical foundations• Cultural foundations• Foreign entry

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Globalisation

• What is globalisation?

• Explain three causes for globalisation with examples.

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Globalisation Advantages

• New market opportunities • Resources of different countries are used for producing

goods and services they are able to do most efficiently.• Consumers to get much wider variety of products to

choose from.• Consumers get the product they want at more

competitive prices.• It promotes understanding and goodwill among different

countries.

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Globalisation Disadvantages• It increases country inequality

• Threatens cultural traditions and values

• Economic depression in one country can trigger adverse reaction across the globe.

• Companies face much greater competition. This can put smaller companies, at a disadvantage as they do not have resources to compete at global scale. 7

Global marketing strategies

• Global market segmentation• Global positioning • The global marketing mix

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Global market segmentation

• Targeting is to find homogeneous groups of customers with high demand potential for the firm.

• Target segments have to posses the following characteristics– Identifiable – Measurables– Reachable

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- Able to buy- Willing to buy

Global market segmentation

Two-Stage Global segmentation

• Macro segmentation - Grouping countries into different regions based on common characteristics.

• Micro segmentation – collect data on the potential customers and identify clusters in the market place.

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Macro segmentation• Many companies often start with existing trade blogs or

geographical regions when clustering.

• Variables include– Sociodemographic data– Population size and character– Disposable income level– Educational background– Indicators of level of development– Infrastructure

• Variables used for the segmentation depend on the purpose of the segmentation 11

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Macro segmentation

• Clustering countries – Computerised technieque such as cluster analysis can be used for this purpose.

• Examples– A market oriented clustering of world market– Think and Feel country clusters

(see the handout – country clusters)

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Micro segmentation

• Selection of similar target segments within the countries selected in macro segmentation.

• Data collected in micro segmentation is different to the typical domestic segmentation. – Product usage pattern– Benefits desired– Price sensitivity– Media usage– Shopping behaviour

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Micro segmentation

• Example

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The bicycle-riders product market

Submarket 3Transportation

Riders

Submarket 5Environmentalists

Submarket 4Socializers

Submarket 1Exercisers

Submarket 2Off-Road

Adventurers

Concept: divide a broad product-market (or generic market) into homogeneous submarkets

Global Product Positioning

• Positioning means saving a place in customer’s mind .

• Positioning includes activities such as Communicate the features, benefits of the product and image to the actual and potential customers.

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Positioning issues

1. Should be positioned the same way everywhere or not ?

– Even if same segment targeted everywhere, positioning

strategy should not be same.

E.g. Levi’s - US – fun and practical

Overseas – status of the original jeans

– If the important attributes and benefits customers look for are similar, then for those global markets similar positioning is feasible and desirable – Uniform Positioning17

Positioning issues

1. contd.– In more multi domestic markets such as foods and

clothing consumers in different countries will be looking at products with different eyes.

– e.g. McDonald, Levi’s

2. The stage of the PLC– Different country markets are at different stage of

PLC, this makes uniform positioning less attractive

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The product space

• Salient attributes – attributes what customers looks from a product. Consumers in mature markets are very sure about the features of a product.

• Evoke set – brands that are considered for purchase

• Attribute rating – rate the brands in evoke set on the salient attributes.

• Preference – How the brand rank in terms of overall preference.

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Perceptual Map of Automobiles (from WSJ, 1984)Has a Touch of Class A Car to be Proud to Own Distinctive Looking

Pontiac

BMW

PorscheLincoln

Cadillac

Mercedes

ChryslerBuick

Chevrolet

Oldsmobile Has Spirited PerformanceAppeals to Young People Fun to DriveSporty Looking

Very PracticalProvides Good Gas MileageAffordable

Datsun

Toyota

VW

Conservative lookingAppeals to Older People

Ford

Dodge

Plymouth

Activity

• Select a product category in Sri Lankan context and prepare a perceptual map, positioning the brands.

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Standardisation vs. adaptation

• Standardization’’ means uniformity of product or service features, design, and styling

• Adaptation means adapting according to the local requirements.

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Standardisation

Advantages Disadvantages

Cost reduction – scale of economy Off-target - Not being perfectly adapted to customer’s requirements

Improve quality Lack of uniqueness

Enhanced customer preference Valnerable to trade barriers – when country is protected by trade barriers, local manufacturing is necessary.

Global customers – demand uniform quality and service everywhere

Strong local competition – locally adapted products

Global segments - customer segments in one market can often be similar to those in other markets.

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Tutorial

• Select one international product and answer following questions.

– Evaluate up to what degree the product offering has been customised to the local requirements.

– Compare positioning strategy in international market with the positioning strategy in Sri Lanka.

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Key concepts

• Global marketing

• Foreign marketing

• Multidomestic marketing

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Key concepts

• Global marketing – Marketing activities that are coordinated and integrated across multiple markets. – It involve standardised products, uniform packaging,

identical brand name and similar advertising campaign.

• Foreign marketing – Primarily for exports to selective countries

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Key concepts

• Multi-domestic marketing

– Company offering has been customised according to the culture and preference of the target market.

– E.g. McDonald, Unilever

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Key concepts

• Global competition– Competitors are expanding globally– Home market is challenged by a global competitor– Global raw material procurement will drive down cost– Saturated home market is slowing down growth

• Global brands– Brands that are available, well known and highly

regarded throughout the world’s markets.

Activity – provide some examples for global brands.34

Key concepts

• Leading marketsCountry markets where global firm wants to be present even if competition is fierce and profitability is uncertain.

Leading markets emerge because of country’s location specific advantages such as natural resources, technology know-how and labour skills.

E.g. US PC market, Japanese camera market, German automobile market.

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Key concepts

• Leading markets contd.

– Lead markets are characterised by strong competitors and demanding customers.

– Free from government regulation and protective measures.

– Products and services incorporate latest technology.

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Sum up

• Global marketing strategies– Segmentation– Positioning– Positioning issues– The product space– Standardisation vs. adaptation

• Key concepts– Global marketing– International marketing– Multidomestic markets 37