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Introduction to Global MarketingSession 1 & 2

Course : J1354 - International Marketing

Years : February 2013

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Learning Objectives

Understanding the global marketing

Understanding the importance of Global marketing

Knowing the economic environment

Bina Nusantara University

Keegan and Green, Chapter 1 3

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Introduction to Global Marketing

Chapter 1

Global Marketing

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Keegan and Green, Chapter 1

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Reasons for Global Marketing

Growth

Access to new markets

Access to resources

Survival

Against competitors with lower costs (due to increased access to

resources)

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Keegan and

Green, Cha ter 1

6

Invented Here, Made Elsewhere

U.S. Invented Technology

Phonographs

Color TVs

Audiotape Recorders

Videotape Recorders

Machine Tools

Telephones

Semiconductors

Computers7 4%

9 8%6 4%

8 9%2 5%

9 9%

3 5%

9 9%

1%1 0%

0% 4 0%

1 0%

9 0%

1%9 0%

0 20 40 60 80 100

1 9 7 0N O W

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Global Marketing Vs. Marketing

Marketing is the process of planning and executing

the conception, pricing, promotion, and distribution of

goods, ideas, and services to create exchanges that

satisfy individual and organizational goals.

Global marketing focuses on global market

opportunities and threats.

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Differences between Global Marketing and

Marketing

Scope of activities Nature of activities

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The International Marketing Task

Political/legalforces

Economicforces

1

2

Environmentaluncontrollablescountry market A

Environmentaluncontrollablescountry

market B

Environmentaluncontrollablescountrymarket C

Competitivestructure Competitive

Forces

Level ofTechnology

Price Product

PromotionChannels of

distribution

Geographyand

Infrastructure

Foreign environment(uncontrollable)

Structure ofdistribution

Economic climate

Cultural

forces

3

45

6

7Political/

legal

forces

Domestic environment(uncontrollable)

(controllable)

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Globalization

Globalization is the inexorable integrationof 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

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What is a Global Industry?

An industry is global to the extent that a

companys industry position in one country

is interdependent with its industry position

in another country

Indicators of globalization: Ratio of cross-border trade to total worldwide production

Ratio of cross-border investment to total capital

investment

Proportion of industry revenue generated by companies

that compete in key world regions

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Keys to Global Success

Value creation

Competitive advantage

Focus

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Value Creation

Value = Benefits/Price

Price is a function of money, time, and effort

Benefits result from the product, promotion, and distribution

2 methods of value creation Improved benefits

Lower prices

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Competitive Advantage

Success over competition in industry at value creation

Achieved by integrating and leveraging operations on a

worldwide scale

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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

Gl b li ti Gl b l

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Globalization or Global

Localization? Globalization

Developing standardized products marketed worldwide

with a standardized marketing mix

Essence of mass marketing

Global localization

Mixing standardization and customization in a way thatminimizes costs while maximizing satisfaction

Essence of segmentation

Think globally, act locally

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Where in the World?

How does a company decide which markets to enter?

Company resources

Managerial mind-set

Nature of opportunities and threats in that market

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Examples of Global Marketers

Coca-Cola

Philip Morris

Daimler-Chrysler

McDonalds

Toyota

Ford

Unilever

Gillette

IBM

USA

USA

Germany

USA

Japan

USA

UK/ Netherlands

USA

USA

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Why Go Global?

For US-based companies, 75% of sales potentialis outside the US.

About 90% of Coca-Colas operating income is

generated outside the US.

For Japanese companies, 85% of potential isoutside Japan.

For German and EU companies, 94% of

potential is outside Germany.

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Management Orientations

Ethnocentric

Polycentric

Regiocentric

Geocentric

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Ethnocentric Orientation

Assumes home country is superior to the rest of the

world; associated with attitudes of national arrogance

and supremacy

Management focus is to do in host countries what is

done in the home country

Sometimes called an international company

Products and processes used at home are used abroad

without adaptation

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Polycentric Orientation

Management operates under the assumption that every

country is different; the company develops country-

specific strategies

Sometimes called a multinational company

Company operates differently in each host country based on that

situation

Opposite of ethnocentrism

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Regiocentric Orientation

Region becomes the relevant geographic unit (rather

than by country)

Management orientation is geared to developing an

integrated regional strategy

European Union

NAFTA

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Geocentric Orientation

Entire world is a potential market Managerial goal is to develop integrated world

market strategies

Global companies serve world

markets from a single country and

tend to retain association with a

headquarters country

Transnational companies serve globalmarkets and acquire resources

globally; blurring of national identity

Transnationality Rankings Table 1

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Transnationality Rankings -Table 1-

5

1. Nestle (Switzerland) 2. Thomson Corp

(Canada)

3. Holderbank

Financiere(Switzerland)

4. Seagram Company

(Canada)

5. Solvay (Belgium) 6. ABB Asa Brown

Beveri (Switzerland)

7. Electrolux (Sweden)

8. Unilever (UK/Netherlands)

9. Royal Philips

Electronics

(Netherlands)

10. Roche Holdings

(Switzerland)

11. SCA (Sweden)

12. Northern Telecom(Canada)

13. Glaxo Wellcome

(UK)

14. Cable & WirelessUK

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Forces Affecting Global Integration (Fig. 1-3)

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Driving Forces

Regional economic agreements

Market needs and wants

Technology

Transportation and communication improvements

Product development costs Quality

World economic trends

Leverage

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Restraining Forces

Management myopia

Organizational culture

National controls

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How to asses this course?

MID Exam

Final

TASK

The Role of Class

Tapping

Others

Bina Nusantara University

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j13540000220124001im session-1-2

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