Introduction to Global Marketing Global Marketing

(Global Edition)

Chapter 1
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 Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders
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Introduction
Global vs. Regular arketing

! "cope of activities are outside the home# country market

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Global Marketing
$reate value for customers by improving benefits or reducing price
! %mprove the product ! &ind new distribution channels ! $reate better communications ! $ut monetary and non#monetary costs and prices
Value=Benefits/Price
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Globalization
Globalization is the inexorable integration of markets, nation-states and technologies to a degree never witnessed before'in a way that is enabling individuals, corporations and nationstates to reach around the world farther, faster, deeper and cheaper than every 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 riedman
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Global Industries
(n industry is global to the e)tent that a company*s industry position in one country is interdependent with its industry position in another country %ndicators of globalization+ ! Ratio of cross#border trade to total worldwide production ! Ratio of cross#border investment to total capital investment ! ,roportion of industry revenue generated by companies that compete in key world regions
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Competitive Advantage, Globalization, and Global Industries

&ocus
! $oncentration and attention on core business and competence !estle is focused" #e are food and beverages. #e are not running bicycle shops. $ven in food we are not in all fields. There are certain areas we do not touch%#e have no soft drinks because & have said we will either buy 'oca-'ola or we leave it alone. This is focus.
Helmut Maucher, ormer chairman o !estl" #A
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Global Marketing$ %hat It Is and %hat It Isn&t

Single Country Marketing Strategy
-arget arket "trategy arketing i)
! ! ! ! ,roduct ,rice ,romotion ,lace

Global Marketing Strategy

Global arket ,articipation arketing i) .evelopment
! / ,*s+ (dapt or "tandardize0

$oncentration of arketing (ctivities $oordination of arketing (ctivities %ntegration of $ompetitive oves

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#tandardization versus Adaptation

Globalization 1"tandardization2
! .eveloping standardized products marketed worldwide with a standardized marketing mi) ! 3ssence of mass marketing

Global localization 1(daptation2

! i)ing standardization and customization in a way that minimizes costs while ma)imizing satisfaction ! 3ssence of segmentation ! -hink globally, act locally
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#tandarization versus Adaptation

(rabic Read right to left

$hinese delicious4happiness

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The Faces of Coca-Cola Around the

orld

Mc'onald&s Global Marketing

Marketing Mi! "le#ent ,roduct ,romotion $tandardi%ation 5ig ac &ocali%ed c(loo -ikka potato burger 1%ndia2 "lang acca*s 1(ustralia2

5rand name

ak.o 1,hilippines2 (dvertising "logan %*m 6oving %t ,lace &ree#standing McJoy magazine, <awaii "urfing <ula promotion 1=apan2 <ome delivery 1%ndia2 "wiss rail system dining cars ,rice 5ig ac is 78.9: in ;.". and -urkey 7>.?9 1"witzerland2 79.891$hina2
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(he Importance o Going Global

&or ;.". companies, @>A of total world market for goods and services is outside the country
! $oca#$ola earns @>A of operating income and ?48 of profit outside of Borth (merica

&or =apanese companies, C>A of world market is outside the country D/A of market potential is outside of Germany for its companies
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(he ortune Global )**

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Consumer+Industrial Markets
,roduct4"ervice arket "ize 15illions2

$igarettes 6u)ury Goods $osmetics ,ersonal $omputers 5ottled Eater $ontainer "hipping $onstruction 3Fuip. $rop "eeds $R "ervices
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7?D> ?8: ?:: 9@> 9:: 9>: D: 8: G

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Management ,rientations
3thnocentric Hrientation
! <ome country is superior to others ! "ees only similarities in other countries ! (ssumes products and practices that succeed at home will be successful everywhere ! 6eads to a standardized or extension approach
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Management ,rientations
,olycentric Hrientation
! 3ach country is uniFue ! 3ach subsidiary develops its own uniFue business and marketing strategies ! Hften referred to as multinational ! 6eads to a localized or adaptation approach that assumes products must be adapted to local market conditions
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Management ,rientations
Regiocentric Hrientation
! ( region is the relevant geographic unit
3)+ -he B(&-( or 3uropean ;nion market

! "ome companies serve markets throughout the world but on a regional basis
3)+ General otors had four regions for decades

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3uropean ;nion

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Management ,rientations
Geocentric Hrientation
! ! ! ! 3ntire world is a potential market "trives for integrated global strategies (lso known as a global or transnational company Retains an association with the headFuarters country ! ,ursues serving world markets from a single country or sources globally to focus on select country markets ! 6eads to a combination of extension and adaptation elements
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'riving -orces A ecting Global Integration and Global Marketing

ultilateral trade agreements $onverging market needs and wants and the information revolution -ransportation and communication improvements ,roduct development costs
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'riving -orces A ecting Global Integration and Global Marketing

Iuality
! RJ. as a percent of sales

Eorld economic trends

! ?::C global crisis ! Growing middle class in $hina, %ndia, 5razil, etc. ! Rapid growth in $hina pre# ?::C ! ovement to free markets worldwide
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'riving -orces A ecting Global Integration and Global Marketing

6everage
! 3)perience transfers ! "cale economies ! Resource utilization ! Global strategy

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.estraining -orces A ecting Global Integration and Global Marketing

anagement myopia Hrganizational culture Bational controls Hpposition to globalization

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,vervie/ o 0ook
,art %+ Hverview of Global arketing ,art %%+ 3nvironments of Global arketing ,art %%%+ Global "trategy ,art %K+ Global $onsiderations of the arketing i) ,art K+ %ntegrating the .imensions of Global arketing
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1ooking Ahead to Chapter 2

-he Global 3conomic 3nvironment

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