Concepts of Global Marketing
- 1. DBBA 501C Dr. Chhavi Jain
- 3. DBBA 502C
- 4. Unit 1 • Global Marketing: Concept and scope of international and global marketing, Stages of International Marketing Involvement, Importance of international and global marketing, opportunities and challenges of international and global markets, participants in international and global marketing, Historical and Geographical perspective in Global business, Dynamics of Global Population Trends
- 7. Concept of international and global marketing Domestic Marketing Export Marketing International Marketing Multinational Marketing Multiregional Marketing Global Marketing
- 8. • Domestic Marketing – Single Market, – Domestic Market, – Only one set of competitive, economic and market issues – Deals only with one set of customers or several segments in one market
- 9. • Export Marketing – When firm markets its products outside its main (domestic) base of operation – Products are physically shipped from one market or country to another – Domestic operations remain of primary importance – Major challenge- • Selection of appropriate market or country through marketing research • Determination of appropriate product modification to meet demand of export market • Development of export channels through which the company can market its products abroad
- 10. • International Marketing – Company goes beyond exporting and becomes much more directly involved in the local marketing environment within a given country or market. – It has its own sales subsidiaries and will participate in and develop entire marketing strategies for foreign markets. – Understanding different cultural, economic, political environments becomes necessary for success
- 11. • Multinational Marketing • They are characterized by extensive development of assets abroad and operate in a number of foreign countries or markets as if they were local companies. • The firm competes with many strategies, each one tailored to a particular local market. • Major challenge- find the best possible adaptation of a complete marketing strategy to an individual country. • This leads to a maximum amount of localisation and to a large variety of marketing strategies. • Thus duplication of some key resources. • Benefit- ability to completely tailor a marketing strategy to the local requirements.
- 12. • Multiregional Marketing – Due to diseconomies of individualized marketing strategies, each tailored to a specific local environment, companies have begun to emphasize strategies for larger regions. – These regional strategies encompass a number of markets- NAFTA- US Canada Mexico – Companies considering regional strategies look to tie together operations in one region, rather than around the globe, the aim being increased efficiency.
- 13. • Global Marketing – Opportunities for economies of scale and enhanced competitiveness are greater if they can manage to integrate and create marketing strategies on a global scale. – Global marketing strategy involves the creation of a single strategy for a product, service or company, for the entire global market, that encompasses many markets or companies simultaneously and is aimed at leveraging the commonalities across many markets. – Challenge- design marketing strategies that work well/ fits across many markets.
- 14. • Global Marketing – Markets appear increasingly similar in environmental and customer requirements. – Large investments in technology, logistics or other key functions force the companies to expand their market coverage.
- 15. • Global Marketers – They include some exporting in their strategies – Includes international marketing because designing one global strategy requires a sound understanding of the cultural, economic and political environment of many countries.
- 17. Scope of International and Global Marketing • Exporting • Service industries- advertising firms, banks, investment bankers, public accounting firms, consulting companies, hotel chains, airlines, etc. • Product industries • Entertainment industry
- 18. International Business Global Marketing International Marketing International Trade
- 19. Stages of International Marketing Involvement • Factors which favour faster internationalisation: – Companies with either high technology and/or marketing based resources appear to be better equipped to internationalize, than more traditional manufacturing kinds of companies – Smaller home markets and larger production capacities – Firms with key managers well networked internationally
- 20. • In general, one of five stages can describe the international marketing involvement of a company. Although the stages are linear, but a firm may begin its involvement at any stage or be in more than one stage simultaneously. • Because of a short product life cycle and a thin but widespread market for many technology products, many high-tech companies, large and small, see the entire world, including their home market, as a single market and strive to reach all possible customers as rapidly as possible.
- 21. 1. No Direct Foreign Marketing 2. Infrequent Foreign Marketing 3. Regular Foreign Marketing 4. International Marketing 5. Global Marketing
- 22. No Direct Foreign Marketing • Company does not actively cultivate customers outside national boundaries • Company’s products may reach foreign markets • Sales may be made to trading companies as well as foreign customers who directly contact the firm • Products may reach foreign markets via domestic wholesalers or distributors who sell abroad without the explicit encouragement or even knowledge of the producer. • Buyer can approach the firm through internet too.
- 23. Infrequent Foreign Marketing • Temporary surpluses caused by variations in production levels or demand may result in infrequent marketing overseas. • The surpluses are characterized by their temporary nature with little or no intention of maintaining continuous market representation. • When domestic demand increases and absorbs surpluses, foreign sales activity is reduced or even withdrawn.
- 24. Other approach 1. Regular foreign marketing 2. Multidomestic or international marketing 3. Global marketing
- 25. Regular Foreign Marketing • The firm has permanent productive capacity devoted to the production of goods and services to be marketed in foreign markets. • Firm may employ foreign or domestic overseas intermediaries or it may have its own sales force or sales subsidiaries in important foreign markets.
- 26. International Marketing • They seek markets all over the world and sell products that are a result of planned production for markets in various counties. • it entails not only the marketing but also the production of goods outside the home market.
- 27. Global Marketing • The most profound change is the orientation of the company toward markets and associated planning activities. • Companies treat the world, including their home market, as one market. • Market segmentation decisions are no longer focused on national borders. • Instead, market segments are defined by income levels, usage patterns, or other factors that frequently span countries and regions. • Entire operations- organisational structure, sources of finance, production, marketing, etc. – began to take on global perspective.
- 28. Importance of International and Global Marketing • Reduction of cost efficiencies and duplication of efforts between national and regional subsidiaries • Opportunities to transfer products, brands, ideas to other subsidiaries • Appearance of global clients • New insights into consumer behaviour • Alternative distribution strategies
- 29. Opportunities of International and Global markets • Large customer bases • Larger volume of sales and exchange • Larger growth rates in GDP • Empowered individuals and political systems • Additional resources and capital • Lower labour cost • Realization of economies of scale by mass producing goods • Cheaper costs, strong margins large revenues
- 30. Challenges of International and Global markets International product restrictions and regulatory requirements and ethical business practices Organisational structure Technology Infrastructure Pricing- shipping, taxes, currency value, surcharges, Customs, duties Package loss and damage Political environment Reputation management Delays and mail disruptions Language barriers Intellectual property infringement and copy cats Consumer fraud and Returns
- 31. Major Participants in International and Global Marketing • Several types of companies are major participants in international and global marketing. Among the leaders are MNCs, exporters, importers and service companies. • These firms may be engaged in: – manufacturing consumer or industrial goods, – in trading or – in the performance of a full range of services. • Service companies include: – Commercial banks, – Investment bankers, – Brokers, – Airlines and hotel companies
- 32. Driving Forces Technology Culture Market Needs Cost Free Markets Economic Integration Peace Management Vision Strategic Intent Global Strategy and Action Restraining Forces Culture Market Differences Costs National Controls Nationalism War Management Myopia Organisation History Domestic Focus
- 35. Market Drivers – Common Customer Needs – Global Customers – Global Channels – Transferable Marketing • https://www.mccann.com/work/pro tect-like-a-mother
- 36. Competitive Drivers American Mobile Phone Market during late 90s Swedish Ericsson Finnish Nokia
- 37. Competitive Drivers Honda’s Acura Toyota’s Lexus Nissan’s Infiniti Luxury Cars The Limited The GAP Benetton
- 38. Cost Drivers • Economies of scale- unit cost reduction • Economies of scope- gains fro spreading activities • Global sourcing advantages- cost savings via supply from a low wage country, improved logistics and distribution systems • Growth of inexpensive global telecommunications • Federal Express – computerized tracking system
- 39. Technology Drivers • Internet – – online presence, – receive orders from abroad, – get paid via credit card, – ship products instantly
- 40. Government Drivers • Favourable trade policies • Acceptance of foreign investment, • Compatible technical standards • Common marketing regulations
- 41. Three Hats • To get a better grip on the complex job faced by the global marketing manager, it is useful to distinguish between three roles he or she may assume as a company goes global and becomes more extensively involved in international markets. 1. The Foreign Entry Role 2. The Local Marketing Role 3. The Global Management Role
- 42. The Foreign Entry Role The manager has to learn: • the intricacies of doing business overseas, • of finding the right middlemen, • of quantitatively or qualitatively evaluating foreign markets, • negotiating for joint marketing ventures, • helping to set up a sales subsidiary, and learning to understand foreign customers’ product and service requirements.
- 43. The Local Marketing Role • In many countries like Japan, the company can’t be satisfied using independent middlemen for the marketing effort. Especially in the leading markets, the company needs to be closer to the ultimate consumer. • Establishing a sales subsidiary and sending some expatriates to work there is common. In this way the company can ensure that the potential of the market is exploited, that the company capabilities are properly leveraged, that customer trends are monitored and that moves by the competitor are anticipated. • Day-to-day management is left for natives and expatriates play a more strategic role.
- 44. The Global Management Role • It is the truly global part of the job. Using the learning and experience gained from foreign entry and local marketing, the marketer now works on deriving global benefits from the firm’s presence in various markets. • The idea is to capture the scale advantages and other synergies to be created by more coordinated marketing. • It involves questions of global segmentation and positioning, standardization of products and services, uniform pricing around the globe, prototype advertising with a similar theme across countries, global brand names and international logistics. • The basic notion is to rationalize the global marketing operations in order to capture spillovers, scale advantages and lower costs and to coordinate the marketing campaigns across countries for maximum effect.
- 45. Historical and Geographical Perspective in Global Business • In order to understand fully a society’s actions and its points of view , one must have an appreciation of historical events and the geographical uniqueness to which a culture has had to adapt. • To interpret behaviour and attitudes in a particular culture or country, a marketer must have some idea of a country’s history and geography.
- 46. Historical perspective in Global Business • History helps define: – A nation’s mission – How it perceives its neighbours – How it sees its place in the world – How it sees itself • Insights into the history of a country are important for understanding attitudes about the role of government and business, the relations between managers and managed, the sources of management authority and attitudes toward foreign corporations.
- 47. Historical perspective in Global Business • To understand, explain and appreciate a people’s image of itself and the attitudes and unconscious fears that are reflected in its view of foreign cultures , it is necessary to study the culture as it is now as well as to understand the culture as it was- that is, a country’s history. • History also influences business decisions such as foreign direct investments, market entry and even personal choices.
- 48. • Many people throughout the history have gained pre-eminence in the world through their trade activities. Among them were Itruscans, Phoenicians, Egyptians, Chinese, Spaniards, Portugese, etc.
- 49. Trade with Rome
- 50. • Romans placed primary emphasis on encouraging international business activities. The principal approaches used to implement this emphasis were the Pax Romana or Roman Peace and the common coinage. • Rome developed a systematic law, central market locations through the finding of cities and an excellent communication system.
- 52. • Europe imported rice, oranges, dyes, cotton and silk. It exported timber, arms and woollen clothing in exchange for these luxury goods.
- 53. Trade with China
- 54. UK China
- 55. China Tea Silk Sugar Mother-of-pearl Paper Camphor Cassia Copper and Alum Various oils Bamboo Porcelain OPIUM UK Cotton and Woollen Textiles Iron Tin Lead Diamonds Watches Clocks
- 56. • First Opium War and the Treaty of Nanjing (1839-1842) • Second Opium War (1857- 1860) • Taiping Rebellion (1851-1864)
- 57. Trade with Japan
- 58. • Loyalty to family, to country, to company and to social groups and the strong drive to cooperate, to work together for a common cause, permeate many facets of Japanese behaviour. • Historically, loyalty and service, a sense of responsibility, and respect for discipline, training and artistry were stressed to maintain stability and order.
- 59. Geographical perspective in Global Business • Altitude, humidity and temperature extremes are climatic features that affect the uses and functions of product and equipment. • Products that perform well in temperate zones may deteriorate rapidly or require special cooling or lubrication to function adequately in tropical zones.
- 61. Taiwan to Middle East
- 62. • Geography answers questions related to the location of different kinds of economic activity and the transactions that flow across national boundaries. • It provides insight into the natural and human factors that influence patterns of production and consumption in different parts of the world. • More of emphasis is placed on location, place, interaction, movement and region.
- 63. 1. Location Marco Polo Christopher Columbus Vasco Da Gama James Cook Leading manufacturer of disk drives and other electronic components....light weight, heavy value goods
- 64. 2. Place • Natural/ Physical Features- it includes natural resources and influence the type of economic activities in which people engage. • Human Features-
- 65. Place • Natural/ Physical Features- – Geological Characterisitcs- Gold and Diamond South Africa, Rich Deposits of Iron ore Amazon Basin in Brazil, Copper Chile, Petroleum Saudi Arabia – Terrain- Silk Route, Mountain Passes for collecting taxes – Hydrology- Bangladesh frequent flooding – Climate- – Soil more commercial crops are grown in US while the Amazon basin of Brazil has less fertile soil thus deals in less commercial crops.
- 66. Place • Human Features- – Population skills and qualifications. • Swiss have emphasized high levels of education and training in order to maintain a labour force that manufactures sophisticated products for export all around the world. • Japan, Korea, Taiwan have increased the productivity of their workers to become major industrial exporters. – Rural/Urban
- 67. 3. Interaction • Managers seek to take advantage of opportunities present in different places and not to view each place separately. • The way a place functions depends on the presence and form of certain characteristics as well as the interactions among them. – Natural resources such as coal, iron ore and limestone enabled the iron and steel industry to develop in the Ruhr valley of Germany. The chemical and textile industries also grew due to good transport links and available workforce. Canals and rivers such as the Rhine were used for transport and power.
- 69. 4. Movement • International marketing exists because movement permits the transportation of people and goods and communication of information and ideas among different places. – New York became the largest city in NORTH AMERCIA because its harbour provided sheltered anchorage for ships crossing the Atlantic and the Hudson River provided access leading into the interior of the continent.
- 70. 5. Region • A region is a set of places that share certain characteristics. Many regions are defined by characteristics that all of the places in the group have in common. • When economic characteristics are used, the delimited regions include places with similar kind of economic activity. • Agricultural regions include areas where certain farm products dominate. • Regions can also be defined by patterns of movement. Transportation or communication linkages among places may draw them together into configurations that differentiate them from other locales. • Economic aspects of movement may help define functional regions by establishing areas where certain types of economic activity are more profitable than others.
- 71. Dynamics of Global Population Trends • Current population, rural/ urban population shifts, rated of growth, age levels and population control help determine today’s demand for various categories of goods. • Changes in the composition and distribution of population among the world’s countries will affect future demand.
- 72. • Controlling population growth – Economics, self esteem, religion, politics and education play critical roles in attitudes about family size. – The prerequisites to population control are adequate incomes, higher literacy levels, education for women, universal access to healthcare, family planning, improved nutrition, a change in basic cultural beliefs, regarding the importance of large families.
- 73. • Rural / Urban Migration – Migration from rural to urban areas, which can consist of domestic or international moves, is largely a result of a desire for greater access to sources of education, healthcare and improved job opportunities. – Although migrants experience some relative improvement in their living standards, intense urban growth without investment in services eventually leads to serious problems. – Slums populated with unskilled workers living hand to mouth put excessive pressure on sanitation systems, water supplies and social services.
- 74. • Population Decline and Aging – While the developing world faces a rapidly growing population, the industrialized world’s population is in decline and rapidly aging. – The problems caused by an increasing percentage of elderly people must be supported by a declining number of skilled workers.
- 75. • Worker shortage and immigration – The free flow of immigration will help ameliorate the dual problems of explosive population in less developed countries and worker shortage in industrialised regions.
- 76. • The trends of increasing population in the developing world, with substantial shifts from rural to urban areas, declining birth rates in the industrialised world, and global population aging, will have profound effects on the state of world business and world economic conditions. • Without successful adjustments to these trends, many countries will experience slower economic growth, serious financial problems for senior retirement programs and further deterioration of public and social services, leading to possible social unrest.
Editor's Notes
- #8: Jeannet page 3
- #21: cateora pg 19
- #33: Keegan Pg 15
- #35: Johansson pg 17 Global Customers- Federal Express, Erickson, Hilton Hotels, German Bosch Transferable Marketing- multilanguage packaging
- #37: 1984 Summer Olympics in Los Angeles sponsorship Kodak hesitated and Fuji offered for sponsorship
- #39: Unilever, Colgate-Palmolive, Procter and Gamble
- #42: Johansson pg 25
- #49: Itruscans-Italy Phoenicians- lebnan, Syria, Israel, CYPRUS, etc.
- #51: Pax Romana ensured that merchants were able to travel safely on roads that were built, maintained and protected by Roman legions and their affiliated troops. The common coinage ensured that business transactions could be carried out easily through out the empire.
- #63: Czinkota pg 21
- #64: Singapore important centre for trade in the British Empire