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    Chapter11 Chapter11 Presentation Transcript

    • Global Marketing Management Planning and Organization McGraw-Hill/Irwin International Marketing, 13/e © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
    • Global Perspective Global Gateways
      • Confronted with increasing global competition for expanding markets, multinational companies are changing their marketing strategies and altering their organizational structure.
      • A recent study of North American and European corporations indicated that nearly 75% of the companies are revamping their business processes.
      • The flexibility of a smaller company may enable it to reflect the demands of global markets and redefine its programs more quickly than larger multinationals .
      • Acquiring a global perspective is easy, but the execution requires planning, organization and willingness to try new approaches.
    • Global Marketing Management
      • 1970s – “standardization versus adaptation”
      • 1980s – “global integration versus localization”
      • 1990s – “global integration versus local responsiveness”
      • The trend back toward localization is caused by the new efficiencies of customization made possible by the Internet and increasingly flexible manufacturing processes.
      • From the marketing perspective customization is always best.
      • As global markets continue to homogenize and diversify simultaneously, the best companies will avoid the trap of focusing on country as the primary segmentation variable .
    • The Nestle Way: Evolution Not Revolution
      • Nestle is the world’s biggest marketer of infant formula, powdered milk, instant coffee, chocolate, soups, and mineral water.
      • Nestle strategy can be summarized in four points:
        • Think and plan long term
        • Decentralize
        • Stick to what you know
        • Adapt to local tastes
      • Long-term strategy works for Nestle because the company relies on local ingredients and markets products that consumers can afford.
    • Benefits of Global Marketing
      • economies of scale in production and marketing can be important competitive advantages for global companies.
      • Transfer of experience.
      • Marketing globally also ensures that marketers have access to the toughest customers.
      • Diversity of markets served carries with it additional financial benefits.
      • Firms that market globally are able to take advantage of changing financial circumstances.
    • Planning for Global Markets
      • Planning is the job of making things happen that might not otherwise occur.
      • Planning allows for rapid growth of the international function, changing markets, increasing competition, and the turbulent challenges of different national markets.
      • Planning relates to the formulation of goals and methods of accomplishing them, so it is both a process and philosophy.
        • Corporate planning
        • Strategic planning
        • Tactical planning
      • Successful planning is evaluating company objectives, including management’s commitment and philosophical orientation to international business.
    • Planning for Global Markets (cont’d)
      • Company objectives and resources
        • Each new market can require a complete evaluation, including existing commitments, relative to the parent company’s objectives and resources.
        • Defining objectives clarifies the orientation of the domestic and international divisions, permitting consistent policies.
      • International commitment
        • Commitment in terms of:
          • Dollars to be invested
          • Personnel for managing the international organization
          • Determination to stay in the market long enough to realize a return in investments.
        • The degree of commitment to an international marketing cause reflects the extend to a company’s involvement
    • The Planning Process
      • Phase 1: Preliminary Analysis and Screening – Matching Company and Country Needs.
      • Phase 2: Adapting the Marketing Mix to Target Markets.
      • Phase 3: Developing the Marketing Plan
      • Phase 4: Implementation and Control
    • International Planning Process
      • Insert Exhibit 11.1
    • Alternative Market-Entry Strategies
      • An entry strategy into the international market should reflect on analysis of market characteristics such as:
        • Potential sales
        • Strategic importance
        • Strengths of local resources
        • Cultural differences
        • Country restrictions
      • A company has four different modes of foreign market entry from which to select:
        • Exporting
        • Contractual agreements
        • Direct foreign investments
    • Alternative Market-Entry Strategies
      • Insert Exhibit 11.2
    • Exporting
      • Exporting accounts for some 10% of global activity.
      • Direct exporting - the company sells to a customer in another country.
      • Indirect exporting – the company sells to a buyer (importer or distribution) in the home country, who in turn exports the product.
      • The Internet
        • Initially, Internet marketing focused on domestic sales, however, a surprisingly large number of companies started receiving orders from customers in other countries, resulting in the concept of international Internet marketing (IIM).
      • Direct sales
        • Particularly for high technology and big ticket industrial products.
    • Contractual Agreement
      • Contractual agreements are long-term, nonequity association between a company and another in a foreign market.
      • Licensing
        • A means of establishing a foothold in foreign markets without large capital outlays.
        • A favorite strategy for small and medium-sized companies.
        • Legitimate means of capitalizing on intellectual property in a foreign market.
    • Contractual Agreement (continued)
      • Franchising
        • Franchiser provides a standard package of products, systems, and management services, and the franchise provides market knowledge, capital, and personal involvement in management.
        • Despite temporary setbacks, franchising is still expected to be the fastest-growing market-entry strategy.
        • Two types of franchise agreements:
          • Master franchise – gives the franchisee the rights to a specific area with the authority to sell or establish sub franchises.
          • Licensing- L a local franchisee to use a product good services, trademark.
    • Strategic International Alliances
      • A strategic international alliance (SIA) is a business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective
      • SIAs are sought as a way to shore up weaknesses and increase competitive strengths.
      • Firms enter SIAs for several reasons:
        • Opportunities for rapid expansion into new markets
        • Access to new technology
        • More efficient production and innovation
        • Reduced marketing costs
        • Strategic competitive moves
        • Access to additional sources of products and capital
      • Many companies also are entering SIAs to be in strategic position to be competitive and to benefit from the expected growth in the single European market.
    • Strategic International Alliances (continued)
      • International Joint Ventures
        • A joint venture is a partnership of two or more participating companies that have joined forces to create a separate legal entity.
        • Four Characteristics define joint ventures:
          • JVs are established, separate, legal entities
          • The acknowledged intent by the partners to share in the management of the JV
          • There are partnerships between legally incorporated entities such as companies, chartered organizations, or governments, and not between individuals
          • Equity positions are held by each of the partners
    • Strategic International Alliances (continued)
      • Consortia
        • Consortia are similar to joint ventures and could be classified as such except for two unique characteristics:
          • They typically involve a large number of participants
          • They frequently operate in a country or market in which none of the participants is currently active.
        • Consortia are developed to pool financial and managerial resources and to lessen risks.
    • Direct Foreign Investment
      • Factors that have been found to influence the structure and performance of direct investments:
        • Timing
        • The growing complexity and contingency of contracts
        • Transaction cost structures
        • Technology transfer
        • Degree of product differentiation
        • The previous experiences and cultural diversity of acquired firms
        • Advertising and reputation barriers
    • Organizing for Global Competition (cont’d)
      • Locus of decision
        • Considerations of where decisions will be made, by whom, and by which method constitute a major element of organizational strategy.
      • Centralized versus decentralized organizations
        • An infinite number of organizational patterns fro the headquarters activities of multinational firms exist, but most fit into one of three categories:
          • Centralized
          • Regionalized
          • Decentralized
      • No single traditional organizational plan is adequate for today’s global enterprise seeking to combine the economies of scale of a global company with the flexibility and marketing knowledge of a local company.
    • Schematic Marketing Organization Plan Combining Product, Geographic, and Functional Approaches
      • Insert Exhibit 11.4
      • Thank you