I woke up this morning and fixed myself a cup of coffee made by a Swiss company taking milk from a Korean fridge. I watched the news briefly on a British channel on a Japanese TV set. I shaved with an American shaving gel and splashed on an after shave made in France , distributed by an American company under the license of another Swiss company. I also shampooed my hair  using a shampoo made in Thailand . I then checked for messages on my phone (made in China for a Canadian company). Before leaving for here, I quickly paid my satellite TV subscription (of partly Australian origin) with a credit card of a Dutch bank on an American laptop. I drove to work in a car made in Korea listening to music from a Jamaican . Welcome to Global Marketing

Two centuries of sweeping changes In the 1800s , all products used were manufactured within a few miles Great Britain actively involved in international trade in the mid 19 th century Since,WWII rapid expansion into global markets Why Global? Realize their commercial potential Why Global? Survival…..

In the 1800s , all products used were manufactured within a few miles

Great Britain actively involved in international trade in the mid 19 th century

Since,WWII rapid expansion into global markets

Why Global? Realize their commercial potential

Why Global? Survival…..

Global Marketing Is it different from “regular” marketing? Marketing : Series of Activities leading to an exchange Organization’s efforts to satisfy customer wants and needs with products and services with competitive value Marketing Mix: Marketer’s primary tools Marketing is an universal discipline

Is it different from “regular” marketing?

Marketing : Series of Activities leading to an exchange

Organization’s efforts to satisfy customer wants and needs with products and services with competitive value

Marketing Mix: Marketer’s primary tools

Marketing is an universal discipline

Global Marketing Focus on Global markets and opportunities Scope of activities is different Universal marketing guidelines should be combined with specific concepts,considerations and strategies to ensure success

Focus on Global markets and opportunities

Scope of activities is different

Universal marketing guidelines should be combined with specific concepts,considerations and strategies to ensure success

Marketing…An Universal Discipline Marketing: Focusing on resources and objectives of an organization on environemental opportunities and threats Set of concepts,tools, theories,practices and procedures, and experiences Teachable and Learnable body of knowledge Marketing practice varies from country to country

Marketing: Focusing on resources and objectives of an organization on environemental opportunities and threats

Set of concepts,tools, theories,practices and procedures, and experiences

Teachable and Learnable body of knowledge

Marketing practice varies from country to country

The Marketing Concept Shift of focus from the product to the consumer in the 60s The strategic Concept of Marketing evolved in the 1990s Knowing the customer in a context From profits to stakeholders benefits From profit maximization to managing strategic relationships Positioning the firm in the value chain

Shift of focus from the product to the consumer in the 60s

The strategic Concept of Marketing evolved in the 1990s

Knowing the customer in a context

From profits to stakeholders benefits

From profit maximization to managing strategic relationships

Positioning the firm in the value chain

The Infosys Sustainability Report 2008 Communication channels with key stakeholders Customers: Customer Satisfaction Surveys Annual Customer Leadership Meets Employees: Employee Satisfacion Surveys Inclusivity Survey Infosys Women Inclusivity Councils CEO-Employee Column Local Communities: Site Visits Interactions with NGOs Investors: Annual meets Suppliers: Vendor Surveys Government: Membership in key Government bodies Education: Global Internship Programs/Fellowships

Communication channels with key stakeholders

Customers: Customer Satisfaction Surveys

Annual Customer Leadership Meets

Employees: Employee Satisfacion Surveys

Inclusivity Survey

Infosys Women Inclusivity Councils

CEO-Employee Column

Local Communities: Site Visits

Interactions with NGOs

Investors: Annual meets

Suppliers: Vendor Surveys

Government: Membership in key Government bodies

Education: Global Internship Programs/Fellowships

Boundaryless Marketing Marketing Customer Needs and Wants R & D Engineering Mfg CV

Three Principles of Marketing Customer Value Competitive or Differential Advantage Focus

Customer Value

Competitive or Differential Advantage

Focus

Customer Value Value(V)= B(Benefits)/P(Price) Task is to create better customer value than competitors Cos with cost advatage: Price competitive weapon Knowledge of Customer+ Innovation & Creativiity can lead to offerings of superior customer value

Value(V)= B(Benefits)/P(Price)

Task is to create better customer value than competitors

Cos with cost advatage: Price competitive weapon

Knowledge of Customer+ Innovation & Creativiity can lead to offerings of superior customer value

SAP empowers midisized cos deliver superior CV SAP Business All-in-One Solution adds new CRM functionality Delivers key CRM capabilties to marketing sales and services with ability to analyze results Enables companies to generate more sales leads,close more deals and provide better service and support

SAP Business All-in-One Solution adds new CRM functionality

Delivers key CRM capabilties to marketing sales and services with ability to analyze results

Enables companies to generate more sales leads,close more deals and provide better service and support

Competitive or Differential Advantage CA: Total offer that is is more attractive to customers vis-à-vis competitors Could come from any element of the offer Product Price Promotion Distribution

CA: Total offer that is is more attractive to customers vis-à-vis competitors

Could come from any element of the offer

Product

Price

Promotion

Distribution

Design…a competitive advantage Unicorn Industrial Sewing Machines Company in China Makes Sewing Machines for Consumers and Industrial Users

Unicorn Industrial Sewing Machines Company in China

Makes Sewing Machines for Consumers and Industrial Users

Design…..a competitive advantage Industrial sewing machines can have over 1000 precision parts and assemblies Uses Autodesk Invention software to make product desgn more efficient and reduce design cycle time and potential errors Makes it possible even for new engineers to design in a third of the time

Industrial sewing machines can have over 1000 precision parts and assemblies

Uses Autodesk Invention software to make product desgn more efficient and reduce design cycle time and potential errors

Makes it possible even for new engineers to design in a third of the time

Focus Required to succeed in the task of creating Customer Value at a competitive advantage Concentrating resources or efforts on consumer needs and wants How to deliver a product that will meet those needs and wants

Required to succeed in the task of creating Customer Value at a competitive advantage

Concentrating resources or efforts on consumer needs and wants

How to deliver a product that will meet those needs and wants

Global Marketing: What it is and what it is not? Markets and customers are different from country to country Marketing practices must vary Experiences not directly applicable from country to country Kellogg Breakfast cereals

Markets and customers are different from country to country

Marketing practices must vary

Experiences not directly applicable from country to country

Kellogg Breakfast cereals

The Global Marketing Controversy Prof. Theodore Levitt in HBR 1983 “Globalization of Markets” “ Homogenous Global Village” High Quality, world products Market around world using standardized advetising,pricing and distribution Major failures

Prof. Theodore Levitt in HBR 1983 “Globalization of Markets”

“ Homogenous Global Village”

High Quality, world products

Market around world using standardized advetising,pricing and distribution

Major failures

Coca Cola….A major global Marketing Success Success not based on standardization of marketing mix elements Global Localization Think Global, Act Local Combination of standard(actual product itself) and nonstandard( distribution or packaging)

Success not based on standardization of marketing mix elements

Global Localization

Think Global, Act Local

Combination of standard(actual product itself) and nonstandard( distribution or packaging)

Group Danone……A truly Global company Revenues of Euro 15.22 Billion in 2008 World’s No. 1 in Fresh Dairy Products World’s No. 2 in Bottled Water World’s No. 2 in Biscuits

Revenues of Euro 15.22 Billion in 2008

World’s No. 1 in Fresh Dairy Products

World’s No. 2 in Bottled Water

World’s No. 2 in Biscuits

Group Danone Presence in 120 countries 40% Revenues from outside Europe Key to Danone’s success: extensive knowledge of local market Focus: Innovation and local market autonomy Group’s Identity “Worldwide business with local presence”

Presence in 120 countries

40% Revenues from outside Europe

Key to Danone’s success: extensive knowledge of local market

Focus: Innovation and local market autonomy

Group’s Identity “Worldwide business with local presence”

Group Danone Priority: Develop a strong brand that reflect consumer needs in that market as closely as possible Danone: seen as French in France Spanish in Spain Mexican in Mexico Dannon in America In Argentina, fresh dairy brand Le Serenissiree 65% market share

Priority: Develop a strong brand that reflect consumer needs in that market as closely as possible

Danone: seen as French in France

Spanish in Spain

Mexican in Mexico

Dannon in America

In Argentina, fresh dairy brand Le Serenissiree 65% market share

Group Danone Most new product ideas come from specific needs in a country Usually tested in the country Drinking yoghurt Actimel first tested in Belgium Juice brand Dano first tested in France If product works,local office takes and adapts it Role of HQ: For each pdt, the pureness of the concept

Most new product ideas come from specific needs in a country

Usually tested in the country

Drinking yoghurt Actimel first tested in Belgium

Juice brand Dano first tested in France

If product works,local office takes and adapts it

Role of HQ: For each pdt, the pureness of the concept

Group Danone Local office: can adapt to individual markets,encouraged to Some change advertising,some change name Some opt for sweeter tasting yoghurt,some will have simpler packagings

Local office: can adapt to individual markets,encouraged to

Some change advertising,some change name

Some opt for sweeter tasting yoghurt,some will have simpler packagings

Global Marketing No imposition of a standardised approach Does not mean entering every market in the world Means widening business horizons to encompass the world when scanning for opportunities and threats Decision to enter markets will depend on several factors like resources,managerial mind-set and nature of opportunities and threats

No imposition of a standardised approach

Does not mean entering every market in the world

Means widening business horizons to encompass the world when scanning for opportunities and threats

Decision to enter markets will depend on several factors like resources,managerial mind-set and nature of opportunities and threats

Nokia-A Global marketing success World’s largest handset manufacturer In 2005, Nokia was loosing market share and share price was dipping Missed the “mobile-as-fashion statement” trend Slow to take advantage of this trend in developed world Concentrated on building business in developing world(India,China,Indonesia) Different requirement:Basic,reliable hardware

World’s largest handset manufacturer

In 2005, Nokia was loosing market share and share price was dipping

Missed the “mobile-as-fashion statement” trend

Slow to take advantage of this trend in developed world

Concentrated on building business in developing world(India,China,Indonesia)

Different requirement:Basic,reliable hardware

Nokia-A Global Marketing Success Global Market share jumped to 40% in 2007 China market share: 35% Trusted,but not trendy in the USA US Cellphone market difficult to grow Driven by cell-service carriers,like Verizon,AT & T Phones sold at subsidized rates,works only with their service

Global Market share jumped to 40% in 2007

China market share: 35%

Trusted,but not trendy in the USA

US Cellphone market difficult to grow

Driven by cell-service carriers,like Verizon,AT & T

Phones sold at subsidized rates,works only with their service

Nokia-A Global Marketing success Europe: Nokia leader USA leaders: Samsung, Motorola and Palm USA: consumers driven by emerging technology No right products Corrected by launch of two new products: E Series and N Series E Series: corporate E-mail users N Series: Multimedia capabilties

Europe: Nokia leader

USA leaders: Samsung, Motorola and Palm

USA: consumers driven by emerging technology

No right products

Corrected by launch of two new products: E Series and N Series

E Series: corporate E-mail users

N Series: Multimedia capabilties

Nokia E 90: closer to laptop Some models: Big and Untrendy in USA but seen as strength in some markets Old,Flat brick phones:Out of fashion in USA,status symbol in Jakarta Trend laggard,but enormous level of trust from consumers in Asia and Europe Wide View of the World

E 90: closer to laptop

Some models: Big and Untrendy in USA but seen as strength in some markets

Old,Flat brick phones:Out of fashion in USA,status symbol in Jakarta

Trend laggard,but enormous level of trust from consumers in Asia and Europe

Wide View of the World

LVMH Moet Hennessey Louis Vouitton-A Global Marketing Success World’s largest luxury products manufacturer

World’s largest luxury products manufacturer

LVMH… Enduring status symbol around the world Major threats: Counterfeiting Brand Dilution Growth Markets: China and India China: set up in 92 Todat,LVMH China’s leading luxury brand 4 stores: Nanjing,Beijing,Tiajin and Shenyang 3 Stores in India: 2 in Delhi and 1 in Mumbai

Enduring status symbol around the world

Major threats: Counterfeiting

Brand Dilution

Growth Markets: China and India

China: set up in 92

Todat,LVMH China’s leading luxury brand

4 stores: Nanjing,Beijing,Tiajin and Shenyang

3 Stores in India: 2 in Delhi and 1 in Mumbai

LVMH in Japan Japanese customer: great eye for detail Powerful appeal of French quality and savoir faire Respect tradition yet future facing 54 Stores in Japan Store Architecture integral part of brand identity Instore experience as important as the product

Japanese customer: great eye for detail

Powerful appeal of French quality and savoir faire

Respect tradition yet future facing

54 Stores in Japan

Store Architecture integral part of brand identity

Instore experience as important as the product

LVMH in Japan-the Omotendo Building in Tokyo

LVMH in Japan…the Omotendo Building

The Importance of Global Markets Largest Market in the world: USA: 25% Second largest Market: Japan: 15% Largest European Market: Germany: 8% Rise of the global corporation Inefficient companies will disappear

Largest Market in the world: USA: 25%

Second largest Market: Japan: 15%

Largest European Market: Germany: 8%

Rise of the global corporation

Inefficient companies will disappear

The World’s largest companies 22,345 205,514 China Sinopec 9. Netherlands ING Group 8. 20,102 259,171 France Total SA 6. 35,235 367,053 UK BP 4. 51,340 453,500 Netherlands Royal Dutch Shell 1. -4,560 203,260 Japan Toyota Motors 10. -16,998 230,764 USA Conoco Philips 7. 23,931 263,159 USA Chevron 5. 13,400 405,607 USA Wal-Mart 3. 45,220 442,851 USA Exxon-Mobil 2. Profit($ mill) Revenues($ mill) Country Company Rank

Management Orientations Co’s responses depends on management’s assumption or beliefs Ethnocentric Polycentric Regiocentric Geocentric

Co’s responses depends on management’s assumption or beliefs

Ethnocentric

Polycentric

Regiocentric

Geocentric

Ethnocentric Orientation Home country is superior Sees similarities in foreign countries Assumption is: successful products in home countries can be sold anywhere without adaptation Foreign operations viewed as secondary or subordinate Assumption is HQ knowledge and capabilties applicable anywhere For mfg cos, foreign markets means of disposal of surplus

Home country is superior

Sees similarities in foreign countries

Assumption is: successful products in home countries can be sold anywhere without adaptation

Foreign operations viewed as secondary or subordinate

Assumption is HQ knowledge and capabilties applicable anywhere

For mfg cos, foreign markets means of disposal of surplus

Ethnocentric Orientation No systematic marketing research outside home country No major modification in product Differerences in consumer needs ignored Ethnocentrism big internal threat

No systematic marketing research outside home country

No major modification in product

Differerences in consumer needs ignored

Ethnocentrism big internal threat

Polycentric Orientation Belief that each country is unique Each subsidiary develops its unique business and marketing strategies Called a Multinational Company

Belief that each country is unique

Each subsidiary develops its unique business and marketing strategies

Called a Multinational Company

GE in Korea GE Capital,financing arm Started with fully owned subsidiary in Korea For six years,tried to market auto,personal loans and leasing of office equipments Negligible market share Folded ops of its two subsidiaries in 2004 into two subsidiaries of Hyundai Motors-Hyundai Capital(car financing arm) and Hyundai Card(credit card arm)

GE Capital,financing arm

Started with fully owned subsidiary in Korea

For six years,tried to market auto,personal loans and leasing of office equipments

Negligible market share

Folded ops of its two subsidiaries in 2004 into two subsidiaries of Hyundai Motors-Hyundai Capital(car financing arm) and Hyundai Card(credit card arm)

GE in Korea Since 2004, invested $ 3 billion in these two subsidiaries Owns 43% of the shares GE’s biggest minority investments in the world Now, among GE’s most profitable investments Model for GE’s marketing and branding strategies worldwide Before Hyundai, GE strongly preferrred management control in JVs

Since 2004, invested $ 3 billion in these two subsidiaries

Owns 43% of the shares

GE’s biggest minority investments in the world

Now, among GE’s most profitable investments

Model for GE’s marketing and branding strategies worldwide

Before Hyundai, GE strongly preferrred management control in JVs

GE in Korea GE success in Korea led to similar decisions……25.4% of Bank of Ayudha in Thailand Hyundai had 75% of the Korean auto market Korean operations provide 5.1% of GE’s worldwide profits of the consumer fianncing business GE: moving from ethnocentricity to polycentricity

GE success in Korea led to similar decisions……25.4% of Bank of Ayudha in Thailand

Hyundai had 75% of the Korean auto market

Korean operations provide 5.1% of GE’s worldwide profits of the consumer fianncing business

GE: moving from ethnocentricity to polycentricity

Regiocentric Orientation Regions as Unique Intergrated Regional Strategy US company focusing on the NAFTA countries European company focusing on EU or Europe

Regions as Unique

Intergrated Regional Strategy

US company focusing on the NAFTA countries

European company focusing on EU or Europe

Geocentric Orientation Entire world as potential market Integrated world marketing strategy “ Worldview”: similarities and differences in markets and countries Global strategy fully responsive to local needs and wants

Entire world as potential market

Integrated world marketing strategy

“ Worldview”: similarities and differences in markets and countries

Global strategy fully responsive to local needs and wants

Ford and the World car Modelled after the BMW world car the 3 Series Sports Sedan

Modelled after the BMW world car the 3 Series Sports Sedan

Ford and the World Car Ford planning the “world car” Simple premise “ Building one product for multiple markets” Basic belief: To make money on smalll cars, development and other costs to be spread over one huge global market First test: the subcompact Fiesta Fiesta selling well in Europe and Asia, to debut in the USA early 2010

Ford planning the “world car”

Simple premise “ Building one product for multiple markets”

Basic belief: To make money on smalll cars, development and other costs to be spread over one huge global market

First test: the subcompact Fiesta

Fiesta selling well in Europe and Asia, to debut in the USA early 2010

Ford and the World Car Risky strategy, failures earlier Potential for huge profits Regional divisions disagreement CEO has organized the company around the world car Global version of other models planned

Risky strategy, failures earlier

Potential for huge profits

Regional divisions disagreement

CEO has organized the company around the world car

Global version of other models planned

Ford and the World Car Potential savings: upto $ 700 million per model Plus factor: European and US tastes seem to be converging Midsize sedans earlier much smaller in EU than USA,now almost comparable Tastes to a degree is globalizing

Potential savings: upto $ 700 million per model

Plus factor: European and US tastes seem to be converging

Midsize sedans earlier much smaller in EU than USA,now almost comparable

Tastes to a degree is globalizing

The Inspiration…the BMW 3 Series Sports Sedan Virtually the same in every market Secret of success” Show consumers what the next big thing is,not relect what they know now” Ubiquity engenders trust while design creates inspiration

Virtually the same in every market

Secret of success” Show consumers what the next big thing is,not relect what they know now”

Ubiquity engenders trust while design creates inspiration

The Research Ford researched small car buyers…owners of VW in EU,Honda in USA and Toyota in China Consumer: Aged 20-30 Limited funds Big apetite for fashion and design Imaginary Global archetype customer: Isabella Recent college graduate living near Milan Creative,thinking about pursuing journalism

Ford researched small car buyers…owners of VW in EU,Honda in USA and Toyota in China

Consumer: Aged 20-30

Limited funds

Big apetite for fashion and design

Imaginary Global archetype customer: Isabella

Recent college graduate living near Milan

Creative,thinking about pursuing journalism

Isabella….. Modest earner,likes city living Fashionable,very much in social media Customer Clinics conducted all around the world Isabell’s personality traits,aspirations and sensibilties and what she wants resonated around the world What worked for BMW, will it work for Ford???????

Modest earner,likes city living

Fashionable,very much in social media

Customer Clinics conducted all around the world

Isabell’s personality traits,aspirations and sensibilties and what she wants resonated around the world

What worked for BMW, will it work for Ford???????

Factors driving Global Integration and Marketing Technology Truly stateless No cultural boundaries Soon available everywhere in the world

Technology

Truly stateless

No cultural boundaries

Soon available everywhere in the world

Regional Economic Agreements NAFTA(North Atlantic Free Trade Agreement) WTO (World Trade Organization) EU (European Union)

NAFTA(North Atlantic Free Trade Agreement)

WTO (World Trade Organization)

EU (European Union)

Market Needs and Wants Cultural universals and differences Common elements in human nature: Basis for creating global markets Converging consumer needs and wants Top global brands built on fulfilling universal needs…..basic appeal are global

Cultural universals and differences

Common elements in human nature: Basis for creating global markets

Converging consumer needs and wants

Top global brands built on fulfilling universal needs…..basic appeal are global

The Top Global Brands

Transportation and Communication Improvements Time and cost barriers with distance has fallen dramatically Physical distribution costs and time has reduced

Time and cost barriers with distance has fallen dramatically

Physical distribution costs and time has reduced

Product Development Costs New products: Major investments and long periods of development time Pfizer R&D Budget: $ 7 Billion Annually

New products: Major investments and long periods of development time

Pfizer R&D Budget: $ 7 Billion Annually

Product Development costs High Product Development costs must be recovered in global marketplace No single national market likely to be large enough

High Product Development costs must be recovered in global marketplace

No single national market likely to be large enough

Quality Global Marketing Strategies generates greater revenue,greater margins and larger investments in product design and quality Global companies “raise the bar” Uniformity drives down research,engg,design and production cost

Global Marketing Strategies generates greater revenue,greater margins and larger investments in product design and quality

Global companies “raise the bar”

Uniformity drives down research,engg,design and production cost

World Economic Trends Economic Growth resulted in market opportunities India: Fertile Ground for long-term sustainable growth India: A “guaranteed- to-happen” success story: Between ’92-93 to 2005-2006, average growth rate: 6.2% India : Young People,virgin market: 400 Million people below 21 and 20 Million new babies every year

Economic Growth resulted in market opportunities

India: Fertile Ground for long-term sustainable growth

India: A “guaranteed- to-happen” success story: Between ’92-93 to 2005-2006, average growth rate: 6.2%

India : Young People,virgin market: 400 Million people below 21 and 20 Million new babies every year

World Economic Trends Reduced resistance to entry of foreign firms Worldwide movement towards deregulation and privatization

Reduced resistance to entry of foreign firms

Worldwide movement towards deregulation and privatization

Leverages....Experience transfer Can leverage its experience in any market in the world: Management Practices Strategies Products Advertising Appeals Sales Ideas Promotional Ideas

Can leverage its experience in any market in the world:

Management Practices

Strategies

Products

Advertising Appeals

Sales Ideas

Promotional Ideas

Leverages…..Scale Economies Advantage of greater manufacturing volumes to obtain economies of scale Finished products can be produced by combining components manufactured by scale-sufficient plants in different countries

Advantage of greater manufacturing volumes to obtain economies of scale

Finished products can be produced by combining components manufactured by scale-sufficient plants in different countries

Scale Economies Buying….Levers “Global procurement Officer” Manufacturing Marketing Research & Development Logistics

Buying….Levers “Global procurement Officer”

Manufacturing

Marketing

Research & Development

Logistics

Resource Utilization Ability to scan the world to identify people.money and raw materials that will enable it to compete efficiently in world markets Indiabulls real Estate raised $ 533 million from FIIs(Fidelity,HSBC,TPG and Moor Capital) in May 2009

Ability to scan the world to identify people.money and raw materials that will enable it to compete efficiently in world markets

Indiabulls real Estate raised $ 533 million from FIIs(Fidelity,HSBC,TPG and Moor Capital) in May 2009

Global Strategy Greatest single advantage Based on info system that scans the whole world to identify opportunities,trends,threats and resources Once opportunities are identified,leverages its skills and focuses its resources to create superior customer value and achieve competitive advantage Design to create winning effort on a global scale

Greatest single advantage

Based on info system that scans the whole world to identify opportunities,trends,threats and resources

Once opportunities are identified,leverages its skills and focuses its resources to create superior customer value and achieve competitive advantage

Design to create winning effort on a global scale

The Global/Transnational Corporation Any Business Enterprise that pursues global business objectives by linking world resources to world market opportunities Within the international financial framework Under the umbrella of global peace Advantage of expanding communication technologies Serve needs and wants on global scale

Any Business Enterprise that pursues global business objectives by linking world resources to world market opportunities

Within the international financial framework

Under the umbrella of global peace

Advantage of expanding communication technologies

Serve needs and wants on global scale

Restraining Forces Management Myopia and Organizational Culture Essential to combine global vision and perspective with local market initiative and input

Management Myopia and Organizational Culture

Essential to combine global vision and perspective with local market initiative and input

National Controls and Barriers Protectionist forces Control over market acess and entry Control over advertising Nontariff Barriers Only solution: Become “insiders” in every country

Protectionist forces

Control over market acess and entry

Control over advertising

Nontariff Barriers

Only solution: Become “insiders” in every country