This document discusses various aspects of global marketing and management. It begins by outlining reasons for companies to go global, such as new trade agreements and transportation improvements. It then describes methods for foreign market entry, such as exports, strategic alliances, and wholly owned subsidiaries. The document also examines different phases of international expansion and considerations for developing global and localized products. It concludes by emphasizing the need for global managers to balance local responsiveness with global scale.

1. Global Marketing
Foreign Entry
Local Marketing
Global Management

2. Why go Global?
 Emergence of WTO
 Creation of Free Trade Areas
 Benefits of Foreign Trade
 Revolution in Global Communications
 Fast and Efficient Transportation
 Opening of Previously Closed Markets

3. Means to go Global
 Exports to foreign Countries
 Strategic Alliances
– Licensing
– Franchising
– Contract Manufacturing
 Joint Ventures
 Wholly Owned Subsidiaries

4. Multinational Phase
 After WW-II, MNC’s from US & Europe
expanded into Asia, Europe and Latin
America.
 Parent company maintained nominal control
over subsidiaries
 Manufacturing & marketing of products
were localized to meet local demands
 Foreign markets needs are subordinate to
the home markets

5. Global Phase
 Theodore Levitt’s “Globalization of
markets” highlighted the merits of
standardization – Noted the convergence of
world markets
 Selling standardized products in
standardized methods all over the world
 Centralized core competence activities
– R&D, Manufacturing, Management, etc
– E.g.: Semiconductors, Software, Boeing etc.

6. Transnational Phase
 Sumantra Ghoshal, Christopher Bartlett etc
developed a Transnational business idea
 Decentralized but Coordinated operations
 Products are tailored to suit local needs
 Central marketing plan but Local execution
 Subsidiaries network with each other and
share knowledge.
 Head Quarters manages and coordinates
activities

7. Global Products
 People all over have similar needs
 This implies that some products have
Global demand
– E.g. Industrial products Steel, Chemicals etc.
– Semiconductors, Internet services, Software
 Global products are usually impersonal
products.
– People have no personal preference and
decision is made on price or technical merits.

8. Global –Local Products
 People in different cultures have different
styles and different tastes
– E.g: Food, Clothes, Housing etc.
– Cell Phones, Software – Different languages
 Government Regulations force Local
Modifications
– Electrical Appliances, Cars, Automobiles etc.
 Regional Economic Differences
– Purchasing power, economic development etc.

9. Global Marketing Defined
 Marketing activities that are coordinated
and integrated across multiple markets
– Integration can involve Standardized products,
Identical Brand names, Uniform packaging,
Synchronized product introductions, Similar
advertising messages etc.
– Coordination can involve competitive pricing,
sales campaigns, market promotions etc.

10. Other Terms Used
 International Marketing or Foreign
Marketing
– Primarily for exports to selective countries
 Multi-domestic marketing
– Different Products sold in different countries.
– Driven to localize and adapt to local markets
– E.g: HLL and Unilever

11. Global Markets
 Increasingly Common Consumer
requirements and preferences as lifestyles,
tastes and behavior narrow.
 Disappearing National trade boundaries
with new Free Trade Agreements
 Global Brand Recognition
– E.g: Nike, Reebok, Coke, Nikon, Honda, Sony
 Global Communication Revolution

12. Global Competition
 Competitors are expanding globally
 Home market is challenged by a Global
competitor
 Global Raw Material procurement will
drive down costs
– Can also be Man power, finished products etc.
 Saturated home market is slowing down
growth

13. Global Channels
 Global Distribution, Transportation,
Marketing Channels
– Walmart, Metro, Costco – Global retailers
 Global Channels
– CNN, Star TV, Zee etc.
 Transferable Marketing
– I.e.: Similar marketing strategies all over
 Leading markets
– Need to learn from the leading markets. E.g.
Scooters in Italy, Cars in Germany

14. Cost Drivers
 Economies of Scale
– E.g. Reliance Petroleum
 Economies of Scope
– E.g. Infosys, Wipro, TCS
 Global Sourcing Advantages
– E.g TELCO in Italy, Cisco in Bangalore
 Avoid Duplication – Capitalize on spillover
effects
– E.g P&G with Pantene Shampoo

15. Government Drivers
 Favorable Trade policies
– Export promotion, Foreign Investments
 Common Technical Standards
– ISO 9000
 Free Trade Agreements
– NAFTA, ASEAN, EU etc.
 Active Government Promotion
– E.g Halliburton

16. Limits to Globalization
 Internal Resources
– Capital, Labor, Experience etc.
 Industry Factors – Not All industries can go
global e.g Medical services, Defense etc.
 Global Turmoil
– Recession, Political coup, war etc.
 Product Mixes
– Culturally sensitive products cannot be
Globalized

17. Global Localization
 Products that need large scale customization
 Strategy formulation is Globalized
 Execution is Localized
 Examples
– McDonalds, Pizza Hut
– HLL soaps
 Resource limitations force Local Execution
– E.g MTR

18. Developing Knowledge Assets
 Knowledge from Global operation can be a
powerful competitive advantage
– E.g Fiat learnt a lot about emerging markets in
Brazil and applied the same concepts in India
 Knowledge is build through exposure to
new competition, customers, government
rules, technology and business methods
 Learning Organizations can apply their
newly acquired skills in other regions

19. Skill Benefits
 Transferring competitive information and
new products to other markets (including
home market)
 Capitalizing on the knowledge of foreign
markets
– Offer distribution service to other companies
 Stretching and Building the firm’s
capability
– New markets need new skills. Going Global
helps

20. Global Marketing Objectives
 Exploit Market Potential and Growth
 Gain Economies of Scale and Scope
 Learn from the Leading Market
 Pressuring Competitors
 Diversifying Markets
 Learning How to do Business Abroad

21. Roles of a Global Manager
 Select & Implement Foreign Market Entry
– Select Countries, Mode of Entry etc
 Perform Local Marketing Abroad
– Promote Products and Services
– Conduct Market Research
– Manage Advertising Campaign
 Manage Global Operations

22. Skills of Global Manager
Skills Foreign Entry Local marketing Global
Management
Market
Analysis
Market Research
Barriers to Entry
Local Customer
Behavior
Local Market
Research
Global
Segmentation,
Targeting,
Positioning
Strategy Modes of Entry
Expansion Paths
Local Marketing
Strategy
Global
Marketing
Strategy
Implement
&
Execution
Finding the right
Agent
Marketing in
New Countries
Meeting Goals,
Motivating &
E-Commerce

23. Anti-Globalization Phase
 Anti-Globalization movement started
gaining ground in year 1998
 Underdeveloped countries questioned the
economic benefits
 Developed Countries are afraid of losing
Jobs
 Developing Countries are worried about
Financial Instability
– Thailand, Mexico, Brazil, Indonesia, South
Korea

24. Porter’s Five Forces Model
New Entrants
Firm’s Intense
Rivalry
Bargaining
Power
of
Customers
Threat Of substitutes
Bargaining
Power
of
Suppliers

25. Strategic Groups
 A Strategic Group consists of competitors
who offer similar products or service in that
Segment
E.g: IBM, Accenture, EDS for Infosys but
NOT Bian, McKinsey, BCG
 Strategic Group can consist of competitors
who offer Substitute Products
E.g: Nestlé's water for Pepsi and Coca Cola

26. Country Specific Advantages
A Firm possesses some advantages because of
the country from where it Operates.
E.g: Infosys, Wipro have a cost advantage by
operating in India
E.g: Cosco, a Chinese furniture manufacturer
has a cost advantage when competing in US
E.g: IBM has a cost advantage by operating in
India, has famous Brand Name &
Recognition

27. National Competitive Advantage
 A country might provide an absolute
advantage by the virtue of having certain
resources
– Oil in Saudi Arabia, Labor in China
– High Technology in USA
 Comparative Advantage : When one
country is better in producing a certain type
of product
– Coffee in Brazil
– Software & Garments in India

28. New Trade Theory
 Man made Locational Advantages has a big
impact on the Trade Patterns
 Certain Areas have a huge concentration of
certain Industries
– Software firms in Bangalore, Silicon Valley
– Garments in Delhi, Financial services in
Mumbai

29. Country of Origin Effects
 Customers give a value for “Made-in-XXX”
label.
 Products or services from a country with a
positive image tend to be favorably
evaluated, while products from less
positively perceived countries tend to be
downgraded
– Chocolates from Belgium, Watches from
Switzerland, Computers from USA : Positively
Perceived
– Cars from Kenya, Brazil : Negatively Perceived

30. Domestic Competitors
 Domestic Competitors : They have the same
Country Specific Advantages as you.
– E.g: Wipro & Infosys
 Country Specific Advantages are derived
from Government Rules, Regulations, Tax
benefits, Availability of Raw materials,
Human Resources etc
 A large Home Market also helps domestic
competitors. E.g: IBM, DELL & EDS
– Also called Demand Conditions

31. Foreign Competitors
 Foreign Competitors : Foreign Firms are the
most direct competitors of a Globalizing
firm.
– Foreign Competitors from the same country can
be analyzed as a separate Strategic Group.
E.g: Samsung, LG, Daewoo
– Firms from the same country follow similar
strategy
– Regional Trade Blocs also help Foreign
Competitors E.g: Electrolux from EU

32. New Entrants & Substitutes
 Potential New Entrants & Substitutes are
another competitive threat to a Firm
– Banks face a threat of more competition with
new entrants from Japan, US, Europe
– Banks face a threat from substitutes like Web-
Bank, Investment companies like Charles
Schwab, E-Trade etc.
– Banks face threat from Chit-Funds, Mutual
Funds etc.

33. First Mover Advantages
An Emerging market offers an opportunity to
be a first mover and create demand.
Emerging Market can be a Country or
Introducing a new Product/Services
 Higher Brand Recognition
 Positive Brand Image
 More Customer Loyalty
 Longer Market Experience
 Wider Distribution

34. Pioneering Costs
 Customer Tastes & Preferences are
unknown
 New Distribution Channel may have to be
set up
 Customers have to be educated
 Advertising Expenses, Promotion expenses
will be high
 Few Firms tend to be Followers – “Second
Mover Advantage”

35. Transaction Costs
 Transaction Costs are costs incurred when
completing a transaction between a buyer and a
seller.
 Includes hidden costs such as negotiation costs,
finding partners, communication overheads etc. In
addition to obvious costs such as transportation,
taxes, brokerage fees etc.
 Banks & middlemen lower transaction costs by
performing “Market Making” functions

36. Hypercompetition
 The intense rivalry between global firms and
domestic competitors is common in Global
business.
 Competitive advantages are increasingly difficult
to sustain is face of Hypercompetition
 Bench Marking reduces competitive advantages of
the competitors
 Lack of sustainable competitive advantages is
forcing companies to develop intangible skills like
customer service, quality, Brand image etc

37. Winning in Hypercompetition
 Firms can win in a hypercompetitive environment
by continuously moving to new grounds, I.e
raising standards, improving product/Service
quality etc.
 Hypercompetition forces firms to concentrate on:
– Cost & Quality: Lower cost, improve quality
– Timing & Know-how: Market Knowledge
– Defending Strongholds
– Financial Resources: Financial strength is necessary to
keep competitive edge; R&D, M&A, Advertising etc.

38. Closing Thoughts
 Going global will stretch and mold company
resources into a globally effective marketing
organization.
 Global Managers will have to select the right entry
strategies, decide on trade-offs between
localization or global standardization to achieve
the optimal local responsiveness and global scale
of economies.
 When Going global, it is better to take help from
experts for market entry, market research &
international Financing