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Global Marketing and the
Global Marketing
Environment
Going Global
• The post WWII era brought unparalleled
expansion by companies going outside their
home markets.
• Four decades ago the phrase global
marketing did not exist.
• Today companies go global to survive as
competitors will enter the home market with
lower costs, more experience and better
products.
Marketing and
Global Marketing Defined
• Marketing: “the activity, set of institutions,
and processes for creating, communicating,
delivering, and exchanging offerings that have
value for customers, clients, partners, and
society at large”
• Marketing Mix: The 4 Ps
• Global Marketing: The scope of activities
outside the home market
What is Global Marketing
• Global vs. “Regular” Marketing
- Scope of activities are outside the home-country market
Value Chain and Value Proposition
• Value Chain
Marketing, along
with all other
functional business
areas, create value
for the customer
• Value Proposition
– Perceived value to
the customer
– The firm’s promise to
the customer
Customer Perceived Value
• Create value for customers by improving
benefits or reducing price
– Improve the product
– Find new distribution channels
– Create better communications
– Cut monetary and non-monetary costs and prices
Value=Benefits/Price
Globalization
“Economic globalization constitutes
integration of national economies into the
international economy through trade, direct
foreign investment (by corporations and
multinationals), short-term capital flows,
international flows of workers and humanity
generally, and flows of technology.”
~Jagdish Bhagwati~
Global Industries
• An industry is global to the extent that a company’s
industry position in one country is interdependent
with its industry position in another country
Indicators of globalization:
•Ratio of cross-border investment to total capital
investment
•Proportion of industry revenue generated by all
companies that compete in key world regions
•Ratio of cross-border trade to worldwide
production
Competitive Advantage
• When a company succeeds in creating more
value for customers than its competitors do
• Measured relative to industry rivals
• “Created when a firm has value-creating
strategy not simultaneously being
implemented by an current or potential
competitors.” ~ Jay Barney
Globalization of Pro Sports
• Major league sports like
the NBA, NFL, and MLS
are finding new fans
abroad.
• Soccer is a global sport.
• The National Football
League is focusing on
Canada, China,
Germany, Japan,
Mexico, and the UK.
The NFL promoted a 2013 game
in London with banners across a
major street.
Competitive Advantage, Globalization
& Global Industries
• Focus
– Concentration and attention on core business and
competence
“Nestle is focused: We are food and beverages. We are not
running bicycle shops. Even in food we are not in all fields.
There are certain areas we do not touch…We have no soft
drinks because I have said we will either buy Coca-Cola or
we leave it alone. This is focus.”
~Helmut Maucher, former chairman of
Nestlé SA~
Nestlé took a majority stake in the hip
coffee brand Blue Bottle Coffee
GLOBAL MARKETING: What It Is
& What It Isn’t
Single Country
Marketing Strategy
• Target Market Strategy
• Marketing Mix
– Product
– Price
– Promotion
– Place
Global Marketing
Strategy
• Global Market Participation
• Marketing Mix Development
– 4 P’s: Adapt or Standardize?
• Concentration of Marketing
Activities
• Coordination of Marketing
Activities
• Integration of Competitive Moves
Standardization Vs. Adaptation
• Globalization (Standardization)
– Developing standardized products marketed worldwide
with a standardized marketing mix
– Essence of mass marketing
• Global localization (Adaptation)
– Mixing standardization and customization in a way that
minimizes costs while maximizing satisfaction
– Essence of segmentation
– Think globally, act locally
Burberry’s GMS
• Expand in BRIC, US
• Marketing Mix
– Product: emphasize handbags, belts, accessories
– Price: Affordable luxury
– Place: Independent stores in major cities like
Hong Kong, Los Angeles, San Francisco, NYC
– Promotion: New logo, use social media, Burberry
Acoustic for emerging musicians
New Logo
Global Localization
• “Think globally, act locally”
• May be a combination of standard (product)
and nonstandard approaches ( distribution or
packaging)
• Cinnabon/USA developed dulce de leche
flavors for Latin America
• Kraft developed Tang flavors of mango and
pineapple for Latin America and the Mideast
The Importance of Going Global
• For U.S. companies, 75% of total world market for
goods and services is outside the country
– Coca-Cola earns 75% of operating income and
2/3 of profit outside of North America
• For Japanese companies, 90% of world market is
outside the country
• 94% of market potential is outside of Germany
for its companies even though it is the largest EU
market
Management Orientations
• Ethnocentric Orientation
– Home country is superior to others
– Sees only similarities in other countries
–Assumes products and practices that
succeed at home will be successful
everywhere
–Leads to a standardized or extension
approach
Management Orientations
• Polycentric Orientation
– Each country is unique
– Each subsidiary develops its own unique business
and marketing strategies
– Often referred to as multinational
– Leads to a localized or adaptation approach that
assumes products must be adapted to local
market conditions
Management Orientations
• Regiocentric Orientation
– A region is the relevant geographic unit
• Ex: The NAFTA or European Union market
– Some companies serve markets throughout
the world but on a regional basis
• Ex: General Motors had four regions for decades
Management Orientations
• Geocentric Orientation
– Entire world is a potential market
– Strives for integrated global strategies
– Also known as a global or transnational company
– Retains an association with the headquarters
country
– Pursues serving world markets from a single
country or sources globally to focus on select
country markets
– Leads to a combination of extension and
adaptation elements
Forces Affecting Global Integration
& Global Marketing
• Multilateral trade agreements
• Converging market needs and wants and
the information revolution
• Transportation and communication
improvements
• Product development costs
Driving Forces Affecting Global
Integration and Global Marketing
• Leverage
–Experience transfers
–Scale economies
–Resource utilization
–Global strategy
Restraining Forces Affecting Global
Integration and Global Marketing
• Management myopia
• Organizational culture
• National controls
• Opposition to globalization
Marriott Hotel Brands
The World Economy—An Overview
• In the early 20th century economic
integration was at 10%; today it is 50%
• EU and NAFTA are very integrated
• Global competitors have displaced or
absorbed local ones
The World Economy—An Overview
• The new realities:
– Capital movements have replaced trade as the
driving force of the world economy
– Production has become uncoupled from
employment
– The world economy, not individual countries,
is the dominating factor
The World Economy—An Overview
The new realities, continued:
• The struggle between capitalism and socialism
began in 1917 is over
• E-Commerce diminishes the importance of
national barriers and forces companies to re-
evaluate business models
The Triad
• U.S., Western Europe, and Japan
• Represents 75% of world income
• Expanded Triad includes all of North America
and the Pacific Rim and most of Eastern
Europe
• Global companies should be equally strong in
each part

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global marketing management.pptx

  • 1. Global Marketing and the Global Marketing Environment
  • 2. Going Global • The post WWII era brought unparalleled expansion by companies going outside their home markets. • Four decades ago the phrase global marketing did not exist. • Today companies go global to survive as competitors will enter the home market with lower costs, more experience and better products.
  • 3. Marketing and Global Marketing Defined • Marketing: “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” • Marketing Mix: The 4 Ps • Global Marketing: The scope of activities outside the home market
  • 4. What is Global Marketing • Global vs. “Regular” Marketing - Scope of activities are outside the home-country market
  • 5. Value Chain and Value Proposition • Value Chain Marketing, along with all other functional business areas, create value for the customer • Value Proposition – Perceived value to the customer – The firm’s promise to the customer
  • 6. Customer Perceived Value • Create value for customers by improving benefits or reducing price – Improve the product – Find new distribution channels – Create better communications – Cut monetary and non-monetary costs and prices Value=Benefits/Price
  • 7. Globalization “Economic globalization constitutes integration of national economies into the international economy through trade, direct foreign investment (by corporations and multinationals), short-term capital flows, international flows of workers and humanity generally, and flows of technology.” ~Jagdish Bhagwati~
  • 8. Global Industries • An industry is global to the extent that a company’s industry position in one country is interdependent with its industry position in another country Indicators of globalization: •Ratio of cross-border investment to total capital investment •Proportion of industry revenue generated by all companies that compete in key world regions •Ratio of cross-border trade to worldwide production
  • 9. Competitive Advantage • When a company succeeds in creating more value for customers than its competitors do • Measured relative to industry rivals • “Created when a firm has value-creating strategy not simultaneously being implemented by an current or potential competitors.” ~ Jay Barney
  • 10. Globalization of Pro Sports • Major league sports like the NBA, NFL, and MLS are finding new fans abroad. • Soccer is a global sport. • The National Football League is focusing on Canada, China, Germany, Japan, Mexico, and the UK. The NFL promoted a 2013 game in London with banners across a major street.
  • 11. Competitive Advantage, Globalization & Global Industries • Focus – Concentration and attention on core business and competence “Nestle is focused: We are food and beverages. We are not running bicycle shops. Even in food we are not in all fields. There are certain areas we do not touch…We have no soft drinks because I have said we will either buy Coca-Cola or we leave it alone. This is focus.” ~Helmut Maucher, former chairman of Nestlé SA~
  • 12. Nestlé took a majority stake in the hip coffee brand Blue Bottle Coffee
  • 13. GLOBAL MARKETING: What It Is & What It Isn’t Single Country Marketing Strategy • Target Market Strategy • Marketing Mix – Product – Price – Promotion – Place Global Marketing Strategy • Global Market Participation • Marketing Mix Development – 4 P’s: Adapt or Standardize? • Concentration of Marketing Activities • Coordination of Marketing Activities • Integration of Competitive Moves
  • 14. Standardization Vs. Adaptation • Globalization (Standardization) – Developing standardized products marketed worldwide with a standardized marketing mix – Essence of mass marketing • Global localization (Adaptation) – Mixing standardization and customization in a way that minimizes costs while maximizing satisfaction – Essence of segmentation – Think globally, act locally
  • 15. Burberry’s GMS • Expand in BRIC, US • Marketing Mix – Product: emphasize handbags, belts, accessories – Price: Affordable luxury – Place: Independent stores in major cities like Hong Kong, Los Angeles, San Francisco, NYC – Promotion: New logo, use social media, Burberry Acoustic for emerging musicians
  • 17. Global Localization • “Think globally, act locally” • May be a combination of standard (product) and nonstandard approaches ( distribution or packaging) • Cinnabon/USA developed dulce de leche flavors for Latin America • Kraft developed Tang flavors of mango and pineapple for Latin America and the Mideast
  • 18. The Importance of Going Global • For U.S. companies, 75% of total world market for goods and services is outside the country – Coca-Cola earns 75% of operating income and 2/3 of profit outside of North America • For Japanese companies, 90% of world market is outside the country • 94% of market potential is outside of Germany for its companies even though it is the largest EU market
  • 19. Management Orientations • Ethnocentric Orientation – Home country is superior to others – Sees only similarities in other countries –Assumes products and practices that succeed at home will be successful everywhere –Leads to a standardized or extension approach
  • 20. Management Orientations • Polycentric Orientation – Each country is unique – Each subsidiary develops its own unique business and marketing strategies – Often referred to as multinational – Leads to a localized or adaptation approach that assumes products must be adapted to local market conditions
  • 21. Management Orientations • Regiocentric Orientation – A region is the relevant geographic unit • Ex: The NAFTA or European Union market – Some companies serve markets throughout the world but on a regional basis • Ex: General Motors had four regions for decades
  • 22. Management Orientations • Geocentric Orientation – Entire world is a potential market – Strives for integrated global strategies – Also known as a global or transnational company – Retains an association with the headquarters country – Pursues serving world markets from a single country or sources globally to focus on select country markets – Leads to a combination of extension and adaptation elements
  • 23. Forces Affecting Global Integration & Global Marketing • Multilateral trade agreements • Converging market needs and wants and the information revolution • Transportation and communication improvements • Product development costs
  • 24. Driving Forces Affecting Global Integration and Global Marketing • Leverage –Experience transfers –Scale economies –Resource utilization –Global strategy
  • 25. Restraining Forces Affecting Global Integration and Global Marketing • Management myopia • Organizational culture • National controls • Opposition to globalization
  • 27. The World Economy—An Overview • In the early 20th century economic integration was at 10%; today it is 50% • EU and NAFTA are very integrated • Global competitors have displaced or absorbed local ones
  • 28. The World Economy—An Overview • The new realities: – Capital movements have replaced trade as the driving force of the world economy – Production has become uncoupled from employment – The world economy, not individual countries, is the dominating factor
  • 29. The World Economy—An Overview The new realities, continued: • The struggle between capitalism and socialism began in 1917 is over • E-Commerce diminishes the importance of national barriers and forces companies to re- evaluate business models
  • 30. The Triad • U.S., Western Europe, and Japan • Represents 75% of world income • Expanded Triad includes all of North America and the Pacific Rim and most of Eastern Europe • Global companies should be equally strong in each part