Introduction to Global Marketing

Outline
Marketing (Domestic) Vs. International Marketing (Global) Why Do Firms Go Global? Management Orientations Driving and Restraining Forces

What is Marketing?

What is Marketing?

Marketing is to

C, C, D,V,T,P
Philip Kotler

What is Marketing?

C Communicate and Deliver value to a Target market at a Profit.

reate,
Philip Kotler

What is Marketing?
Marketing Seeks to: Discover Needs and Wants of Customers Satisfy Them

What Is Marketing Management?

The art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.
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What is Marketing?
Marketing is not:

Core Marketing Concepts

(1) Needs, Wants, Demands (2) Products

(5) Markets & target market

(3) Value, Satisfaction

(4) Exchange
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Core Marketing Concepts

NEEDS
States of deprivation Physical needs Social needs Individual needs

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Core Marketing Concepts

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Core Marketing Concepts

WANTS
Forms taken by human needs as they are shaped by culture and individual personality Unlimited wants, limited resources

American

Vietnamese

Indian

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Core Marketing Concepts

DEMANDS WANTS DEMANDS

When backed by power, wants become DEMANDS.

An ability to pay

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Core Marketing Concepts

TARGET MARKET
A target market consists of one or more specific groups of potential consumers toward which an organization directs its marketing program.

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Question
What is International Marketing?

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International Marketing Defined

Defined as the performance of business activities designed to plan, price, promote, and direct the flow of a companys goods and services to consumers or users in more than one nations for a profit. (Cateora, Gilly &
Graham 2009)

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International Marketing Defined

Set of different factors: political systems, legal frameworks, cultural norms, economic circumstances etc.

Uncontrollable Elements
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Uncontrollable Elements

Google in China

Coca-Cola in India Examples: Political & legal constraints

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Uncontrollable Elements

Example: Cultural norms

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Uncontrollable Elements

Example: language
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Please share more!

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International Marketing Task

Foreign environment (uncontrollable) Political/legal forces

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Domestic environment (uncontrollable) (controllable)

Economic forces

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Cultural forces

Political/ legal forces

Competitive structure Competitive Forces

Price Promotion

Product

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Geography and Infrastructure Channels of distribution

Environmental uncontrollable country market A Environmental uncontrollable country market B

Economic climate

Level of Technology

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Structure of distribution

Environmental uncontrollable country market C

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Keys to Global Success

Value Creation

Competitive Advantage

Focus

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Value Creation
Value = Benefits/Price 2 methods of value creation?

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Competitive Advantage
Success over competition in industry at value creation Achieved by integrating and leveraging operations on a worldwide scale

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Focus
Concentration and attention on core business and competence

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 CocaCola or we leave it alone. This is focus.
Helmut Maucher (Nestle)

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Examples of Global Marketers

Coca-Cola Philip Morris Daimler-Chrysler McDonalds Toyota Ford Unilever Gillette IBM USA USA Germany USA Japan USA UK/ Netherlands USA USA
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Question
Why Do Firms Go Global?

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Why Do Firms Go Global?

Saturation of the home market Converging market needs and wants Transportation and communication improvements Utilizing global resources Huge potential is from outside
USA : 75% market potential is outside Japan : 85%... Germany : 94%...

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Driving Forces
Product development costs E.g.: New drug (14 yrs. & 400 mil) Quality World economic trends - Emerging Asia - BRICS Leverage Economies of scales Resource utilization Experience transfer

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Restraining Forces
Management myopia Organizational culture

National controls (Eg.: N.T.Bs) Opposition to globalization (Globalphobia)

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Question!
Why have some countries opposed globalization?

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Management Orientations
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Ethnocentric Orientation

Polycentric Orientation Regiocentric Orientation

Geocentric Orientation
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Ethnocentric Orientation
Mainly focus on home country market View foreign market as a dumping ground Little or no marketing research Limited modifications E.g.: American cars (1960s & 70s)

Standardization or extension
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Polycentric Orientation
View each foreign market as unique Consider manufacturing locally

Localized or adaptation

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Regiocentric Orientation
Develop an integrated regional strategy E.g.: NAFTA, Western Europe, Asean Realize the benefit of economies of scale Standardize product(s) within a region

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Geocentric Orientation
View the entire world as a single market Have the ability to think global & act local

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Management Orientations

Ethnocentric
Geocentric Polycentric
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Management Orientations
Ethnocentrism : Domestic/ International Polycentrism : Multinational

Geocentrism

: Transnational / Global

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Management Orientations
What distinguishes Global/Transnational & International/Multinational companies?

Mind-set
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Degree of Trans-nationality
Company Global revenues ($Bil) Percent Revenue from outside the U.S

Intel

37.6
31.9 52.8 118.4 182.5 60.0 146.3 36.4

85.4
77.0 74.8 68.2 53.7 65.0 51.9 46.0
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- Sales
- Assets - Employees

Coca-Cola Citi Group Hewlett-Packard General Electric Boeing Ford Motor Apple

(Source: Cateora, Gilly & Graham 2009)

Standardization Vs. Adaptation

Standardization (Global)
Developing standardized products marketed worldwide with a standardized marketing mix Essence of mass marketing

Adaptation (Local)
Mixing standardization and customization in a way that minimizes costs while maximizing satisfaction Essence of segmentation

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Standardization Vs. Adaptation

- India: Maharaja Mac (made by mutton/lamb) - German : McCroissants (selling with beers) - Philippines: McSpaghetti noodles - Latin America: Banana-fruit pies - New Zealand: Kiwiburger chicken
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Standardization Vs. Adaptation

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Standardization Vs. Adaptation

English Arab Korean Marathi Japanese Cantonese Mandarin Russian Greek Vietnamese Coca-Cola - - C Ca C La
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Standardization Vs. Adaptation

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Standardization Vs. Adaptation

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Standardization Vs. Adaptation

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Questions
Standardization # Adaptation. Examples? Think global & Act local. What does it mean?

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Summary
z z z Global marketing is the process of focusing resources on global marketing opportunities Key success: to create customer value & competitive advantage by maintaining focus Three classifications of management orientation: ethnocentric, polycentric, regiocentric, geocentric Global marketing importance is shaped by a variety of driving & restraining forces

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