Global Marketing
Management
Planning and Organization
Global Marketing Management
• 1970s – “standardization versus adaptation”
• 1980s – “globalization 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.
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Global Marketing Management
Coca Cola and Pepsi
Compete World
Round – Which Sign
Can You Read?
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Global Marketing Management
Disney Successfully Exports its Princesses While Barbie Fails.
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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.
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The International Marketing Task
• Insert Exhibit 1.3
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The Self-Reference Criterion and
Ethnocentrism
• The key to successful international marketing is adaptation to the
environmental differences from one market to another.
• Primary obstacles to success in international marketing:
- SRC
- Associated ethnocentrism
SRC is an unconscious reference to
one’s own cultural values,
experiences, and knowledge as a basis
for decisions.
Ethnocentrism is the notion that
one’s own culture or company knows
best how to do things.
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Benefits of Global Marketing
• When large market segments can be identified, economies of scale
in production and marketing can be important competitive
advantages for global companies.
• Transfer of experience and know-how across countries through
improved coordination and integration of marketing activities.
• 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.
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Alternative Market-Entry Strategies
• Insert Exhibit 11.2
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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.
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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.
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Contractual Agreement (continued)
• Franchising
- Franchiser provides a standard package of products, systems,
and management services, and the franchisee provides market
knowledge, capital, and personal involvement in management.
- Two types of franchise agreements:
• Master franchise – gives the franchisee the rights to a
specific area with the authority to sell or establish
subfranchises.
• Licensing
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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
• 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.
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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
• They acknowledged intent by the partners to share in the
management of the JV
• They 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
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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.
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Direct Foreign Investment
• Factors that have been found to influence the structure
and performance of direct investments:
-
Timing
The growing complexity and contingencies of contracts
Transaction cost structures
Technology transfer
Degree of product differentiation
The previous experiences and cultural diversity of acquired
firms
- Advertising and reputation barriers
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The International Communications Process
• Insert Exhibit 16.4
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Legal Constraints
• Laws that control comparative advertising vary from country to
country in Europe.
• Advertising of specific products
• Control of advertising on television
• Accessibility to broadcast media
• Limitations on length and number of commercials
• Internet services
• Special taxes that apply to advertising
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Linguistic Limitations
• Language is one of the major barriers to effective communication
through advertising
• Translation challenges
• Low literacy in many countries
• Multiple languages within a country
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Cultural Diversity
• Knowledge of cultural diversity must encompass the total
advertising project
• Existing perceptions based on tradition and heritages are often
hard to overcome
• Subcultures
• Changing traditions
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Media Limitations and Production and Cost
Limitations
• Media limitations may diminish the role of advertising in the
promotional program
• Examples of production limitations:
- Poor-quality printing
- Lack of high-grade paper
• Low-cost reproduction in small markets poses a problem in many
countries
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Media Planning and Analysis –
Tactical Considerations
Local Restrictions or Lack of Availability Spawn
Other Media Vehicles
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Microsoft
United States
Corporate
Branding/
Image
Campaign
Mexico
Japan
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Microsoft
Korea
United States
France
Product
Specific
Advertising
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