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Introduction toGlobal Marketing

Outline

• Marketing (Domestic) Vs. International Marketing (Global)

• Why Do Firms Go Global?

• Management Orientations

• Driving and Restraining Forces

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What is Marketing?

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What is Marketing?

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Marketing is to

C, C, D,V,T,P

Philip Kotler

What is Marketing?

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…Create, Communicate and Deliver value to

a Target market at a Profit.

Philip Kotler

What is Marketing?

Marketing Seeks to: Discover Needs and Wants of Customers

Satisfy Them

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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:

SELLINGADs

(1) Needs, Wants, Demands

(2) Products

(3) Value, Satisfaction

(4) Exchange

(5) Markets & target market

Core Marketing Concepts

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NEEDS

• States of deprivation

• Physical needs

• Social needs

• Individual needs

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Core Marketing Concepts

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Core Marketing Concepts

Forms taken by human needs as they are shaped by culture and individual personality

Unlimited wants, limited resources

WANTS

American Indian

Vietnamese

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Core Marketing Concepts

DEMANDSWANTS

An ability to pay

When backed by power, wants become DEMANDS.

Core Marketing Concepts

DEMANDS

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

TARGET MARKET

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Core Marketing Concepts

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 company’s 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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Political/legalforces

Economicforces

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Environmentaluncontrollablecountry market A

Environmentaluncontrollablecountrymarket B

Environmentaluncontrollablecountrymarket C

Competitivestructure Competitive

Forces

Level of Technology

Price Product

Promotion Channels of distribution

Geography and

Infrastructure

Foreign environment(uncontrollable)

Structure ofdistribution

Economic climate

Cultural forces

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7Political/

legalforces

Domestic environment(uncontrollable)

(controllable)

International Marketing Task

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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 Coca-Cola 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• McDonald’s• Toyota• Ford• Unilever• Gillette• IBM

USAUSAGermanyUSAJapanUSAUK/ NetherlandsUSAUSA

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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

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• Leverage• Economies of scales• Resource utilization• Experience transfer

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

1• Ethnocentric Orientation

2• Polycentric Orientation

3• Regiocentric Orientation

4• 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

Polycentric

Geocentric

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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

- Sales

- Assets

- Employees

Company Global revenues($Bil)

Percent Revenue from outside the

U.S

Intel 37.6 85.4

Coca-Cola 31.9 77.0

Citi Group 52.8 74.8

Hewlett-Packard 118.4 68.2

General Electric 182.5 53.7

Boeing 60.0 65.0

Ford Motor 146.3 51.9

Apple 36.4 46.0

(Source: Cateora, Gilly & Graham 2009)

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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 Coca-Cola

Arab كوكاكول

Korean 코카콜라 Marathi को�को�-को�ला�

Japanese コカ・コーラCantonese 可口可樂 Mandarin 可口可乐　Russian Кока-Кола

Greek Κόκα κόλα

Vietnamese Cô Ca Cô 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

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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