Chapter 1A

Chapter 1Introduction toGlobal Marketing : 

Chapter 1Introduction toGlobal Marketing

Slide 2: 

1-2 Global Perspective: Recent Events Information technology boom of the late 1990s

Slide 3: 

1-3 Global Perspective: Recent Events

Introduction : 

1-4 Introduction Global versus “regular” marketing Scope of activities are outside the home-country market Product/market growth matrix

Global Marketing : 

1-5 Global Marketing 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 : 

1-6 Globalization Globalization is the inexorable integration of markets, nation-states and technologies to a degree never witnessed before—in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than every before, and in a way that is enabling the world to reach into individuals, corporations and nation-states father, faster, deeper and cheaper than ever before. Thomas L. Friedman

Global Industries : 

1-7 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 trade to total worldwide production Ratio of cross-border investment to total capital investment Proportion of industry revenue generated by companies that compete in key world regions

Competitive Advantage, Globalization, and Global Industries : 

1-8 Competitive Advantage, Globalization, and 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

Global Marketing: What It Is and What It Isn’t : 

1-9 Global Marketing: What It Is and 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

Standarization versus Adaptation : 

1-10 Standarization versus 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

Standarization versus Adaptation : 

1-11 Standarization versus Adaptation Arabic read right to left Chinese “delicious/happiness” The faces of Coca-Cola around the world

McDonald’s Global Marketing : 

1-12 McDonald’s Global Marketing Marketing Mix Element Standardization Localized Product Promotion Place Price Big Mac Brand name Advertising slogan “I’m Loving It” Free-standing Big Mac is $3.10 in U.S. and Turkey McAloo Tikka potato burger (India) Slang ’Macca’s (Australia) MakDo (Philippines) McJoy magazine, “Hawaii Surfing Hula” promotion (Japan) Home delivery (India) Swiss rail system dining cars $5.21 (Switzerland) $1.31(China)

The Importance of Going Global : 

1-13 The Importance of Going Global For U.S. companies, 70% of total world market for goods and services is outside the country Coca-Cola earns 75% of operating income and two-thirds 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

Global Auto Industry : 

1-14 Global Auto Industry Thousands of auto companies globally in the early twentieth century More than 500 of those producers were in the United States Today there are fewer than 20 in the world Toyota is the world’s most valuable car company and is eighth largest in revenue globally

Management Orientations : 

1-15 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 : 

1-16 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 : 

1-17 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 : 

1-18 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

Driving Forces Affecting Global Integration and Global Marketing : 

1-19 Driving Forces Affecting Global Integration and Global Marketing Regional economic 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 : 

1-20 Driving Forces Affecting Global Integration and Global Marketing Quality World economic trends Leverage

Restraining Forces Affecting Global Integration and Global Marketing : 

1-21 Restraining Forces Affecting Global Integration and Global Marketing Management myopia Organizational culture National controls Opposition to globalization

Questions International Marketers Ask : 

1-22 Questions International Marketers Ask How will my idea, good, or service fit into the international market? Should I obtain my supplies domestically or from abroad? What marketing adjustments will be necessary? What threats from global competition should I expect? How can I work with these threats and turn them into opportunities? What are my strategic global alternatives?

Slide 23: 

1-23 How would you expect to come into contact with global marketing activities? How is global marketing as a field related to your future career?