Introduction

Global Marketing can be defined as “marketing on a worldwide scale reconciling or

taking commercial advantage of global operational differences, similarities and

opportunities in order to meet global objectives.” 

The main objective of the study is to find how the NISSAN works as a global marketer.

Nissan is the fourth worldwide automaker with sales of 6,129,254 units in 2005, up

5.9% over 2004. Considering the traditional position of mistubishi in the actual market,

the analysis of Nissan alliance case would provide you with valuable element on how

to approach the growing and competitive manufacturing global market.

As such, the success of Carlos Ghosn is correlated to his extensive vision of synergies

between the Renault and Nissan, thus he believes that the transfer of knowledge

between foreign engineering world only occur within a framework of quality. The

reason he didn’t merge Renault and Nissan relay on the advantage of mutual challenge

the push both firms to seek new cost reductions, economies of scale and scope

opportunities. Consequently, Renault and Nissan both managed to reach their goal by

remaining profitable.

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Nissan Motor Company Ltd, usually shortened to Nissan is

a multinational automaker headquartered in Japan. It was formerly a core member of

the Nissan Group, but has become more independent after it’s restructuring

under Carlos Ghosn (CEO).

It formerly marketed vehicles under the "Datsun" brand name and is one of the largest

car manufacturers in the world. As of 2011, the company's global headquarters is

located in Nishi-ku, Yokohama. In 1999, Nissan entered a two way alliance

with Renault S.A. of France, which owns 43.4% of Nissan while Nissan holds 15% of

Renault shares, as of 2008. The current market share of Nissan, along

with Honda and Toyota, in American auto sales represent the largest of the automotive

firms based in Asia that have been increasingly encroaching on the historically

dominant US-based "Big Three" consisting of GM, Ford and Chrysler. In its home

market, Nissan became the second largest car manufacturer in 2011, surpassing Honda

with Toyota still very much the dominant first. Along with its normal range of models,

Nissan also produces a range of luxury models branded as Infiniti.

The Nissan VQ engines, of V6 configuration, have been featured among Ward's 10

Best Engines for 14 straight years.

History

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Beginnings of Datsun name from 1914

Masujiro Hashimoto founded The Kwaishinsha Motor Car Works in 1911. In

1914, the company produced its first car, called DAT.

The new car's name was an acronym of the company's investors' family names:

Kenjiro Den 

Rokuro Aoyama 

Meitaro Takeuchi 

It was renamed to Kwaishinsha Motorcar Co., Ltd. in 1918, and again to DAT

Motorcar Co. in 1925.[1] DAT Motors built trucks in addition to the DAT and Datsun

passenger cars. The vast majority of their outputs were trucks, due to an almost non-

existent consumer market for passenger cars at the time. Beginning in 1918, the first

DAT trucks were produced for the military market. It was the low demand of the

military market in the 1920s that forced DAT to merge in 1926 with Japan's 2nd most

successful truck maker, Jitsuyo Motors.

In 1926 the Tokyo-based DAT Motors merged with the Osaka-based Jitsuyo Jidosha

Co., Ltd.  Jitsuyo Motors (established 1919, as a Kubota subsidiary) to become DAT

Automobile Manufacturing Co., Ltd.  in Osaka until 1932. (Jitsuyo Jidosha began

producing a three-wheeled vehicle with an enclosed cab called the Gorham in 1920,

and the following year produced a four-wheeled version. From 1923 to 1925, the

company produced light cars and trucks under the name of Lila.)

In 1931, DAT came out with a new smaller car, the first "Datson", meaning "Son of

DAT". Later in 1933 after Nissan took control of DAT Motors, the last syllable of

Datson was changed to "sun", because "son" also means "loss" in Japanese, hence the

name "Datsun”.

In 1933, the company name was Nipponized to Jidosha-Seizo Co., Ltd.  "Automobile

Manufacturing Co., Ltd.")  and was moved to Yokohama.

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Nissan name first used in 1930s

In 1928, Yoshisuke Aikawa founded the holding company Nippon Sangyo (Japan

Industries or Nippon Industries). "The name 'Nissan' originated during the 1930s as an

abbreviation" used on the Tokyo stock market for Nippon Sangyo. This company was

the famous Nissan "Zaibatsu" (combine) which included Tobata Casting and Hitachi.

At this time Nissan controlled foundries and auto parts businesses, but Aikawa did not

enter automobile manufacturing until 1933.

Nissan would eventually grow to include 74 firms, and to be the fourth-largest combine

in Japan during World War II.

In 1930, Aikawa purchased controlling shares in DAT Motors, and then in 1933 it

merged Tobata Casting's automobile parts department with DAT Motors. As Tobata

Casting was a Nissan company, this was the beginning of Nissan's automobile

manufacturing.

Nissan Motors founded in 1934

In 1934, Aikawa "separated the expanded automobile parts division of Tobata Casting

and incorporated it as a new subsidiary, which he named Nissan Motor (Nissan)".

Nissan Motor Co., Ltd. The shareholders of the new company however were not

enthusiastic about the prospects of the automobile in Japan, so Aikawa bought out all

the Tobata Casting shareholders (using capital from Nippon Industries) in June, 1934.

At this time Nissan Motors effectively became owned by Nippon Sangyo and Hitachi.

Nissan built trucks, airplanes, and engines for the Japanese military. The company's

main plant was moved to China after land there was captured by Japan. The plant made

machinery for the Japanese war effort until it was captured by American and Russian

forces. From 1947 to 1948 the company was called Nissan Heavy Industries Corp.

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Nissan's early American connection

DAT had inherited Kubota's chief designer, American William R. Gorham. This, along

with Aikawa's inspiring 1908 visit to Detroit, was to greatly affect Nissan's future.

Although it had always been Aikawa's intention to use cutting-edge auto making

technology from America, it was Gorham that carried out the plan. All the machinery,

vehicle designs and engine designs originally came out of the United States. Much of

the tooling came from the Graham factory and Nissan had a Graham license under

which trucks were made. The machinery was imported into Japan by Mitsubishi on

behalf of Nissan, which went into the first Yokohama factory to produce cars.

Foreign expansion

In the 1950s, Nissan decided to expand into worldwide markets. Nissan management

realized their Datsun small car line would fill an unmet need in markets such as

Australia and the world's largest car market, the United States. They first showed cars

at the 1959 Los Angeles Auto Show and sold a few that year in the United States. The

company formed a U.S. subsidiary, Nissan Motor Corporation U.S.A., in 1959, headed

by Yutaka Katayama. Nissan continued to improve their sedans with the latest

technological advancements and chic Italianate styling in sporty cars such as theDatsun

Fairlady roadsters, the race-winning 411 series, the Datsun 510 and the world-

class Datsun 240Z, and by 1970, they had become one of the world's largest exporters

of automobiles.

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U.S. market) began turning in rapidly increasing numbers to high-quality small

economy cars. To meet the growing demand, the company built new factories in

Mexico, Australia, Taiwan and South Africa.

The "Chicken Tax" of 1964 placed a 25% tax on imported commercial vans. In

response, Nissan, Toyota Motor Corp. and Honda Motor Co. began building plants in

the U.S. in the early 80s.

Nissan's initial assembly plant, in Smyrna, Tennessee, at first built only trucks such as

the 720 and Hardbody, but has since expanded to produce several car and SUV lines,

including the Altima, Maxima, Xterra and Pathfinder. An engine plant in Decherd,

Tennessee followed, and most recently a second assembly plant in Canton, Mississippi.

In 1998 Nissan announced that it was selling one of its headquarter buildings to the

Mori Group for $107.8 million.

In order to overcome export tariffs and delivery costs to its European customers, Nissan

contemplated establishing a plant in Europe. After an extensive review, Sunderland in

the north east of the United Kingdom was chosen for the local availability of a highly

skilled workforce and its position near major ports. The plant was completed in 1986 as

the subsidiary Nissan Motor Manufacturing (UK) Ltd. By 2007, it was producing

400,000 vehicles per year, landing it the highly coveted title of the most productive

plant in Europe.

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Products

Automotive products

Nissan has produced an extensive range of mainstream cars and trucks, initially for

domestic consumption but exported around the world since the 1950s. There was a

major strike in 1953.

It also produced several memorable sports cars, including the Datsun Fairlady 1500,

1600 and 2000 Roadsters, the Z-car, an affordable sports car originally introduced in

1969; and the GT-R, a powerful all-wheel-drive sports coupe.

In 1985, Nissan created a tuning division, NISMO, for competition and performance

development of such cars. One of Nismo's latest models is the 370Z NISMO.

Until 1982, Nissan automobiles in most export markets were sold under

the Datsun brand. Since 1989, Nissan has sold its luxury models in North America

under the Infiniti brand.

Nissan also sells a small range of kei cars, mainly as a joint venture with other Japanese

manufacturers like Suzuki or Mitsubishi. Nissan does not develop these cars. Nissan

also has shared model development of Japanese domestic cars with other

manufacturers, particularly Mazda, Subaru, Suzuki and Isuzu.

In China, Nissan produces cars in association with the Dongfeng Motor

Group including the 2006 Nissan Livina Geniss. This is the first in the range of a new

worldwide family of medium sized cars and is to make its world debut at

the Guangzhou International Motor Show.

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Non-automotive products

Nissan has also had a number of ventures outside the automotive industry, most

notably the Tu-Ka mobile phone service (est. 1994), which was sold to DDI and Japan

Telecom (both now merged into KDDI Corporation) in 1999. Nissan also owns Nissan

Marine, a joint venture with Tohatsu Corp that produces motors for boats and other

maritime equipment.

Global sales figures

Calendar Year Global Sales

1998 2,555,962

1999 2,629,044

2000 2,632,876

2001 2,580,757

2002 2,735,932

2003 2,968,357

2004 3,295,830

2005 3,597,851

2006 3,477,837

2007 3,675,574

2008 3,708,074

2009 3,358,413

2010 4,080,588

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Manufacturing locations

 Japan

Oppama, Yokosuka, Kanagawa (Oppama Plant & Research Center)

Kaminokawa, Tochigi (Tochigi Plant)

Kanda, Fukuoka (Kyushu Plant & Nissan Shatai Kyushu Plant)

Kanagawa-ku, Yokohama, Kanagawa (Yokohama Plant)

Iwaki, Fukushima (Iwaki Plant)

Hiratsuka, Kanagawa (Nissan Shatai Shonan Plant)

Nagoya, Aichi (Aichi Machine Industry Atsuta & Eitoku Plants)

Matsusaka, Mie (Aichi Machine Industry Matsusaka Plant)

Tsu, Mie (Aichi Machine Industry Tsu Plant)

Uji, Kyoto (Auto Works Kyoto)

Ageo, Saitama (Nissan Diesel Motor, currently owned by the Volvo Group)

Samukawa, Kanagawa (Nissan Kohki)

Zama, Kanagawa (Zama Plant closed in 1995, currently Global Production

Engineering Center and storage unit for its historic models)

 India

Oragadam, Chennai

 Brazil

Sao Jose dos Pinhais, Parana

 Indonesia

Cikampek, West Java

 Iran

Karaj, Tehran

 Malaysia

Segambut, Kuala Lumpur

Serendah, Selangor

 Mexico

Aguascalientes, Aguascalientes

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Cuernavaca, Morelos

 Morocco

Tangier, Tangier Med port (Under construction, Renault-Nissan plant)

 Egypt

6th of October City, October 6 Governorate

 Pakistan

Karachi, Sindh

 Philippines

Santa Rosa City, Laguna

 South Africa

Rosslyn, Pretoria, Gauteng.

 Spain

Barcelona

Avila

Cantabria

Montcada i Reixac

 Thailand

Bangna, Samutprakarn

 Republic of China

Taipei, Taiwan

 United Kingdom

Sunderland, County Durham, North East England

 United States

Smyrna, Tennessee

Canton, Mississippi

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GLOBAL MARKETING

Two decade ago, the global marketing did not even exist. Today, global

Marketing is essential not only for the realization to the full success potential of a

business, but even more critically for their survival of a business. A company

which fails to go global is in longer of losing its domestic business to competitors

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with lower costs, greater experience, and better products and in a nutsheel, more

value for the customers. The importance of going global is to ensure company

survival; it is a more powerful motive for many companies than the attraction of

opportunity abroad. Industries that were entirely national in scope only a few

years ago are dominated today by a handful of global companies. International

marketing (IM) or global marketing refers to marketing carried out by companies

overseas or across national borderlines. This strategy uses an extension of the

techniques used in the home country of a firm. It refers to the firm-level

marketing practices across the border including market identification and

targeting, entry mode selection, marketing mix, and strategic decisions to

compete in international markets. According to the American Marketing

Association (AMA) "International marketing is the multinational process of

planning and executing the conception, pricing, promotion and distribution of

ideas, goods, and services to create exchanges that satisfy individual and

organizational objectives."

Meaning of Marketing

Marketing is essentially a creative corporate activity involving the planning and

execution of the conception, pricing, promotion, and distribution of ideas, products, and

services in an exchange that not only satisfies customer’s current needs but also

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anticipates and creates their future needs at a profit. Marketing is not only much

broader than selling; it also encompasses the entire company’s market orientation

towards customer satisfaction in a competitive environment. In other word marketing

strategy requires close attention to both customers and competitors. The aim of

marketing is to create value for stakeholders, and the key stakeholder’s is the customer.

Meaning of Global Marketing

The oxford university press defines global marketing as “marketing on a worldwide

scale reconciling or taking commercial advantage of global operational differences,

similarities and opportunities in order to meet global objectives´.

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Customer needs & wantsCustomer needs & wants

Research & developmentResearch & development ManufacturingManufacturing

Customer Value Customer Value

Global marketing refers to marketing activities by companies that emphasize activities

the following:

Reduction of cost inefficiencies and duplication of efforts among their national

and regional subsidiaries

Opportunities for the transfer of products, brands, and other ideas across

subsidiaries

Emergence of global customers

Improved linkages among national marketing infrastructures leading to the

development of a global marketing infrastructure.

Although Levitt’s view that global marketing does not necessarily mean

standardization of products, promotion, pricing, and distribution worldwide but rather,

it is a company’s proactive willingness to adopt a global proactive perspective instead

of a country country-by-country or region-by- region perspective region in developing

a marketing strategy.

Evolution of Global Marketing

Global marketing is not a revolutionary shift, it is an evolutionary process. While the

following does not apply to all companies, it does apply to most companies that begin

as domestic-only companies.

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Domestic Marketing

A marketing restricted to the political boundaries of a country, is called

"Domestic Marketing". A company marketing only within its national

boundaries only has to consider domestic competition. Even if that competition

includes companies from foreign markets, it still only has to focus on the

competition that exists in its home market. Products and services are developed

for customers in the home market without thought of how the product or service

could be used in other markets. All marketing decisions are made at

headquarters. The biggest obstacle these marketers face is being blindsided by

emerging global marketers. Because domestic marketers do not generally focus

on the changes in the global marketplace, they may not be aware of a potential

competitor who is a market leader on three continents until they simultaneously

open 20 stores in the Northeastern U.S. These marketers can be considered

ethnocentric as they are most concerned with how they are perceived in their

home country.

Export Marketing

Generally, companies began exporting, reluctantly, to the occasional foreign

Customer who sought them out. At the beginning of this stage, filling these

orders was considered a burden, not an opportunity. If there was enough

interest, some companies became passive or secondary exporters by hiring an

export management company to deal with all the customs paperwork and

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language barriers. Others became direct exporters, creating exporting

departments at headquarters. Product development at this stage is still focused

on the needs of domestic customers. Thus, these marketers are also considered

ethnocentric.

International Marketing

If the exporting departments are becoming successful but the costs of doing

business from headquarters plus time differences, language barriers, and

cultural ignorance are hindering the company’s competitiveness in the foreign

market, then offices could be built in the foreign countries. Sometimes

companies buy firms in the foreign countries to take advantage of relationships,

storefronts, factories, and personnel already in place. These offices still report to

headquarters in the home market but most of the marketing mix decisions are

made in the individual countries since that staff is the most knowledgeable

about the target markets. Local product requires weeks to fit into any regional

marketplace. Marketing decisions are made by consulting with marketers in all

the countries that will be affected. The goal is to sell the same thing the same

way everywhere.

Objective of the study

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PRIMARY OBJECTIVE

The primary objective of the project is to know the concept of Global Marketing as a

whole.

SECONDARY OBJECTIVE

To study the main area of the Global Marketing:

To study the advantages & disadvantages of global marketing

To study the Global marketing environment

To study global marketing strategies

To study the Five Global Considerations Every Marketer needs to think

about.

To know the Global Marketing 5 Steps to Succession

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Literature review

1. Marketing of products and services in the Muslim countries presents a very

challenging task to multinational companies (MNC) due to the difference in

political, economy and socio-cultural aspects. At the same time, MNC could not

“avoid” targeting Muslim countries as their source of expansion as these

countries represent almost 20% of the world’s population. Furthermore, this

figure is expected to increase to 30% by 2025. One of the most important

concepts in Islam is the concept of halal, which means “permissible.” Halal

covers the aspects of slaughtering, storage, display, preparation, hygiene and

sanitation. It covers food as well as non-food category of products. Given the

speed of trade globalization, the advancement in science and technology, and

the ongoing initiatives to simplify manufacturing processes, it is essential that

the halal concept be fully understood by marketers. This paper discusses the

marketing challenges in dealing with the halal issue. It makes reference to

Malaysia’s halal certification policy and procedure as the country has set itself

to become the major player in providing halal products and services. This

complements well with Malaysia’s role as the Chairman of the 57-nation

Organization of Islamic Conference (OIC) and its vision to become the global

halal hub.

SORUCE: Halal Certification: an international marketing issues and challenges

by Shahidan Shafie, Prof. Dr. Md Nor Othman, Faculty of Business &

Accountancy, University Malaya, Kuala Lumpur, Malaysia.

2. International market selection is one of the most important decisions to be made

by organisations engaging in international trade. Yet, despite its importance, the

approaches taken by many organisations in identifying profitable and servable

markets in the international context are often based on ad hoc decisions and

intuition, rather than a formalised attempt to match the organisation with

appropriate foreign target markets. This paper attempts to clarify some of the

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issues arising in international market selection. A rationale for international

trade is outlined, followed by an assessment of firm-related factors that need to

be considered before market selection and market entry can occur. An overview

of current methodologies for market selection based on the literature on

international marketing is then given. Subsequent to the presentation and

evaluation of these models, salient elements within the models are discussed in

more detail. The conclusion will provide a short executive summary to identify

the key elements to be considered by management in choosing international

markets.

SORUCE: International Market Selection – Issues and Methodologies, a Global

Marketing Paper, Kai F. Mahnert, Sarah McGauley, Laura McGrath, Liz McGrath

(March 2004).

Research Methodology

Research Design:-

Research design used was descriptive. Descriptive research describes data and

characteristics about the population or phenomenon being studied. Descriptive research

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answers the questions who, what, where, when and how. Although the data description

is factual, accurate and systematic, the research cannot describe what caused a

situation. Thus, Descriptive research cannot be used to create a causal relationship,

where one variable affects another. In other words, descriptive research can be said to

have a low requirement for internal validity.

Descriptive research can be either quantitative or qualitative. It can involve collections

of quantitative information that can be tabulated along a continuum in numerical form,

such as scores on a test or the number of times a person chooses to use a-certain feature

of a multimedia program, or it can describe categories of information such as gender or

patterns of interaction when using technology in a group situation. Descriptive research

involves gathering data that describe events and then organizes, tabulates, depicts, and

describes the data collection (Glass & Hopkins, 1984). It often uses visual aids such as

graphs and charts to aid the reader in understanding the data distribution.

TYPES OF DATA COLLECTED:-

Data collected included both primary and secondary data.

PRIMARY DATA:-

Primary data is that kind of data which is collected by the investigator himself for the

purpose of the specific study. The data such collected is original in character. The

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advantage of third method of collection is the authenticity. A set of questions were put

together in the form of questionnaire.

SECONDARY DATA:-

When an investigator uses the data that has been already collected by others is called

secondary data. The secondary data could be collected from Journals, Reports and

Various Publications. The advantages of secondary data can be economical, both in the

term of money and time spent. The researcher of the reporter also did the same and

collected secondary from various internet sites like Google.com. Altavista.com and

many more. The researchers of the reporter also visited various libraries for collection

of the introduction part.

Sources of Data collection:-

Primary Data Collection: - Primary data was collected directly from the respondents.

Secondary Data Collection: - Secondary data was collected with the help of books,

magazine, internet and company brochures.

TOOLS OF DATA COLLECTION: -

The popular ways to collect primary data consist of surveys, interviews and focus

groups, which show that direct relationship between potential customers and the

companies.

Survey method was used in the study and the tool used was the questionnaire.

Questionnaire (interview): - questionnaire is a research instrument consisting of a

series of questions and other prompts for the purpose of gathering information from

respondents.

SAMPLING:-

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Sampling is the process of selecting units (e.g., people, organizations) from a

population of interest so that by studying the sample we may fairly generalize our

results back to the population from which they were chosen.

Sampling Design: - Sampling design used was non-probability sampling that include

convenience and judgmental sampling.

Non- probability sampling:-

Non-probability sampling is a sampling technique where the samples are gathered in a

process that does not give all the individuals in the population equal chances of being

selected.

Convenience sampling is probably the most common of all sampling techniques. With

convenience sampling, the samples are selected because they are accessible to the

researcher. Subjects are chosen simply because they are easy to recruit. This technique

is considered easiest, cheapest and least time consuming.

Judgmental sampling is more commonly known as purposive sampling. In this type of

sampling, subjects are chosen to be part of the sample with a specific purpose in mind.

With judgmental sampling, the researcher believes that some subjects are fit for the

research compared to other individuals. This is the reason why they are purposively

chosen as subjects.

The research conducted for this report was done purely with the help of interviews

conducted with top officials of three companies. Every company has its own

environmental strategy and thus the efforts made by each company cannot be measured

on a common scale.

Global Marketing Advantages & Disadvantages

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Advantages

The advantages of global market we can introduce our product by using

advertising

Economies of scale in production and distribution

Lower marketing costs

Power and scope

Consistency in brand image

Ability to leverage good ideas quickly and efficiently

Uniformity of marketing practices

Helps to establish relationships outside of the "political arena"

Reach

The nature of the internet means businesses now have a truly global reach. While

traditional media costs limit this kind of reach to huge multinationals, E-Marketing

opens up new avenues for smaller businesses, on a much smaller budget, to access

potential consumers from all over the world.

Scope

Internet marketing allows the marketer to reach consumers in a wide range of ways and

enables them to offer a wide range of products and services. E-Marketing includes,

among other things, information management, public relations, customer service and

sales. With the range of new technologies becoming available all the time, this scope

can only grow.

Interactivity

Whereas traditional marketing is largely about getting a brand’s message out there, E-

Marketing facilitates conversations between companies and consumers. With a two

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way communication channel, companies can feed off of the responses of their

consumers, making them more dynamic and adaptive.

Immediacy

Internet marketing is able to, in ways never before imagined, provide an immediate

impact. Imagine you’re reading your favorite magazine. You see a double-page advert

for some new product or service, maybe BMW’s latest luxury sedan or Apple’s latest

iPod offering. With this kind of traditional media, it’s not that easy for you, the

consumer, to take the step from hearing about a product to actual acquisition. With

eMarketing, it’s easy to make that step as simple as possible, meaning that within a few

short clicks you could have booked a test drive or ordered the iPod. And all of this can

happen regardless of normal office hours. Effectively, Internet marketing makes

business hours 24 hours per day, 7 days per week for every week of the year. By

closing the gap between providing information and eliciting a consumer reaction, the

consumer’s buying cycle is speeded up and advertising spend can go much further in

creating immediate leads.

Demographics and targeting

Generally speaking, the demographics of the Internet are a marketer’s dream. Internet

users, considered as a group, have greater buying power and could perhaps be

considered as a population group skewed towards the middle-classes. Buying power is

not all though. The nature of the Internet is such that its users will tend to organize

themselves into far more focused groupings. Savvy marketers who know where to look

can quite easily find access to the niche markets they wish to target. Marketing

messages are most effective when they are presented directly to the audience most

likely to be interested. The Internet creates the perfect environment for niche marketing

to targeted groups.

Adaptively and closed loop marketing

Closed Loop Marketing requires the constant measurement and analysis of the results

of marketing initiatives. By continuously tracking the response and effectiveness of a

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campaign, the marketer can be far more dynamic in adapting to consumers’ wants and

needs. With eMarketing, responses can be analyzed in real-time and campaigns can be

tweaked continuously. Combined with the immediacy of the Internet as a medium, this

means that there’s minimal advertising spend wasted on less than effective campaigns.

Maximum marketing efficiency from eMarketing creates new opportunities to seize

strategic competitive advantages. The combination of all these factors results in an

improved ROI and ultimately, more customers, happier customers and an improved

bottom line.

Disadvantages

Differences in consumer needs, wants, and usage patterns for products

Differences in consumer response to marketing mix elements

Differences in brand and product development and the competitive environment

Differences in the legal environment, some of which may conflict with those of

the home market

Differences in the institutions available, some of which may call for the creation

of entirely new ones (e.g. infrastructure)

Elements of the global marketing mix

The “Four P’s” of marketing: product, price, placement, and promotion are all affected

as a company moves through the five evolutionary phases to become a global company.

Ultimately, at the global marketing level, a company trying to speak with one voice is

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faced with many challenges when creating a worldwide marketing plan. Unless a

company holds the same position against its competition in all markets (market leader,

low cost, etc.) it is impossible to launch identical marketing plans worldwide. Nisant

Chakram (Marketing Management)

Product

A global company is one that can create a single product and only have to tweak

elements for different markets. For example, Coca-Cola uses two formulas (one with

sugar, one with corn syrup) for all markets. The product packaging in every country

incorporates the contour bottle design and the dynamic ribbons in some way, shape, or

form. However, the bottle or can also includes the country’s native language and is the

same size as other beverage bottles or cans in that same country.

Price

Price will always vary from market to market. Price is affected by many variables: cost

of product development (produced locally or imported), cost of ingredients, cost of

delivery (transportation, tariffs, etc.), and much more. Additionally, the product’s

position in relation to the competition influences the ultimate profit margin. Whether

this product is considered the high-end, expensive choice, the economical, low-cost

choice, or something in-between helps determine the price point.

Placement

How the product is distributed is also a country-by-country decision influenced by how

the competition is being offered to the target market. Using Coca-Cola as an example

again, not all cultures use vending machines. In the United States, beverages are sold

by the pallet via warehouse stores. In India, this is not an option. Placement decisions

must also consider the product’s position in the market place. For example, a high-end

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product would not want to be distributed via a “dollar store” in the United States.

Conversely, a product promoted as the low-cost option in France would find limited

success in a pricey boutique.

Promotion

After product research, development and creation, promotion (specifically advertising)

is generally the largest line item in a global company’s marketing budget. At this stage

of a company’s development, integrated marketing is the goal. The global corporation

seeks to reduce costs, minimize redundancies in personnel and work, maximize speed

of implementation, and to speak with one voice. If the goal of a global company is

to send the same message worldwide, then delivering that message in a relevant,

engaging, and cost-effective way is the challenge.

Effective global advertising techniques do exist. The key is testing advertising ideas

using a marketing research system proven to provide results that can be compared

across countries. The ability to identify which elements or moments of an ad are

contributing to that success is how economies of scale are maximized. Market research

measures such as Flow of Attention, Flow of Emotion and branding moments provide

insights into what is working in an ad in any country because the measures are based on

visual, not verbal, elements of the ad .

Global Marketing Environment

Demographic environment

Demography is the study of human populations in terms of size, density, n

location, age, gender, race, occupation, and other stat statistics. The

27

demographic environment is of major interest to marketers because it involves

people, and people make up markets.

The world population is growing at an explosive rate. It now totals more ion

explosive than 5.9 billion and will exceed 7.9 billion by the year 2025. The

explosive world population growth has major implications for business. A

growing population means growing human needs to satisfy. Depending on ion

purchasing power, it may also mean growing market opportunities.

The world’s large and highly diverse population poses both opportunities and

challenges. Thus, marketers keep close track of demographic trends and

developments in their markets, both at home and abroad. They track changing

age and family structures, geographic population shifts, educational

characteristics, and population diversity.

Economic environment

The economic environment consists of factors that affect consumer purchasing power

and spending patterns. Nat ions vary great ly in their levels and distribution of income.

Some countries have subsistence economies they consume most of their own

agricultural and industrial output. These countries offer few market opportunities. At

the other extreme are industrial economies, which constitute rich markets for many

different kinds of goods. Marketers must pay close attention to major trends and

consumer spending patterns both across and within their world markets.

Marketers should pay attention to income distribution as well as average income.

Income distribution is still very poor. At the top are upper class consumers, whose

spending patterns are not affected by current economic events and who are a major

market for luxury goods. There is a comfortable middle class that is somewhat careful

about its spending but can still afford the good life some of the time. The working class

28

must stick close to the basics of food, clothing, and shelter and must try hard to save.

Finally, the poor class must count their pennies when making even the most basic

purchases. Over the past three decades, the rich have grown richer, the middle class has

shrunk, and the poor have remained poor.

Natural environment

The natural environment involves the natural resources that are needed as inputs

by marketers or that are affected by marketing activities. Marketers should be

aware of several trends in the natural environment. The first involves growing

shortages of raw materials. Air and water may seem to be infinite resources, but

some group see long-run dangers. Air pollution chokes many of the world’s

large cities and water shortages are already a big problem in some parts of the

world. Renewable resources, such as forests and food, also have to be used

wisely. Nonrenewable resources, such as oil, coal, and various minerals, pose a

serious problem. Firms making resources, such as oil, coal, and various

minerals, pose a serious problem.

Technological environment

The technological environment is perhaps the most dramatic force now shaping

our destiny. Technology has released such wonders as antibiotics, organ

transplants, computers, and the Internet. It also has released such horrors as

nuclear missiles, chemical weapons, and assault rifles. It has released such

29

mixed blessing as the automobile, television, and credit cards. New

technologies create new markets and opportunities. However, every new

technology replaces an older technology. Transistors hurt the vacuum-tube

industry, xerography.

Hurt the carbon-paper business, the auto hurt the railroads, and compact disks

hurt phonograph records. When old industries fought or ignored new

technologies, their businesses declined. Thus, marketers should watch the

technological environment closely. Companies that do not keep up with

technological change soon will find their products outdated. And they will miss

new product and market opportunities.

Political environment

Marketing decisions are strongly affected by developments in the political

environment. The political environment consists of laws, government agencies,

and pressure groups that influence and limit various organizations and

individuals in a given society. Even the most liberal advocates of free-market

economies agree that the system works best with at least some regulation. Well-

conceived regulation can encourage competition and ensure fair markets for

goods and services. Thus, governments develop public policy to guide

commerce-sets of laws and regulations that limit business for the good of

society as a whole. Almost every marketing activity is subject to a wide range

of laws and regulations. Legislation affecting business around the world has

increased steadily over the years. The States has many laws covering issues

30

such as competition, fair trade practices, environmental protect ion, product

safety, truth in advertising, packaging and labeling, pricing, and other important

areas. The European Commission has been active in establishing a new

framework of laws covering competitive behavior; product standards, product

liability, and commercial transact ions for the nations of the European Union.

Several countries have gone farther than the United States in passing strong

consumerism legislation. For example, Norway bans several forms of sales

Promotion trading stamps, contests, premiums as being inappropriate or unfair

ways of promoting products. Thailand requires food processors selling national

brands to market low price brands also, so that low-income consumers can find

economy brands on the shelves. In India, food companies must obtain special

approval to launch brands that duplicate those already existing on the market.

Cultural environment

The cultural environment is made up of institutions and other forces that affect a

society’s basic values, percept ions, preferences, and behaviors. People grow up

in a particular society that shapes their basic beliefs and values. They absorb a

world view that defines their relationships with others. People in a given society

hold many beliefs and values. Their core beliefs and values have a high degree

of persistence. For example, most Indians believe in working, getting married,

giving to charity, and being honest. These beliefs shape more-specific attitudes

and behaviors found in everyday life. Core beliefs and values are passed on

from parents to children and are reinforced by schools, churches, business, and

government.

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The notion of various environmental forces to global company is shown in

Figure:-

Micro context of international marketing:-

Organizational and consumer behavior:

organizational buying behavior

international negotiations

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consumer behavior

Country of origin.

Marketing entry decisions:

initial mode of entry

specific modes of entry

exporting

joint ventures

Local market expansion: marketing mix decisions:

global standardization vs. local responsiveness

Marketing mix

product policy

Advertising

Pricing

Distribution

Global Marketing Strategies

Competitive strategy

conceptual development

competitive advantage vs. competitive positioning

sources of competitive advantage and performance implications

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Strategic alliances

learning and trust

recipes for alliance success

performance of different types of alliance

Global sourcing

global sourcing in a service context

benefits of global sourcing

country of origin issues in global sourcing

Although some would stem the foreign invasion through protective legislation,

protectionism in the long run only raises living costs and protects inefficient

domestic firms (national controls). The right answer is that companies must

learn how to enter foreign markets and increase their global competitiveness.

Firms that do venture abroad find the international marketplace far different

from the domestic one. Market sizes, buyer behavior and marketing practices all

vary, meaning that international marketers must carefully evaluate all market

segments in which they expect to compete.

Whether to compete globally is a strategic decision (strategic intent) that will

fundamentally affect the firm, including its operations and its management. For

many companies, the decision to globalize remains an important and difficult

one (global strategy and action). Typically, there are many issues behind a

company`s decision to begin to compete in foreign markets. For some firms,

going abroad is the result of a deliberate policy decision (exploiting market

potential and growth); for others, it is a reaction to a specific business

opportunity (global financial turmoil, etc.) or a competitive challenge

(pressuring competitors). But, a decision of this magnitude is always a strategic

34

proactive decision rather than simply a reaction (learning how to business

abroad). Reasons for global expansion are mentioned below:

Opportunistic global market development (diversifying markets)

Following customers abroad (customer satisfaction)

Pursuing geographic diversification (climate, topography, space, etc.)

Exploiting different economic growth rates (gaining scale and scope)

Exploiting product life cycle differences (technology)

Pursuing potential abroad

Globalizing for defensive reasons

Pursuing a global logic or imperative (new markets and profits)

35

36

Global Market Entry Strategies

Exporting as an Entry Strategy:

Exporting represents the least commitment on the part of the firm entering a foreign

market. Exporting to a foreign market is a strategy many companies follow for at least

some of their markets. Since many countries do not offer a large enough opportunity to

justify local production, exporting allows a company to centrally manufacture its

products for several markets and therefore to obtain economies of scale. Furthermore,

since exports add volume to an already existing production operation located

elsewhere, the marginal profitability of such exports tends to be high.

A firm has two basic options for carrying out its export operations. The form of

exporting can be directly under the firm`s control or indirect and outside the firm`s

control. It can contact foreign markets through a domestically located (in the exporter`s

country of operation) intermediary-an approach called indirect exporting. Alternatively,

it can use an intermediary located in the foreign market-an approach termed direct

exporting.

Indirect Exporting:

Indirect exporting includes dealing through export management companies of foreign

agents, merchants or distributors. Several types of intermediaries located in the

domestic market are ready to assist a manufacturer in contacting international markets

or buyers. The major advantage for managers using a domestic intermediary lies in that

individual`s knowledge of foreign market conditions. Particularly, for companies with

little or no experience in exporting, the use of a domestic intermediary provides the

exporter with readily available expertise. The most common types of intermediaries are

brokers, combination export and manufacturers` export agents. Group selling activities

can also help individual manufacturers in their export operations

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Direct Export

Direct exporting includes setting up an export department within the firm or having the

firm`s sales force sell directly to foreign customers or marketing intermediaries. A

company engages in direct exporting when it exports through intermediaries located in

the foreign markets. Under direct exporting, an exporter must deal with a large number

of foreign contacts, possibly one or more for each country the company plans to enter.

Although a direct exporting operation requires a larger degree of expertise, this method

of market entry does provide the company with a greater degree of control over its

distribution channels than would indirect exporting. The exporter may select from two

major types of intermediaries: agents and merchants. Also, the exporting company may

establish its own sales subsidiary as an alternative to independent intermediaries.

Successful direct exporting depends on the viability of relationship built up between the

exporting firm and the local distributor or importer. By building the relationship well,

the exporter saves considerable investment costs.

The independent distributor earns a margin on the selling price of the products.

Although the independent distributor does not represent a direct cost to the exporter,

the margin the distributor earns represents an opportunity that is lost to the exporter. By

switching to a sales subsidiary to carry out the distributor`s tasks, the exporter can earn

the same margin. With increasing volume, the incentive to start a sales subsidiary

grows. On the other hand, if the anticipated sales volume is small, the independent

distributor will be more efficient since sales are channeled through a distributor who is

maintaining the necessary staff for several product lines. The lack of control frequently

causes exporters to shift from an independent distributor to wholly owned sales

subsidiaries.

Many companies export directly to their own sales subsidiaries abroad, sidestepping

independent intermediaries. The sales subsidiary assumes the role of the independent

distributor by stocking the company’s products and/or services, sometimes jointly

advertising & promoting the products, selling to buyers and assuming the credit risk.

38

The sales subsidiary offers the manufacturer full control of selling operations in a

foreign market. Such control may be important if the company`s products require the

use of special marketing skills such as advertising or selling. The exporter finds it

possible to transfer or export not only the product but also the entire marketing program

that often makes the product a success.

The operation of a subsidiary adds a new dimension to a company`s international

marketing operation. It requires the commitment of capital in a foreign country,

primarily for the financing of account receivables and inventory. Also, the operation of

a sales subsidiary entails a number of general administrative expenses that are

essentially fixed in nature. As a result, a commitment to a sales subsidiary should not

be made without careful evaluation of all the costs involved.

Foreign Production as an Entry Strategy

Many companies realize that to open a new market and serve local customers better,

exporting into that market is not a sufficiently strong commitment to realize strong

local presence. As a result, these companies look for ways to strengthen their base by

entering into one of several ways to manufacture.

Licensing

Licensing is similar to contract manufacturing, as the foreign licensee receives

specifications for producing products locally, but the licensor generally receives a set

fee or royalty rather than finished products. Licensing may offer the foreign firm access

to brands, trademarks, trade secret or patents associated with products manufactured.

Under licensing, a company assigns the right to a patent (which protects a product,

39

technology or process) or a trademark (which protects a product name) to another

company for a fee or royalty. Using licensing as a method of market entry, a company

can gain market presence without an equity (capital) investment. The foreign company,

or licensee gains the right to commercially exploit the patent or trademark on either an

exclusive (the exclusive right to a certain geographic region) or an unrestricted basis.

Due to advantages of low risk and low investment, licensing is a particularly attractive

mode for small and medium-sized firms. Licensing also is an effective mode for testing

the future viability of more active involvement with a foreign partner.

Licenses are signed for a variety of time periods. Depending on the investment

needed to enter the market, the foreign licensee may insist on a longer licensing period

to pay off the initial investment. Typically, the licensee will make all necessary capital

investments (machinery, inventory and so forth) and market the products in the

assigned sales territories, which may consist of one or several countries. Licensing

agreements are subject to negotiation and tend to vary considerably from company to

company and from industry to industry.

Companies use licensing for a number of reasons. For one, a company may not

have the knowledge or the time to engage more actively in international marketing. The

market potential of the target country may also be too small to support a manufacturing

operation.

Strategic Alliances

A more recent phenomenon is the development of a range of strategic alliances.

Alliances are different from traditional joint ventures in which two partners contribute a

fixed amount of resources and the venture develops on its own. In an alliance, two

entire firms pool their resources directly in a collaboration that goes beyond the limits

of a joint venture. Although a new entity may be formed, it is not a requirement.

40

Sometimes, the alliance is supported by some equity acquisition of one or both of the

partners. In an alliance, each partner brings a particular skill or resource-usually they

are complementary-and by joining forces, each expects to profit from the other`s

experience. Typically, alliances involve distribution access, technology transfers or

production technology with each partner contributing a different element to the venture.

Alliances can be in the forms of technology-based alliances, production- based

alliances or distribution-based alliances.

Although many alliances have been forged in a large number of industries, the

evidence is not yet in as to whether these alliances will actually become successful

business ventures. Experience suggests that alliances with two equal partners are more

difficult to manage than those with a dominant partner. In particular, it is important to

recognize that the needs and aspirations of partners may change over the life of an

alliance and do so in divergent ways. Predicting what the goals and incentives of the

various parties will be under various circumstances is a critical part of effective

planning. Furthermore, many observers question the value of entering alliances with

technological competitors, such as between western and Japanese firms. The challenge

in making an alliance work lies in the creation of multiple layers of connections or

webs that reach across the partner organizations. Eventually such connections will

result in the creation of new organizations out of the cooperating parts of the partners.

In that sense, alliances may very well be just an intermediate stage until a new company

can be formed or until the dominant partner assumes control.

Entering Markets through Mergers and Acquisitions

Although international firms have always made acquisitions, the need to enter markets

more quickly than through building a base from scratch or entering some type of

collaboration has made the acquisition route extremely attractive. This trend has

probably been aided by the opening of many financial markets, making the acquisition

of publicly traded companies much easier. Most recently even unfriendly takeovers in

foreign markets are now possible. Nevertheless, international mergers and acquisitions

41

are difficult to make work. A major advantage of acquisitions is that they can quickly

position a firm in a new business. By purchasing an existing player, a firm does not

have to take the time to establish its presence or develop for itself the resources it does

not already possess. This can be particularly important when the critical resources are

difficult to imitate or accumulate. Acquiring an existing firm also takes a potential

competitor out of the market. Despite these advantages, acquisitions can have serious

drawbacks. First and foremost, acquisitions can be a very expensive way to enter a

market. In addition to the likelihood of overbidding, acquisitions pose a number of

other challenges. Most targets contain bundles of assets and capabilities, only some of

which are of interest to the acquirer. Disposing of unwanted assets or maintaining them

in the portfolio is often done at significant cost, either in real terms or in management

time. Although these obstacles are serious, a number of acquisitions fail on another

account: the post acquisition integration process fails. Integrating an acquired company

into a corporation is probably one of the most challenging tasks confronting top

management.

Preparing an Entry Strategy Analysis

Of course, assembling accurate data is the cornerstone of any entry strategy analysis.

The necessary sales projections have to be supplemented with detailed cost data and

financial need projections on assets (managerial, financial, etc. resources). The data

need to be assembled for all entry strategies under consideration. Financial data are

collected not only on the proposed venture but also on its anticipated impact on the

existing operations of the international firm. The combination of the two sets of

financial data results in incremental financial data incorporating the net overall benefit

of the proposed move for the total company structure.

For best results, the analyst must take a long-term view of the situation. Asset

requirements, costs and sales have to be evaluated over the planning horizon of the

proposed venture, typically three to five years for an average company. Furthermore, a

thorough sensitivity analysis must be incorporated. Such an analysis may consists of

assuming several scenarios of international risk factors that may adversely affect the

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success of the proposed venture. The financial data can be adjusted to reflect each new

set of circumstances. One scenario may include a 20 percent devaluation in the host

country, combined with currency control and difficulty of receiving new supplies from

foreign plants. Another situation may assume a change in political leadership to a group

less friendly to foreign investments. With the help of a sensitivity analysis approach, a

company can quickly spot the key variables in the environment that will determine the

outcome of the proposed market entry. The international company then has the

opportunity to further add to its information on such key variables or at least to closely

monitor their development. It is assumed that any company approaching a new market

is looking for profitability and growth. Consequently, the entry strategy must support

these goals. Each project has to be analyzed for the expected sales level, costs and asset

levels that will eventually determine profitability. Sales, costs and assets levels have to

be estimated before. Also, profitability has to be estimated (past sales analysis, market

test method). In order to do this, assessing international risk factors, maintaining

flexibility and assessing total company impact are required. Market research that

focuses on buying patterns, customer segmentation on ability to pay especially in

developing countries, etc. (survey of buyers` intentions, composite of sales force

opinion, expert opinion) (SWOT Analysis-strengths, weaknesses, opportunities,

threats)

Exit Strategies

Circumstances may make companies want to leave a country or market. Other than the

failure to achieve marketing objectives, there may be political, economic or legal

reasons for a company to want to dissolve or sell an operation (management myopia).

International companies have to be aware of the high costs attached to the

liquidation of foreign operations; substantial amounts of severance pay may have to be

paid to employees and any loss of credibility in other markets can hurt future prospects.

43

Sometimes, an international firm may need to withdraw from a market to consolidate

its operations. This may mean a consolidation of factories from many to fewer such

plants. Production consolidation when not combined with an actual market withdrawal

is not really what we are concerned with here. Rather, our concern is a company`s

actual abandoning its plan to serve a certain market or country. This is differentiation

between production withdrawal or consolidation and brand withdrawal. A firm can

consolidate production elsewhere while retaining a strong brand and marketing

presence.

Changing political situations have at times forced companies to leave markets.

Changing government regulations can at times pose problems, prompting some

companies to leave a country. Exit strategies can also be the result of negative reactions

in a firm`s home market.

Several of the markets left by international firms over the past decades have changed in

attractiveness, making companies reverse their exit decisions and enter those markets a

second time.

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Global marketing system

45

Five Global Considerations Every Marketer Needs to think about

Each year we ask, Will this be the year of truly global marketing? In 2006 we saw

many companies, large and small, wake to the opportunities abroad. This year we are

seeing many more marketing executives highlight the international experience on their

résumés as they increase revenue, share, and brand awareness in other countries. They

will target the right populations, the right mix of channels to reach them, and the right

products to offer them.

As these marketers write their business plans for the coming years, many will cite an

evergreen litany of reasons for targeting global markets. Among them will be the need

to

1. Prepare for continued growth beyond the North Atlantic:

Not every international market matters, but some matter a lot. I’m actually

writing this column from Shanghai, a booming city in the People’s Republic of

China. Ignore China - now the world’s fourth largest economy -at your peril. Its

middle class today totals 130 million consumers and is expect to grow to some

650 million by 2010. Within 20 years, one of every three consumers in the

world will speak Chinese from birth. Meanwhile, India’s middle class already

equals in size the entire population of the United States. And aging populations

in Europe and Japan will join the retiring baby boomers in the U.S. with

demands for new products, services, and leisure options.

2. Reinforce brand in international markets:

Higher prices and customer demand come from the goodwill associated with a

brand, a hard-won value resulting from the trust that a strong name engenders

among buyers and partners. As they begin to saturate the demand in their

domestic markets, companies spending hundreds of millions of dollars annually

46

to manage and refine their brand will want to extend beyond the small patch of

their headquarters’ country.

3. Balance your business:

When buyers in one region are slow to reach for their wallets, buyers in other

geographies might take up the slack. Global firms with diversified regional

portfolios can always focus their energy on the markets that are doing well.

Closely monitoring economic indicators will let you redeploy assets as

worldwide market conditions dictate.

4. Improve corporate information flow:

Many multinational companies conduct business exclusively in English, but this

works best at the executive- management and director levels. In the operational

trenches and the factories, local languages and customs dominate. To optimize

the output of staff and enable collaborative efforts across a global enterprise,

companies have to make critical communication systems such as e-mail, human

resources, data portals, and decision support available in the language that their

employees are most comfortable with.

5. Satisfy the customer - wherever that customer might be:

People buy from you today, from your competitors tomorrow. Whether they’re

buying iPods or I-beams, international customers begin their buying cycle

online, where they can get answers to their frequently asked questions, product

information, and transactions - all in their local languages. Prospects can review

product offerings, safety advisories, technical data, and competitive

descriptions. Tailoring services to local languages and customs is a natural

extension to personalized marketing, creating a personally and culturally

relevant experience that will strengthen the customer relationship and improve

customer satisfaction.

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Global Marketing 5 Steps to Succession

Companies decide to expand their organizations globally and are unsuccessful

because they fail to realize one very important thing. They do not change their

marketing efforts to adapt to those of another country. Some people feel one

country’s values, beliefs, culture, economic conditions and competitive conditions

are not very different from another. But a message that works in one country can

fail miserably in another because countries are very different from each other.

Companies need to make variations to their marketing approach when doing

business internationally.

To overcome global marketing struggles and conquer your competition, we have

created Global marketing process to guide. Which are as follows:

1. Do The Research:

With any kind of marketing there should always first be some kind of ting

research when developing your marketing strategies. This is especially

important when a business is expanding internationally because their targeted

audience is much different than their home land audience. Researching the

demographics and also doing some kind of research to searching figure out if

there will be a demand for your product or service is very important. Make sure

there is a want or need for your product and then figure out for that country who

your audience is and what will be the best way to target them.

2. Recognize Cultural Differences:

Countries differ in many ways including language, religion, social structure and

education. These differences have significant impact on a business’s marketing

strategies. Through one’s research they also need to find what. Traditions, tastes

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and preferences are of other countries, so their marketing ideas can

accommodate to the country and be effective.

3. Develop a Unique Marketing Mix to Appeal to the Purchasing Behavior of

a Certain Segment in a Given Country:

This secret also includes some research. One needs to identify groups of

consumers whose purchasing behavior differs from others in an important way.

These segments can be found though the geographies, demographics, social-

cultural factors and psychological factors. The segment that would best benefit

the company is the one that then needs to have a unique marketing mix that will

appeal to those purchasing behaviors. The marketing mix will include a firm’s

choice about product attributes, communication strategy, distribution strategy

and pricing strategy that they will offer their targeted segment.

4. Identify Market Segments that Transcend National Borders:

In order to do this, a company needs to find the similarities among the

consumers in a certain segment. Such similarities like values, age, and lifestyle

choices which need to translate into similar purchasing behaviors. Once these

similarities are found, a company can then view the global marketplace as a

single entity and sell a standardized product worldwide using their same basic

marketing mix to help them position and sell that product in a variety of

national markets.

5. Decide if standardized advertising will work for your company:

If a company’s advertisements legally and ethically can be viewed in their home

land country but also in other countries, then standardized advertising is a great

idea. If the advertisements are not offensive and abide by that country’s laws

then most likely using the same ads instead of developing new ones for different

countries is going to be a significant cost saver. Also, there is concern that

creative talent is limited and that one large marketing effort has better results

49

than 40 or 50 smaller efforts. On the other hand, cultural diversity makes it

exceptionally hard to develop a single advertising theme that will be successful

worldwide. Also, advertising regulations might block implementation of

standardized advertising. Laws vary from country to country and so what might

be acceptable in one country is breaking the law in another. Differentiating

between the two and then deciding what will work for your company might

save you money or avoid a lawsuit.

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Findings

The Japanese company Matsushita Electric was promoting a new Japanese PC

for internet users. Panasonic created the new web browser and had received

license to use the cartoon character Woody Woodpecker as an interactive

internet guide. The day before the huge marketing campaign, Panasonic realized

its error and pulled the plug. Why? The ads for the new product featured the

following slogan: "Touch Woody - The Internet Pecker." The company only

realized its cross cultural blunder when an embarrassed American explain what

"touch Woody's pecker" could be interpreted as!

The Swedish furniture giant IKEA somehow agreed upon the name

"FARTFULL" for one of its new desks.

In the late 1970s, Wang, the American computer company could not

understand why its British branches were refusing to use its latest motto "Wang

Cares". Of course, to British ears this sounds too close to "Wankers" which

would not really give a very positive image to any company.

"Traficante" and Italian mineral water found a great reception in Spain's

underworld. In Spanish it translates as "drug dealer".

In 2002, Umbro the UK sports manufacturer had to withdraw its new trainers

(sneakers) called the Zyklon. The firm received complaints from many

organizations and individuals as it was the name of the gas used by the Nazi

regime to murder millions of Jews in concentration camps.

Sharwoods, a UK food manufacturer, spent £6 million on a campaign to launch

its new 'Bundh' sauces. It received calls from numerous Punjabi speakers telling

them that "bundh" sounded just like the Punjabi word for "arse".

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Honda introduced their new car "Fitta" into Nordic countries in 2001. If they

had taken the time to undertake some cross cultural marketing research they

may have discovered that "fitta" was an old word used in vulgar language to

refer to a woman's genitals in Swedish, Norwegian and Danish. In the end they

renamed it "Honda Jazz".

American Motors tried to market its new car, the Matador, based on the image

of courage and strength. However, in Puerto Rico the name means "killer" and

was not popular on the hazardous roads in the country.

Proctor & Gamble used a television commercial in Japan that was popular in

Europe. The ad showed a woman bathing, her husband entering the bathroom

and touching her. The Japanese considered this ad an invasion of privacy,

inappropriate behaviour, and in very poor taste.

Leona Helmsley should have done her homework before she approved a

promotion that compared her Helmsley Palace Hotel in New York as

comparable to the Taj Mahal--a mausoleum in India.

A golf ball manufacturing company packaged golf balls in packs of four for

convenient purchase in Japan. Unfortunately, pronunciation of the word "four"

in Japanese sounds like the word "death" and items packaged in fours are

unpopular.

Pepsodent tried to sell its toothpaste in Southeast Asia by emphasizing that it

"whitens your teeth." They found out that the local natives chew betel nuts to

blacken their teeth which they find attractive.

A company advertised eyeglasses in Thailand by featuring a variety of cute

animals wearing glasses. The ad was a poor choice since animals are considered

to be a form of low life and no self respecting Thai would wear anything worn

by animals.

The soft drink Fresca was being promoted by a saleswoman in Mexico. She

was surprised that her sales pitch was greeted with laughter, and later

embarrassed when she learned that fresca is slang for "lesbian."

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Recommendations

Recommendation 1: Clarify what is driven globally and what is managed locally

A global marketing approach does not mean the absence of local, market-specific plans and initiatives. These should, in fact, be complementary.

Global marketing will typically set the framework and parameters within which local marketing operates, whilst giving in-market teams the freedom to control local success levers.

Some areas of marketing that lend themselves to being led at a global or central level include branding and brand guidelines, strategic marketing planning and budgeting (with autonomy given to markets within their allocated budget), large-scale marketing campaigns, social media strategy and guidelines, research strategy, and global PR.

Other areas best managed locally include local outreach initiatives and more tactical campaigns, local social media channels and PR initiatives, local partnerships and events, etc.  Markets need to have some control over the local channels that contribute to driving their success.

In practice, it might be useful to divide your markets into tiers.

A tiered market will help you identify territories that might drive the highest potential returns. It also allows top tier markets to access bigger budgets, giving them autonomy; for example, research into local users’ behaviours to inform product development.

Global and local areas of ownership may differ from company to company. However, it is critical you define the areas clearly to avoid friction and inefficiencies.  Take the time to do this upfront - don’t wait until issues start arising.

Recommendation 2: Understand local market needs and develop a collaborative approach

Too often, operating globally is seen as an excuse to avoid spending time understanding local cultures, customer needs and behaviours, as well as successful and less successful marketing approaches.

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And yet, it is obvious that a US-based customer is likely to be very different from a customer located in India or SEA. Their lives, cultures, and needs are different, so it makes sense they will interact very differently with your products or services.

For a global model to work, global teams need to develop an understanding of local markets and establish a close relationship with local marketing teams.

So, if you are in a global marketing role:

Research the markets and take the time to get to know the international teams you will be working with.

Trust them to be the experts on local customs and users.

Recommendation 3: Develop and socialise a global marketing plan early (seek feedback)

So, you have established key relationships, researched local markets, and defined global marketing plans which you think accommodate local needs where required.

That’s a great start, but don’t wait for the campaign to begin to validate your assumptions. Socialise these plans with your international teams as soon as possible, seek their feedback and ensure that there are no legal issues to prevent your plans from working in certain markets.

A proactive approach will give you time to adjust and revise your plans in the event of a problem. It will also allow you to get buy-in from your local colleagues.  And, after all, a huge part of the success will rest on their shoulders during execution.

Recommendation 4: Manage campaigns like an army operation – plan ruthlessly

As the time for your campaign to kick-off approaches, there are a few key elements to consider to help it succeed; starting with outstanding project planning.

Appoint a global campaign manager - with responsibility for all communication and coordination around the campaign. Make sure his/her overall accountability is understood by all. Failing to do this will result in cross-communication, misunderstandings and missed deliverables.

Plan ruthlessly – make sure deadlines, responsibilities and deliverables are clear to everyone involved. Plan your campaign’s official launch at a time and date that works for all the countries in the campaign. And, at every step of the way, get all parties to confirm when deliverables have been completed so you can stay on top of the project at a global level.

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Consider time-zones - your timelines must reflect these so all relevant materials are ready concurrently across all markets. And don’t forget to factor in time for translation, localisation, reviews and iterations.

Communicate - plans, deliverables and expectations across different channels and multiple times.  Touch base with in-country teams regularly to provide support and advice and to stay on top of the campaign as it unfolds.

Recommendation 5: Make sure you track and adjust in real time

Running a campaign in multiple markets means you will have to be particularly disciplined about tracking results.  The campaign manager is a good person to coordinate this.

Here are a few suggestions:

Define key metrics and goals at the start of the campaign at both global and market level (clicks, click-through rate%, conversion rate, average customer spend, etc.)

Get buy-in from in-market teams on these targets.  Share these metrics early and share them all.  Seeing how each market contributes to the overall success of the campaign might help drive a bit of healthy competition!

Keep a centralised shared template where market metrics are updated every week/day/any other relevant frequency

Review metrics weekly with the team, preferably on a call or video call, and take actions to address under-performance. These discussions should be active and vibrant, allowing all local teams to chip in and contribute. This is also a good opportunity to leverage best practice across markets.

Recommendation 6: Consolidate and share insight

Once your campaign comes to an end, make sure you consolidate the insight gained and organise a debrief.

It is important results are both shared upward and reviewed with in-market teams. Discuss what worked, what didn’t; which markets the campaign was most successful in and why.  Learnings will be invaluable in planning future activity.

Recommendation 7: Over-communicate

Effective communication is important at all times, not only when running campaigns.

Being in a global marketing role inevitably means you will be working with colleagues around the globe; most of whom will be sitting thousands of miles away from you.  In

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these circumstances it’s easy to feel disconnected.  And, if you are disconnected, so is your strategy, plans and activities.

A critical element that makes global marketing work is the relationship you establish with in-market teams.  An open communication channel is vital in developing trust and nurturing these relationships. Regular (video) calls are a great way to keep the teams up-to-date with the latest global plans and changes, as well as to learn about the latest competitive developments in-market, or to discuss new campaign ideas.

Reap the benefits of operating globally :

Yes, global marketing requires some effort to work, but it does have a number of benefits.

Most obviously, it ensures your marketing strategy is applied consistently (but smartly) across territories and it allows you to operate more efficiently through economies of scale.

Beyond this, one of the biggest benefits of operating globally with a local presence is the opportunity it provides to develop a deeper understanding of the markets in which your company operates and their potential. It enables you to prioritise and optimise your efforts and budgets effectively.

And last but not least, it gives you as many territories to test and learn from. For each campaign or activity you run, you will gather feedback and suggestions from a range of markets. This is invaluable insight you can leverage by developing a repository of best practice and ideas which will help drive your long term success.

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Conclusion

Global marketing is a proactive response to the intertwined nature of proactive business

opportunities and competition that know no political boundaries. Global marketing

does not necessarily mean that companies should market the same product in the same

way around the world as world markets are converging. Global marketing is a

company’s willingness to willing adopt a global perspective instead of a country-by-

country or region-by region perspective in developing a marketing strategy for growth

and profit. The six forces making up the company’s macro global environment macro-

global include demographic, economic, natural, technological, political and cultural

forces. These forces shape opportunities and pose threats to the company. Global

market possesses great importance of less developed countries (LDCs) it provides all

urge to develop knowledge and experience that make development possible in LDC’s.

The remarkable growth of the global economy over the post 50 years has occurred

because of many driving forces contributing to the growth of international contributing

business, namely, market needs, modern technology, minimum cost, application, and

higher quality, and information revolution and leverage ion, advantages. Several

restraining forces also occurred in international trade in the form of tariff barriers and

non non-tariff barriers. There are four identifiable stages in the evolution of marketing

across national evolution boundaries. These are known as Ethnocentrism, poly

centrism, regiocentrism and geocentrism. Companies have the plan of entry strategy

choices to implement their global expansion efforts. Each alternative has its pros and

cons. Global companies often adopt a phased and entry strategy. They start off with a

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minimal risk strategy. Once the perceived risk declines, they switch to higher

commitment mode. It is made clear that, a broad range of variables impact the entry

mode choice. The three major dimensions include the resource commitment a firm is

willing to make, the amount of risk the firm is willing to take and the degree of control

that is desirable.

Questionnaire

Name: Occupation: Name of the company: Address: Contact no.: Designation: Q1. Are you?

Male ( ) Female ( )

Q2. Which of the following categories include your age? Under age 18 ( ) 18 to 24 ( ) 25 to 34 ( ) 35 to 44 ( ) 45 to 54 ( ) 55 to 64 ( ) 65 or older ( )

Q3. What is your total annual household income? (Per annum) Less than 50,000 ( ) 50,000 to 1,00,000 ( ) 1,00,000 to 2,00,000 ( ) 2,00,000 to 5,00,000 ( )

Q4. Do you own a car? Yes ( ) No ( )

Q5. Which car do you own? Mercedes ( )

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Audi ( ) Hyundai ( ) Nissan ( ) Renault ( ) Toyota ( )

Q6. Do you think that you would be buying a car in the near future? Yes ( ) No ( )

Q7. Which factors do yon think would influence your purchasing decision the most? Price ( ) Finance ( ) Past financial records ( ) Brand name ( ) After sales service ( ) Income ( )

Q8. Do you have faith in Indian car manufacturer or you prefer multinational? Not at all ( ) Not too much ( ) Significant ( )

Q9. Which kinds of advertisement attract you to Nissan? Newspaper Ads ( ) Television Ads ( ) Hoardings ( ) Other (please specify)

Q10. What do you prefer the most in a car? Features ( ) Space ( ) Shape ( ) Technology ( ) Price ( )

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Q11. Do you think that the name Nissan is going to invoke internationalist feelings in the public and lead to rise in sales?

Yes ( ) No ( )

Q12.  Please write one positive point that you attribute to each of the following models.

Brand Name Positive Point Hyundai Toyota Mercedes Audi Nissan Renault

Q13. .  Please write one negative point that you attribute to each of the following models.

Brand Name Negative Point Hyundai Toyota Mercedes Audi Nissan Renault

Q14. Please rate Nissan out of 10. ( )

THANK YOU.

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