International marketing (6)

Global marketing management


• In the 1970s - standardization versus adaptation.

• In the 1980s - globalization versus localization

• In the 1990s - global integration versus local responsiveness.

Global marketing management• Some companies are answering global as the way to go.

– Twix Cookie bars - a new global advertising agency– a global campaign does make sense for Twix.

• Some companies that are going in the other direction– Levi’s jeans have faded globally in recent years. – Ford - Mazda, Jaguar, and Volvo. – Coca-cola is peddling two brands in India – Coke and

Thums Up

• Consumers have become pickier more pennywise or a little more nationalistic and they are spending more of their money on local drinks


• From the marketing perspective customization is always best.

• Forward looking proactive firms have the ability and willingness

– To accomplish both tasks (standardization and localization) simultaneously.


• Standardization versus adaptation is simply not the right question to ask.

• What are the most efficient ways to

segment markets?

• The information explosion allows marketers to segment markets ever more finely

Benefits of global marketing• Introduce products 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

Benefits of global marketing

• Uniformity of marketing practices • Helps to establish relationships outside

of the "political arena" • Helps to encourage ancillary industries to

be set up to cater for the needs of the global player

• Benefits of e-Marketing over traditional marketing

Planning for global markets

• Planning is a systematized way of relating to the future.

• It is an attempt to manage the effects of external, uncontrollable factors on the firm’s strengths, weaknesses, objectives, and goals to attain a desired end.


• International corporate planning is

– essentially long term, – incorporating generalized goals for the

enterprise as a whole.


• Each new market can require a complete evaluation

• Defining objectives clarifies the orientation of the domestic and international divisions, permitting consistent policies.

• The lack of well-defined objectives - conflict with or detract from the companies’ primary objectives.

International planning process

1. Preliminary analysis and screening – matching company and country needs

– Environmental factors, company character, and screening criteria

– First Xmas promotion for Dec 25 in Holland, unaware that Dutch celebrate St.Nicolas day and give gifts on Dec 6.


2. Adapting the marketing mix to target market

– Matching mix requirement– In Germany, product manager for coffe

• How does a German rank of coffee?• Is Germany a high or a low per capita

consumption market?• Annual per capita of consumption: Sweden - 7.5

kg, USA - 2.2kg, Japan – 0.8kg


3. Developing the marketing plan– Situation analysis

4. Implementation and control

Alternative market entry strategies

Organizing for global competition


• The turbulence of global markets requires flexible organizational structures

• 43 large US companies – 137 organizational change over 5 years

Product, Geographic and Functional approaches

Products and Services for Consumers

What Should You Learn?

• The importance of offering a product suitable for the intended market

• The relationship between product acceptance and the market into which it is introduced

• The importance of quality and how quality is defined• Country-of-origin effects on product image• Physical, mandatory, and cultural requirements for

product adaptation• The need to view all attributes of a product in order

to overcome resistance to acceptance

Global Perspective Hong Kong – Disney Rolls the Dice Again

• Tokyo Disneyland – successful• EuroDisney – disaster• Hong Kong Disneyland – open for business• Opportunities and challenges for international

marketers of consumer goods and services are great and diverse

• Any marketing firm’s goal should be quality products and services that meet the needs and wants of consumers at an affordable price

• Which products and services should we sell?

Global competition

• Shortening product life cycle

• Focusing on the importance of quality

• Competitive prices

• Innovative products

Quality

• Shift to a customer’s market– More competition, more choices

• Increased customer knowledge– What is best, cheapest and highest quality

• The customer defines quality– Needs and resources

• The cost and quality of a product – Among the most important criteria by which

purchases are made

Quality

• Two dimensions

1. Market-perceived quality (customer requires)

2. Performance quality (customer expects)

• In many industries quality is measured by third parties

– JD Power and Associates

Maintaining Quality

• Damage in the distribution chain– Russia’s Red October chocolate (open

market, Russian taste)

Maintaining Quality

• Quality is essential for success in today’s competitive global market

• The decision to standardize or adapt a product is crucial in delivering quality

Physical or Mandatory Requirements for a new market

• Product homologation

– Changes mandated by local product and service standards

– Electrolux: Cold-wash-only washing machine in Asia (electric power is expensive and scarce)

Physical or Mandatory Adaptation

• Product adaptation requirements

– Legal, Economic, Political, Technological, Climate

– Pepsi Cola – Lehar Pepsi in India

Green Marketing and Product Development

• Green marketing concerns the environmental consequences of a variety of marketing activities

• Critical issues affecting product development– Control of the packaging component of solid

waste– Consumer demand for environmentally friendly

products• European Commission guidelines for ecolabeling• Laws to control solid waste

Products and Culture• A product is the sum of the physical and

psychological satisfactions it provides the user– Primary function (automobile: to move

passengers from point A to point B)– Psychological attributes (color, size, design,

brand name, price)

International marketing (6)

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