MKT 3620

transcript

MKT 3620

Name: Surej P JohnOffice: MSM 3rd floor, Cabin# 01

Email: surejpjohn@gmail.com

Website: http://surejpjohn.hpage.com/

CHAPTERS & TOPICS TO BE DISCUSSEDChapter 1: Introduction to Global Marketing Chapter 2: The Global Economic Environment Chapter 3: Regional Market Characteristics and Preferential Trade AgreementsChapter 4: Social and Cultural Environments Chapter 5: The Political, Legal and Regulatory Environments

QUIZ I ***(Chapter 1 – 5)

Chapter 7: Segmentation, Targeting, and PositioningChapter 8: Importing, Exporting, and SourcingChapter 9: Global Market Entry Strategies: Licensing, Investment, and Strategic AlliancesReview for Midterm / Term Project Checking (1st Half)

Midterm Examination *** (Chapter 1 – 5, 7 – 9)

July 19th, 2011 at 12.00-14.00

Mark Allocations

Surej P John 4

Quizzes (2x5%) 10%Class Participation 5%Group Project 10%Group project presentation 5%Midterm Examination 30%Comprehensive Final Examination 40%Total 100%

Online resources

• Course syllabus, project outline, power points are all available in www.lms.au.edu

• Enrollment key: MKT 30• All students are

requested to register online to make use of the online resources.

1/ 2010 Surej P John 5

CHAPTER 1

INTRODUCTION TOGLOBAL MARKETING

IntroductionGlobal versus “regular” marketing

Scope of activities are outside the home-country market

Product/market growth matrix

Market Penetration

1/ 2011Surej P John8

Started the first shop in 2004

In 2009, the number of shops reached 41 including 8 University campuses

Market Development

Product Development

DiversificationDiversification is developing new products

for new markets

Global MarketingCreate value for customers by

improving benefits or reducing priceImprove the productFind new distribution channelsCreate better communicationsCut monetary and non-monetary

costs and prices

Value = Benefits/Price

Globalization

Globalization is the inexorable integration of markets, nation-states & technologies to a degree never witnessed before—

in a way that is enabling: individuals, corporations & nation-states to reach around the world farther, faster, deeper & cheaper than ever before, &

in a way that is enabling: the world to reach into individuals, corporations & nation-states farther, faster, deeper & cheaper than ever before.

Competitive Advantage and Global IndustriesCompetitive advantage:

When a company succeeds in creating more value for customers than its competitors, that company is said to enjoy more competitive advantage.

Global industryA global industry is one in which competitive advantage can

be achieved by integrating and leveraging operations on a world wide

An industry is global to the extent that a company’s industry position in one country is interdependent with its industry position in another country1-

Degree of Industrial Globalization

1/ 2011Surej P John16 Consumer electronics Apparel Auto Steel IT/BPO0%

120%118%

Competitive Advantage

Global Marketing:What it is & What it Isn’t???

Single Country Marketing Strategy

• Target market strategy

• Marketing mix – Product

– Price– Promotion

– Place

(Domestic Marketing activities)

(Table 1-2)

Global Marketing:What it is & What it

Isn’t???Global Marketing Strategy

(GMS)• Global market participation

(companies have operations in more than one market)

• Marketing mix development– 4 P’s: adapt or standardize?

• Concentration of marketing activities.

• Coordination of marketing activities.

• Integration of competitive moves. (Eg. Lenovo) p. 43-4

Standardization versus Adaptation

Globalization (standardization)Developing standardized products marketed

worldwide with a standardized marketing mixEssence of mass marketing

Global localization (adaptation)Mixing standardization and customization in

a way that minimizes costs while maximizing satisfaction

Essence of segmentationThink globally, act locally

Change in the Slogan of Nike in European market

Standardization versus Adaptation

Arabicread right to left

Chinese “delicious/happiness”

The faces of Coca-Cola around the world

McDonald’s Global Marketing

Marketing Mix Element Standardization Localized

Product

Promotion

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)

In India, there are no Big Macs because the Hindu people don't eat beef.However, they have the Maharaja Mac, which is a Big Mac made of lamb or chicken meat. There is also a vegetarian burger, the McAloo Tikki.

MANAGEMENT ORIENTATIONSManagement

emphasisStage one Domestic

Stage two International

Stage three Multinational

Stage four Global

Focus Domestic Ethnocentric Polycentric Geocentric

Marketing strategy Domestic Extension Adaption Extension

Structure Domestic International Worldwide area Adaption creation matrix/mixed

Management style Domestic Centralized top

downDecentralized

bottom up Integrated

Manufacturing stance Mainly domestic Mainly domestic Host country Lowest cost

worldwide

Investment policy Domestic Domestic used

worldwideMainly in each host country Cross subsidization

Performance

evaluationDomestic

market shareAgainst home

country market share

Each host country market

shareWorldwide

1/ 201126

Home country is superior to others

Sees only similarities in other countries.

Assumes products & practices that succeed at home will be successful everywhere .

Leads to a standardized or extension approach.

MANAGEMENT ORIENTATIONSEPRG FRAMEWORK

1. Ethnocentric orientation/

INTERNATIONAL

Home country DO NOT adjust

To Host country!!p. 52

Domestic going International

New true coffee shops at Vientiane, Laos & Shanghai, China

Each country is unique.

Each subsidiary develops its ownunique business & marketing strategies.

Leads to a localized or adaptation approach.

2. Polycentric Orientations/

MULTINATIONAL

Focus is HOST country

Multi-National Approach• In Polycentric stage, subsidiaries are formed in each

market and each subsidiaries operates independent of each other and formulates its own marketing strategies

• Separate product lines are formed in each country and these products are modified to meet local needs ( Adaptation)

• Sales force in each country is local nationals• Channels of distribution are those traditionally used

by each country.

A region is the relevant geographic unit.

Ex: NAFTA (North American Free Trade Agreement between: Canada, Mexico & U.S.)

3. Regiocentric orientation

Regional airline serving Malaysia and south-east Asian destinations

Entire world is a potential market.

Strives for integrated global strategies.

Retains an association with 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 & adaptation elements.

4. GEOCENTRIC ORIENTATIONS/

GLOBAL OR TRANSNATIONAL

HD serves worldMarkets from U.S.

DRIVING FORCES AFFECTING GLOBAL INTEGRATION & GLOBAL MARKETGING

Multilateral economic agreements

Converging market needs & the information revolution

Transportation & communication improvements

Product development costs

DRIVING FORCES AFFECTING GLOBAL INTEGRATION & GLOBAL MARKETGING

World economic trends

Leverage

Quality

LeverageScale economies. • The global company can take advantage of its

greater manufacturing volume to obtain traditional scale advantages within a single factory.

• Also, finished products can be produced by combining components manufactured in scale-efficient plants in different countries.

• The larger scale of the global company also creates opportunities to improve corporate staff competence and quality.

Experience transfers. A global company can leverage its experience in any market in the world. It can draw on management practices, strategies, products, advertising appeals, or sales or promotional ideas that have been tested in actual markets and apply them in other comparable markets.

Leverage

ABB- 1400 subsidiaries in 140 countries.Very famous for running the operations with the minimum number of staff

LeverageGlobal strategy.• The global company's

greatest single advantage can be its global strategy.

LeverageResource utilization. A major strength of the global company is its ability to scan the entire world to identify people, money, and raw materials that will enable it to compete most effectively in world markets. This is equally true for established companies and start-ups. For example, British Biotechnology Group, founded in 1986, raised $60 million from investors in the United States, Japan, and Great Britain. For a global company, it is not problematic if the value of the "home" currency rises or falls dramatically, because for this company there really is no such thing as a home currency.

RESTRAINING FORCES AFFECTING GLOBAL INTEGRATION & GLOBAL MARKETGING

Management myopia & Organizational culture

National controls – (to protect local industries)

Opposition to globalization

Summary• Global marketing is the process of focusing

resources on global marketing opportunities

• Goal, to create customer value & competitive advantage by maintaining focus

• Three classifications of management orientation: ethnocentric, polycentric, regiocentric, geocentric

• Global marketing importance is shaped by a variety of driving & restraining forces

Group Assignment No. 1• Make a detailed study on the Socio-Economic

and Cultural factors of BRIC Nations and submit the assignment as a typewritten report.

• All groups has to prepare a short presentation ( not more than 15 mins.) and one of the groups may be asked to do the presentation in the class!!

IT MAY BE ANY OF YOU….. GOOD LUCK

Looking Ahead to Chapter 2

The global economic environment

MKT 3620

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