Global Marketing: Principles, Insights & Challenges

Global Marketing: Global Marketing: Principles,Principles,InsightsInsights

&& Challenges Challenges

InsightsInsightsIn Hong Kong, a German businessperson is driving a Lexus; he’s wearing Bruno Magli shoes, Irish cashmere socks, Calvin Klein underwear, an Armani suit, with a Gucci belt. He has a Mont Blanc pen, in his Italian shirt. He’s going to meet an American investor at a KFC restaurant, for a Coke. After lunch, they stop for a Baskins-Robbins (actually a foreign firm) ice cream sundae. --- OK, that’s a stretch. When he gets home, sitting on an ottoman, he has an Absolut vodka nightcap, while listening to American country western music.

ChallengesChallenges Huge Foreign indebtedness Unstable governments Foreign-exchange problems Foreign entry and government bureaucracy Tariffs and other trade barriers Corruption E-commerce---doesn’t offer complete

solutions Technological pirating High cost of product and communication

adaptations

Global MarketingGlobal Marketing

Marketing has become more complex. Increases in new products, product

extensions, high cost of distribution and shelf space.

Expansion of retailer control and power, changing media habits, overload of information, and array of communication choices.

Ultimate goal of programs Timing goals

Global Integration ForcesGlobal Integration Forces

Driving ForcesDriving Forces Technology Culture Market Needs Costs Free Markets Economic Integration Peace Strategic Intent Management Vision, Strategy and Action

Global Integration ForcesGlobal Integration Forces

Restraining ForcesRestraining Forces Culture Market Differences Costs National Controls Nationalism Peace vs. War/ Stability Management Myopia Organization History Domestic Focus

ChallengesChallenges

Markets can present higher profit opportunities than present markets.

Markets can offer size but not profits.Company needs a larger customer

base for economies of scale.Present customers are needing

service and products as they go international.

Major DecisionsMajor Decisions

Deciding to go abroadDeciding which marketsDeciding how to enter marketsDeciding on marketing programsDeciding on marketing organization


Denotes the use of advertising and marketing on a global basis.

Marketing is at the threshold of a new and exciting era: e-business, e-commerce and e-marketing

Business has two basic functions: marketing and innovation (Drucker)

New era of competition, demanding customers More stakeholders (customers, employees,

media).


Companies need new set of guidelines, values and insight

Marketing is a Strategic Business Concept Marketing is too important to be left to the

Marketing Department. (David Packard) Formulated, integrated, long-term Hold to the responsibilities of customers,

employees, investors


Advantages, especially if the companies emphasize selection, availability, quality, reliability and lower prices.

Economies of scale. Lower marketing and advertising costs in

planning and control. Lower advertising production costs.

Exploiting your best ideas on a worldwide basis.

Global MarketingGlobal MarketingDeciding How to Enter a Market Indirect Export-Thru export and thru

others. Direct Export-Handle own exports. Licensing-License a foreign company to

use trademark, manufacturing process, trade secret, or other item for a fee or royalty.

Joint Ventures- Join with local investors Direct Investment- Direct ownership.


Joint Ventures-- Join with local investors to create venture. Coca-Cola and Nestle joined forces in “ready to drink” coffee and tea.

P&G with rival, Fater, in Italy and Great Britain.

Whirlpool formed venture with Dutch electronic group Philip’s on white-goods business to leapfrog into European market.


Direct Investment--Ultimate form is direct ownership of foreign-based assembly or manufacturing facilities.

Can buy part or full interest in a local company.


Principle of Research Understand the consumer-behavior

perspectives. Be sure you are asking right questions. Use appropriate research techniques and

controls. Present clear, comprehensive and “actionable”

results. We study people using geographics,

demographics, psychographics, lifestyles, and behaviors.

Global MarketingGlobal Marketing Bodily adornment, cooking, courtship, food

taboos, gift giving, language, marriage, status, sex, and superstitions, in all societies, although each society attaches different values and traditions.

The world, countries, regions, and subcultures.

Different groups of people share subcultures---values, customs, and traditions.

Geomarketing uses these differences in foods, terminology, subculture identities.


Example: Global youth are notorious for challenging norms and defying labels. A study of 27K teenagers in 44 countries. Insights and motivations.

Six different segments. But remember that even in a specific

country the teenagers are not homogeneous.

Six segments in a Teen World values research study.

Global MarketingGlobal Marketing Thrills and Chills. Driving principles---fun,

excitement, irreverence and friends. Expect everything in life. Make it a goal to get as much and as many good times. Popular kids in schools. Brand loyal. Mostly in Germany, England, Greece, South Africa, Netherlands, US, Belgium and Canada. 18%

Resigned: Fun, Friends and Low expectations. Little discretionary income. Cynical. Denmark, Sweden, Korea, Norway, Germany, Belgium, Argentina, Canada and Turkey 14%

Global MarketingGlobal Marketing World Savers. Defining principles: Fun,

Humanism, and friends. Models of what gives hope to next generation. Good kids, who care. Technologically advanced. Motivated by new and exciting. Attracted by honest and sincere messages. Sophisticated, sense of humor. Hungary, Philippines, Venezuela, Brazil, Spain, Argentina, Russia, France, Poland. 12%

Quiet Achievers. Success, quiet, anti-indi-vidualism, social optimism. Have deter-mination and restraint. Study hard. Do well in school. Limit outside activities. Thailand, China, Hong Kong, Korea, Russia, Peru. 15%


Bootstrappers. Defining principles: Achievement, Individualism, optimism, determination, power. Try hard to please parents. Determined to succeed. Positive values. One in four in US; 14% overall. Nigeria, Mexico, US, India, Chile, Puerto Rico, Peru and Venezuela.

Upholders. Family, tradition, respect for individuals. Dreamy. Quiet. Good teens. Follow their parents. Don’t like risks. Use proven products. Vietnam, Indonesia, Taiwan, China, Italy, Peru, India, 16%


Principle of Integrated Marketing: Marketing is everyone’s business.“Marketing Community”

Examples: Coca-Cola, Merrill Lynch, Xerox,

American Express, British Airways, Gillette.


When all of the departments work together to serve the customer’s interests.

Works on two different levels: All of the various marketing functions work together: sales force, sales promotion, advertising, PR, Product development, Marketing research

Plus all of the departments work together. They must “Think Customer.”

Global MarketingGlobal MarketingGlobal Standardization or Adaptation Toyota built the Corolla on a world

platform. Ford with its Focus. McDonald’s uses chili sauce (salsa) on its hamburgers in Mexico. Coca-Cola is can be sweeter, or less carbonated.

Adaptation elements: Product features, brand name, labeling, packaging, colors, materials, prices, sales promotion, advertising themes, media, execution.

Marketing programs do work best when they are tailored to each target group.


An endless process or principle:Customer attractionCustomer satisfactionCustomer retention. CEO is also the Chief Marketing

Officer.


Principle of Competition: Value War Create long-tern customer value. Continuously and consistently crated

customer value. Look at total customer benefits vs.

customer expenses Ultimate goal of project Relationship to other projects High-level timing goals


Principle of Customer Satisfaction and Retention

Look at overall satisfaction and customer loyalty

Easier to retain a customer than to gain or win a new one.

Consistently improve customer value to win the marketing war.


Principle of Integration: Learn about the needs and wants.There are no “average” customers.Concentrate on the individual

differences while looking at segmentation, targeting and positioning.


More on Integration:Plan for and review differences in

culture, markets, economic development, consumer differing needs, usage patterns, media availability and legal restrictions.


Principle of Anticipation and Being Proactive. Not Reactive.

Are you ready for change? Being adaptive to the marketplace.

Macroenvironment Changes. The high income growth country has shifted from Japan to US. Low to medium has been concentrated in Southeast Asia and southern Asia with China as a unique, high-growth, large country in the region and the world. Also look at Singapore, Taiwan and South Korea.


Principle of the Growth of Internet and Information Technology.

Principles of: – Marketing Planning– Marketing Mix– 7P’s

– Controls.


The old trade model is just old. It stated that as a product matures,

production would shift to low-wage countries.

Today, must look at transportation costs, availability of skilled labor, market responsiveness, market access and innovation in product design and manufacturing. Especially of products with less than 15% of labor in total cost.

Global MarketingGlobal MarketingPrinciple of Branding: The umbrella. Determines price and value.

Be more than a commodity. A brand is a name, term, sign, symbol, or

design or a combination of them to identify the goods and services of a seller and to differentiate them from the competitors.

Identifies seller or maker. We see a huge increase in the global brands for autos, food, clothing, electronics and more.

Increasing number of cross-border marketing alliances.


Principle of Service: Service before, during and after sale.Create long-term value and connect

with customer. Both products and services. It’s

creating more value.

Global MarketingGlobal MarketingPrinciple of Process: Commands the company to be the captain of

its supply-chain. It should manage from raw materials to finish goods. Enhance value-creating activities.

Look at Strategic Alliances/Partners . Can be suppliers, customers and even parts of competitors. Benchmarking, reengineering, outsourcing, mergers, and acquisitions are examples.

Brand, service and process are three value-creating principles and drivers to win customers and deliver market share.


Principles of STP: Segmentation, Targeting and

PositioningProcess of segmenting. Look at

demographics, geographics, psychographics and behavior variables.

Look for market opportunities.


Principle of Differentiation:Don’t be different just to be different.Design and plan for meaningful

differences versus the competitors. Design truly different and unique

products for customers.


Principle of Marketing Mix: Integrate 4P’s and 7P’s. Offer, Logistics and Competition. The whole marketing concept.


Principle of Selling: Integrate Company, Customers and

Relationships/Partnerships. Create long-term relationships with

customers. More than personal selling. Features and benefits of the product. AIDA: Awareness-Interest-Desire-Action. Manage communication.


Principle of Balance: After focusing on the elements of

marketing---segmentation, targeting, positioning (STP), differentiation, marketing mix, selling, branding, service and process, you need to balance the strategies, tactics and implementation.

Share of Heart and Mind. Share of Voice. Dynamic environment. Timing. High-level timing goals


Principle of Positioning: The act of designing the product or

service (company’s offering and image) to occupy a distinctive place in the target market’s mind.

Ultimate goal of product. Differentiation

Relationship to other products.


Principle of Future: Manage today’s products by

managing a profit and by servicing customers of today and tomorrow.

Develop tomorrow’s products. Look at Marketing Myopia.


Principle of Global Experience Counts for companiesCounts in the job market for

employees.Marketing Audits. Marketing is not a destination, or a

goal. It’s a process. A moving target.

Wrap-up on Global Marketing Wrap-up on Global Marketing PrinciplesPrinciples

Companies cannot stay domestic and expect to maintain their markets.

Companies need to define their global policies and objectives.

Companies need to decide on how much to adapt marketing mix.

Wrap-up on Global Marketing Wrap-up on Global Marketing PrinciplesPrinciplesMarket entry and market control

costs can be high.Product and communication

adaptation costs can be high. Dominant foreign firms can establish

high barriers of entry. Which types of markets and

countries?


Ultimate goal of projectRelationship to other projectsHigh-level timing goalsAttractiveness influenced by the

product, geography, income, population, political climate and more factors.

Review Forces: ---Driving and Restraining

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Global Marketing: Principles, Insights & Challenges

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