1 - Basics Flashcards
A fundamental difference between regular marketing and global marketing is…?
The Scope of Activities **
The standardization-adaptation scale goes as follows:
Standardization Adaptation
Market penetration strategy is identified by these product/market dimensions:
Existing products Existing markets
What are key facilitators of globalization?
An increasingly mobile workforce More informed customers Rapidly changing transportation and communications technologies
The CAGE distance framework includes these four dimensions:
Cultural Administrative Geographic Economic
Adaptation/localization is preferred when there are…?
- Different customer preferences - Different performance requirements and standards across countries - Different cultural perceptions
Product development strategy is identified by these product/market dimensions:
New products Existing markets
The EPRG framework includes these four approaches/orientations:
Ethnocentric - focus on the home market Polycentric - approach global markets with discrete strategies Regiocentric - strategies target entire regions Geocentric - the world is one market
What three things characterize global markets?
1) Greater uncertainty in markets and environments 2) Greater diversity and dynamism than domestic, internal markets 3) Greater separation of geographical and psychological distances
CAGE: Cultural, includes…?
Interactions among people. Language, education, religion, values, norms
Diversification strategy is identified by these product/market dimensions:
New products New markets
CAGE: Economic, includes…?
Wealth. Differences in national income, costs of business, prices, availability of human/natural resources
Direct marketing is a low/high localization need business function
High need, marketing must be adapted to appeal to individual, local markets
What is globalization?
A process of interaction and integration among people, companies, and governments of many nations.
Driving forces affecting global integration and marketing
Leverage Experience transfers Scale economies Resource utilization Global strategy
CAGE: Geographic, includes…?
Country size, infrastructure, climate, remoteness from neighboring countries
Finance is a low/high localization need business function
Low need, finance practices are internal and can be standardized
What is the driving force behind globalization?
International trade and investment. This has resulted in a global economy.
Forces affecting global integration and global marketing
- Multilateral trade agreements - Converging market needs and wants - Transportation and communication improvements - Product development costs
Benefits of standardization include…?
- Economies of scale - Lowered costs - Uniform products - Shorter learning curve
EPRG: Ethnocentric characteristics
Home country is superior to others, looks for similarities in other companies. Products that succeed at home will succeed elsewhere. Leads to standardized approach
Restraining forces affecting global integration and marketing
Management myopia and organizational culture National control Opposition to globalization
EPRG: Regiocentric characteristics
A region is the relevant geographic unit (eg: NAFTA)
Value equals…?
Benefits/Price
EPRG: Polycentric characteristics
Each country is unique. Unique strategies for individual subsidiaries. Leads to localized approach.
Market development strategy is identified by these product/market dimensions:
Existing products New markets
EPRG: Geocentric characteristics
Entire world is market, strives for integrated global strategies. “Global” or “transnational” company. Leads to combination of extension and adaptation elements.
CAGE: Administrative, includes…?
Policies and red tape. Laws, political risk, government structure
How do you create value?
Improve benefits or reduce price Improve the product Find new distribution channels Create better communications Cut costs
