3.3 Impact of Globalisation on Global Companies Flashcards
What is a global marketing strategy?
The same products and strategy can be used in all markets.
What are the benefits of a global marketing strategy?
- Large scale is cheaper and benefits from eofs
- Product range can be smaller
- The same marketing can be used everywhere
- Less market research is needed
What are the downfalls of a global marketing strategy?
- Some sales will be lost if not all segments are catered for
- Turnover and profits are unlikely to be maximised
- Marketing may not suit everywhere in the world
What is global localisation?
(aka. glocalisation) Adopting a new approach to each differing market in order to reflect that market’s expectations and wants.
What are the advantages to a glocalised approach?
- Sales are likely to increase as markets are specifically targeted. Promotion is set to reflect locals GDP
- Turnover and profits are maximised
What are the disadvantages to a glocalised approach?
- The business can’t exploit economies of scale
- Time consuming
- Expensive
- Harder to manage (managerial diseconomies)
- Average costs are likely to be higher
Explain the polycentric, geocentric and ethnocentric models
Polycentric - Adaptation of products to each country, different features according to that culture, glocalised approach
Ethnocentric - No adaptation to one specific country, a globalised strategy
Geocentric - A mix of similar features to the domestic market with some adaptation (most common)
What do the glocalised differences centre around?
Price, product, promotion and place
How may a company alter its prices to suit another country?
- Lower them to adhere to the country’s GDP & disposable income
- Prestige pricing strategy - set it high for an aire of quality
How many a company alter its products to suit another country?
- Standardise all products due to high production costs
- Some markets need no change of product
- Food & drink may need to be adapted to suit culture (halal)
- Safety regulations may be different
- Adapted to suit the climate
- Clothing sizes ( demographics )
- Backwards innovation - Creating simpler/cheaper products which are more suited to emerging economies needs’
How may a company adapt its promotion to suit another country?
- Suit a culture
- Sense of humour may be different
- Language has to be appropriately translated to make sure it doesn’t offend anyone
CASE STUDY: pepsi once used a slogan that directly translated to in China ‘pepsi brings your ancestors back from the grave’ - Celeb endorsement must be placed right
How may a company adapt their place to suit another country?
In some economies, there may not be shops nearby or online methods such as in Western societies
- May be targeted in shopping malls
- CASE STUDY: Unilever recruited women to sell their products to friends in remote areas
- Distribution of perishable goods can be a problem in hot countries
- Supply chains may be unreliable in countries with poor infrastructure
How do McDonalds apply the geocentric model?
As well as serving big macs in every country and having the large yellow M for their logo, McDonalds also tailor some foods towards certain cultures such as McSoup in Portugal
Why is branding important?
- Aire of quality
- Aire of establishment
- Add value - more reputable, likely to shop there
What are social and cultural differences?
They vary for each society. Many will have specific values and expectations from other countries/companies
