4.3 Flashcards
what is global marketing
the process of adjusting the marketing strategies of your business to adapt to the conditions of other countries
what is ethnocentric marketing
standardize the product for all for all markets
believes that success will translate to all countries
what are the advantages and disadvantages of ethnocentric
+/ economies of sale
create distinctive brand association
promotes USP of products
there are enough customers in different countries that products don’t need to be adapted
-/ must stay consistent
doesn’t suit tastes in all markets
political barriers
ignoring cultures may reduce sales
what is polycentric marketing
adapt to each market to appeal to local customers
each subsidiary business should develop its own marketing strategy according to the needs of that market
what are the advantages and disadvantages of polycentric marketing
+/ markets are unique and need to be addressed in different ways in order to increase sales
differences in culture
-/ economies of scale is lower
higher prices due to investment into research of foreign markets
what is geocentric marketing
a mixture of the two to create a global brand
branding done on a global scale but adapt marketing preferences to different cultures
what are the advantages and disadvantages of geocentric marketing
+/ global customers with similar tastes can be targeted
firm is multinational
-/ requires large investment into advertising & promotion
may ignore some cultural differences
define globalization
process of deeper econmomic intergration between countries
what is a dynamic market
constantly and rapidly changing market
what is a mass market
a large general market with no specific wants & needs
what is global niche marketing
targeting small markets in multiple countries, highly specialized and characterized by local customers
why do businesses target global niche markets
technology can be used to make small batches of products
can be highly profitable
can be a stepping stone to mass markets
what are the advantages and disadvantages of targeting global niche markets
+/ charge premium prices
customer loyalty
good reputation
less competition
reduce risk, spread across different countries
social media allows worldwide promotion
-/ no economies of scale
high production costs
requires a lot of market research
co-ordination & communication may be difficult
may not be a repeat buy product
what are the 4 marketing mix and give examples for each
product - material, quality, size, colour
promotion - strength of brand name, advertising
price - must reflect quality & disposable income levels
place - distribution channels, red tape
define culture
the dominant set of behaviors, values, beliefs and thinking patterns individuals learn as part of their society
what cultural differences do businesses need to consider
language
custom
values
time
business norms
religious beliefs
state 3 reasons for market adaptation
cultural differences
laws for your products in foreign countries
competition
what are the advantages and disadvantages of market adaptation
+/ respect local culture
improve local brand image
advertising is more effective
-/ lower economies of scale
requires detailed research
doesn’t allow single coherent global image
how is market penetration low risk
increases brand loyalty
encourages current customers to buy product more often
how is product development medium risk
marketing new or modified products
significant investment in R&D
keeps up with changes in consumer trends
how is market development medium risk
new geographical markets
different tastes & preferences
requires understanding of local market
how is diversification high risk
outside of expertise
high cost
changes in technology
How is market penetration considered when expanding to global markets `
targeting the same customer base in current global markets
likely use an ethnocentric approach
How is market development considered when expanding to global markets
global businesses will always be looking to pursue a strategy of new market development
as market grows disposable income increases so businesses want to move into the market
often a geocentric approach is used
how is product development considered when expanding to global markets
takes into account the needs of global markets
lots of R&D, innovation & product extension
dependent on needs of customers
how is diversification considered when expanding to global markets
risky strategy
often done through inorganic growth
looked at when a primary business has grown as much as possible
can help parent company grow further
