4.3

Question 1

global marketing is

Answer 1

Global marketing is defined as the process of adjusting the marketing strategies of your company to adapt to the conditions of other countries. It is the process of planning, creating, positioning, and promoting your products in a global market.

Question 2

Ethnocentric –

Answer 2

Ethnocentric – standardise the product for all markets to keep costs low

Question 3

Polycentric –

Answer 3

Polycentric – adapt to each market to appeal to local customers to maximise revenue

Question 4

Geocentric –

Answer 4

Geocentric – a mixture of the two to create a global brand

Question 5

Ethnocentric pro

Answer 5

-Business can create a distinctive brand linked to its origins
-Promotion highlights the USP of product
-There are enough consumers in different countries who don’t need product to be adapted

Question 6

Ethnocentric cons

Answer 6

-Standard product may not suit tastes in all markets
-Political events may make products from a country unpopular
-Ignoring cultural differences may mean some sales are lost

Question 7

Polycentric pros

Answer 7

-Markets are unique and need to be addressed in different ways
-There are big differences in cultural , for example food products

Question 8

Polycentric cons

Answer 8

-Economies of Scale will be lower
-High prices due to investment in research for foreign markets

Question 9

Geocentric pros

Answer 9

-“Global consumers” with similar tastes can be targeted
-Firm is multinational that can operate across the world

Question 10

Geocentric cons

Answer 10

-Requires large investment
-Advertising and promotion needs to ignore differences in culture

Question 11

Glocalisation is

Answer 11

• Glocalisation is a combination of the words ‘globalisation’ and ‘localisation’ and is used to describe products and services that are both developed and sold to global customers but designed so that they suit the needs of local markets.
  -This is the idea that a MNC should “think global and act local to personalise their marketing

Question 12

Global niche market

Answer 12

-A global niche market is a very small market in each country, but the combination of all the countries together make enough demand to make the business profitable
-A global niche market is high specialised and is characterised by very loyal customers and premium prices

Question 13

Why target global market niches

Answer 13

-Technology can be used to make small batches of products
-Selling a unique product or service to a niche group of customers can be highly profitable.
-Niches can be stepping stones to mass markets

Question 14

Advantages of global niche market

Answer 14

-There is less competition and greater customer loyalty in niche markets.
-Prices are likely to be higher and therefore profits may be greater.
-Risk may be reduced as sales are spread across different countries
-Social media allows brands to be promoted worldwide

Question 15

Disadvantages of selling in a global market niche

Answer 15

-Some of the possible global economies of scale may not be achievable as each market will need individual attention
-Co-ordination and communications may be more difficult across differing brands and markets
-Some products may require unique ingredients or production techniques that increases costs
-Cultural differences may impact on the ability of the firm to reach its target customers

Question 16

Standardised or Adapted Approach?

Answer 16

-Standardisation creates economies of scale in manufacturing, advertising and packaging, thus it may be tempting to standardise as much of the marketing mix as possible across markets.
-However real differences between markets may require a business to adapt its marketing mix.

Question 17

culture differences

Answer 17

Time differences
How to address someone when meeting
Cultural meaning of different colours
Holidays: these may be at a different time of the year
Language barriers
Local knowledge
Sense of Humour
Body language

Question 18

Culture and Business

Answer 18

-Culture is the dominant set of behaviors, values, beliefs, and thinking patterns we learn as part of society

-International businesses need to be aware of cultural diversity- the way that people behave differently in different countries

Question 19

Cultural Differences that need to be considered

Answer 19

Language
Custom
Values
Times
Business Norms
Religious beliefs

Question 20

Adapting Marketing
There are three main reasons encouraging you to adapt your products:

Answer 20

-Laws for your products in the foreign country: may involve changing ingredients, label, safety features;
-The competition: your product could have serious rivals;
-Cultural differences: e.g. colours must conform to local cultural preferences.

Question 21

Adapting Marketing ad

Answer 21

-Respect local culture
-Improved local brand image
-Advertising will be more effective
-Low barriers to acceptance

Question 22

Adapting Marketing dis

Answer 22

-Lower economies of scale
-Higher costs
-Requires detailed market research
-Doesn’t allow a single coherent global image

Question 23

Market Penetration

Answer 23

Existing product and market

-A business might wish to pursue a strategy of market penetration targeting the same customer base in its current global markets.
-To do this it will look at its EPG (Ethnocentric, Polycentric and Geocentric) marketing approach and decide where and how to invest.
-It will look to see if it should continue its current approach e.g. ethnocentric or adapt it to meet the changing requirements of the market e.g. to one of geocentricity.

Question 24

Market Development

Answer 24

Existing product and new market

-Global businesses will always be looking to pursue a strategy of new market development.
-As markets grow and disposable incomes increase, then there is an increased attractiveness for global businesses.
-Again, using the EPG (Ethnocentric, Polycentric and Geocentric) model, how they approach this is dependent on the type of business and the type of market.

Question 25

Product Development

Answer 25

New product and Existing market

-New product development will take into account the needs of global and international markets.
-Global businesses spend billions on research and development in order to innovate and constantly bring out new products, particularly when old products are in decline (mature stage of product life cycle).
-However, whether this is a standardised product or caters for specific national needs is dependent on the type of product and the needs of consumers

Question 26

Diversification

Answer 26

New product and New market

-Diversification for a global business is a risky strategy. Often, this will be undertaken through takeovers and mergers
-When a company realizes that its primary business has grown as much as possible they will usually examine diversification.
-New businesses with more growth potential can help the parent company continue to perform and grow

Question 27

Advantages of Ansoff’s Matrix

Answer 27

-Simplicity – gives a business 4 strategies to choose from
-Shows all possible ways to increase sales
-Analyses risk- by showing how risky each option is

Question 28

Disadvantages of Ansoff’s Matrix

Answer 28

-Competition is ignored so you don’t see the strategy other businesses are following
-Doesn’t consider the costs and benefits of each option
-Difficult to predict