4.3 Flashcards
glocalistion
a strategy where businesses aim to reach customers globally and also take into consideration the needs of the local market
what is a Domestic/Ethnocentric Approach
no changes to the products for overseas customers and marketing of the product will be the same
advantages of Domestic/Ethnocentric Approach
Businesses can benefit from economies of scale as the product is standardised and produced on a large scale
Costs are also lower as there is no investment into product development to adapt products for different markets
Disadvantages of Domestic/Ethnocentric Approach
The business could potentially lose sales as the product is not tailored to the needs and wants of markets overseas
This approach can lead to cultural insensitivity and may not resonate with local customers in other countries
what is a Polycentric/International approach
Businesses adapt their marketing strategy by tailoring their products to the local market
advantages of a polycentric/ international approach
Sales are likely to increase as the product is tailored to meet the needs of customers
This helps to develop brand loyalty in overseas markets
disadvantages of polycentric / international approach
Product development to adapt the product may increase average unit costs
There will also be additional costs in market research to find out about the market
what is a geocentric / mixed approach
approach utilises the benefits of standardised products but also tailors products to meet the needs of local markets overseas while maintaining a consistent brand image across markets (eg McDonald’s do not offer beef or pork in India due to religious reasons. However in the majority of western countries, McDonald’s has standardised products such as the Big Mac)
The Advantages of the Geocentric Approach
Sales are likely to increase as the product is tailored to meet the needs of customers
This helps to develop brand loyalty in overseas markets
The Disadvantages of the Geocentric Approach
There will be costs associated with the product development and menu changes required to meet the needs of the local market
what are the four ps of the marketing mix
product, place, promotion, place
adapting Place to the global market
Businesses have to identify the best channel of distribution to get the product/service to the customer in a particular market
They also need to consider the available technology as many transactions take place via e-commerce
adapting Product to the global market
Businesses need to consider how much they should modify or adapt their products to meet new markets overseas
They need to consider if they will take an ethnocentric, polycentric or geocentric approach
adapting price to the global market
When making pricing decisions, businesses must consider customer incomes, costs of production and taxes
They must also consider the stage of the product life cycle the product is at within that market
The state of the economy (recession or boom) will also impact the pricing strategy
adapting promotion to the global market
Promotion needs to be adapted to meet language and cultural differences
Businesses must aim to choose the most effective method of promotion to promote products in that market
What is ansoffs matrix?
Ansoff’s Matrix is a strategic planning tool that helps businesses identify potential growth opportunities by analysing their product and market strategies
The matrix consists of four growth strategies - market penetration, market development, product development, and diversification
Market Penetration
existing products into existing markets
Carries the least risk - if a business already operates in a market and launches another product, customers are already familiar with the business
Market Development
selling existing products to new markets
Businesses may have to adapt the product to meet the needs of customers in global markets who have different preferences
This strategy carries more risk as customers may not understand the product
Diversification
new products for new markets
A high risk strategy as the business may have limited knowledge about the market
This strategy requires a deep understanding of local market conditions and consumer behaviour to ensure that the new product and market are a good fit for the business
Product Development
introduce new products into existing markets
This requires market research to identify the target market’s needs and preferences, developing products that meet those needs, and adapting the marketing mix to ensure that the products resonate with local consumers
Factors to Consider in Global Marketing
Cultural differences
Different tastes
Language
Unintended meanings
Inappropriate/Inaccurate translations
Inappropriate branding/promotion
Cultural differences
Businesses need to understand cultural differences in areas such as values, beliefs, customs, and traditions, and adapt their marketing strategies accordingly
Different tastes
Tastes and preferences vary greatly between cultures and regions
Businesses must ensure that their products/services are adapted to meet local preferences
Language
Businesses must ensure that their marketing messages are translated accurately and appropriately
This involves understanding language nuances and idioms
E.g. When KFC entered the Chinese market, it translated its slogan “Finger-Lickin’ Good” into Chinese as “Eat Your Fingers Off”, which had negative connotations in the Chinese culture
Unintended meanings
Unintended meanings can arise when businesses use images, symbols, or language that have different connotations in different cultures
E.g. The colour white symbolises purity and innocence in Western cultures, but it represents death and mourning in some Asian cultures
Inappropriate/Inaccurate translations
Inappropriate or inaccurate translations can lead to serious consequences for businesses, including loss of credibility, legal implications, and damage to brand reputation
Businesses must use professional translation services and consult with local experts to ensure that their messages are accurately translated and culturally appropriate
