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Business > 4.3 > Flashcards

4.3 Flashcards

1
Q

What’s a global marketing strategy?

A

Business doesn’t differentiate its products or marketing between countries.

Sees it’s home county’s market the same as international markets.

Same products, logo and promotion

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2
Q

Give an example of brands that use global marketing

A

IKEA, Coca Cola

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3
Q

What’s a global brand?

A

Views the world as a global marketplace and creates products that will suit a world audience.

The promotional message will be the same all over the world —> reduced marketing costs, economies of scale.

The only differences might be that sales incentives may vary in different countries

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4
Q

Give examples of global brands

A

Microsoft, Disney, IKEA, Coca Cola

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5
Q

Positives of global marketing

A
  1. economies of scale can be achieved in both production and distribution
  2. lower than average marketing costs
  3. power in the market as brand is known
  4. consistency in brand image
  5. ability to leverage good ideas quickly
  6. uniformity of marketing practices
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6
Q

Explain how economies of scale being achieved in both production and distribution is a benefit of global marketing?

A

Production -> can mass produce products as they’re standardised -> bulk buy -> use machines/ technology -> speeds up production.

Distribution -> in larger quantities -> more low cost methods -> shipping containers.

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7
Q

Explain how lower than average marketing costs is a benefit of global marketing?

A

One global advertising campaign across multiple countries

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8
Q

Explain how power in the market as brand is known is a benefit of global marketing?

A

More recognisable brand -> stand out in market

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9
Q

Explain how consistency in brand image is a benefit of global marketing?

A

Generates more trust as its reliable -> more likely to buy from a brand they trust

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10
Q

Explain how the ability to leverage good ideas quickly and efficiently is a benefit of global marketing?

A

One product for global market -> quicker to launch

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11
Q

Explain how uniformity of marketing practices is a benefit of global marketing?

A

Everything is the same -> marketing strategies centralised -> made by head office -> covers all areas of business -> no difference in quality between countries -> helps establish consistent brand image

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12
Q

Negatives of global marketing

A
  1. differences in consumer needs, wants and usage patterns for products -> use products differently
  2. Differences in consumer response to marketing mix elements -> they may not like it
  3. Differences in brand and product development and the competitive environment -> not taking into account what competitors do
  4. Differences in legal environment, some of which may conflict with those of the market -> doesn’t take into account social environment -> social norms in counties vary e.g. the done thing, equality of genders, fashion norms, values of culture
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13
Q

What’s glocalisation?

A

A combination of 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

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14
Q

What are glocalisation businesses aware of

A

The importance of combining relevant transferable products with the heritage and authenticity of local identities

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15
Q

What are glocalised products designed to do

A

To benefit a local market while at the same time being developed on a global level

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16
Q

What’s the polycentric marketing strategy

A

Adapting the marketing mix for different countries.

See each host country as unique.

Each subsidiary business in each country should develop its own marketing strategies

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17
Q

What’s the polycentric marketing strategy also known as?

A

The international approach

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18
Q

Give an example of a business that uses the polycentric marketing strategy

A

McDonald’s

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19
Q

What’s the ethnocentric marketing strategy

A

Believe whatever works in their domestic country will work in others.

No adaptations in marketing mix

Tend to be more product orientated

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20
Q

What’s the ethnocentric marketing strategy also known as

A

The domestic approach

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21
Q

Give an example of a business that uses the ethnocentric marketing strategy

A

IKEA

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22
Q

What’s ethnocentrism

A

The belief of superiority is ones personal ethnic group

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23
Q

What’s the geocentric marketing strategy

A

Can have some advantages of a standardised global approach to get economies of scale but cater for needs of individual markets

Branding may be done on a global basis

Worldwide approach to marketing and its operations become global

A global MNC will have manufacturing and processing facilities around the world to serve the various regional and national markets through a complicated but well coordinated system of distribution networks

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24
Q

Explain the adaption of 4ps to global markets (product) (standardised)

A
  • travel, media and the internet. World is getting smaller, easier to marker a globally known product
  • international standardisation has its own advantages. As people travel the world, they can buy the same products E.g. Levi’s
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25
Q

Explain the adaption of 4ps to global markets (product) (adapted)

A
  • Coca Cola makes its products sweeter for some markers to take account of local tastes
  • in Canada it has taken the decision to make it less sweet
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26
Q

Explain the adaption of 4ps to global markets (place) (standardised)

A

• distribution in national markets such as the uk will probably involve goods being moved in a chain from the manufacturer to wholesalers and onto retailers for consumers to buy from.

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27
Q

Explain the adaption of 4ps to global markets (place) (adapted)

A
  • in overseas markets there’ll be more parties involved as the goods need to be moved around a foreign market where business practices will be different to national markets.
  • e.g. Agents might be used to sell products in other counties
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28
Q

Explain the adaption of 4ps to global markets (price) (standardised)

A
  • setting international prices is very complex.
  • it is unlikely that a MNC will attempt to gain the same price in Mexico or Brazil as it does in Germany or France due to the disposable income of the population
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29
Q

Explain the adaption of 4ps to global markets (price) (adapted)

A

• businesses need to consider factors such as:

  • cost of transport tariffs
  • import duties
  • exchange rate fluctuations
  • personal disposable incomes of target market
  • currency they want to be paid in
  • the general economic situation of the country and how this will influence pricing
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30
Q

Explain the adaption of 4ps to global markets (promotion) (standardised)

A
  • standardised marketing can be used internationally
  • this type of marketing conforms to work across different cultures and countries to promote a product
  • this reduces costs and ensures the brand is known world wide
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31
Q

Explain the adaption of 4ps to global markets (promotion) (adapted)

A
  • advertising messages in countries may have to be adapted because of language, political climate, cultural attitudes and religious practices
  • what works in one country may cause offence in another
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32
Q

What is Ansoff’s matrix

A

A management tool that helps business leaders to decide how to grow their business

33
Q

What did Ansoff suggest

A

That there were only 4 real strategies that a business would follow

He then put all of this into a table format

34
Q

What does Ansoff’s matrix look like

A 
Existing product/     |  New product/
Service                     |   Service
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
               |                    |
Existing  | 1. Market   | 2. Product or 
Market   |penetration | service development
               |                    |
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
             |                      |
New     | 3. Market     | 4. Diversification
Market | development |
             |                      |
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
35
Q

What is market penetration

A

On a global level means selling more products to existing customers

Marketing teams may look to see if frequency of use or purchase can be increased

36
Q

+ of market penetration

A

Low risk -> lowest out of the 4 -> least financial risk as you don’t have to create new products, less R + D, less advertisement, less training costs for HR

37
Q
  • of market penetration
A

Least potential for dramatically increasing sales

38
Q

What is product or service development

A

When you create new products to sell to existing customers

39
Q

How can you carry out product or service development

A

Through bringing out a new/ new version of a product or bring out a complimentary product to go alongside the main product offering

40
Q

Example of product or service development

A

Apple phone cases and screen protectors

41
Q
  • of product or service development
A

Medium risk -> use r&d budget to fund it, may have to adapt production facilities, may have to increase capacity, train staff on new products, advertise new products

42
Q

What does product or service development link to

A

The product lifecycle

May consider this strategy to simulate growth in maturity/ decline stage

43
Q

What is market development

A

Taking existing products and selling them in new markets

44
Q

How do you carry out market development

A

May mean moving to a country that has had trade liberalisation or is part of a trade bloc.

They have to find demand in a new market

Exporting to foreign countries or set up within a foreign country

45
Q
  • of market development
A

Big financial risk in terms of investment, setting up physical premises, hiring staff that know about new market, advertising in market

46
Q

What’s diversification

A

New products into new markets

47
Q

Why might you carry out diversification

A

Because of current market positioning, push factors, saturated market, lots of competitors

48
Q

What does diversification link to

A

The Boston matrix. -> if you have a cash cow or dog product, you may consider this strategy

49
Q

How can you reduce risk when carrying out diversification

A

Try and find a market that marries with your key competencies to try and reduce risk

50
Q
  • of diversification
A

Highest risk strategy

51
Q

+ of diversification

A

Most potential to enable significant amounts of growth

52
Q

What is a niche market

A

A small specialised market which caters for a particular product or service

53
Q

Explain the product part of the niche market marketing mix

A
  • not mass produced
  • customisable
  • highly differentiated
  • meets customer needs more
  • USP
  • high quality
  • specialised
54
Q

Explain the price part of the niche market marketing mix

A
  • higher prices
  • cost plus, skimming pricing strategies & premium pricing as lack of substitutes -> add value -> small target audience -> less profit incentive
  • inelastic PED -> charge higher price, demand doesn’t fall
55
Q

Explain the promotion part of the niche market marking mix

A
  • less competitors so don’t have to promote as much or on a smaller scale
  • more targeted to smaller audience -> social media, specialist magazines, targeted emails
56
Q

Explain the place part of the niche market marketing mix

A

• online because:

  • can access audience better
  • reduces need for store -> convenient, saves costs
57
Q

What is cultural diversity

A

A range of different societies or people of different origins, religions and traditions all living and interacting together.

58
Q

Example of cultural diversity

A

In Britain there is an ethnic minority population of just over 4 million

59
Q

Linking to cultural diversity, what do businesses have to consider

A

Cultural sensitivity
International business communication
Cultural differences

60
Q

What is cultural sensitivity

A

Understanding that people all over the world have different interests and values

61
Q

Examples of cultural sensitivity

A

Thanksgiving

Bonfire night

62
Q

What is international business communication

A

Having a sensitivity in communication is the key to smooth international business. Don’t want to cause offence or be rude

63
Q

Why is international business communication important

A

Important as communication is one of the most important resources a business can use

64
Q

Examples of international business communication

A

A business greeting in Japan would be a bow with different degrees of bowing having different meanings

In western countries a familiar greeting is a handshake

65
Q

What is cultural differences

A

The greeting rituals are very important in international business, getting it right can set the tone for the whole negotiation

66
Q

Example of cultural difference

A

Greeting with a kiss in Brazil

67
Q

What’s a global niche market

A

A very small market in each country but the combination of all countries together make enough demand to make the business profitable

68
Q

Advantages of selling in a global market niche

A

There is less competition and greater customer loyalty

Prices likely to be higher so profits may be greater

Risk may be reduced

Specialist products reduce PED and premium prices may be possible

69
Q

Disadvantages of selling in global market niche

A

Some of the possible global economies of scale may not be achievable as each market will need individual attention

Coordination and communication may be more difficult across differing brands and markets

Some products may require unique ingredients or production techniques reducing the scope for economies of scale

70
Q

Explain the product part in a global niche market marketing mix

A
  • Products that succeed in global markets are usually at the premium end of the market
  • A prime example is supercars which appeal to only a small subset of a country’s population, but bought by customers in many countries
71
Q

Explain the pricing part of global niche market marketing mix

A
  • Global niche markets provide an opportunity for businesses to charge premium prices as the products tend to be more unique
  • It depends on customer perception, as they will pay what they perceive the product to be worth not its actual value in terms of raw materials e.g. Rolex watch or Bugatti car
72
Q

Explain the place part of the global niche market marketing mix

A
  • Niche products can reach a global audience easily thorough websites
  • Alternatively agents may be used in other countries apart from the host country e.g. Bentley showroom in Dubai which includes a VIP area
73
Q

Explain the promotion part of the global niche market marketing mix

A
  • Promotion is just the communication aspect of the entire marketing function.
  • In a global niche market the promotion may be more targeted and subtle than in a mass market
  • The promotional message must be able to reach across cultures
  • Brands have to be careful not to devalue the brand image by discounting
74
Q

What’s a global market niche

A

A subset of a global market

Highly specialised and characterised by very loyal customers and premium prices

75
Q

What are cultural factors

A

Include beliefs, moral values, traditions, language, laws held by a country

76
Q

What a social factors

A

lifestyle, religion(s), economic wealth, family structures, education, and political systems held by a country

77
Q

Explain cultural differences

A

When doing business abroad a business needs to keep in mind the culture of the nation

78
Q

Explain different tastes

A

Businesses have to change to adapt to different tastes

E.g.

  • Pepsi lost market share in Southeast Asia when it changed its vending machines from deep blue to light blue.
  • Light blue is a symbol of death and mourning in Southeast Asia.
  • OREO has lots of different types of their cookie for their various different markets

Business (18 decks)

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