4.3 Global Marketing Flashcards
what is global localisation?
when a business adapts to local expectations in order for a business to succeed in the international market, it can also be known as glocalisation
what is an ethnocentric approach?
they make little to no attempt to adapt to global markets, eg Apple
2 advantages of ethnocentric approach
- economies of scale, the same product is made in larger quantities, savings can be made from raw materials
- no development costs to identify and develop new products, therefore leading to lower costs and increased competitiveness
disadvantage of ethnocentric approach
- product may not sell well in a local market, as it is new and has different cultural norms
polycentric approach
when businesses adapt their product to local markets where they plan to sell the product
advantage of polycentric approach
- product should sell well as it has been precisely targeted to that local market
2 disadvantages of polycentric approach
- high cost as the market research is expensive
- hard to compete with local markets
geocentric approach
a combination of ethnocentric and polycentric marketing
geocentric approach
a combination of ethnocentric and polycentric marketing so keeping the brand name but developing some products to meet the needs of the market, for example, mcdonald’s and their different burgers around the world
advantage of geocentric approach
- tailor product to local market tastes and needs
disadvantage of geocentric approach
- high cost of product development
- there is a risk that the market still won’t like the product
applying Price to local markets (4 P’s)
need to consider local prices, incomes, taxes, rent etc meaning they won’t charge the same price everywhere
applying Product to local markets (4 P’s)
how much does the business have to adapt their product to the market? need to choose which approach (ethno, geo, poly)
applying Promotion to local markets (4 P’s)
business needs to be conscious of different languages and cultures when promoting their products
applying Place to local markets (4 P’s)
businesses need to take into account of how local consumers buy their products
market penetration in global markets
when the business adapts products for markets it already operates in e.g mcdonalds already operates in japan, launched the teriyaki burger
market development in global markets
marketing existing products in new markets in new markets, not always straightforward as customers from different countries have different tastes
diversification in global markets
when new products are developed for new markets
what are global niche markets?
customers who live in a different country and who’s needs are not met by global mass markets
features of global niche markets
- clear understanding of needs and wants of the market segment
- emphasis on quality
- good customer service
- innovation
why are customers prepared to pay higher prices for these global brands rather than local equivalents?
- the internet and e-commerce: internet is a good way to spread information and e-commerce helps businesses expand into foreign markets
- social media: the rise of platforms like tik tok and instagram and the impact of influencers has helped raise awareness for brands
- ease of travel: low cost airlines has made it more appealing for consumers to travel and purchase these products
in what ways is cultural diversity a barrier?
a product suitable in one country may have a different meaning in another, for example, in the East, white is associated with mourning rather than black
adaption of product in global niche markets (marketing mix)
there is a huge emphasis on quality and often luxury, for example, luxury cars/watches
adaption of price in global niche markets (marketing mix)
they charge higher prices as they provide a product not intended for the mass market, charge premium prices
