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
adaption of promotion in global niche markets (marketing mix)
often based around the name and the exclusivity of the brand, more targeted than the mass market promotion
adaption of place in global niche markets (marketing mix)
niches are more careful when choosing distribution channels, they usually use networks of exclusive dealers
2 advantages of niche global marketing
- prices are higher, demand is price inelastic
- distributed through specialist retailers or directly to the consumer, this has advantages in terms of image
2 disadvantages of niche global marketing
- products sell in low volumes, so profits need to be high to make it worthwhile
- the niche market must be large enough to support the business, the small size prevents economies of scale
things to consider: cultural differences
different cultures greet in different ways, e.g in Vietnam, they shake hands and exchange business cards, but in the UK, it is less formal
things to consider: language
over-reliance on one language is risky, as it can lead to miscommunication and there’s different forms of communication, like high context and low context
what is the difference between low context and high context cultures
low context are cultures like America and Europe, who say what they mean and relies on direct language
whereas high context cultures like the Middle East and Asia, that are collectivist, focus on developing trust and interpersonal relationships
things to consider: unintended meanings
simple things like gestures are different in different cultures, like how a thumbs up is offensive in Australia and Greece
give 3 examples of differing tastes in different countries
- halal meat is common in the middle east but not in more western countries
- many foods from the US are banned in European countries
- Mcdonald’s change their types of burgers depending on where they are located to fit different countries’ tastes
things to consider: inappropriate branding and promotion
- the beer maker Coors translated its slogan ‘turn it loose’ into Spanish, which meant ‘drink Coors and get diarrhoea’
businesses need to ensure that they are translating everything before they publicise/ sell
