4.3- Global Marketing Flashcards
What is meant by the global marketing strategy
A global marketing strategy means that a business doesn’t differentiate its products or marketing between countries.
The same product is sold in many countries with some fine tuning of the product price, promotion etc.
What are the advantages to global marketing
Economies of scale can be achieved in both production and distribution
This will mean lower than average marketing costs
Power in the market as the brand is known
Consistency in brand image
Ability to leverage good ideas quickly and efficiently
Uniformity of marketing practices
What are the disadvantages to global marketing
Differences in consumer needs, wants and usage patterns for products
Differences in consumer response to marketing mix elements.
Differences in brand and product development and the competitive environment
Differences in the legal environment, some of which may conflict with those of the market
Define globalisation
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
What are the three approach theory to global marketing (or PEG)
Polycentric
Ethnocentric
Geocentric
What is the PEG approach
The decision whether products sold in a new international market should be adapted or standardised.
To what extent can a MNC design and market a truly global product
What is meant by polycentric
adapt to each market to appeal to local customers to maximise revenue
What is meant by ethnocentric
standardise the product for all markets to keep costs low
What is meant by geocentric
A mixture of polycentric and ethnocentric
What are the 4Ps to global markets
Product
Place
Price
Promotion
What is Ansoff’s matrix
Existing product or service + Existing market = Market penetration (low risk)
New product of service + Existing market = product or service development (moderate risk)
Existing product or service + new market = market development (moderate risk)
New product or service + new market = diversification (high risk)
What is meant by market penetration
Market penetration on a global basis means selling more products to existing customers
Marketing teams may look to see if frequency of use or purchase can be increased
This is a very low risk strategy as the customers are already very loyal
What is meant by product or service development
New product development in marketing is critical to keep consumers buying more otherwise they may go and buy from competitions
What is meant by market development
Market development means taking products that already exist and finding new global markets for them
What is meant by diversification
Diversification is the most risky of the four strategies as it means providing new products for new markets
A business will do this in an attempt to move away from shrinking markets and into new more attractive markets
Define niche market
A niche market is a small specialised market which caters for a particular product or service
What is meant by cultural sensitivity
Having cultural sensitivity, means understanding that people all over the world have different interests and values
What is meant by international business communication in terms of cultural semsitivity
Having a sensitivity to cultural diversity in communication is the key to smooth international business. For example a business greeting in Japan would be a bow – with different degrees having different meanings
What is meant by cultural diversity
The phrase ‘Cultural Diversity’ means a range of different societies or people of different origins, religions and traditions all living and interacting together
Define global niche market
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
What are the advantages of selling in a global niche market
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
Specialist products reduce PED and premium prices may be possible
What are the disadvantages of selling in a global niche market
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 reducing the scope for economies of scale
What is the pricing strategy in a global niche market
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
What is meant by place (distribution) in a global niche market
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
The product is made in Crewe in the UK, but sold all over the world to a niche market that can afford the luxury cars
What is meant by promotion in a global niche market
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
Define cultural and social facotrs
Cultural factors include; Beliefs, moral values, traditions, language, laws held by a country
Social factors include; lifestyle, religion(s), economic wealth, family structures, education, and political systems held by a country
