4.3- Global Marketing

Question 1

What is meant by the global marketing strategy

Answer 1

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.

Question 2

What are the advantages to global marketing

Answer 2

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

Question 3

What are the disadvantages to global marketing

Answer 3

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

Question 4

Define globalisation

Answer 4

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

Question 5

What are the three approach theory to global marketing (or PEG)

Answer 5

Polycentric
Ethnocentric
Geocentric

Question 6

What is the PEG approach

Answer 6

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

Question 7

What is meant by polycentric

Answer 7

adapt to each market to appeal to local customers to maximise revenue

Question 8

What is meant by ethnocentric

Answer 8

standardise the product for all markets to keep costs low

Question 9

What is meant by geocentric

Answer 9

A mixture of polycentric and ethnocentric

Question 10

What are the 4Ps to global markets

Answer 10

Product
Place
Price
Promotion

Question 11

What is Ansoff’s matrix

Answer 11

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)

Question 12

What is meant by market penetration

Answer 12

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

Question 13

What is meant by product or service development

Answer 13

New product development in marketing is critical to keep consumers buying more otherwise they may go and buy from competitions

Question 14

What is meant by market development

Answer 14

Market development means taking products that already exist and finding new global markets for them

Question 15

What is meant by diversification

Answer 15

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

Question 16

Define niche market

Answer 16

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

Question 17

What is meant by cultural sensitivity

Answer 17

Having cultural sensitivity, means understanding that people all over the world have different interests and values

Question 18

What is meant by international business communication in terms of cultural semsitivity

Answer 18

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

Question 19

What is meant by cultural diversity

Answer 19

The phrase ‘Cultural Diversity’ means a range of different societies or people of different origins, religions and traditions all living and interacting together

Question 20

Define global niche market

Answer 20

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

Question 21

What are the advantages of selling in a global niche market

Answer 21

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

Question 22

What are the disadvantages of selling in a global niche market

Answer 22

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

Question 23

What is the pricing strategy in a global niche market

Answer 23

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

Question 24

What is meant by place (distribution) in a global niche market

Answer 24

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

Question 25

What is meant by promotion in a global niche market

Answer 25

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

Question 26

Define cultural and social facotrs

Answer 26

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