4.3 - Global Marketing Flashcards
What is global marketing?
It is the process of planning, producing, placing, and promoting a business’s product or service to the global market
What is Glocalisation?
It is a strategy where businesses aim to reach customers globally and also take into consideration the needs of the local market - THINK GLOBAL, ACT LOCAL
What is a domestic/ethnocentric marketing approach?
Businesses see the domestic market and foreign markets as very similar
* No changes to the products or marketing for overseas customers
* Based on the belief that the company’s home country culture and marketing practices are superior to those of other countries
What are the advantages of the ethnocentric approach?
- Benefit from economies of scale as the product is standardised and produced on a large scale
- Costs are also lower as there is no investment into product development to adapt products for different markets
What are the disadvantages of the ethnocentric approach?
- The business could potentially lose sales as the product is not tailored to the needs and wants of markets overseas
- This approach can lead to cultural insensitivity and may not resonate with local customers in other countries
What is an international/polycentric marketing approach?
Businesses adapt their marketing strategy by tailoring their products to the local market
* The company treats each country as a unique market and develops a customised marketing mix for each market
What are the advantages of the polycentric approach?
- Sales are likely to increase as the product is tailored to meet the needs of customers
- This helps to develop brand loyalty in overseas markets
What are the disadvantages of the polycentric approach?
- Product development to adapt the product may increase average unit costs
- There will also be additional costs in market research to find out about the market
What is a mixed/geocentric marketing approach?
It is a mix of polycentric and ethnocentric approaches
* This approach uses the benefits of standardised products but also tailors products to meet the needs of local markets overseas while maintaining a consistent brand image across markets
What are the advantages of the geocentric approach?
- Sales are likely to increase as the product is tailored to meet the needs of customers
- This helps to develop brand loyalty in overseas markets
What are the disadvantages of the geocentric approach?
- There will be costs associated with the product development and menu changes required to meet the needs of the local market
How does the marketing mix adapt for global businesses?
PLACE - identify the best channel of distribution in a particular market
- consider the available technology as many transactions take place via e-commerce
PRODUCT - consider how much they should adapt the product
- consider what approach to take ethno/geo/poly
PRICE - consider consumer incomes, costs of production, and taxes
- consider the stage of the product life cycle the product is at within that market
- the state of the economy (boom or recession)
PROMOTION - promotion must be adapted to meet language and cultural differences
- aim to choose the most effective promotion method in that market
Ansoff’s matrix concerning global markets:
Existing product + Existing Global Market = Market Penetration
Existing product + New Global Market = Market Development
New product + Existing Global Market = Product Development
New product + New Global Market = Diversification
What is cultural diversity?
Cultural diversity recognises the ideas, customs, and social behaviour of particular people or society in different global markets
* Businesses need to take into account the different cultural behaviours and customers when operating in overseas markets
What are the features of global niche markets?
- Clear understanding of the wants and needs of customers
- Emphasis on quality
- Expertise in product area
- Prioritising profit over market share
- Innovation
- Excellent customer service
How can the marketing mix be adapted to suit global niches?
PRODUCT - modify the features of the product to meet the specific needs of the target audience
PRICE - adapting the price to suit global niche market involves offering a pricing strategy that is attractive to the target audience
PROMOTION - adapting the promotion to suit a global niche market involves using marketing communication strategies that resonate with the target audience
PLACE - adapting the place to suit a global niche market involves choosing a distribution strategy that is convenient for the target audience
What are the factors a business should consider when using global marketing?
- Cultural differences
- Unintended meanings
- Inappropriate/inaccurate translations
- Inappropriate branding and promotion
- Language
- Different tastes
