4.3 - Global Marketing Flashcards
Glocalisation
Product or service that is developed and sold globally but also adapted to meet the needs and wants of customers in a local market
Ethnocentric approach
When the business sees the domestic market and foreign markets as very similar, so there will be no changes to the product for overseas customers and marketing of the product will be the same
Advantages of an ethnocentric approach
- Strong brand identity
- Centralised control
- Economies of scale
Disadvantages of an ethnocentric approach
- Ignores local culture
- Could potentially lose sales as product is not tailored to wants and needs of locals
- Limited market share growth
Polycentric approach
When the business treats each country as a unique market, so they adapt their marketing strategy by tailoring their products to the local market
Advantages of a polycentric approach
- Better market adaptation
- Cultural sensitivity
- Higher market acceptance
Disadvantages of a polycentric approach
- Higher costs
- Complex management
- Brand inconsistency
Geocentric approach
Global business strategy where a company integrates its operations across all markets, treating the world as a single market while balancing local and global needs
Advantages of geocentric approach
- Global consistency and efficiency
- Sales likely to be higher as product is tailored to meet locals’ needs
- Can develop brand loyalty in overseas markets
Disadvantages of geocentric approach
- Resistance from local markets
- High costs
- Logistical difficulties
Bartlett and Ghoshal model
Indicates the marketing strategy options for businesses wanting to manage their global marketing, based on two pressures, local responsiveness and global integration
Features of the Bartlett and Ghoshal model
- International (Low pressure for global integration and low pressure for local responsiveness)
- Multi-domestic (Low pressure for global integration and high pressure for local responsiveness)
- Global (High pressure for global integration and low pressure for local responsiveness)
- Transnational (High pressure for global integration and high pressure for local responsiveness)
Features of a global strategy
- Highly centralised
- Focus on efficiency
- Little sharing of expertise locally
- Standardised products
Features of a transnational strategy
- Complex to achieve
- Aim is to maximise local responsiveness but also gain benefits from global integration
- Wide sharing of expertise
Features of an international strategy
- Aims to achieve efficiency by focusing on domestic activities
- International operations are largely managed centrally
- Relatively little adaptation of products to local needs
Features of a multi-domestic strategy
- Aims to maximise benefits of meeting local market needs through extensive communication
- Decision making is decentralised
- Local businesses treated as separate businesses
- Strategies for each country
Cultural diversity
Recognition that groups of people across the globe have different interests and values
Factors influencing cultural diversity in markets
- Economic development
- Language
- Weather
- Religious and social norms
Global niche market
Market where customers in many countries have specific needs and wants that are not satisfied by mass market products or services
How global niche markets develop
- Cultural differences
- Specialist expertise developed
- Different adoption of technology
- Distinctive branding
Global marketing
When the business does not differentiate its products or marketing between countries, the same product is sold in many countries with only some fine tuning of the product, price or promotion
Benefits of global marketing
- Economies of scale can be achieved in both production and distribution
- Consistent brand image
- Power in the market as the brand is known
Drawbacks of global marketing
- Differences in consumer needs, wants and usage patterns for products
- Differences in the competitive and legal environment
- Differences in brand and product development
Benefits of glocalisation
- Multinational Corporations get access to larger culturally different markets
- Multinational Corporations that follow a glocalisation strategy can compete more effectively in those markets
- More demand from customers familiar with those products
Drawbacks of glocalisation
- Small local businesses will struggle to compete with the Multinational Corporations as they can’t get the economies of scale
- Its expensive, slow and complex to launch new products that have to be adapted to local markets
Benefits of selling in a global niche market
- Less competition and greater customer loyalty
- Prices likely to be higher
- Risk may be reduced
Drawbacks of selling in a global niche market
- Co-ordination and communication may be more difficult across differing brands and markets
- Some products may require unique ingredients or production techniques reducing the scope for economics of scale
Features of high context communication
- Establish social trust first
- Value personal relations and good will
- Agreement by general trust
- Negotiations slow and ritualistic
Features of low context communication
- Get down to business first
- Value expertise and performance
- Agreement by specific, legalistic contract
- Negotiations efficient as possible
Problems with operating internationally
- Different tastes
- Language barriers and unintended meanings
- Inappropriate and inaccurate meanings
- Inappropriate branding and marketing
