4.3 - Global marketing

Question 1

Define Glocalisation

Answer 1

Is a term used to describe an approach to global marketing that maintains a consistent brand and image across the world, but makes adaptations especially to products to suit local markets

Question 2

Strengths of global brands (4)

Answer 2

• Huge sales provide production opportunities to enjoy significant economies of scale
• Over 1.1 billion people travelled abroad in 2014; global brands can be bought for reassurance and familiarity I.e globalisation helps sales
• Many promotional tools are global (e.g sponsoring Formula 1 of buying the rights Arsenal shirt font)and can be economic if the brands sell globally (e.g emirates airline)
• Global scale provides strong negotiating power with retailers (helping those ‘power brands’ get better display and distribution)

Question 3

Strength of local globalisation (globalisation) (4)

Answer 3

• Tailoring to local tastes and habits should boost market share e,g green tea magnums in Japan
• Local buyers can assume you are a local producer, which may help sales (w.g many British people believe ford to be a British car maker, not American)
• An innovative product designed for local tastes may end up being a global success e.g Nissan Qashqai, designed in Sunderland, but now an important global brand
• Localising brands probably means localised production which cuts costs and may help establish a greener image for business

Question 4

What are the three marketing approaches?

Answer 4

• Domestic/ ethnocentric
• Mixed/ geocentric
• International/ polycentric

Question 5

Domestic/ ethnocentric - marketing approach (4)

Answer 5

• This approach to global marketing stays focused on the home country
• Attitudes of the company’s senior managers will be heavily influenced by their national culture - This leads to an approach that expects consumers in foreign markets to welcome the company’s products as they are
• Ethnocentric attitudes gives domestic producers a competitive advantage in their home markets as consumers sometime unwilling to consider imported products worthy of their attention
• This approach may not guarantee success in other countries as managers assume foreign consumers will buy products because they come from their country

Question 6

International/ Polycentric - marketing approach (4)

Answer 6

• Is an approach with the belief that all markets are different
• Therefore decision making is made at a local level so that they are specific to suit needs of local customers
• Advantage: purchase economies of scale - due to size
• Disadvantage: Can undo some of the advantages of operating on a global scale - due to local managers developing new products and brands with local tastes

Question 7

Mixed/ geocentric - marketing approaches (4)

Answer 7

• Is seen as the best approach as it combines ethnocentric and polycentric perspectives
• This approach believes that people all over the world share some characteristics - thus the creation of global brands with a level of consistency worldwide is possible
• The approach also accepts that local differences exist, necessitating localisation
• Managers make decisions that suit their area where the company’s global approach cannot be applied effectively

Question 8

Advantages of ethnocentric (2)

Answer 8

• Lower cost of development and production

* Economies of scale

Question 9

Disadvantage of ethnocentric (2)

Answer 9

• Products may not sell well

* Does not take account of national/ cultures differences

Question 10

Advantages of a polycentric market approach

Answer 10

Targeted products for different markets - higher sales

Question 11

Disadvantages of polycentric

Answer 11

• Higher cost of development

* Difficult to compete with established local brands

Question 12

Advantages of geocentric

Answer 12

Tailoring product to local tastes and needs - higher sales

Question 13

Disadvantages of geocentric

Answer 13

Higher cost of product development

Question 14

Applying the marketing mix to global markets (4)

Answer 14

Local adjustments needed could include:
• Product: size, taste/flavour, packaging to what extent should they adapt
• Promotion: Firms’s need to be conscious of language differences
• Place: Typical outlets may vary; a delivery service may be expected
• Price: some local markets may need to see pricing strategies adjusted due to local competition, incomes, taxes, rents and other costs

Question 15

Applying Ansoff’s matrix to global markets (3)

Answer 15

• Ansoff helps businesses assess the level of risk associated with their choice of strategic direction
• Firms considering to entering new foreign markets, they can assess how similar or different new markets are to existing markets
• Firms can judge risk by the extent to which local market conditions require the, to change their product portfolio or enter market with existing products

Question 16

Define economies of scale

Answer 16

Arise when unit costs fall due to increased output

Question 17

Define cultural diversity

Answer 17

It describes the differing interests and values of people from different national backgrounds

Question 18

Factors that cause cultural diversity (3)

Answer 18

• Economic factors: particularly differing levels of average disposable income in different countries
• Weather: particularly temperature influences how and where people work, relax, eat or generally live their lives
• History and tradition: these features of a country may have a wide-ranging impact on so many relevant issues to business including diet, attitudes to religion, gender, racial diversity and lifestyle

Question 19

Impact of cultural diversity (2)

Answer 19

• Is to make the delivery of a single global strategy very hard to pull off
• This is because consumers in different niche markets desire different needs and wants increasing the pressure to adapt to local diversity

Question 20

Features of business that operate in global niche markets (6)

Answer 20

• Clear understanding of the needs of wants of the market segment
• Emphasis on quality
• Excellent customer service
• Expertise in the product area
• Prioritising profit rather than market share
• Innovation

Question 21

Features of global niche markets (2)

Answer 21

• Customers have very particular needs that are sometimes not catered for by local businesses
• Higher prices can be charged for products which is desirable for businesses - due to catering for very specific needs

Question 22

Features for businesses aiming at high end luxury niches - adapting the marketing mix to fit global niche markets (4)

Answer 22

• Aspirational price levels
• Products with a strong brand heritage
• Distribution through world famous luxury stores such as harrods and at airports
• Promotion is glossy style and travel magazines and through glamorous PR events

Question 23

Elements of the marketing mix (4)

Answer 23

• Price
• Product
• Place
• Promotion

Question 24

For companies competing in multiple niche markets (globally) with less commonality - Adapting the marketing mix to fit global niche markets (5)

Answer 24

• A deeper understanding of local tastes is critical
• Different features are expected for each product
• Different price expectations depending on the value placed on the product or service locally also levels of income locally
• Differences in traditional channels of distribution from country to country
• Different expectations of how promotional messages are received from country to country and market to market

Question 25

Importance of staff availability in global niche markets

Answer 25

Without the availability of staff who have a deep understanding and experience of local market differences, the marketing mix produced for a global brand may fall victim to failing to appropriately read the conditions that would allow a successful brand launch

Question 26

Cultural/social factors that businesses must consider (6)

Answer 26

• cultural differences
• Different tastes
• language
• unintended meanings
• inappropriate/inaccurate translations
• inappropriate branding and promotion

Question 27

Cultural differences - Cultural/social factors that businesses must consider (2)

Answer 27

• In business meetings behavioural norms can be different between countries such as greetings
• Societies have vastly different perceptions of certain marketing methods e.g the use of dancing and singing cows in the UK could be offensive to religions who believe that cows are sacred animals - religious beliefs can form a set of values that influence cultural differences

Question 28

Different tastes - Cultural/social factors that businesses must consider (3)

Answer 28

• Food and drink markets are the one of the most heavily impacted markets on differing tastes - Different national cuisines influences by the types of food that’s produced locally and historical factors can influence different flavours of drink and food
• The clothing and fashion market is heavily impacted on tastes which can be influenced by the local media and local climate
• Meanwhile markets for products such as cars(Different features or interior designs), electronics(different ways of using them) or books (Different genres preferred) maybe hugely influenced by local tastes

Question 29

Language - Cultural/social factors that businesses must consider (4)

Answer 29

• Speaking to a consumer in their own language makes it easier to effectively sell a product or service to them - it can improve employability if you can speak more than just one language
• Key benefits of having a fluent linguist in a business:
- customers will be impressed if spoken to in their own tongue
- marketing errors can by linguistic misunderstandings in a product’s name, brand or promotion are likely to be avoided

Question 30

Unintended meanings - Cultural/social factors that businesses must consider

Answer 30

The problem with literal translation is different idioms in different languages as a result this could lead to a significantly different meaning to be understood by consumers in a local market which could be far from the intended meaning behind the promotion

Question 31

Inappropriate or inaccurate translations - Cultural/social factors that businesses must consider (3)

Answer 31

The major causes of problems relating from translations include:
• Wrong words - choosing the wrong word to use in a local language can confuse or obscure meaning
• Sounds like something else - a brand name that sounds like something else can lead to problems
• Slang: local slang can make some words used as brands or in advertising slogans carry unexpected and inappropriate meanings

Question 32

Inappropriate branding or promotion - Cultural/social factors that businesses must consider (3)

Answer 32

• Wording and imagery used in branding may clash with local values and cultures causing negative publicity for a brand in a local market
• Carefully designing a TV advert in a local market does not guarantee it will be effective or acceptable in all global markets
• A major area for problems here is religious beliefs and cultural diversity