4.3.1 - Marketing Flashcards
Global Marketing Strategies
There’s 2 approaches to marketing (4P’s) in a global marketplace.
1.) Global Marketing - Product or Marketing is not differentiated between countries
2.) Glocalisation - products and services that are both developed and sold to global customers but designed so that they suit the needs of local markets.
Global Marketing - Brands
A global brand views the world as a global marketplace and creates products that will suit a world audience
Global Marketing - Decisions
- In global marketing the promotional message may be the same all over the world leading to reduced average marketing costs, economies of scale
- The only differences might be that sales incentives may vary in different countries
Global marketing brand - Disney
• Disney will concentrate on selling their films to cinemas in countries where there is an existing film distribution and similar media infrastructure.
• They may be able to use the same promotional message for their film in each country reducing the average cost of marketing.
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
Disadvantages of 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
Globalisation and the local market
• Glocalisation businesses are aware of the importance of combining relevant, transferrable products with the heritage and authenticity of local identities
• Products or services are designed to benefit a local market while at the same time being developed and distributed on a global level.
The three approach theory to global marketing or PEG
• 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.
1. Polycentric – adapt to each market to appeal to local customers to
maximise revenue
2. Ethnocentric – standardise the product for all markets to keep costs low
3. Geocentric – a mixture of the two
Polycentric
• The international approach is the polycentric model – adapting the marketing mix to maximise sales in different countries
• Each host country is unique
• Each subsidiary business in each country should develop its own marketing strategy
Ethnocentric
• A business which believes that a success story in one country can translate to all other countries in which it operates
• Foreign operations are subordinate to domestic markets
• Products sold without adaptation
• Ethnocentrism is the belief of superiority is one’s personal ethnic group
Geocentric
• Business can have some of the advantages of a standardised global approach to get economies of scale but cater for needs of individual markets to maximise sales
• Branding may be done on a global basis
• The businesses has a world wide approach to marketing and its operations become global
• A global MNC will have manufacturing and processing facilities around the world to serve the various regional and national markets through a complicated but well co-ordinated system of distribution networks
Adaptation of the 4P’s: Product
- Coca-Cola makes its products sweeter for some markets to take account of local tastes
- In Canada it has taken the decision to make it less sweet to bring it in line with other countries
Adaptation of the 4P’s: Price
Business needs to consider factors such as;
• the cost of transport tariffs or
• import duties
• exchange rate fluctuations,
• personal disposal incomes of the target market
• the currency they want to be paid in
• the general economic situation of the country and how this will influence pricing
Adaptation of the 4P’s: Place
In an overseas market there will be more parties involved because the goods need to be moved around a foreign market where business practices will be different to national markets.
• For example agents might be used to sell products in other countries
Adaptation of the 4P’s: Promotion
Advertising messages in countries may have to be adapted because of language, political climate, cultural attitudes and religious practices.
• What works in one country could cause offence in another country.
• For example a business cannot promote white bridal wear in India as it is worn as a colour by mourners
Global Market Strategy
- Market penetration strategy – current products and current markets
- Product development strategy – new products and current markets
- Market development strategy – current products and new markets
- Diversification – new products and new markets
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
• Promotions play a large part in this e.g. MCd Happy meals / Monopoly games / holiday and festival promotions such as Halloween
Product or Service Protein
• New product development in marketing can be critical to keep customers buying more – think about your IPhone is it an IPhone 4? No???
• This strategy may be used to replace the normal product with a better one, or to develop and sell a complementary product that needs to be sold along side the main one
Market Development
• Market development means taking products that already exist and finding new global markets for them
• This may mean moving into countries that have had trade liberalisation
• This may also mean the business has to find suitable alternative markets for the products
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
• A business may look at other markets where it can use its core competencies e.g. Swatch made plastic watches – so then came up with the plastics for the smart car
Believe it or not, it was the man behind the Swatch
