Chapter 1-Global Marketing Introduction Flashcards
Marketing:
the activities that research ‘people’; the intent being to design and implement communication that will enhance business opportunities.
Marketing Mix:
The 4 Ps (Product, Price, Placement, Promotion) - Advertising is the output of marketing
Global Marketing:
Extending marketing beyond the original domestic market.
Standardization vs Adaptation:
defined as the extent to which each aspect of a marketing plan needs to be adjusted to accommodate different country markets.
Customer preferences, managing competitors, channels of distribution, communication and the 4 P’s usually require changes.
Typically, a marketing plan that is designed for one country will not necessarily work in another. Customer preferences are the primary issue; competition and logistics are also major concerns.
Marketing Activity Methods:
Concentration
Coordination
Integration
Concentration:
Concentration: a defined marketing plan that is being applied to one country (and possibly a nearby identical country) Bottle of scotch in Airplanes.
Coordination
Coordination: a modified marketing plan that is being applied to the same customer segment, but in multiple countries.
Integration:
Integration: multiple marketing plans being applied to similar segments in multiple countries. In some cases, their success are interdependent.
Product/Market Growth Matrix
- Market Penetration
- Market Development
- Product Development
- Diversification
Market Penetration
defined as getting your existing customers to buy more of the same products (or finding more customers within the same targeted area). This is the preferred (less risky) option if the current market has not reached ‘saturation’.
Market Development
defined as taking existing products into new markets. Example: a product being sold to U of M students could be offered to all Canadian university campuses. This is minimal risk because you are selling the product to a specific (and researched) segment. You only need to find them at a new location (which is easy because you know where they are) and introduce them to the product.
Product Development
defined as developing new products and placing them in existing markets. Example: a company that sells bathroom cleaning products launches kitchen cleaning products. There is minimal risk because you have already researched the target audience.
Diversification
defined as developing new products for new markets.
“Related Diversification” (example: a coffee shop gets a liquor license so it can offer wine in the evenings): you have minimal research; risky.
“Unrelated Diversification” (selling a new product to a new target market). Not recommended; failure is common (but not advertised).
Single-Country Marketing Strategy: The Process
Use research to position and target the primary target audience.
Refine the Marketing Mix for the primary segment:
1. Product
2. rice
3. Promotion
4. Place
Global-Country Marketing Strategy: The Process
Use research to position and target the primary target audience (with government regulations, tax laws and cultural preferences being substantial inputs to the process).
Refine the Marketing Mix (the 4 P’s); determine the required degree of standardization vs customization.
Coordinate marketing activities across borders.
Develop contingency plans for the competitor’s response.
Trends Affecting Global Business Today
The constant negotiation of trade agreements.
The Internet’s attack on national borders and cultures.
Threats of terrorism.
Confidentiality.
The economic power of Brazil, Russia, India and China.
Foreign acquisitions.
Marketing Factors: Controllable Factors
- Product
- Price
- Promotion
- Channels of Distribution
- Research
Marketing Factors: Domestic Environment Uncontrollables
- Economics (micro)
- Competition
- Available Technology
- Infrastructure
- Political & Legal Forces
- Cultural Variations
- Geography (logistics)
Marketing Factors: Foreign Environment Uncontrollables
- Economics (micro and macro)
- Competition
- Available Technology
- Infrastructure
- Political & Legal Forces
- Cultural Variations
- Geography (logistics)
- Duties, Taxes, Tariffs
- Currency, Inflation
The Self-Reference Criterion (SRC);A Major Obstacle
SRC is an unconscious (and singular) reference to one’s own cultural values, experiences, and knowledge as a basis for decisions.
Cultural ethnocentricity:
is the belief that aspects of one’s culture are superior to another’s.
Consumer ethnocentrism
is the belief that it is wrong or inappropriate to buy foreign made products. With the latter belief, a person would buy a domestic product even if a superior or less expensive foreign made item were available.
These perspectives restrict the ability to assess a foreign market opportunity.
Cultural Considerations
Research: easily learned; provides the foundation for understanding how to interact with a culture.
Examples: preferences to colour, attire, religious obligations.
Experience: observing (or using the documented observations of others) to understand the unspoken variances in cultures.
Examples: the value of time, the social status within a society, the degree of trust of foreigners, the degree of control of a person’s future (which is often a function of religious or spiritual teachings that are carried into business life).
Resistance to Change
A consumers’ acceptance of new products or services is partially controlled by the training and expectations of their specific culture.
Using Hofstede’s work as a reference, a market’s degree of resistance to change is related to the culture’s:
High individualism: willing to try new ideas.
High collective: prefers to follow practices.
Low uncertainty avoidance: accepts risk.
High uncertainty avoidance: avoids risk.