Chapter 1 - Introduction to Global Marketing

Question 1

History of Going Global

Answer 1

• The post WWII era brought unparalleled expansion by companies going outside their home markets.
• Four decades ago the phrase global marketing did not exist.
• Today companies go global to survive as competitors will enter the home market with lower costs, more experience and better products.

Question 2

Marketing and Global Marketing Defined

Answer 2

• Marketing: “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”
• Marketing Mix: The 4 Ps
• Global Marketing: The scope of activities outside the home market

Question 3

Describe the product market growth

Answer 3

Product Orientation (Existing Products/New Products
Market Orientation (Existing Markets/New Markets)

Existing P/Existing M: Market penetration strategy
Existing P/ New M: Market development strategy
New P/ Existing M: Product development strategy
New P / New M: Diversification strategy

Question 4

Define Value Chain and Value Proposition

Answer 4

Value Chain
- Marketing, along with all other functional business areas, create value for the customer

Value Proposition
– Perceived value to the customer
– The firm’s promise to the customer

Question 5

Mit welcher Formel lässt sich Value berechnen und wie kreiert man Customer Perceived Value

Answer 5

Create value for customers by improving benefits or reducing price
– Improve the product
– Find new distribution channels
– Create better communications
– Cut monetary and non‐monetary costs and prices

Value=Benefits/Price

Question 6

What are global industries and indicators of globalisation?

Answer 6

An industry is global to the extent that a company’s industry position in one country is interdependent with its industry position in another country

Indicators of globalization:
*Ratio of cross-border investment to total capital investment

*Proportion of industry revenue generated by all companies that compete in key world regions

*Ratio of cross-border trade to worldwide
production

Question 7

What is competitive advantage and how is it measured?

Answer 7

• When a company succeeds in creating more value for customers than its competitors do
• Measured relative to industry rivals
• “Created when a firm has value‐creating strategy not simultaneously being implemented by an current or potential competitors.” ~ Jay Barney

Question 8

Name examples of globalisation of sports

Answer 8

• Major league sports like the NBA, NFL, and MLS are finding new fans abroad.
  The NFL promoted a 2013 game in London with banners across a major street.
• Soccer is a global sport.
• The National Football League is focusing on Canada, China, Germany, Japan, Mexico, and the UK.

Question 9

What is important to do when you want Competitive Advantage, Globalization & Global Industries?

Answer 9

Focus
- concentration and attention on core business and competence

Question 10

Compare Global Marketing Strategy to Single Country Marketing Strategy

Answer 10

Single Country Marketing Strategy
* Target Market Strategy
* Marketing Mix – Product – Price – Promotion – Place

Global Marketing Strategy
* Global Market Participation
* Marketing Mix Development – 4 P’s: Adapt or Standardize?
* Concentration of Marketing Activities
* Coordination of Marketing Activities
* Integration of Competitive Moves

Question 11

Compare Standardisation and adaption in context of globalisation

Answer 11

Globalization (Standardization)
– Developing standardized products marketed worldwide with a standardized marketing mix – Essence of mass marketing

Global localization (Adaptation)
– Mixing standardization and customization in a way that minimizes costs while maximizing satisfaction
– Essence of segmentation
– Think globally, act locally

Question 12

Give an insight on Global Localization

Answer 12

• “Think globally, act locally”
• May be a combination of standard (product) and nonstandard approaches ( distribution or packaging)
• Cinnabon/USA developed dulce de leche flavors for Latin America
• Kraft developed Tang flavors of mango and pineapple for Latin America and the Mideast

Question 13

Describe the importance of going global by facts and figures

Answer 13

• For U.S. companies, 75% of total world market for goods and services is outside the country
  – Coca‐Cola earns 75% of operating income and 2/3 of profit outside of North America
• For Japanese companies, 90% of world market is outside the country
• 94% of market potential is outside of Germany for its companies even though it is the largest EU market

Question 14

What kind of management orientiations can be distiguished when a company is globalised/going global?

Answer 14

Ethnocentric
Polycentric
Regiocentric
Geocentric

Question 15

Describe the ethnocentric management orientation

Answer 15

– Home country is superior to others
– Sees only similarities in other countries
–Assumes products and practices that succeed at home will be successful everywhere
–Leads to a standardized or extension approach

Question 16

Describe the geocentric management orientation

Answer 16

– Entire world is a potential market
– Strives for integrated global strategies
– Also known as a global or transnational company – Retains an association with the headquarters country
– Pursues serving world markets from a single country or sources globally to focus on select country markets
– Leads to a combination of extension and adaptation elements

Question 17

Describe the regiocentric management orientation

Answer 17

– A region is the relevant geographic unit
* Ex: The NAFTA or European Union market
– Some companies serve markets throughout the world but on a regional basis
* Ex: General Motors had four regions for decades

Question 18

Describe the polycentric management orientation

Answer 18

– Each country is unique
– Each subsidiary develops its own unique business and marketing strategies
– Often referred to as multinational
– Leads to a localized or adaptation approach that assumes products must be adapted to local market conditions

Question 19

Forces Affecting Global Integration & Global Marketing

Answer 19

• Multilateral trade agreements
• Converging market needs and wants and the information revolution
• Transportation and communication improvements
• Product development costs

Question 20

Driving Forces Affecting Global Integration and Global Marketing

Answer 20

Leverage
–Experience transfers
–Scale economies
–Resource utilization
–Global strategy

Question 21

Restraining Forces Affecting Global Integration and Global Marketing

Answer 21

• Management myopia
• Organizational culture
• National controls
• Opposition to globalization