Marketing Flashcards
Global marketing strategy
- refers to the marketing strategies used by businesses when operating in global markets.
- some firms standardize their marketing strategies and others adapt them to meet the needs of different markets.
Glocalisation
- refers to the notion of having to personalize marketing where required to the local market, while at the same time trying to keep marketing approaches consistent across all markets.
- this suggests that to be successful businesses need to take into account local tastes, customs and traditions.
- the term ‘think local, act global’ is used to describe the strategy of glocalisation.
Advantages of glocalisation
- sales are likely to increase as each market is specifically targeted.
- product features are tailored to customer needs, preferences and incomes.
- turnover and profits can be maximized.
- marketing and products are ideally suited to the local situation = increases demand.
- however, these benefits depend on the effectiveness of glocalisation.
Disadvantages of glocalisation
- the business cannot fully exploit global EOS.
- researching each market and adapting or developing takes time and money.
- wider product ranges and multiple marketing campaigns are harder to manage.
- average costs are therefore likely to be higher.
- these limitations will not happen if glocalisation is successful.
Ethnocentric / domestic approach
- businesses see the domestic and foreign market as very similar.
- this approach is based on the belief that the company’s home country culture and marketing practices are superior to those of other countries.
- there will be no changes to the products for overseas customers and marketing of the product will be the same
*advantages:
- business can benefit from EOS as the product is standardized and produced on a large scale.
- costs are also lower as there is no investment into product development to adapt products for different markets.
*disadvantages:
- business could potentially lose sales as product is not tailored to the needs and wants of the oversea market.
- approach could lead to cultural insensitivity and may not resonate with local customers in other countries.
Polycentric / International approach
- business fully adapts the product and the marketing to suit local preferences and interests.
- the business treats each country as a unique market and develops a customized marketing mix for each market.
*advantages:
- The product is tailored to meet the needs of customers and so this may lead to greater sales revenue.
- This helps to build customer loyalty in oversea markets and a possible competitive advantage.
*disadvantage:
- product development to adapt the product may increase average unit costs.
- there will be additional costs in market research to find out about the market.
- there is limited opportunities to benefit from EOS.
Geocentric / Mixed approach
- it is a mix between polycentric and ethnocentric approach.
- approach utilizes the benefits of standardized products but also tailors products to meet the needs of local markets overseas while maintaining a consistent brand image across markets.
*advantages:
- sales will increase as the product is tailored to meet the needs and preferences of customers.
- this is likely to also help build brand loyalty in overseas markets.
*disadvantages:
- there will be costs associated with the product development required to meet the needs of the local market.
Adapting & Applying the Marketing Mix to Global Markets
- The marketing mix is the set of controllable marketing tools that a company uses to promote its brand or product in a market
—> It consists of the four Ps - product , price , place , and promotion - Businesses have to adapt the marketing mix to a new overseas market ensure the success of the product/service
- By adapting the marketing mix to meet local needs, companies can effectively penetrate global markets and build a strong global brand
Price
- when making pricing decisions, the business must take into account local factors:
- customer incomes
- cost of production
- taxes
- cost of living
- the state of the economy (recession or boom).
- the stage of the product lifecycle
Product
- business need to consider that the product may need to be changed to meet differing needs or cultural sensibilities.
- businesses also need to consider how much they should modify or adapt their products to meet new markets overseas.
- also need to consider whether they are taking an ethnocentric, geocentric or polycentric approach.
Place
- businesses may need to take into account how customers typically buy products (e.x: online, big supermarkets, small village shops).
- Businesses have to identify the best channel of distribution to get the product/service to the customer in a particular market .
- They also need to consider the available technology as many transactions take place via e-commerce.
Promotion
- promotional activities may need to be adapted to be culturally relevant or avoid offence.
- Promotion needs to be adapted to meet language and cultural differences.
- Businesses must aim to choose the most effective method of promotion to promote products in that market.
—> e.x: social media may be an effective marketing tool in some markets but less effective in others
Adapting & Applying Ansoff’s Matrix to Global Markets
- Ansoff’s Matrix is a strategic planning tool that helps businesses identify potential growth opportunities by analysing their product and market strategies
- The matrix consists of four growth strategies - market penetration, market development, product development, and diversification
- Expanding outside of domestic markets generates risks for the business, so they need to ensure that they adopt the right strategy
—> By doing so, businesses can effectively penetrate global markets and achieve long-term success
Market penetration
- This strategy focuses on selling existing products into existing markets.
- Carries the least risk - if a business already operates in a market and launches another product, customers are already familiar with the business.
Market development
- This strategy focuses on selling existing products to new markets (e.x: new geographical market, exporting product to a ew country).
- Businesses may have to adapt the product to meet the needs of customers in global markets who have different preferences
- This strategy carries more risk as customers may not understand the product
