Marketing 4.3.1 Flashcards
What is a global marketing strategy?
What is a marketing strategy?
A product strategy to increase sales through promotion and advertisements to the international market. It focuses on the 4Ps - Price, Place, Promotion and Product - in a range of foreign markets.
A process to allow a business to focus limited resources on the best opportunities to increase sales and thereby achieve a sustainable competitive advantage.
What are the benefits and disadvantages of a global marketing strategy?
+ EOS in production and distribution
+ Lower average marketing costs
+ Power in the market as your brand is known
+ Consistency of brand image
+ Uniformity of marketing practices
+ Ability to leverage good ideas quickly and efficiently
- Cultural differences/Cultural clashes
- Protectionist barriers
- Differences in consumer needs wants and usage patterns
- Differences in consumer response
- Differences in brand and product development
- Differences in a legal environment
What is glocalisation?
This is where products are adapted and developed to meet the needs of the local market. MNCs personalise their marketing.
What are the pros and cons of glocalisation?
+ Suit local demands and markets
+ Flexibility
+ Better customer service
- Can be expensive
- Time-consuming
- Not always successful (highly risky due to over-diversifying)
- Domestic competition
- Negative PR
- Harder to achieve economies of scale
- Requires different and new suppliers
What is localism?
Strategies that adjust products to fit with target customers.
What are the marketing strategies?
- Domestic/ethnocentric
- Mixed/ geocentric
- International/polycentric
Know as the EPG model:
- Ethnocentric
- Polycentric
- Geocentric
What is an ethnocentric marketing strategy?
The ethnocentric approach or home country orientation is where a company simply markets its products or services internationally in the same manner as they do domestically. Companies believe that consumer needs in market conditions are more or less homogenous than international markets. General marketing reproduced overseas for their product has no adaptation of the product to meet local needs.
What is a geocentric marketing strategy?
This is a fusion of both ethnocentric and polycentric approaches whereby the promotion of the product is undertaken from a global POV. Therefore, it is not based on the perspective of either the home or the host nation.
- This approach takes the benefits of polycentric and ethnocentric to gain the best of both and hence is the best approach for businesses to take. For example, Coca-cola can operate an ethnocentric approach in markets such as the UK and the US and benefit from economies of scale, but a polycentric approach in places like India, where customers have less money to spend; hence similar cans are sold at cheaper prices.
What is a polycentric marketing strategy?
The business adapts its marketing strategy to the local market, providing products tailored to that market. The values of that country are the most important in order to successfully market the product there. This approach is the direct opposite of ethnocentrism.
- Typically with this approach, the business believes the overseas market is distinct from the domestic market. For example, Pizza Hut in Japan has pizza toppings of squid and seaweed and in South Korea, it offers crusts stuffed with sweet potato to satisfy local customer tastes. The business fully takes into account the nation’s values including its customs, culture and religion.
What are the benefits and drawbacks of using an ethnocentric approach?
+ Standardisation provides significant economies of scale and much lower marketing costs as there is little or no research required for new markets.
- The risk of losing sales as the business is not market-orientated.
What are the benefits and drawbacks of using a geocentric approach?
+ The benefits are the same as the polycentric and ethnocentric approaches.
- Will not always be clear which is the correct strategy to choose for different markets, which could lead to the wrong approach, invoking the drawbacks of either ethnocentric or the polycentric discussed above.
What are the benefits and drawbacks of using a polycentric approach?
+ Likely increase in sales and local brand loyalty due to the market orientation of the product.
- Average product costs will increase due to new product development, market research and a reduction in economies of scale. Additionally, a loss of sales as the product is no longer differentiated from other local competition.
What is the marketing mix?
The set of actions, or tactics, that a company uses to promote its brand or product in the market. The 4Ps - price, product, place and, promotion - make up a typical marketing mix.
How does the price link to global marketing?
Price strategies that have worked in other economies such as western markets are unlikely to be successful in emerging and undeveloped economies where economic development is low. Therefore, pricing strategies need to be tailored to local customers. In some cases, this means pricing low, such as Coca-Cola’s 10p can in India. In other cases, it means pricing high. such as the Land Rover Evoque, which sells well in China despite double the UK price tag.
A global standardised price removes the possibility of the product being sold on in a grey market, where people simply take advantage of the difference in price and sell it on e.g. through Amazon or e-Bay.
However, this would not take into account the level of disposable income that people have so might mean that a business is reducing the sales revenue available to it.
How does the product link to global marketing?
A firm will need to consider whether a standardised product can be sold in all global markets. Then it can build up an associated product range. This might be easier for a technological business as opposed to a food business.
