Marketing (4.3.1) Flashcards
What is a global marketing strategy?
The process of planning, producing, placing and promoting a business’s product or service to the global market
What is Glocalisation?
Strategy where businesses aim to reach customers globally and also take into consideration the needs of the local market
What are the three different marketing approaches that a business can take when it comes to expanding its operations to other countries or regions?
-Domestic/Ethnocentric
-Mixed/Geocentric
-International/Polycentric
What is the Domestic/Ethnocentric Approach?
Businesses see the domestic and foreign markets as very similar. 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.
ethNOcentric-NO changes
What’s a real-life example of a business taking an Ethnocentric approach?
Apple sells standardised products across their global markets e.g. iPhone, iPad which helps them to reduce costs as they can benefit from economies of scale
What are the advantages of an Ethnocentric Approach?
-Economies of scale as product is standardised and produced on a large scale
-Costs are lower as no investment into product development to adapt products for different markets
What are the disadvantages of an Ethnocentric Approach?
-Business could potentially lose sales as product isn’t tailored to needs and wants of markets overseas
-This Approach can lead to cultural insensitivity and may not resonate with local customers in other countries
What is the Polycentric/International approach?
Businesses adapt their marketing strategy by tailoring their products to the local market. Company treats each country as a unique market and develops a customised marketing mix for each market
What’s a real-life example of a business that take a Polycentric Approach?
KitKat (Nestle) has developed different adaptations of the chocolate to reach different consumers in the international market. The packaging for KitKat in Japan was changed to include cherry blossoms, a symbol of good luck. Additional flavours, such as purple sweet potato and matcha powder, were included to appeal to the tastes of the local market
What are the advantages of the Polycentric Approach?
-Sales are likely to increase as the product is tailored to meet the needs of customers
-Helps develop brand loyalty in overseas markets
What are the disadvantages of the Polycentric Approach?
-Product Development to adapt product may increase average unit costs
-Additional costs in market research to find out about the market
What is the Geocentric/Mixed Approach
This strategy is a mix of the polycentric and ethnocentric approach. This approach utilises the benefits of standardised products but also tailors products to meet the needs of local markets overseas while maintaining a consistent brand image across markets
What’s a real-life example of a business that take a Geocentric Approach?
McDonald’s has a geocentric approach by adapting their menu to meet the tastes and culture of different overseas markets. McDonald’s do not offer beef or pork in India due to religious reasons. However in the majority of western countries, McDonald’s has standardised products such as the Big Mac
What are the advantages of the Geocentric Approach?
-Sales are likely to increase as the product is tailored to meet the needs of customers
-helps develop brand loyalty in overseas markets
What are the disadvantages of the Geocentric Approach?
-There will be costs associated with the product development and menu changes required to meet the needs of the local market
What is the marketing mix?
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
What do businesses have to do to the Marketing Mix to ensure the success of their product/service in overseas markets?
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
How can a business adapt Place to Global Markets?
Businesses have to identify the best channel of distribution to get the product/service to the customer in a particular market. Also need to consider the available technology as many transactions take place via e-commerce
How can a business adapt Product to Global Markets?
Businesses need to consider how much they should modify or adapt their products to meet new markets overseas. Need to consider if they will take an ethnocentric, polycentric or geocentric approach
How can a business adapt Price to Global Markets?
When making pricing decisions, businesses must consider customer incomes, costs of production and taxes. They must also consider the stage of the product life cycle the product is at within that market. The state of the economy (recession or boom) will also impact the pricing strategy
How can a business adapt Promotion to Global Markets?
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.g. social media may be an effective marketing tool in some markets but less effective in others
What does Ansoff’s Matrix help a business to do?
Strategic planning tool that helps businesses identify potential growth opportunities by analysing their product and market strategies
What are the four growth strategies the matrix consists of
-Market penetration
-Market development
-Product development
-Diversification
What do businesses need to make sure they are doing when expanding outside of domestic markets? So they can do what?
They need to ensure they adopt the right strategy so they can effectively penetrate global markets and achieve long-term success
What does Market Penetration mean?
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
What does Market Development mean?
This strategy focuses on selling existing products to new markets. 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
What does Diversification mean?
This strategy involves businesses developing new products for new markets. A high risk strategy as the business may have limited knowledge about the market. This strategy requires a deep understanding of local market conditions and consumer behaviour to ensure that the new product and market are a good fit for the business
What does Product Development mean?
A growth strategy where a business aims to introduce new products into existing markets. This requires market research to identify the target market’s needs and preferences, developing products that meet those needs, and adapting the marketing mix to ensure that the products resonate with local consumers
