Marketing Flashcards
Define a GLOBAL MARKETING STRATEGY
A global marketing strategy is one in which a business does not differentiate its products or other elements of the marketing mix between countries. The products are based on values of the home nations and sold to the host nation.
Define a LOCALISATION STRATEGY
A localisation strategy is the opposite of a global marketing strategy. It involves businesses adapting their product/service offerings and other elements of the marketing mix (such as pricing or distribution strategies) to meet the local customer needs.
Define a GLOBAL LOCALISATION (GLOCALISATION) STRATEGY
A glocalisation strategy is the practice of conducting business according to both local and global considerations. Some elements will remain the same globally, while others will be adapted to meet local conditions.
What will a business need to consider when expanding into a new country?
- cultural differences
- different customer tastes
- language
- unintended meanings
- inappropriate/inaccurate translations
- inappropriate branding and promotion
Define the EPG MODEL
The EPG model is a framework that can be used to analyse the marketing strategies of global businesses.
Define the ETHNOCENTRIC APPROACH
The ethnocentric approach is another name for a global marketing strategy. The business sells one product everywhere, which is marketed in the same way. There is a highly centralised structure and standardised products.
The products are based on values of the home nations and sold to the host nation.
Define the POLYCENTRIC APPROACH
The polycentric approach is essentially a localisation strategy. Decision making is decentralised, and the marketing mix is adapted carefully for each country.
Define the GEOCENTRIC APPROACH
A geocentric approach is a glocalisation strategy. The marketing is somewhat adapted for each country but the business seeks to benefit from global integration.
What are the advantages of an ethnocentric approach?
- Lower cost of product development
- Economies of scale due to uniformity
- Very tight control
What are the disadvantages of an ethnocentric approach?
- Does not take cultural/national differences into account
- Fails to exploit local manager expertise
- Decision making can be slow
- Diseconomies of scale
What are the advantages of an polycentric approach?
- A targeted marketing mix can maximise sales
- Empowered local managers can respond quickly to market changes
- Separating different areas of the business can minimise diseconomies of scale
What are the disadvantages of an polycentric approach?
- High development costs from differentiation of products for different markets
- Fails to exploit global brand power
- Difficult to compete will established local brands
- Prices differences creates risk of reselling across borders e.g. via Ebay
What are the advantages of an geocentric approach?
- Sales may be increased by adapting to local markets
- Some economies of scale can be achieved for similar products
- Some control retained at the centre
- Local managers have the power to adapt/respond to changing market conditions
What are the disadvantages of an geocentric approach?
- Costs associated with ‘acting local’
- Can the MNC compete effectively with domestic or polycentric businesses?
- Will there be tensions between the centre and the regions when making key decisions?
