CH 1 - Global Marketing in The Firm + Intro Modified

Svend Hollensen
GLOBAL MARKETING
4th Edition
1 Global marketing in the firm
ISBN 978-0-273-70678-6
Hollensen, Global Marketing 4e, Pearson Education 2008
1-2
1-3
1-4
1-5
Globalization is for debate .
1-6
1-7
Learning objectives
-Characterize and compare the
management style in SMEs and LSEs
-Identify drivers for global integration and
market responsiveness
-Explain the role of global marketing in the
firm from a holistic perspective
1-8
Learning objectives (2)

-Describe and understand the concept of
the value chain
-Identify and discuss different ways of
internationalizing the value chain
1-9
Internationalization
Firms must decide whether to stay at
home or strengthen the global position
Globalization reflects trend of buying,
selling, and distributing products in many
countries and regions of world
1-10
Figure 1.1
Nine strategic windows
1-11
What is this?
The firms commitment to coordinate its
marketing activities across national
boundaries in order to find and satisfy
global customer needs better than the
competition is known as ______.
Global marketing
1-12
Halls Low-Context,
High-Context Approach
Low-context: words used by speaker
explicitly convey speakers message
High-context: the context in which a
conversation occurs is just as important
as the words spoken; cultural clues are
critical to communication
1-13
High- and Low-Context Cultures
1-14
Chinese
Korean
Japanese
Vietnamese
Arab
Greek
Spanish
Italian
Britain
U.S./ Canadian
High
Context
Scandinavian
Swiss
German
Low
Context
Example of Globalized Production

Of the $20,000 sticker price of a General Motors
Automobile LeMans:
$6,000 goes to South Korea, where the car was
assembled
$3,000 goes to Japan for sophisticated high-tech
parts (engines, transaxles, electronics)
$800 goes to Taiwan, Singapore, and Japan for
small parts
$500 goes to Great Britain for advertising and
marketing services
$1,000 goes to Ireland for data processing
$7,600 goes to GM and its external professional
firms in the United States
McGraw-Hill

1-15
2004 The McGraw-Hill Companies, Inc. All rights reserved.
Q-1 Characterize and compare the development

of the Global Marketing concepts?
EPRG framework of business activities

Ethnocentric
Polycentric
Geocentric
Regiocentric
1-16
Parent-Country Nationals (PCNs

Host-Country Nationals (HCNs)
Third-Country Nationals (TCNs)
1-17
Approaches to Staffing
Factors affecting approaches to staffing
General staffing policy on key positions at
headquarters and subsidiaries
Constraints placed by host government
Staff availability
Ethnocentric
Polycentric
Geocentric
Regiocentric
1-18
Ethnocentric
Strategic decisions are made at
headquarters;
Limited subsidiary autonomy;
Key positions in domestic and foreign
operations are held by headquarters
personnel;
PCNs manage subsidiaries.
1-19
Ethnocentric Approach
Advantages:
To ensure new
subsidiary complies
with overall corporate
objectives and
policies
Has the required level
of competence
Assignments as
control
Disadvantages:
Limits the promotion opportunities
of HCNs, leading to reduced
productivity and increased turnover
among the HCNs
Longer time for PCNs to adapt to
host countries, leading to errors
and poor decisions being made
High cost
Considerable income gap, high
authority, and increased standard
of living may relate to lack of
sensitivity
1-20
Geocentric
A global approach - worldwide integration;
View that each part of the organization
makes a unique contribution;
Nationality is ignored in favor of ability:
Best person for the job;
Color of passport does not matter when it
comes to rewards, promotion and
development.
1-21
Geocentric Approach
Advantages:
Disadvantage:
Ability of the firm to

develop an international
executive team
Overcomes the
federation drawback of
the polycentric
approach
Support cooperation
and resource sharing
across units
Host government may use

immigration controls in
order to increase HCNs
employment
Expensive to implement
due to increased training
and relocation costs
Large numbers of PCNs,
HCNs, and TCNs need to
be sent across borders
Reduced independence of
subsidiary management
1-22
Polycentric
Each subsidiary is a distinct national
entity with some decision-making
autonomy;
HCNs manage subsidiaries who are
seldom promoted to HQ positions;
PCNs rarely transferred to subsidiary
positions.
1-23
Polycentric Approach
Disadvantages:
Difficult to bridge the gap between HCN
subsidiary managers and PCN managers at
headquarters ( language barriers, conflicting
national loyalties, cultural differences)
HCN managers have limited opportunities to
gain experience outside their own country
PCN managers have limited opportunities to
gain international experience
Resource allocation and strategic decision
making will be constrained when headquarter
is filled only by PCNs who have limited
exposure to international assignment
1-24
Regiocentric
Reflects a regional strategy and structure;
Regional autonomy in decision making;
Staff move within the designated region,
rather than globally;
Staff transfers between regions are rare.
1-25
Regiocentric Approach
Advantages:
Disadvantages:
Allow interaction between

executives transferred to
regional headquarters from
subsidiaries in the region
and PCNs posted to the
regional headquarters
Provide some sensitivity to
local conditions
Help the firm to move from
a purely ethnocentric or
polycentric approach to a
geocentric approach
Produce federalism at a
regional rather than a
country basis and
constrain the firm from
taking a global stance
Staffs career
advancement still limited
to regional headquarters,
not the parent country
headquarters
1-26
What is this?
What term refers to the development
and selling of products or services
intended for the global market, but
adapted to suit local culture and
behaviour (think globally, act locally)?
Glocalization
1-27
Figure 1.2 Knowledge transfer

Core global business strategy
(HQ)
Country
A
Country
B
Country
C
Country
D
Feedback
Feedback
Internationalizing the strategy
Transferring global know-how and best practices

between countries with feedback to HQ
1-28
Figure 1.3
Convergence of orientation
1-29
Q2- Comparison of the global marketing

and management style of SMEs and
LSEs ?
Recourses
Formation of
strategy
Organization
Risk Taking
Flexibility
Economies of
Scale and scope
Use of
information
sources
1-30
Figure 1.4
Intended and emergent strategy
Int
en
str ded
ate
gy
De
libe
rate
stra
teg
y
Realized
strategy
Unrealized
strategy
n
e
g
er
m
E
gy
e
t
ra
t st
Source: Mintzberg, 1987, p. 14. Copyright 1987 by the Regents of the University of California. Reprinted from the California
Management Review, Vol. 30, No. 1. By permission of the Regents.
1-31
Figure 1.5 Incremental change

and strategic drift
E.g.
1-32
Figure 1.6 Entrepreneurial

decision-making model
1-33
What is this?
When accumulated volume in
production results in lower cost price
per unit, _____ occur.
Economies of scale
1-34
Finding economies of scale

Reducing operating costs per unit and spreading
fixed costs over larger volume due to
experience curve effects
Pooling global purchasing gives the opportunity
to concentrate global purchasing power over
suppliers
Building of centres of excellence by using larger
scale and focusing talent in one location
1-35
What is this?
When resources can be reused
from one business/country in
additional business/countries, _____
occur.
Economies of scope
1-36
Production orientation
vs marketing orientation
1-37
Q3- Explain the forces for global

integration and market
responsiveness?
Global
integration
Market
responsiveness
1-38
Figure 1.7 Global integration/

market responsiveness grid
1-39
Forces for global

coordination/ integration
Removal of trade
barriers
Global customers
Relationship
management
Standardized
worldwide technology
Worldwide markets
Global village
Worldwide
communication
Global cost drivers
1-40
Forces for
market responsiveness
Cultural differences
Regionalism/ protectionism
Deglobalization trend
1-41
1-42
Question: How globalized is Unilever??

Unilever Worldwide - A Multi-local Multinational
Unilever is dedicated to meeting the everyday needs of people
everywhere.Around the world our foods and home and personal care brands
are chosen by many millions of individual consumers each day. Earning their
trust, anticipating their aspirations and meeting their daily needs are the tasks
of our local companies.
They bring to their consumers our best brands and both our international and
local expertise.
Management in the countries in which we operate is made up of local
employees who typically represent 95 percent of the management team. We
strongly believe that meeting the specific needs of all our consumers is best
achieved through our local employees and managers who can draw upon the
best of Unilever's international expertise to meet the mosaic of aspirations of
consumers across the globe.
(source: www.unilever.com)
1-43
Our corporate purpose

Our deep roots in local cultures and markets around the world give us
our strong relationship with consumers and are the foundation for our
future growth. We will bring our wealth of knowledge and international
expertise to the service of local consumers a truly multi-local
multinational.
Our long-term success requires a total commitment to exceptional
standards of performance and productivity, to working together
effectively, and to a willingness to embrace new ideas and learn
continuously.
1-44
To succeed also requires, we believe, the

highest standards of corporate behaviour
towards everyone we work with, the
communities we touch, and the environment
on which we have an impact.
This is our road to sustainable, profitable
growth, creating long-term value for our
shareholders, our people, and our business
partners.
1-45
Why is Unilever Interested in Engaging

with Value Chain Partners?
Applies Up and Down the Value Chain e.g.
Does not have specific competencies.
Does not wish to invest but wishes to expand.
Does not see sufficient added value.
Does not have scale of operations.
Does not have geographic reach.
Wishes to be flexible-particularly in innovation cycle.
Activity not core to business.
Risk not acceptable.
Seek synergies with local partner.
1-46
Q4 -Explain the Value Chain as a framework for

identifying international competitive advantage?
Structure
Strategy
Shared
Values
Systems
Skills
Style
Staff
Source: McKinsey 7S Framework from In Search of Excellence: Lessons from Americas Best Run Companies by Thomas J. Peters
and Robert H. Waterman, Jr. Copyright 1982 by Thomas J. Peters and Robert H. Waterman, Jr. Reprinted by permission of
HarperCollins Publishers, Inc.
1-47
Figure 1.9 The value chain

Support activities
Firm infrastructure
Human resource management
Technology development
Procurement
Inbound
Outbound Marketing
Operations
Service
logistics
logistics and sales
Primary activities
Upstream value activities
Downstream value activities
Source: Reprinted with permission of The Free Press, a division of Simon & Schuster Adult Publishing Group, from Competitive Advantage: Creating and Sustaining Superior Performance by Michael E. Porter. Copyright 1985, 1998 Michael E. Porter.
1-48
Figure 1.10
A simplified value chain
Research
and development
Upstream
Production
Marketing
Sales
and service
Downstream
1-49
Important Terms
Value Chain A categorization of the
firms activities providing value for the
customers and profit for the company.
Deglobalization Moving away from the
globalization trends and regarding each
market as special with its own economy,
culture and religion.
1-50
Figure 1.11 Strategic pyramid

1. Strategic
2. Managerial
3. Operational
Research
and development
Production
Marketing
Sales
and service
1-51
Figure 1.13 Centralization

in the value chain
1-52
Exhibit 1.4: Pocoyo
Zinkia Entertainment, Madrid
Upstream
Granada
Ventures, UK
Pocoyo sold to
100 countries
(beginning of 2007)
Downstream
1-53
Figure 1.14 Value shop

and the service chain
1-54
What is this?
What term refers to an extension of
the conventional value chain,
where the information
processing
itself can create
value for customers?
Virtual value chain
1-55
Figure 1.15 Virtual value chain

Physical value chain
R&D
Production
Define
information
problem
Organize,
select,
gather
information
Marketing
Sales
and service
Value
Synthesize
information
Distribute
information
Value
Virtual value chain

1-56
Creating value
by using information
Managing risks
Reducing costs
Offering products and services
Inventing new products
1-57
For discussion (1)

What is the reason for convergence
orientation in LSEs and SMEs?
How can an SME compensate for its lack
of resources and expertise in global
marketing when trying to enter export
markets?
1-58
For discussion (2)

What are the main differences between
global marketing and marketing in the
domestic context?
Explain the main advantages of
centralizing upstream and decentralizing
downstream activities?
How is the virtual value chain different
from the conventional value chain?
1-59
CASE STUDY 1.1:

Vermont Teddy Bear
Should Vermont Teddy Bear go abroad?
1-60
1-61
1-62
Questions:
What kind of difficulties would the Vermont Teddy Bear
meet if it were to internationalize its business?
2.In what part of the world should the company start its
internationalization?
3.How should the company penetrate the foreign markets:
(a)
by Internet?
(b)
by physical stores?
(c)
by a combination of the two?
(d)
by other means?
4. How would the communication mix in the chosen countries
differ from the US-market?
1.
1-63

CH 1 - Global Marketing in The Firm + Intro Modified

Загружено:

Сведения о документе

Исходное описание:

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

CH 1 - Global Marketing in The Firm + Intro Modified

Загружено:

Авторское право:

Доступные форматы

Svend Hollensen

1 Global marketing in the firm

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Globalization is for debate .

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Learning objectives (2)

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

High- and Low-Context Cultures

Hollensen, Global Marketing 4e, Pearson Education 2008

Example of Globalized Production

Hollensen, Global Marketing 4e, Pearson Education 2008

Q-1 Characterize and compare the development

EPRG framework of business activities

Hollensen, Global Marketing 4e, Pearson Education 2008

Parent-Country Nationals (PCNs

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Ability of the firm to

Host government may use

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Allow interaction between

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Figure 1.2 Knowledge transfer

Internationalizing the strategy

Transferring global know-how and best practices

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Q2- Comparison of the global marketing

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Figure 1.5 Incremental change

Hollensen, Global Marketing 4e, Pearson Education 2008

Figure 1.6 Entrepreneurial

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Finding economies of scale

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Q3- Explain the forces for global

Hollensen, Global Marketing 4e, Pearson Education 2008

Figure 1.7 Global integration/

Hollensen, Global Marketing 4e, Pearson Education 2008

Forces for global

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Hollensen, Global Marketing 4e, Pearson Education 2008

Question: How globalized is Unilever??