Global Marketing

A PROJECT REPORT

ACKNOWLEDGEMENTS
Thanks to Almighty ALLAH the one and only who gave such
appreciable and worthy opportunity and enabled us to complete
our project and we are also in-debt to Holy Prophet (PBUH)
whose life is a living example for every Muslim.

Thanks to our loving families and our caring friends those helped
us a lot, encouraged us in every despair moment and enabled us
to face the challenges of this project.

Our acknowledgment is due to many people for their help in the

completion of this project, the foremost among them being our
teacher Mr. Muhammad Arif who has been guiding us on every
step and without whose help and guidance we would not have
completed this project. We owe a lot to him for giving us time out
of his very tight schedule. We are also thankful to all the teachers
of our department who helped us in the completion of this
project.

TABLE OF CONTENTS

Page 2. INTRODUCTION
Page 2. MEANING OF MARKETING
Page 4. MEANING OF GLOBAL MARKETING
Page 4. EVOLUTION TO GLOBAL MARKETING
Page 7. GLOBAL MARKETING ADVANTAGES AND
DISADVANTAGES
Page 8. GLOBAL MARKETING ENVIRONMENT
Page 12. GLOBAL MARKETING: 5 STEPS TO SUCCESSION
Page 14. WHY GLOBAL MARKETING IS IMPERATIVE
Page 18. GLOBAL MARKETING PLANNING
Page 20. DOMESTIC vs INTERNATIONAL PLANNING
Page 21. CONCLUSION
Page 22. BIBLOGRAPHY

INTRODUCTION
Two decades ago, the term global marketing did not even exist. Today,
global marketing is essential not only for the realization of the full
success potential of a business, but even more critically for the survival
of a business. A company which fails to go global is in longer of losing
its domestic business to competitors with lower costs, greater
experience, better products and in a nutshell, more value for the
customer.
The importance of going global to ensure company survival is a more
powerful motive for many companies than the attract ion of
opportunity abroad. Industries that were entirely national in scope
only a few years ago are dominated today by a handful of global
companies.

MEANING OF MARKETING
Marketing is essentially a creative corporate activity involving the
planning and execution of the conception, pricing, promotion, and
distribution of ideas, products, and services in an exchange that not
only satisfies customers' current needs but also anticipates and creates
their future needs at a profit. Marketing is not only much broader than
selling, it also encompasses the entire company's market orientation
toward customer satisfaction in a competitive environment. In other
words, marketing strategy requires close attention to both customers
and competitors. The aim of marketing is to create value for
stakeholders, and the key stakeholder is the customer.

MEANING OF GLOBAL MARKETING

The Oxford University Press defines global marketing as "marketing on
a worldwide scale reconciling or taking commercial advantage of
global operational differences, similarities and opportunities in order
to meet global objectives." Global marketing refers to marketing
activities by companies that emphasize the following:
1. Reduction of cost inefficiencies and duplication of efforts among
their national and regional subsidiaries
2. Opportunities for the transfer of products, brands, and other ideas
across subsidiaries
3. Emergence of global customers
4. Improved linkages among national marketing infrastructures
leading to the development of a global marketing infrastructure.
Although Levitt's view that global marketing does not necessarily
mean standardization of products, promotion, pricing, and
distribution worldwide, but rather, it is a company's proactive
willingness to adopt a global perspective instead of a country-bycountry or region-by-region perspective in developing a marketing
strategy

EVOLUTION TO GLOBAL MARKETING

Global marketing is not a revolutionary shift; it is an evolutionary
process. While the following does not apply to all companies, it does
apply to most companies that begin as domestic-only companies.
Domestic marketing
A company marketing only within its national boundaries only has to
consider domestic competition. Even if that competition includes
4

companies from foreign markets, it still only has to focus on the

competition that exists in its home market. Products and services are
developed for customers in the home market without thought of how
the product or service could be used in other markets. All marketing
decisions are made at headquarters.
The biggest obstacle these marketers face is being blindsided by
emerging global marketers. Because domestic marketers do not
generally focus on the changes in the global marketplace, they may not
be aware of a potential competitor who is a market leader on three
continents until they simultaneously open 20 stores in the
Northeastern U.S. These marketers can be considered ethnocentric as
they are most concerned with how they are perceived in their home
country.
Export marketing
Generally, companies began exporting, reluctantly, to the occasional
foreign customer who sought them out. At the beginning of this stage,
filling these orders was considered a burden, not an opportunity. If
there was enough interest, some companies became passive or
secondary exporters by hiring an export management company to deal
with all the customs paperwork and language barriers. Others became
direct exporters, creating exporting departments at headquarters.
Product development at this stage is still focused on the needs of
domestic customers. Thus, these marketers are also considered
ethnocentric.
International marketing
If the exporting departments are becoming successful but the costs of
doing business from headquarters plus time differences, language
barriers, and cultural ignorance are hindering the company's
competitiveness in the foreign market, then offices could be built in
the foreign countries. Sometimes companies buy firms in the foreign

countries to take advantage of relationships, storefronts, factories, and

personnel already in place. These offices still report to headquarters in
the home market but most of the marketing mix decisions are made in
the individual countries since that staff is the most knowledgeable
about the target markets. Local product development is based on the
needs of local customers. These marketers are considered polycentric
because they acknowledge that each market/country has different
needs.
Multinational marketing
At the multi-national stage, the company is marketing its products and
services in many countries around the world and wants to benefit from
economies of scale. Consolidation of research, development,
production, and marketing on a regional level is the next step. An
example of a region is Western Europe with the US. But, at the multinational stage, consolidation, and thus product planning, does not
take place across regions; a region-centric approach.
Global marketing
When a company becomes a global marketer, it views the world as one
market and creates products that will only require weeks to fit into any
regional marketplace. Marketing decisions are made by consulting
with marketers in all the countries that will be affected. The goal is to
sell the same thing the same way everywhere.
The "Four P's" of marketing: product, price, placement, and promotion
are all affected as a company moves through the five evolutionary
phases to become a global company. Ultimately, at the global
marketing level, a company trying to speak with one voice is faced
with many challenges when creating a worldwide marketing plan.
Unless a company holds the same position against its competition in
all markets (market leader, low cost, etc.) it is impossible to launch
identical marketing plans worldwide.

GLOBAL MARKETING ADVANTAGES AND

DISADVANTAGES

Advantages

Economies of scale in production and distribution

Lower marketing costs
Power and scope
Consistency in brand image
Ability to leverage good ideas quickly and efficiently
Uniformity of marketing practices
Helps to establish relationships outside of the "political arena"
Helps to encourage ancillary industries to be set up to cater for
the needs of the global player

Disadvantages
Differences in consumer needs, wants, and usage patterns for
products. Differences in consumer response to marketing mix
elements
Differences in brand and product development and the competitive
environment
Differences in the legal environment, some of which may conflict
with those of the home market.
Differences in the institutions available, some of which may call for
the creation of entirely new ones (e.g. infrastructure)
Differences in administrative procedures
Differences in product placement.

GLOBAL MARKETING ENVIRONMENT

1. Demographic Environment
1. Demographic Environment Demography is the study of human
populations in terms of size, density, location, age, gender, race,
occupation, and other statistics. The demographic environment is of
major interest to marketers because it involves people, and people
make up markets.
The world population is growing at an explosive rate. It now totals
more than 5.9 billion and will exceed 7.9 billion by the year 2025. The
explosive world population growth has major implications for
business. A growing population means growing human needs to
satisfy. Depending on purchasing power, it may also mean growing
market opportunities.
The world's large and highly diverse population poses both
opportunities and challenges. Thus, marketers keep close track of
demographic trends and developments in their markets, both at home
and abroad. They track changing age and family structures, geographic
population shifts, educational characteristics, and population diversity.

2. Economic Environment
The economic environment consists of factors that affect consumer
purchasing power and spending patterns. Nat ions vary great ly in their
levels and distribution of income. Some countries have subsistence
economies they consume most of their own agricultural and industrial
output. These countries offer few market opportunities. At the other
extreme are industrial economies, which constitute rich markets for
many different kinds of goods. Marketers must pay close attention to
major trends and consumer spending patterns both across and within
their world markets.
8

Marketers should pay attention to income distribution as well as

average income. Income distribution in the still very poor. At the top
are upper-class consumers, whose spending patterns are not affected
by current economic events and who are a major market for luxury
goods. There is a comfortable middle class that is somewhat careful
about its spending but can still afford the good life some of the time.
The working class must stick close to the basics of food, clothing, and
shelter and must try hard to save. Finally, the poor class must count
their pennies when making even the most basic purchases. Over the
past three decades, the rich have grown richer, the middle class has
shrunk, and the poor have remained poor.
3. Natural Environment
The natural environment involves the natural resources that are
needed as inputs by marketers or that are affected by marketing
activities. Marketers should be aware of several trends in the natural
environment. The first involves growing shortages of raw materials. Air
and water may seem to be infinite resources, but some group see longrun dangers. Air pollution chokes many of the world's large cities and
water shortages are already a big problem in some parts of the world.
Renewable resources, such as forests and food, also have to be used
wisely. Nonrenewable resources, such as oil, coal, and various
minerals, pose a serious problem. Firms making resources, such as oil,
coal, and various minerals, pose a serious problem. Firms making
products that require these scarce resources face large cost increases,
even if the materials do remain available.
A second environmental trend is increased pollution. Industry will
almost always damage the quality of the natural environment.
Consider the disposal of chemical and nuclear wastes; the dangerous
mercury levels in the ocean; the quantity of chemical pollutants in the
soil and food supply; and the littering of the environment with nonbiodegradable bottles, plastics, and other packaging materials.

4. Technological Environment
The technological environment is perhaps the most dramatic force
now shaping our destiny. Technology has released such wonders as
9

antibiotics, organ transplants, computers, and the Internet. It also has

released such horrors as nuclear missiles, chemical weapons, and
assault rifles. It has released such mixed blessing as the automobile,
television, and credit cards. New technologies create new markets and
opportunities. However, every new technology replaces an older
technology. Transistors hurt the vacuum-tube industry, xerography
hurt the carbon-paper business, the auto hurt the railroads, and
compact disks hurt phonograph records. When old industries fought
or ignored new technologies, their businesses declined. Thus,
marketers should watch the technological environment closely.
Companies that do not keep up with technological change soon will
find their products outdated. And they will miss new product and
market opportunities.

5. Political Environment
Marketing decisions are strongly affected by developments in the
political environment. The political environment consists of laws,
government agencies, and pressure groups that influence and limit
various organizations and individuals in a given society. Even the most
liberal advocates of free-market economies agree that the system
works best with at least some regulation. Well-conceived regulation
can encourage competition and ensure fair markets for goods and
services. Thus, governments develop public policy to guide commercesets of laws and regulations that limit business for the good of society
as a whole. Almost every marketing activity is subject to a wide range
of laws and regulations. Legislation affecting business around the
world has increased steadily over the years. The States has many laws
covering issues such as competition, fair trade practices,
environmental protect ion, product safety, truth in advertising,
packaging and labeling, pricing, and other important areas. The
European Commission has been active in establishing a new
framework of laws covering competitive behavior, product standards,
product liability, and commercial transact ions for the nations of the
European Union. Several countries have gone father than the United
States in passing strong consumerism legislation. For example, Norway
bans several forms of sales Promotion trading stamps, contests,
10

premiums as being inappropriate or unfair ways of promoting

products. Thailand requires food processors selling national brands to
market low-price brands also, so that low-income consumers can find
economy brands on the shelves. In India, food companies must obtain
special approval to launch brands that duplicate those already existing
on the market.

6. Cultural Environment
The cultural environment is made up of institutions and other forces
that affect a society's basic values, percept ions, preferences, and
behaviors. People grow up in a particular society that shapes their
basic beliefs and values. They absorb a world view that defines their
relationships with others. People in a given society hold many beliefs
and values. Their core beliefs and values have a high degree of
persistence. For example, most Indians believe in working, getting
married, giving to charity, and being honest. These beliefs shape morespecific attitudes and behaviors found in everyday life. Core beliefs and
values are passed on from parents to children and are reinforced by
schools, churches, business, and government.
The notion of various environmental forces to global company is
shown in figure.

11

GLOBAL MARKETING: 5 STEPS TO SUCCESSION

Companies decide to expand their organizations globally and are
unsuccessful because they fail to realize one very important thing.
They do not change their marketing efforts to adapt to those of
another country. Some people feel one country's values, beliefs,
culture, economic conditions and competitive conditions are not very
different from another. But a message that works in one country can
fail miserably in another because countries are very different from each
other. Companies need to make variations to their marketing approach
when doing business internationally. To overcome global marketing
struggles and conquer your competition, we've created Global
Marketing: 5 Steps to Succession to help you guide your way through
the marketing process.
1. Do The Research!
With any kind of marketing there should always first be some kind of
research when developing your marketing strategies. This is especially
important when a business is expanding internationally because their
targeted audience is much different than their home land audience.
Researching the demographics and also doing some kind of research to
figure out if there will be a demand for your product or service is very
important. Make sure there is a want or need for your product and
then figure out for that country who your audience is and what will be
the best way to target them.
2. Recognize Cultural Differences.
Countries differ in many ways including language, religion, social
structure and education. These differences have significant impact on
a business's marketing strategies. Through one's research they also
need to find what traditions, tastes and preferences are of other
countries, so their marketing ideas can accommodate to the country
and be effective. If one does not take the cultural differences into
account, then most likely their marketing campaigns will be
12

considered meaningless or offensive and could damage the credibility

of that company.
3. Develop a Unique Marketing Mix to Appeal to the Purchasing
Behavior of a Certain Segment in a Given Country.
This secret also includes some research. One needs to identify groups
of consumers whose purchasing behavior differs from others in an
important way. These segments can be found though the geographies,
demographics, social-cultural factors and psychological factors. The
segment that would best benefit the company is the one that then
needs to have a unique marketing mix that will appeal to those
purchasing behaviors. The marketing mix will include a firm's choice
about product attributes, communication strategy, distribution
strategy and pricing strategy that they will offer their targeted
segment.
4. Identify Market Segments that Transcend National

Borders.
In order to do this, a company needs to find the similarities among the
consumers in a certain segment. Such similarities like values, age, and
lifestyle choices which need to translate into similar purchasing
behaviors. Once these similarities are found, a company can then view
the global marketplace as a single entity and sell a standardized
product worldwide using their same basic marketing mix to help them
position and sell that product in a variety of national markets.
5. Decide if standardized advertising will work for your

company.
If a company's advertisements legally and ethically can be viewed in
their home land country but also in other countries, then standardized
advertising is a great idea. If the advertisements are not offensive and
abide by that country's laws, then most likely using the same ads
instead of developing new ones for different countries is going to be a
significant cost saver. Also, there is concern that creative talent is
limited and that one large marketing effort has better results than 40
or 50 smaller efforts. On the other hand, cultural diversity makes it
13

exceptionally hard to develop a single advertising theme that will be

successful worldwide. Also, advertising regulations might block
implementation of standardized advertising. Laws vary from country
to country and so what might be acceptable in one country is breaking
the law in another. Differentiating between the two and then deciding
what will work for your company might save you money or avoid a
lawsuit.

WHY GLOBAL MARKETING IS IMPERATIVE

First and fundamentally, domestic-market saturation in the
industrialized parts of the world forced many companies to look for
marketing opportunities beyond their national boundaries. The
economic and population growths in developing countries also, gave
those companies an additional incentive to venture abroad. Now
companies from emerging economies, such as Korea's Samsung and
Hyundai and Mexico's Cemex and Grupo Modelo, have made inroads
into the developed markets around the world.
Second, there is a strong competition around the world. About twenty
years ago, the world's greatest automobile manufacturers were General
Motors, Ford, and Chrysler. Today, companies like Toyota, Honda,
BMW, and DaimlerChrysler (a recent merger of Daimler-Benz and
Chrysler), among others, stand out as competitive nameplates in the
automobile market. Similarly, personal computer was almost
synonymous with IBM, which dominated the PC business worldwide.
Today, the computer market is crowded with Dell and Compaq from
the United States, Toshiba and NEC from Japan, Acer from Taiwan,
and so on. Color TVs were invented in the United States, but today it is
almost impossible to find a color TV made by U.S. companies. Instead,
foreign brands such as Sony, Panasonic, and Magnavox are in most
homes in the United States. Even RCA and Zenith television are made
overseas. Nike is a U.S. company with a truly all-American shoe brand,
but its shoes are all made in foreign countries and exported to the
14

United States. Burger King and Pillsbury (known for its Haagen-Dazs
ice cream brand) are two American institutions owned and managed
across the Atlantic Ocean by Diageo, a newly created company as a
result of the merger of Britain's Grand Metropolitan PLC and Guinness
PLC.
Third, another profound change in the last decade is the proliferation
of the Internet and electronic commerce, or e-commerce. The Internet
opened the gates for companies to sell direct-to-consumers easily
across national boundaries. Many argue that e-commerce is less
intimate than face-to-face retail, but it could actually provide more
targeted demographic and psychographic information. Manufacturers
that traditionally sell through the retail channel may benefit the most
from e-commerce. Furthermore, customer information no longer is
held hostage by the retail channel. Most important, the data allow for
the development of relevant marketing messages aimed at important
customers and loyal relationships on a global basis.
An examination of the top one hundred largest companies in the world
also vividly illustrates the profound changes in competitive milieu that
we have seen in the past thirty years (see Table 1.2). Of the top
hundred largest industrial companies in the world, sixty-four were
from the United States in 1970 in 1980 the number declined to fortyfive companies. The latest figure came down to twenty four in 1997
(not shown) and went back up to thirty-five in 1999. The number of
Japanese companies in the top hundred has increased from eight in
1970 to twenty-four in 1999, almost a threefold increase. A similar
increase has also been observed with French companies, from three in
1970 to ten in 1997. The relative decline in the number of U.S.
companies in the top is reflected in the banking, insurance, and other
services sectors, as well as in the manufacturing sectors. The current
world economy has changed drastically from what it was merely a
decade ago.
15

The changes observed in the past thirty years simply reflect that
companies from other parts of the world have grown in size relative to
those of the United States. In other words, today's environment is
characterized by much more competition from around the world than
in the past. As a result, many U.S. executives are feeling much more
competitive urgency in product development, materials procurement,
manufacturing, and marketing around the world.
The competition is not the only force shaping global business today.
Particularly in the past several years, many political and economic
events have affected the nature of global business. The demise of the
Soviet Union, the establishment of the European Union and the North
American Free Trade Agreement, deregulation, and privatization of
state-owned industries has also changed the market environments
around the world. Furthermore, the emerging markets of Eastern
Europe and the rapidly re-emerging markets of Southeast Asia
contribute to an international climate.

16

17

The fluid nature of global markets and competition makes the study of
global marketing not only interesting but also challenging and
rewarding. The term global epitomizes both the competitive pressure
and the expanding market opportunities all over the world.

GLOBAL MARKETING PLANNING

Planning involves where the organization would like to be and how to
get there, which involves goal setting and strategy determination.
Planning involves three main activities:
a) Situation analysis - where are we now?
b) Objectives - where do we want to be?
c) Strategy and tactics - how can we best reach our goals?
Planning gives a number of advantages:
Gives rise to systematic thinking
Helps coordinate activities
Helps prepare for exigencies
Gives activity continuity
Integrates functions and activities
Helps in a continuous review of operations.
The planning task depends on the level of involvement in a country.
Exporting and licensing give minimum country involvement but joint
ventures involve more in-country activity and give a greater degree of
integration and control. Wholly owned subsidiaries give the
organization almost total control. Because of the "external
uncontrollable" international planning is rather more difficult than
domestic planning (see table 13.2). Planning can be standardized,
decentralized or interactive.

18

Standardized plans
These offer a number of advantages:
- Cost savings on limited product range and economies of scale both in
production and marketing, for example fertilizers.
- Uniformity of consumer choice across the world.

There are disadvantages:

- Different market characteristics make uniform products
inappropriate, for example, fresh milk products.
Environmental obstacles disallow standardization; for example, lack of
refrigerated transport in developing countries.

Decentralized plans
Decentralized plans take into account the subtleties of local
conditions; however, they are usually very costly and resource
consuming.

Interactive plans
In this approach headquarters devises branch policy and a strategic
framework, and subsidiaries interpret these under local conditions, for
example Nestle. Headquarters coordinates and rationalizes advertising,
pricing and distribution. Within any of the above approaches plans can
be either long or short term. Increasingly planning is becoming fairly
routine. Most companies operate "annual operating plans" although
these are often "rolled forward" to cover a few years hence.

19

20

CONCLUSION
Global marketing is a proactive response to the intertwined nature of
business opportunities and competition that know no political
boundaries. Global marketing does not necessarily mean that
companies should market the same product in the same way around
the world as world markets are converging. Global marketing is a
companys willingness to adopt a global perspective instead of a
country-by-country or region-by-region perspective in developing a
marketing strategy for growth and profit. The six forces making up the
companys macro-global environment include demographic, economic,
natural, technological, political and cultural forces. These forces shape
opportunities and pose threats to the company. Global market
possesses great importance of less developed countries (LDCs) It
provides all urge to develop knowledge and experience that make
development possible in LDCs. The remarkable growth of the global
economy over the past 50 years has occurred because of many driving
forces contributing to the growth of international business, namely,
market needs, modern technology, minimum cost application, higher
quality, information revolution and leverage advantages. Several
restraining forces also occurred in international trade in the form of
tariff barriers and non-tariff barriers. There are four identifiable stages
in the evolution of marketing across national boundaries. These are
known as Ethnocentrism, poly centrism, egocentrism and egocentrism.
Companies have the plan of entry strategy choices to implement their
global expansion efforts. Each alternative has its pros and cons. Global
companies often adopt a phased entry strategy. They start off with a
minimal risk strategy. Once the perceived risk declines, they switch to
higher commitment mode. It is made clear that, a broad range of
variables impact the entry mode choice. The three major dimensions
include the resource commitment a firm is willing to make, the
amount of risk the firm is willing to take and the degree of control that
is desirable.

21

BIBLOGRAPHY : http://www.wfanet.org/ World Federation of Advertisers

aef.com several presentations on Global Advertising given by
advertising practitioners
http: [ [EzineArticlescomz ?expert=Crystal Vilkaitis
Kotabe, Masaki and Helsen, Kristiaan, Global Marketing
Management - 3 rd Edition,
John Wiley & Sons, Inc - Publishers, Copyright 2004, ISBN 0-47123062-6
Kotler & Keller, Marketing Management - 12th Edition, 2005,
ISBN 81-203-2799-3
Theodore Levitt, The Globalization of Markets, Harvard Business
Review 61 (May-June
1983): 92-102
0 Young, Charles E., The Advertising Research Handbook, Ideas
in Flight, Seattle, WA,
April 2005, ISBN 0-9765574-0-1
Jaffee S. (1992) "Exporting High Value Food Commodities".
World Bank Discussion
Paper 198 World Bank
15. Keegan, W. J. (1989) "Global Marketing Management", 4th ed.
Prentice Hall
International Editions
16. Terpstra, V.(1987) "International Marketing", 4th ed. Dryden
Press.

22

23