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 Formulating Global and Multi-Country
Marketing Strategies
 Dealing with Competitors: Global and Multi-
Market Strategies
 Global and Multi-Market Financial Strategies
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Ú ×   


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Ú Contribute significantly to corporate sales and profits
Ú Take full advantage of the technological and managerial
resources available within corporations
Ú Have significant potential for development in world markets
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Ú ×dentifying Cross-
National Customer
Similarities: Global
Segmentation Criteria
Ú Speed of
×nternationalization:
Single, Multi-country or
Global Expansion
Strategies
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Ú Global Segmentation Criteria
 ×dentifying cross-national customer groupings with
similar needs and who respond in similar fashions
 Demographic Criteria:
Age segments: babies, children, teens, senior citizens
Occupational similarities: business, doctors,
engineers, architects, teachers
×ncome-based segments: upper income, middle classes
Gender-based segments: women (and men)
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Ú Global Segmentation Criteria
 Lifestyle-Psychographics Criteria
International sophisticates: above middle-income consumers
with genuine interests in international products
Semi-sophisticates: middle and high-income consumers: know
little about world affairs/foreign cultures but buy foreign
products for status reasons
Provincial consumers: poor or wealthy, with few interests in
international products or world events; often nationalistic
 Global Segmentation Criteria: Product Features (product
styling, performance, reliability) and Benefits (convenience,
health, efficiency)
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Ú Global Segmentation Criteria
 Market Similarities: Cultural, Political and Economic Catalysts to Global
and Multi-country Segmentation
Trade Blocs, EU, NAFTA, and Mercosur: countries trade together and
assimilate each other¶s cultures (µEuropean¶, µLatin American¶)
Language similarities: often remnants from colonial eras (English,
French, Spanish, Arabic, German)
Religious similarities, Buddhism,
Confucianism and Taoism shaping Asia; ×slam in the
Middle East
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Ú Speed of ×nternationalization: Single, Multi-country
or Global Expansion Strategies
 Availability of corporate resources
 Competitor strategies or likely reactions (first mover
advantages; multi-market launches)
 Corporate objectives (market dominance, follower strategies)
 ×mportance of individual markets: key emerging markets
(×ndia, China, Brazil)


  ×   

Ú Advantages and
Disadvantages

Ú Building Global
Product Portfolios

Ú Creating Global Brands




  ×   

Ú Advantages of Global Branding Strategies
 Simplify marketing task and reduce promotional costs
 Enhances success rates of global product launches and
gives products multi-country momentum
 Good product ideas can gain first mover advantages
 Take advantage of worldwide similarities among
customers
 Country reputations for product expertise can be
leveraged worldwide


  ×   

Ú Disadvantages of Global Branding
Strategies
 Standardized products and images are not sensitive to
cultural differences
 Misfortunes accruing to global brands can reverberate
across entire product ranges and tarnish
corporate reputations on a region-wide (Coca Cola in
Europe) or worldwide
scale (Nestle, Perrier)


  ×   

Ú Building Global Product Portfolios
 Four Strategies to Globalize Brand Portfolios
Consolidation from regional and national lines: Proctor &
Gamble in Europe and Asia
Buying and Selling Brands through Mergers and Acquisitions:
Unilever sold its Harmony hair care brand to EMV×
Building Global Brands through New Product Development:
Ford 2000 unified North American and European divisions
Building Global Product Portfolios Through Geographic
Extensions: McDonalds, KFC and Pizza Hut


  ×   

Ú Creating Global Brands
 Products and brands: Key difference²brands are
µcovenants with the customer¶; built up over time
 Types of global brands
 Building global brand images
 Creating brand personalities
 Building trust and customer relationships
 How global branding contributes to strategy
 Brand associations and country of origin


  ×   

Ú Creating Global Brands
 Types of Global Brands
Corporate (or Organizational) brands, company
reputations as centerpieces of global strategies.
Canon and Johnson & Johnson
Range Brands, collections of product lines brought
together under business. General Electric (GE)
Product brands, contribute to and benefit from
corporate and range branding strategies


  ×   


Ú Creating Global Brands


 Creating Brand Personalities
Sincerity: honest, wholesome
Excitement: sports cars, fashions
Competence: reliability, intelligence
Sophistication: upscale appeals
Ruggedness tough, masculine appeals


  ×   


Ú Creating Global Brands


 Building Trust and Customer Relationships
Clubs and usage programs: airlines, wine clubs
Public relations program: video games and magazines
Product shows and event stores: Cadbury World,
Disney
Publicity stunts: Swatch
Event sponsorships: athletic events, football, rugby,
tennis, golf, motor racing


  ×   


Ú Creating Global Brands
 How Global Branding Contributes to Strategy
Branded components confer additional quality onto
existing brands. µ×ntel ×nside¶
Flagship Brands ³Silver Bullets´, star brands in the
company¶s global portfolio. Walkman for Sony
Global Brand Leverage, product extensions to add
additional brands: Mercedes
Mega-brands, brand names are leveraged over entirely new
business and product lines. Disney, Richard Branson¶s
Virgin
Brand Associations and Country of Origin, Some countries
acquire reputations for specific products, Scotch Whisky


  ×   

Ú Creating Global Brands
 Standardizing and Adapting Marketing Strategies (µbe
global, act local¶)
Product strategies some components easier to standardize than
others (brand name, warranties, positioning)
Distribution worldwide has become streamlined with express
mail services, the internet, and global retailers
Personal selling and sales management strategies have been
harder to standardize globally
Pricing strategies are difficult to standardize globally because of
factor price differences, transportation costs, and foreign
exchange rate discrepancies
Advertising strategy standardization has been facilitated by the
growth of global advertising agencies and global media
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Ú Competitive Strategies,
Global rivalries,
leveraging of competitive
advantages across
markets, offensive
competitive tactics
against rivals
Ú Cooperating with
Competitors: Global
Alliances
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Ú Competitive Rivalries in Global ×ndustries


 Aircraft: Boeing (US) vs. Airbus (Europe)
 Hamburger Franchises: McDonalds (US) vs. Burger King
(UK), etc.
×nitiating Competition: Leveraging Competitive
Advantages Across Markets
 Developing a product that becomes an industry standard
(Xerox)
 Superior customer service (Caterpillar parts; Federal Express),
etc.
 Lower cost, superior styling, technologies, innovation,
reliability, corporate reputation
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Ú Offensive Competitive Strategies


 Frontal Assaults: all-out offensives. Coca-Cola and Pepsi
 Flanking Strategies, attacking market segments ignored by
competitors, Swiss and Japanese watch producers
 Encirclement Strategies, use superior resources to produce
greater product varieties. Japanese motorcycle producers
 Bypass Strategies, focus on future customer needs. ³green´
cars by Honda and Toyota
 Guerilla Strategies, disrupting rivals marketing strategies
or stunting sales in major product or service lines
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Ú Geographically-based Offensive Competitive


Strategies
 Emerging Market Strategies, Marketplace rivals
rush into new, big markets (Latin America, Asia,
Eastern Europe) to gain first mover advantages
 Regional Competitive Strategies, to attack (or
defend against) key regional rivals. Spanish
banks targeted banks in Latin America
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Ú Geographically-based Offensive Competitive


Strategies
 Key Market Competitive Strategies, to undermine rivals in
strategically important markets. Airbus and Boeing in
Japan
 Attacking Rivals in the Home Market: to undermine
international corporations with advantages in their
domestic markets: Kodak against Fuji in Japan; Fuji
attacks Kodak in US
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Ú Responding to Global Competitors


 US Counterstrategies
Government-sponsored trade protection, US imposes tariffs
on steel in 2002
Collaborative with global rivals, to cooperate with rivals
and learn the secrets of their competitive advantages. GM
in Japan
Domestic Collaboration, to form industry-wide cooperation
groups. Semi conductor industry
Competitive Restructuring, to undertake top-to-bottom
evaluations of company and competitor marketing
strategies. Motorola (US) and Philips (Netherlands)
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Ú Responding to Global Competitors


 European Responses
×nternational Offensive Strategies, such as engineering
conglomerate Asea-Brown- Boveri; and L¶Oreal
×nternational Defensive Strategies, to consolidate market
positions within Europe. Solvay (Belgium ± chemicals)
and Heineken (Netherlands)
National Defensive Strategies , to maintain home market
dominance while contemplating international expansions
Restructuring or Exit Strategies, by firms unable to sustain
their market positions in European theater of operations.
Philips
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Ú Responding to Global Competitors


 Emerging Market Responses
Defender Strategies: where industry globalization influences are
low and competitive assets are home-market-customized. Bajaj
countered Honda¶s entry into ×ndian market
Dodger Strategies: by firms with home-market oriented assets
but under high competitive pressures; localize or JV
Contender Strategies: larger, well resourced emergent firms to
upgrade existing technologies and/or transfer competitive assets
into foreign markets (Mexico¶s Cemex)
Extender Strategies: use local market expertise and products to
move into similar markets abroad. Jollibee
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Ú Cooperating with Competitors: Global Alliances


 Characteristics
Tend to be contractual agreements rather than equity-based
relationships such as joint ventures
Often involve parts of corporate supply chains rather than
entire supply chains
Are not necessarily permanent
Often involve divisions of companies
rather than entire firms
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Ú Collaborating with Competitors: Global


Alliances
 Advantages²GAs used for:
Technology and product development
Getting into related businesses
Distribution-sharing agreements
Technology and market access agreements
Shared production
Creating size and critical mass
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Ú Collaborating with Competitors: Global


Alliances
 Keys to managing Global Alliances
1. Take time to get to know and trust partner
2. Choose a partner with complementary products
3. Be patient: do not expect instant results
4. ³Live like brothers and do business like strangers´
(Arabic proverb)
5. Maintain management team continuity where possible.
6. Objectives should be set out in a µpre-nuptial agreement¶
7. Be sure that alliances contribute to long term goals
8. Know when a relationship has accomplished its goals


 

  

Ú Transfer Pricing ×ssues
Ú Managing Foreign Currency Risks
Ú Global Cash Management: Settling Corporate
Subsidiaries
Ú Global and Multi-Market Financial Synergies
Ú Administering Global Finances


 

  

Ú Transfer Pricing ×ssues
 Corporate perspectives on transfer pricing: price to earn profits
where they want; under-charge/over-charge on shipments
among subsidiaries
 Country perspectives on transfer pricing: subsidiaries should
charge ³arm¶s length´ prices and pay appropriate taxes
Ú Managing Foreign Currency Risks
 Transaction risk: risks on individual transactions when
exchange rate values fluctuate; forward rates an option
 Translation risks: µpaper losses/gains¶ when asset valuations
fluctuate with exchange rate values
 Economic risks: Transaction and translation risks projected
over the long-term; preferences for weak currency nations


 

  

Ú Global Cash Management: Settling Corporate
Subsidiary Accounts
 Settling individual accounts as exchange rates fluctuate poses
problems as payment delays cause losses for one party
 Centralized cash management: Netting strategies simplify
settlement by reducing number of settlement payments
Ú Global and Multi-Market Financial Synergies
 Disposal of Surplus Funds: in best-yield markets
 Raising capital: best interest rates
Ú Administering Global Finances
 ×nternal administration: µtreasuries¶ settle internal accounts
 External administration: by banks for less experienced firms
[  
Ú Formulating global strategies involves defining core business
strategies, internationalizing those strategies, and then
globalizing them for competitive strategies
Ú Core businesses contribute to corporate profits, and have
significant global potential
Ú ×nternationalizing core strategies involves recognizing global
similarities in customers and markets
Ú Globalizing international strategies entails creating global
brands and global brand portfolios
Ú Total product standardization, distribution, pricing and
promotional strategies rare²some adaptation usually required
[  
Ú Global brands can be classified into corporate brands, range
brands, and individual brands
Ú Offensive competitive strategies can be product-based or
geographically-based
Ú US companies respond to global rivals by asking for trade
protection, working with competitors, forming domestic
collaborations, or restructuring themselves. European
companies go for offensive or defensive international
strategies, national defensive strategies, or exiting the industry.
Emerging market firms can go for defender, dodger, contender,
or extender strategies.
Ú Companies can collaborate with rivals by global alliances.
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