BY Prof.J.

Varaprasad Reddy

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Introduction
What is Global Marketing? How is it different from regular marketing?

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Stages of International Marketing Involvement

1. No Direct Foreign Marketing 2. Infrequent Foreign Marketing - export operations 3. Regular Foreign Marketing
- export operations, direct investment sales operations, direct investment production operations

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4. International Marketing
- fully committed and involved in imternational marketing through production and service operations

5. Global Marketing
- companies treat the world as one market
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Introduction
Marketing Process of planning and executing the conception pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organization goals

Global Marketing Focuses resources on global market opportunities and threats; the main difference is the scope of activities because global marketing occurs in markets outside the organizations home country
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The International Marketing Task

Foreign environment (uncontrollable) Political/legal forces

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Domestic environment (uncontrollable) (controllable)

Economic forces

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1-5 Cultural forces

Political/ legal forces

Competitive structure Competitive Forces

Price Promotion

Product
Channels of distribution

Environmental uncontrollables country market A Environmental uncontrollables country market B Environmental uncontrollables country market C

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Geography and Infrastructure

Economic climate

Level of Technology

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Structure of distribution

1-5 Copyright2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Domestic environment
Domestic political decisions affecting marketing activities to foreign markets (e.g. Libya, Iraq, South Africa, China) Domestic economic climate (e.g. strength of domestic economy = possibilities to invest abroad, value of currency (weakness of US$)) Competition in home country

International environment
Cultural, political and economic climates can change dramatically (e.g. China and Russia)

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Reasons for Global Marketing

Growth Access to new markets and access to resources Survival Against competitors with lower costs (due to increased access to resources) e.g. India and China Or push and pull factors

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Overview of Marketing

One of the functional areas of a business that is

distinct from finance and operations Primary tools in marketing are product, price, place, and promotion Marketing is an activity that comprises the firms value chain Current trend is to involve marketers in all valuerelated decisions called boundaryless marketing

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Boundaryless Marketing
Goal is to eliminate communication barriers between marketing and other business functional

areas Properly implemented it ensures that a market orientation permeates all value creating activities
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Goal of Marketing
Surpass the competition at the task of creating

perceived value for customers The Guide line is the value equation

Value = Benefits/Price (Money, Time, Effort, Etc.)

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Value Chain and Boundaryless Marketing

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Competitive Advantage
Success over competition in industry at

value creation Achieved by integrating and leveraging operations on a worldwide scale

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Globalization
Globalization is the inexorable integration of markets, nation-states, and technologies to a degree never witnessed before - in a way that is

enabling individuals, corporations, and nationstates to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach into individuals, corporations, and nation-states farther, faster, deeper, and cheaper than ever before.

Thomas Friedman

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Global Industries
An industry is global to the extent that a companys

industry position in one country is interdependent with its industry position in another country Indicators of globalization: Ratio of cross-border trade to total worldwide production Ratio of cross-border investment to total capital investment Proportion of industry revenue generated by companies that compete in key world regions
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Competitive Advantage, Globalization and Global Industries

Focus Concentration and attention on core business and competence Nestle is focused: We are food and beverages. We are not running bicycle shops. Even in food we are not in all fields. There are certain areas we do not touch..We have no soft drinks because I have said we will either buy Coca-Cola or we leave it alone. This is focus.
Helmut Maucher

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Global Marketing: What it is and What it isnt

Strategy development comes down to two main issues

similar to single country marketing

Target market Marketing Mix

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Global Marketing: What it is and What it isnt

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Global Marketing: What it is and What it isnt

Global marketing does not mean doing business in all

of the 200-plus country markets Global marketing does mean widening business horizons to encompass the world in scanning for opportunity and threat

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Standardization versus Adaptation

Globalization (Standardization)
Developing standardized products marketed worldwide

with a standardized marketing mix Essence of mass marketing

Global localization (Adaptation)

Mixing standardization and customization in a way that

minimizes costs while maximizing satisfaction Essence of segmentation Think globally, act locally
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Standardization versus Adaptation

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The Importance of Global Marketing

For US-based companies, 75% of sales potential is

outside the US.

About 90% of Coca-Colas operating income is

generated outside the US.

For Japanese companies, 85% of potential is outside

Japan. For German and EU companies, 94% of potential is outside Germany.

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Environmental adaptation
To adapt marketing programs to foreign markets certain amount of adaptation is needed (take uncontrollable elements into consideration) In broad sense the uncontrollable elements constitute the culture the difficulty is in the recognition of the cultural impact The problem in adapting to foreign markets is self-reference criterion (SRC) and an associated ethnocentrism

SRC is an unconscious reference to ones own cultural values, experiences and knowledge as a basis for decisions ethnocentrism: ones own culture knows best how to do things
To avoid this misconception remember that it makes sense for the other person to do things in his/her own way, if you dont remember this you might fail in recognizing cultural differences and the importance of those differences

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Management Orientations
Ethnocentric: Home country is Superior, sees Similarities in foreign Countries Regiocentric: Sees similarities and differences in a world Region; is ethnocentric or polycentric in its view of the rest of the world Polycentric: Each host country Is Unique, sees differences In foreign countries

Geocentric: World view, sees Similarities and Differences in home And host countries

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Strategic orientation to international markets

Concept
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EPRG Schema (Ethnocentric) (Polycentric) (Regio/Geocentric)

Domestic Market Extension

Multi-Domestic Market Global Marketing

1-24 Copyright2002 by The McGraw-Hill Companies, Inc. All rights reserved.

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It is expected that differences in the complexity and sophistication of companys operations depend on which orientation guides its operations Among the approaches describing the orientations from casual exporting to global marketing is EPRG schema - in this schema the firms are classified as ethnocentric, polycentric, regiocentric or geocentric depending on the international commitment of the firm - in this schema it is also assumed that the degree of internationalization to which management is committed or willing to move affects the specific international strategies and decision rules of the firm

Domestic market extension orientation

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It views its international operations as secondary and as an extension of its domestic operations The primary motive is to market excess domestic production Minimal, if any, efforts are made to adapt the marketing mix to foreign markets In EPRG schema these companies are classified as ethnocentric

Multidomestic market orientation

A company guided by this orientation has a strong sense that country markets are vastly different and that market success requires an almost independent program for each country => development of country based marketing strategies Control is usually decentralized In EPRG schema these companies are classifies as polycentric
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Global marketing orientation

A company guided by global marketing orientation is referred to as a global company: its marketing activity is global and its market coverage is the world It develops a standardized marketing mix applicable across national boundaries In EPRG schema these companies are regiocentric or geocentric

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Forces Affecting Global Integration and Global Marketing

Driving Forces
Regional economic

Restraining Forces
Management myopia Organizational culture National controls

agreements Market needs and wants Technology Transportation and communication improvements Product development costs Quality World economic trends Leverage

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Forces Affecting Global Integration and Global Marketing

Global Integration and Global Marketing

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