Global Marketing

1
Global Marketing

• Dr. Carol Reade
• Bus 187

2
Objectives

• Review the debate on the globalization of markets
  - are all customers the same? Or are there
  distinct and significant differences?
• Introduce the marketing mix
• Better understand the factors that cause firms to
  alter the marketing mix across countries.

3
What is Marketing?

• Marketing is the process of planning and
  executing the conception, pricing, promotion, and
  distribution of ideas, goods, and services to
  create exchanges that satisfy individual and
  organizational objectives.

4
The Globalization of Markets and Brands

• In a classic Harvard Business Review article,
  Theodore Levitt argues that
• ancient differences in national tastes are
  disappearing
• powerful forces are driving the world toward
  common tastes and preferences
• global market for standardized consumer goods
• To what extent is this true?

5
The Globalization of Markets and Brands

• Important to determine when product
  standardization is appropriate in an
  international market
• Firms need to consider
• market segmentation
• marketing mix in each country

6
Market Segmentation

• Refers to identifying distinct groups of
  consumers whose purchasing behavior differs from
  others in important ways
• Segments can based on
• Geography
• Demography
• Socio-cultural factors
• Psychological factors

7
Marketing Mix

• The set of choices the firm offers to its
  targeted markets
• Four elements
• Product attributes
• Distribution strategy
• Communication strategy
• Pricing strategy

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Element 1 - Product Attributes

• A product can be viewed as a bundle of attributes
• Products sell well when attributes match consumer
  needs
• Consumer needs vary due to differences in
• Culture
• Economic development
• Product and technical standards

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Cultural Differences

• Differ along dimensions such as social structure,
  language, religion, and education
• Some tastes and preferences becoming cosmopolitan
• Impact of tradition

10
Economic Development

• Consumer behavior is influenced by economic
  development
• Highly developed countries tend to demand extra
  performance attributes in products
• Price not a factor due to high income level
• Less developed countries -- basic features OK
• Price a factor due to lower income level
• Cars no air-conditioning, power steering, power
  windows, radios, and cassette players
• Product reliability is more important

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Product and Technical Standards

• Government standards can rule out mass production
  and marketing of a standardized product
• Differing technical standards constrain
  globalization of markets
• DVD equipment

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Element 2 - Distribution Strategy

• Choice of the optimal channel for delivering a
  product to the consumer
• Optimal strategy is determined by the relative
  costs and benefits of each alternative
• Depends on differences between countries
• Retail concentration
• Channel length
• Channel quality

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Element 3 Communication Strategy

• Defines the process the firm will use in
  communicating the attributes of its product to
  prospective customers
• Marketing message
• Global Advertising
• Standardization versus non-standardization
• Overcome Cultural Barriers
• Develop cross-cultural literacy
• Use local advertising agency and sales force

14
Element 4 -- Pricing Strategy

• Three aspects of international pricing strategy
• Regulatory influence on prices
• Price discrimination
• Strategic pricing

15
Did You Know?Source National Association of
Pizza Operators

• According to a survey by the American Dairy
  Association, pizza is America's fourth most
  craved food, behind cheese, chocolate and ice
  cream.
• Approximately 3 billion pizzas are sold in the
  U.S. each year.
• There are approximately 61,269 pizzerias in the
  United States.
• Americans eat approximately 100 acres of pizza
  each day, or 350 slices per second.

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Configuring the Marketing Mix

• Some variation of the marketing mix across
  countries is typical
• differences in culture, economic conditions,
  competitive conditions, product and technical
  standards, government regulations, etc.
• However, one or more elements of the marketing
  mix can often be standardized
• Core attributes, marketing message
• Cost-benefit analysis to determine what to
  customize and standardize