Global Marketing: Principles, Insights

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Global Marketing Principles,Insights
Challenges
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Insights

• In Hong Kong, a German businessperson is driving
  a Lexus hes wearing Bruno Magli shoes, Irish
  cashmere socks, Calvin Klein underwear, an Armani
  suit, with a Gucci belt. He has a Mont Blanc
  pen, in his Italian shirt. Hes going to meet an
  American investor at a KFC restaurant, for a
  Coke. After lunch, they stop for a
  Baskins-Robbins (actually a foreign firm) ice
  cream sundae. --- OK, thats a stretch.
• When he gets home, sitting on an ottoman, he has
  an Absolut vodka nightcap, while listening to
  American country western music.

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Challenges

• Huge Foreign indebtedness
• Unstable governments
• Foreign-exchange problems
• Foreign entry and government bureaucracy
• Tariffs and other trade barriers
• Corruption
• E-commerce---doesnt offer complete solutions
• Technological pirating
• High cost of product and communication
  adaptations

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Global Marketing

• Marketing has become more complex.
• Increases in new products, product extensions,
  high cost of distribution and shelf space.
• Expansion of retailer control and power, changing
  media habits, overload of information, and array
  of communication choices.
• Ultimate goal of programs
• Timing goals

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Global Integration Forces

• Driving Forces
• Technology
• Culture
• Market Needs
• Costs
• Free Markets
• Economic Integration
• Peace
• Strategic Intent
• Management Vision, Strategy and Action

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Global Integration Forces

• Restraining Forces
• Culture
• Market Differences
• Costs
• National Controls
• Nationalism
• Peace vs. War/ Stability
• Management Myopia
• Organization History
• Domestic Focus

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Challenges

• Markets can present higher profit opportunities
  than present markets.
• Markets can offer size but not profits.
• Company needs a larger customer base for
  economies of scale.
• Present customers are needing service and
  products as they go international.

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Major Decisions

• Deciding to go abroad
• Deciding which markets
• Deciding how to enter markets
• Deciding on marketing programs
• Deciding on marketing organization

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Global Marketing

• Denotes the use of advertising and marketing on a
  global basis.
• Marketing is at the threshold of a new and
  exciting era e-business, e-commerce and
  e-marketing
• Business has two basic functions marketing and
  innovation (Drucker)
• New era of competition, demanding customers
• More stakeholders (customers, employees, media).

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Global Marketing

• Companies need new set of guidelines, values and
  insight
• Marketing is a Strategic Business Concept
• Marketing is too important to be left to the
  Marketing Department. (David Packard)
• Formulated, integrated, long-term
• Hold to the responsibilities of customers,
  employees, investors

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Global Marketing

• Advantages, especially if the companies emphasize
  selection, availability, quality, reliability and
  lower prices.
• Economies of scale.
• Lower marketing and advertising costs in planning
  and control. Lower advertising production costs.
• Exploiting your best ideas on a worldwide basis.

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Global Marketing

• Deciding How to Enter a Market
• Indirect Export-Thru export and thru others.
• Direct Export-Handle own exports.
• Licensing-License a foreign company to use
  trademark, manufacturing process, trade secret,
  or other item for a fee or royalty.
• Joint Ventures- Join with local investors
• Direct Investment- Direct ownership.

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Global Marketing

• Joint Ventures-- Join with local investors to
  create venture. Coca-Cola and Nestle joined
  forces in ready to drink coffee and tea.
• PG with rival, Fater, in Italy and Great
  Britain.
• Whirlpool formed venture with Dutch electronic
  group Philips on white-goods business to
  leapfrog into European market.

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Global Marketing

• Direct Investment--Ultimate form is direct
  ownership of foreign-based assembly or
  manufacturing facilities.
• Can buy part or full interest in a local company.
  

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Global Marketing

• Principle of Research
• Understand the consumer-behavior perspectives.
• Be sure you are asking right questions.
• Use appropriate research techniques and controls.
• Present clear, comprehensive and actionable
  results.
• We study people using geographics, demographics,
  psychographics, lifestyles, and behaviors.

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Global Marketing

• Bodily adornment, cooking, courtship, food
  taboos, gift giving, language, marriage, status,
  sex, and superstitions, in all societies,
  although each society attaches different values
  and traditions.
• The world, countries, regions, and subcultures.
• Different groups of people share
  subcultures---values, customs, and traditions.
• Geomarketing uses these differences in foods,
  terminology, subculture identities.

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Global Marketing

• Example Global youth are notorious for
  challenging norms and defying labels. A study of
  27K teenagers in 44 countries. Insights and
  motivations.
• Six different segments.
• But remember that even in a specific country the
  teenagers are not homogeneous.
• Six segments in a Teen World values research
  study.

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Global Marketing

• Thrills and Chills. Driving principles---fun,
  excitement, irreverence and friends. Expect
  everything in life. Make it a goal to get as much
  and as many good times. Popular kids in schools.
  Brand loyal. Mostly in Germany, England, Greece,
  South Africa, Netherlands, US, Belgium and
  Canada. 18
• Resigned Fun, Friends and Low expectations.
  Little discretionary income. Cynical. Denmark,
  Sweden, Korea, Norway, Germany, Belgium,
  Argentina, Canada and Turkey 14

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Global Marketing

• World Savers. Defining principles Fun, Humanism,
  and friends. Models of what gives hope to next
  generation. Good kids, who care. Technologically
  advanced. Motivated by new and exciting.
  Attracted by honest and sincere messages.
  Sophisticated, sense of humor. Hungary,
  Philippines, Venezuela, Brazil, Spain, Argentina,
  Russia, France, Poland. 12
• Quiet Achievers. Success, quiet,
  anti-indi-vidualism, social optimism. Have
  deter-mination and restraint. Study hard. Do well
  in school. Limit outside activities. Thailand,
  China, Hong Kong, Korea, Russia, Peru. 15

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Global Marketing

• Bootstrappers. Defining principles Achievement,
  Individualism, optimism, determination, power.
  Try hard to please parents. Determined to
  succeed. Positive values. One in four in US 14
  overall. Nigeria, Mexico, US, India, Chile,
  Puerto Rico, Peru and Venezuela.
• Upholders. Family, tradition, respect for
  individuals. Dreamy. Quiet. Good teens. Follow
  their parents. Dont like risks. Use proven
  products. Vietnam, Indonesia, Taiwan, China,
  Italy, Peru, India, 16

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Global Marketing

• Principle of Integrated Marketing
• Marketing is everyones business.
• Marketing Community
• Examples
• Coca-Cola, Merrill Lynch, Xerox, American
  Express, British Airways, Gillette.

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Global Marketing

• When all of the departments work together to
  serve the customers interests.
• Works on two different levels All of the various
  marketing functions work together sales force,
  sales promotion, advertising, PR, Product
  development, Marketing research
• Plus all of the departments work together. They
  must Think Customer.

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Global Marketing

• Global Standardization or Adaptation
• Toyota built the Corolla on a world platform.
  Ford with its Focus. McDonalds uses chili sauce
  (salsa) on its hamburgers in Mexico. Coca-Cola is
  can be sweeter, or less carbonated.
• Adaptation elements Product features, brand
  name, labeling, packaging, colors, materials,
  prices, sales promotion, advertising themes,
  media, execution.
• Marketing programs do work best when they are
  tailored to each target group.

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Global Marketing

• An endless process or principle
• Customer attraction
• Customer satisfaction
• Customer retention.
• CEO is also the Chief Marketing Officer.

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Global Marketing

• Principle of Competition Value War
• Create long-tern customer value.
• Continuously and consistently crated customer
  value.
• Look at total customer benefits vs. customer
  expenses
• Ultimate goal of project
• Relationship to other projects
• High-level timing goals

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Global Marketing

• Principle of Customer Satisfaction and Retention
• Look at overall satisfaction and customer loyalty
• Easier to retain a customer than to gain or win a
  new one.
• Consistently improve customer value to win the
  marketing war.

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Global Marketing

• Principle of Integration
• Learn about the needs and wants.
• There are no average customers.
• Concentrate on the individual differences while
  looking at segmentation, targeting and
  positioning.

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Global Marketing

• More on Integration
• Plan for and review differences in culture,
  markets, economic development, consumer differing
  needs, usage patterns, media availability and
  legal restrictions.

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Global Marketing

• Principle of Anticipation and Being Proactive.
  Not Reactive.
• Are you ready for change? Being adaptive to the
  marketplace.
• Macroenvironment Changes. The high income growth
  country has shifted from Japan to US. Low to
  medium has been concentrated in Southeast Asia
  and southern Asia with China as a unique,
  high-growth, large country in the region and the
  world. Also look at Singapore, Taiwan and South
  Korea.

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Global Marketing

• Principle of the Growth of Internet and
  Information Technology.
• Principles of
• Marketing Planning
• Marketing Mix
• 7Ps
• Controls.

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Global Marketing

• The old trade model is just old.
• It stated that as a product matures, production
  would shift to low-wage countries.
• Today, must look at transportation costs,
  availability of skilled labor, market
  responsiveness, market access and innovation in
  product design and manufacturing. Especially of
  products with less than 15 of labor in total
  cost.

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Global Marketing

• Principle of Branding
• The umbrella. Determines price and value. Be more
  than a commodity.
• A brand is a name, term, sign, symbol, or design
  or a combination of them to identify the goods
  and services of a seller and to differentiate
  them from the competitors.
• Identifies seller or maker. We see a huge
  increase in the global brands for autos, food,
  clothing, electronics and more.
• Increasing number of cross-border marketing
  alliances.

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Global Marketing

• Principle of Service
• Service before, during and after sale.
• Create long-term value and connect with customer.
  
• Both products and services. Its creating more
  value.

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Global Marketing

• Principle of Process
• Commands the company to be the captain of its
  supply-chain. It should manage from raw materials
  to finish goods. Enhance value-creating
  activities.
• Look at Strategic Alliances/Partners . Can be
  suppliers, customers and even parts of
  competitors. Benchmarking, reengineering,
  outsourcing, mergers, and acquisitions are
  examples.
• Brand, service and process are three
  value-creating principles and drivers to win
  customers and deliver market share.

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Global Marketing

• Principles of STP
• Segmentation, Targeting and Positioning
• Process of segmenting. Look at demographics,
  geographics, psychographics and behavior
  variables.
• Look for market opportunities.

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Global Marketing

• Principle of Differentiation
• Dont be different just to be different.
• Design and plan for meaningful differences versus
  the competitors.
• Design truly different and unique products for
  customers.

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Global Marketing

• Principle of Marketing Mix
• Integrate 4Ps and 7Ps.
• Offer, Logistics and Competition.
• The whole marketing concept.

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Global Marketing

• Principle of Selling
• Integrate Company, Customers and
  Relationships/Partnerships.
• Create long-term relationships with customers.
• More than personal selling.
• Features and benefits of the product.
• AIDA Awareness-Interest-Desire-Action.
• Manage communication.

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Global Marketing

• Principle of Balance
• After focusing on the elements of
  marketing---segmentation, targeting, positioning
  (STP), differentiation, marketing mix, selling,
  branding, service and process, you need to
  balance the strategies, tactics and
  implementation.
• Share of Heart and Mind. Share of Voice.
• Dynamic environment. Timing.
• High-level timing goals

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Global Marketing

• Principle of Positioning
• The act of designing the product or service
  (companys offering and image) to occupy a
  distinctive place in the target markets mind.
• Ultimate goal of product. Differentiation
• Relationship to other products.

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Global Marketing

• Principle of Future
• Manage todays products by managing a profit and
  by servicing customers of today and tomorrow.
• Develop tomorrows products.
• Look at Marketing Myopia.

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Global Marketing

• Principle of Global Experience
• Counts for companies
• Counts in the job market for employees.
• Marketing Audits.
• Marketing is not a destination, or a goal. Its a
  process. A moving target.

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Wrap-up on Global Marketing Principles

• Companies cannot stay domestic and expect to
  maintain their markets.
• Companies need to define their global policies
  and objectives.
• Companies need to decide on how much to adapt
  marketing mix.

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Wrap-up on Global Marketing Principles

• Market entry and market control costs can be
  high.
• Product and communication adaptation costs can be
  high.
• Dominant foreign firms can establish high
  barriers of entry.
• Which types of markets and countries?

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Global Marketing

• Ultimate goal of project
• Relationship to other projects
• High-level timing goals
• Attractiveness influenced by the product,
  geography, income, population, political climate
  and more factors.
• Review Forces
  ---Driving and Restraining