Global Marketing Management

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Global Marketing Management
Introduction to Global Marketing

• Warren J. Keegan
• Bodo B. Schlegelmilch

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Marketing A Universal Discipline

• The management process responsible for
  identifying, anticipating and satisfying customer
  requirements profitably. (The Chartered
  Institute of Marketing)
• Marketing is a social and managerial process by
  which individuals and groups obtain what they
  need and want through creating and exchanging
  products and value with others. (Kotler,
  Armstrong, Saunders and Wong, 2001 5)

• 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. (The American
  Marketing Association)

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Marketing A Universal Discipline

• Marketing (1) the process of focusing resources
  and objectives of an organization on
  environmental opportunities and needs
• Marketing (2) a set of concepts, tools,
  theories, practices, procedures, and experiences
• Although a universal discipline, marketing
  practice varies from country to country

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The Marketing Concept (1)

• Concept has chanced dramatically
• 1950s
• Focus on products
• 1960s
• Focus on customer orientation
• Development of marketing mix product, price,
  promotion, place (4Ps)

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The Marketing Concept (2)

• 1990s
• Focus on customer in the context of the broader
  external environment
• E.g. competition, government policy and
  regulation
• Focus on stakeholder value
• E.g. employees, customers, shareholders, society

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The Marketing Concept (3)

• Today
• Two key tasks of marketing
• Focus on customer and his/her environment
• Create value for consumers and stakeholder
• Shift towards
• Focus on managing strategic partnerships
• Positioning of firm in value chain to optimize
  value creation
• Profit as a measure of success, not an end in
  itself

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The Three Key Elements of Marketing
VALUE
DIFFERENTIATION
FOCUS
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The Three Key Elements of Marketing - Value

• Goal create value that is greater than the value
  created by competitors
• Strategy
• Expand or improve product and/ or service
  benefits
• Reduce the price
• Combine these two elements

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The Three Key Elements of Marketing -
Differentiation

• Goal create competitive advantage through
  differentiation
• Advantage can exist in any element of a companys
  offer e.g. product, price, advertising
• Competitive advantage should be sustainable over
  extended period of time
• BMW Combination of superior production skills
  and marketing competencies

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The Three Key Elements of Marketing - Focus

• Goal a concentration of attention and resources
• Requirement to create customer value at a
  competitive advantage
• A viable way for small and medium sized companies
  to achieve dominant position in world market

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Scope and Boundaries of Global Marketing

• Marketing discipline is universal but markets and
  customers are quite different
• Three domains of knowledge relevant to
  international managers
• Cross-Cultural Knowledge
• Country/ Regional Knowledge
• Cross-Border Transactions Knowledge
• Need for Global Localization Adjustment of
  global marketing strategies to local requirements

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Importance of Global Marketing

• Activities in the international arena are of
  eminent importance to companies in achieving
  maximum growth potential
• E.g. 94 of world market potential for German
  companies is outside of Germany
• Trend A large number of industries will be
  dominated by a handful of global companies

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Management Orientation and Global Marketing (1)

• Different Management Orientations in the Global
  Arena EPRG Framework

Polycentric
Ethnocentric
Regiocentric
Geocentric
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Management Orientation and Global Marketing (2)

• Ethnocentric Orientation
• Home country is superior compared to the rest of
  the world.
• Company personnel see only similarities in market
• Characteristic for domestic and international
  companies
• Marketing opportunities outside the home market
  are pursued by extending various elements of the
  marketing mix or ignored some time
• One of the internal threats to a company

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Management Orientation and Global Marketing (3)

• Polycentric Orientation
• Characteristic for multinational companies
• Opposite of ethnocentrism
• Each company in which a company does business is
  unique
• Sees differences in foreign countries
• Marketing mix is adapted by autonomous country
  managers

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Management Orientation and Global Marketing (4)

• Regiocentric or Geocentric Orientation
• Characteristic for global and transnational
  companies
• Managers view regions unique and seek to develop
  an integrated regional strategy
• Geocentric world as a potential market strive
  to develop integrated world market strategies
• Marketing opportunities are pursued by both,
  extension and adaptation strategies in global
  markets

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Factors Supporting or Inhibiting Global
Integration (1)

• Driving Forces
• Technology
• Regional Economic Agreements
• Market Needs and Wants
• Transportation and Communication Improvements
• Product Development Costs
• Quality
• World Economic Trends
• Leverage

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Factors Supporting or Inhibiting Global
Integration (2)

• Restraining Forces
• Management Myopia
• Ethnocentric Organization Culture
• National Controls
• Cost
• War
• Market differences