MBA 208|

ADVANCE MARKETING
MANAGEMENT

Daniella Mariz Lamptey

The Concept of Global Marketing

Introduction
TOPICS
• What is Marketing? • History of Globalization
• Marketing Concepts- Traditional And • Evaluating Cultural and Social
Modern Environments
• Selling VS Marketing • Globalization and Global Marketing
• Functions of Marketing • Paradoxes in Globalization
• What is Global Marketing? • International Marketing Mix
• Global Marketing Environments • The four Ps of Marketing Mix
• Understanding Global Markets and • The four As of Marketing Mix
Marketing • The Standardization versus
• Assessing the Global Environment The Localization – Adaptation School (1)
Global Economy and Technology • The Standardization versus
• What is Globalization Localization – Adaptation School (1)
• A Global Marketing Management
Framework
 MEANING AND DEFINITION

Marketing is a form of communication between

a business house and its customers to sell its
products or services to them. Goods are not
complete products until they are in the hands of
customers. Marketing is the management
process through which goods and services move
from concept to the customer. Marketing has
less to do with getting customers to pay for a
product than it does with developing a demand
for that product and fulfilling the customer’s
needs.
 MEANING AND DEFINITION
According to the American
Marketing Association (AMA)
Board of Directors,
Marketing is the activity, set of
institutions, and processes for
creating, communicating, delivering,
and exchanging offerings that have
value for customers, clients, partners,
and society at large.
 MEANING AND DEFINITION
Dr. Philip Kotler defines marketing as “the science and
art of exploring, creating and delivering value to satisfy
the needs of a target market at a profit. Marketing
identifies unfulfilled needs and desires. It defines,
measures and quantifies the size of the identified market
and the profit potential. It pinpoints which segments the
company is capable of serving best and it designs and
promotes the appropriate products and services.”

Thus, marketing refers to all the activities involved in the

creation of place, time, possession and awareness utilities
and beyond.
 MARKETING CONCEPTS
A concept is a philosophy, attitude, a line of thinking, an idea or notion to relating any aspects of divine and human
creations. The philosophy of an organization in the dynamic creation of marketing is referred to as a marketing concept.
Thus, the marketing concept is a way of life in which the resources of an organization are mobilized to create, stimulate,
and satisfy the consumer at a profit.

TRADITIONAL/CLASSICAL CONCEPT MODERN CONCEPT

According to this concept, marketing is concerned
with the creation of consumers. According to the
According to this concept, marketing consists of modern thinker Peter Drucker, Marketing is so
those activities which are concerned with the basic that it cannot be considered as a separate
transfer of ownership of goods from producers to function. It is the whole business seen from the
consumers. Here, the role of physical distribution customers’ point of view…business success is not
and marketing channels is over-emphasized. It determined by the producer but the customer.
refers to marketing as the process by which goods
are made available to ultimate consumers from Thus, the modern concept lays greater emphasis on
their place of origin. The emphasis of marketing is customers and considers them as kings. Marketing
on the sale of goods and services. Consumer is not merely a physical process but is something
satisfaction is overlooked. beyond that. It is the managerial philosophy which
centres around the wants and desires of customers.
 TRADITIONAL CONCEPT vs. MODERN CONCEPT

1. Traditional marketing starts from production and ends with sales but modern marketing includes
planning, product, price, promotion, place, people, after-sale service, etc.

2. Traditional marketing concentrates on favorable products, but modern marketing concentrates on

customer needs, wants, and satisfaction.

3. In traditional marketing, only those products are sold that the producer produces. No focus is laid on
consumer preference. On the other hand, modern marketing indulges in production only after analyzing
consumer demands.

4. Traditional marketing is product and production oriented while modern marketing is consumer oriented.

5. The target of traditional marketers was to earn maximum profit by maximizing sales. However, the main
motive of modern marketers is to earn profits through the satisfaction of consumer needs.

6. The principle of the traditional market was “caveat emptor” i.e., “let the buyer beware”. Whereas the
principle followed by the modern market is “caveat venditor” i.e., “let the vendor beware”.
 SELLING vs. MARKETING
It is a common error committed when people say they are going for marketing when they go to the market
to purchase goods/ services. Well, it is simply buying from consumers’ end and selling from the sellers’
end. Marketing is a wider term than selling. Let us now see how selling differs from marketing.the
 FUNCTIONS OF MARKETING
1. Research & Development Function- A marketer has to carry out adequate research
to identify the size, behavior, culture, gender, demands etc. of the target market
7. Promotion Function- The marketing manager must design adequate
segment, and then develop the products/services accordingly to meet and satisfy the strategies to make known to consumers about the availability of products in the
needs of target customers. market. Without this function, products will remain in the hands of producers
and will never reach the consumers. Four important methods of promotion are
advertising, personal selling, publicity and sales promotion.
2. Buying Function- The marketing department has to assist the purchase and supply
department by sending specifications of the materials required so as to get timely and
quality materials for production. 8. Physical Distribution- This function involves the activities which are
necessary to transfer ownership of goods to customers and also making available
3. Standardization & Grading- Standardization means setting quality standards to goods at the right place and time.
achieve uniformity in the product. It provides consistent quality assurance to
consumers. 9. Transportation- It provides the physical needs which facilitate the movement
of persons, goods and services from one place to another.
Grading means classifying the product on certain accepted benchmarks or bases such
as size, quality etc. Through grading, the marketer can get higher price for quality 10. Warehousing- To meet the expected demands of consumers, goods are
product.
produced or procured well in advance and stored in warehouses till they are
transferred to customers. Warehouses protect the goods from any damage which
4. Packaging and Labeling- Packaging is traditionally done to protect the goods from may be caused by any rodents, moisture, sun, theft, etc.
damage in transit and to facilitate easy transfer of goods to customers. But now it is
also used by the manufacturer to establish his brand image as distinct from those of his
rivals. 11. Risk- taking function- Risks are involved in almost all levels of the
marketing process. Risk-taking in marketing refers to the financial risk that is
inherent in producing and handling goods, including the possible loss due to a
Another activity involved with packaging is labeling. It means putting identification
marks on the package. Label is that part of a product which contains information about fall in prices and the losses from spoilage, depreciation, obsolescence, fire and
the producer and the product. floods, etc.

5. Branding- It is the process of stamping a product with some identification name or 12. Customer Support Services- This function relates to developing customer
mark or a combination of both. Branding means giving a distinct individuality to a support services such as after-sales services, handling customer complaints and
product. Some popular brands are Airtel, Sony, Lux, Nirma etc. adjustments, providing credit facilities, maintenance services, technical services,
etc. These services provide maximum customer satisfaction and develop brand
6. Pricing- Determination of price of a product is an important task of a marketing loyalty for a product.
manager. Price is influenced by cost of product and service offered, profit margin
desired, prices fixed by rival firms, government policy, etc.
 Global Marketing Environments
• Global marketing is a firm's(company) ability to market to almost all
countries on the planet.
• Global marketing is a field of study in general business
management to provide valuable products, solutions, and services
to customers locally, nationally, internationally, and worldwide with
extensive reach, the need for a firm's product or services is
established.
• The global firm retains the capability, reach, knowledge, staff, skills,
insights, and expertise to deliver value to customers worldwide.
 Understanding Global Markets and Marketing

REACH
The nature of the internet means businesses now have a truly global reach.
Marketing opens new avenues for smaller businesses, on a much smaller budget, to
access potential consumers from all over the world.
SCOPE
Internet marketing allows the marketers to reach consumers in a wide range of
ways and enables them to offer a wide range of products and services
DEMOGRAPHICS AND TARGETING
The demographics of the internet are a marketer’s dream. Internet users,
considered as a group, have greater buying power. The youth is an example of a
global demographic. Teenagers share common characteristics even if they are from
different cultures and nations
 Assessing the Global Environment
The Global Economy and Technology
• Products are selling everywhere, • Outside the luxury segments,
with consumers becoming similar they often want the products
in preferences, life-style, and for the lowest prices which
aspirations. emerging market
• “Californization of Need” means
multinationals are more likely
that whatever their nationality,
to offer given their favorable
global citizens get the same labor conditions.
information and want the prestige
that comes with certain kinds of • Global competition is
consumer products - fashion, becoming tougher in a world
international cuisine, electronics, without boundaries.
entertainment, and news.
 Assessing the Global Environment
The Global Economy and Technology
1. Companies face consumer needs that are, despite all global harmonization,
different across countries, religions, peer groups, and cultures.
2. Marketing channels vary, preferred means of payment are not the same, and
language choice is important for customer satisfaction.
3. The identification of local preferences can lead to true innovations.
4. Emerging markets as a driver of innovation.
5. Global ethics and social responsibility.
6. It is important to develop a global marketing strategy.
GLOBALIZATION
- is the trend toward a single integrated and interdependent world: it is driven by international trade and
made possible largely by information technology.

International trade has already existed in ancient • Globalization may be understood by different
times. perspectives.
• In Greece and the wider Aegean, local, regional, • To economists, globalization refers to the
and international trade exchange existed from emergence of global markets.
the Bronze Age.
• Sociologists see globalization as the convergence
• The earliest written sources of Homer and Hesiod of lifestyles and social values.
attest to the existence of trade (emporia) and
merchants (Emporio) from the 8th century B.C. • To the political scientist, globalization reduces
national sovereignty.
• International trade grew from 750 B.C., driven
by social and political factors such as population • One of the first to recognize globalization was
movements. colonization inter-state alliances, the Marshall McLuhan. He coined the term “global
spread of coinage, the gradual standardization of village”, wherein people who are physically
measurements, warfare, and safer seas following separated by time and space are interconnected
the determination to eradicate piracy. by electronic media. This linkage, while having
positive benefits, also carries responsibilities on a
global level.
 Some authors suggest that Thomas Frieman, with his
Ultimately, globalization is a
globalization began as early as the international bestselling book
phenomenon shaped by the interplay
discovery of America, while “The World Is Flat: A Brief
between local and global forces. It
others claim that it did not begin History of the Twenty-First
depends on the political, economic,
until the Industrial Revolution in Century”, analyzes globalization
social, technological, and legal
the latter part of the 18th in the beginning of the 21st
environments in and among countries.
century. century.

Globalization is still rather limited when measured on a worldwide scale. The global
transportation and logistics company DHL publishes a Global Connectedness Index (GCI)
designed to track the state of globalization:
• Globalization reached new heights in 2017 after a sharp decline in the aftermath of the
2008 financial crisis.
• 20 percent of economic output around the world is exported.
• Foreign direct investment flows equal 7 percent of global gross fixed capital formation.
• Roughly 7 percent of phone call minutes (including calls over the internet) are
international.
• Only 3 percent of people live outside the countries where they were born.

Globalization does not occur as a single phenomenon but affects many facets of our life.
Evaluating Cultural and
Social Environments
Cultural Globalization
• Rolex and McDonald’s advertisements in Red • Cultural protectionism becomes because of the
Square in Moscow or Paris, are manifestations of spread of the Internet
cultural globalization, showing that globalization
is more than just commerce. ( language, style, • Cultural manifestations of globalization are
taste)someone fears that culture is becoming too many, and whether they incur a loss of local
global, in the sense of becoming too homogenized. values or enrich people's minds toward global
These concerns typically go along with the fear
perspectives and the interchange of
that cultural globalization implies
Americanization and that the uniformity of mass knowledge, and ideas remains a question of
culture leads to the demise of national cultural balance.
heritage.

• If we look at globalization as a Westernization

process, we face a dilemma as many countries
aspire to be globalized yet not Westernized, most
notably the People’s Republic of China. The Chinese
government is attempting to get the benefits of
open markets without the unwanted side effects of
Westernization.
Financial Globalization
• 24-hour availability of information and trading • Critics have remarked that the
potential: for instance, CMC Markets PLC, interconnectedness of world financial markets
established in 1989, is a global leader in online may also increase the exposure to real shocks
financial trading. They make available over 3,000 and to risks that sudden capital reversals may
instruments across 18 global markets as well as translate into large-scale economic disruptions.
easy access to equities, indices, forex,
commodities and treasuries, 24 hours a day from • This was evidenced most recently during the
one single account. global financial crisis of 2008, which nearly
destroyed most North American and European
• Increased transparency does not only benefit the financial institutions, wiped out hundreds of
professional trader but has also helped to thousands of jobs and billions in housing
establish international financial centers where values in these regions, and had serious
loans can be negotiated at better costs than destabilizing effects reaching as far afield as
restricting oneself t local banks. Russia, China, and Southeast Asia.
• It determines a More efficient global allocation of
resources, sustained trade balance, and the
prevention of national shocks
Technological Globalization
• Communication and transportation systems
have facilitated access to information

• Today we are used to consuming international

news, wherever we are and whatever we do.

• Progress in technology and communication has

also benefited poorer countries.

• India is playing an increasing role in

information technology innovation and major
U.S. multinationals rely on their Indian
employees to design software platforms and
next-generation features.
Educational and
Sociological Globalization
Educational and sociological manifestations of globalization go hand in
hand. There is a large issue of labor mobility, induced by the downfall
of boundaries, especially but not exclusively within Europe.

Increasing mobility of researchers and students across different

countries with the dominant attracting nations being the UK, France,
and Germany.

BRAIN DRAIN - is a slang term that indicates a substantial emigration

or migration of individuals. A brain drain can result from turmoil
within a nation, the existence of favorable professional opportunities in
other countries, or a desire to seek a higher standard of living.

Companies and nations will have to look for their future leaders on a
global scale.

“Globalization has changed us into a company that searches the world,

not just to sell or to source, but to find intellectual capital – the world's
best talents and greatest ideas.”
-Jack Welch, CEO-General Electric
Economic Globalization
Economic aspects of globalization are clearly the most
often and most controversially discussed ones and the
major issue has always been the reduction of poverty.

• The surest route to sustained poverty reduction is

economic growth.

• Economies of countries that open their markets grow

at a faster pace than the economies of countries that
open their markets less or not at all.

• A growing economy increases the demand for goods

and services, and as demand increases, more businesses
start and expand their operations. Such expansion leads
to the creation of more, better-paid jobs.

• The same is true when the market expands beyond

borders. Gaining free access to other markets opens up
new business opportunities, encouraging investment and
fostering job creation.
GLOBALIZATION
AND GLOBAL MARKETING
 GLOBALIZATION AND GLOBAL MARKETING
• A global approach requires the firm to focus its Global marketing requires the coordination and
efforts worldwide, rather than developing integration of production, marketing, and other
marketing strategies on a country-by-country functional activities across countries.
basis. For many firms, a global marketing strategy requires a
centralized operation to leverage scale advantages and
• Definition of global marketing by the optimize resources and reduce costs. Specifically, the
American Marketing Association: Marketing objective of global marketing is to attain worldwide
definition: a marketing strategy that coordination, rationalization, and integration of all
consciously addresses global customers, marketing activities including target market selection,
markets, and competition in formulating a marketing-mix decisions, and organizational design and
control mechanisms.
business strategy. Consumer behavior
definition: an approach to international The world-wide integration of marketing activities
strategy that argues for marketing a product in includes the development of global products and
essentially the same way everywhere in the brands and global communication and distribution
world. strategies. However, even a global marketing strategy will
need to account for some local adaptations and the
existence of paradoxes, such as the poor versus rich,
power versus fragility.
Paradoxes in Globalization
Power versus
Rich versus Poor Fragility Media overload versus
Many MNCs are gaining in
fragmentation of media and
The global population of high net
wealth individuals (HNWIs), i.e. power, they exert audiences
those individuals with USD 1 influence on governments The world turned into a “global
million or more in investable to deal with subsidiaries village” as communication costs
assets, continues to increase, or set standards. However, declined owing to
surpassing the USD 70 trillion MNCs are becoming more improvements in information
threshold for the first time in 2018. fragile because many technology. On the other hand,
The population of HNWIs grew by small competitors have several countries are still
1.2 million individuals to reach 18.1 entered the scene and excluded from the Internet. In
million. On the other hand, almost occupy a global niche addition, different age groups
half the world’s population (46% or market (“hidden prefer different media (ex-social
3.4 billion people) still struggles to champions“). networks)
meet their basic needs, according
to the World Bank.
 The operational strategy of
global marketing deserves
attention, as there will be
changes from the traditional
4Ps to the 4As when applied to
emerging markets.

Some of the traditional marketing mix

instruments (the 4Ps: Product, place, price,
promotion) do not fully comply with the
characteristics of emerging markets, where :
• Marketers need to reconsider their pricing to
make sure that their products are affordable.
• They need attract people’s attention to the
product (awareness).
• They have to select or create distribution
channels that fit the infrastructure of the
country (availability)
• They need to make sure that people accept
products in a world where they use and re-use
products over generations (acceptability).
The Standardization versus Localization
– Adaptation School (1)
• One of the main topics of global marketing is • However, there are significant differences
whether a standardized marketing approach between national markets that require
to markets is preferable to a localized adaptation and customization in, if not all of
(differentiated) approach. marketing programs, then at least in some
parts, such as product and promotional
• A truly globalized marketing strategy would aim strategies.
to standardize elements of the marketing mix
in all markets served by the company. • For example, different tastes and customer
preferences and performance requirements
• Standardization allows gaining economies of and standards across countries inhibit the
scale in production and marketing, lowering ability to standardize.
costs—especially high research and
development costs —and easing pressures
exerted by global customers for the supply of
uniform products.
The Standardization versus Localization
– Adaptation School (2)
• In reality, it is rare to find a completely • Even the successful global advertising
standardized marketing mix campaign of Mcdonald’s (“I’m loving it“) is
facing localization needs, as the requirement to
• Service providers typically localize their use Cyrillic letters in Russia
offers to a very high degree (e.g., educational
service providers that need to tailor their • Companies use a strategy of foreign countries
services to local languages or customs, or that exploits location economies, leverages
lawyers that need to rely on local laws) but core competencies and responds to key local
attempt to standardize their advertising conditions. Value is created by the relentless
campaigns as much as possible. renewal, enhancement, and exchange of ideas,
products, and processes across functions and
• Even when products are standardized, it may borders.
not be possible to standardize other elements
of the marketing mix • the importance of people and innovation!
A GLOBAL MARKETING MANAGEMENT
FRAMEWORK