Chapter 1

Introduction to
Global Marketing
 Introduction & Overview

Marketing Global
► The activity @ set of Marketing
institutions, and processes that
► It is a same marketing
happen in the market for
activities that is not
creating, communicating,
happen in our home
delivering, and exchanging
country but happen
offerings that have value for
outside the home country.
customers, clients, partners,
► E.g. Indonesia , Thailand,
and society at large.
Philippine, Singapore
► It involves 4P’s
► E.g. Product, Place, Promotion,
Price
 Market Penetration Product Development Strategy
Strategy
► Its getting the existing customers to buy
more of existing products. ► Developing new products or modifying
► It is measured by the amount of sales existing products so they appear new, and
volume of an existing good or service offering those products to existing markets.
compared to the total target market for that ► It is to reduce costs, add a unique or specific
product or service. feature or to improve product problems or
► E.g. Apple has consistently introduced new glitches.
versions or their iPhones with added ► E.g. Coca-Cola classic Coca-Cola Diet
enhancements and upgrades, including coke
releasing its high-end iPhone X.
 Market Development Diversification Strategy
Strategy
► The strategy is to enter into a new market or
industry which the organization is not
► The existing product to a new market. currently in, whilst also creating a new
► Focus on how to get a new target market by product for the new market.
expanding into new geographic markets. ► Disney’s product portfolio includes Marvel
► E.g. Starbucks’s expansion into India via an Comics, television network ABC, and cable
alliance with the Tata Group. sports channel ESPN.
► Starbucks will source coffee beans in India ► The company has pursued a diversification
and sell worldwide then open cafes in Tata’s strategy, which means purchasing other
upscale Taj hotels in India. companies that enable it to bring new
products into new markets while remaining
true to Disney’s origins.
 Value chain & Value
proposition proposition
•
chain
A value chain is a set of activities
• A value proposition is a promise of value
that a firm operating in a specific
to be delivered, communicated &
industry performs in order to
acknowledged.
deliver a valuable product for the
• It is also a belief from the customer about
market.
how value will be delivered, experienced
• E.g. McDonald's mission is to
and acquire
provide customers with low-priced
food items. Value • E.g. The company enables customization
through its service NikeID. Customers can
• Their customer will feel valued
customize their shoes in a variety of ways,
when their meals they pay, worth
including sport style, traction, and color.
every penny.
Customer perceived value
► Create value for customers by improving benefits or
reducing price

Improve the product

Find new distribution channels

Create better communications

Cut monetary and non-monetary costs and

prices VALUE = BENEFIT @ PRICE

 Competitive
Advantage
► It is something that your company have it,
but the other company doesn’t have it.
► E.g. IKEA offer the combination of in-
store café and home furnishings warehouse.
► Its core competency is their unique
warehouse with café inside that offering
various tasty dishes and home furniture for
the customer.
► Sweedish Meatballs, Chicken Lasagne and
Fried Chicken Wings are some of their menu
served at Ikea Food.
 Global Marketing :
What it is & What is
not

Single Marketing
Global
Country Strategy
 Marketing
Strategy
Single Country Global

► Target market ► Global market

strategy participation
► Marketing mix ► Marketing mix
development development
- Product - 4P : adaptation or
standardization
- Place ► Concentration of marketing
activities
- Price
► Coordination of marketing
- Promotion activities

► Integration of competitive
moves
Standardization vs Adaptation

► Globalization (Standardization)
• Refers to a firm’s efforts to harmonize its marketing mix
by targeting the whole region or the global market with
similar product or services

► Global localization (Adaptation)

• Refers to a firm’s efforts to modify one or more elements
of its marketing mix in order to accommodates specific
customer requirement or need in a particular market
• Think globally, act locally
 The Importance of Global
Marketing
Learning a new culture

► Getting information about a new place can help make our organization more

well-rounded.

► Understanding people who are not from our country will give us a new

perspective on relations with customers and may even help us work better

with domestic customers and business partners.

► E.g. We are exposed to different languages, smells, colors, sights, sounds,

and people.

► In India, their food culture is they love eat anything with curries and herbs.
 The Importance of Global
Marketing
Improving company
reputation

► Businesses that can successfully go global and market their offerings to a

totally different population will enjoy the prestige of calling themselves an
international company.

► It is not an easy feat to accomplish, meaning prospects and potential

business partners will instantly think more highly of our company when they
know we have an international presence.

► Once the business can adapt the culture at new place, it will make easier to
expand more on other target market.

► E.g. McDonald’s can adapt every country such as at Arab they have Chicken
McArabia because Arabian love to eat Arab bread. While at Malaysia, they
have Ayam Goreng Spicy because Malaysian love to eat spicy food.
 The Importance of Global
Marketing
New revenue potential

► By taking the business globally, you get access to a much larger base of
customers. If the product or service is a success, we can enjoy increased
revenues from these new customers even if we have saturated the markets
domestically.

► Globalizing could be exactly the shot of life the company needs to take its
revenues to new heights.

► E.g. Shangri-La known as luxury hotel and resort chain that provides their
guests with lavish accommodation and superb service in a bid to play the
hospitality game right. They have one at Shangri-La’s Villingili Resort and Spa,
 ‘‘ERPG
’’
Ethnocentric Regiocentric
E Orientation Orientation R
Managemen
t
Orientation
P Polycentric Geocentric
G
Orientation Orientation
 ► Home country is superior to others
► Sees only similarities in other countries
► Assumes products and practices that
succeed at home will be successful
Ethnocentri
1 c
everywhere
► Eg: Companies do not adapt their
Orientation
products to the needs and wants of other
countries where they have operations.
Polycentri
2 c
► There are no changes in product
specification, price and promotion
Orientatio
n measures between native market and
overseas markets.
► Leads to a standardized or extension
approach
 ► EXAMPLE:

Ethnocentri
1 c
► Nissan’s ethnocentric orientation was
quite apparent during its first years of
Orientation
exporting cars and trucks in United
States. Designed for mid Japanese
Polycentri
2 c
winters, the vehicles were difficult to
start in many parts of the US during cold
Orientatio
n winter months. In northern Japan many
car owners would put blankets over their
hoods of their cars and they expected
Americans would do the same
 ► Each country is unique
► Each subsidiary develops its own
unique business and marketing
Ethnocentri
1 c strategies
Orientation ► Often referred to as multinational
► Leads to a localized or adaptation
Polycentri approach that assumes products
2 c must be adapted to local market
Orientatio
conditions
n
 ► Example: (i) Google Doodles &
(ii) MCD

Ethnocentri
1 c
Orientation
► (i) Google Doodles: ► (ii) McDonalds Burger:

Google changing doodles McDonalds adapted itself to

Polycentri
2 c each day! Rather than the Indian market

attempting a single doodle introducing a mutton based

Orientatio
n worldwide, it adapts itself “Maharaja Mac” in India as

according to different opposed to its flagship beef

countries. based Big Mac

 ► In this approach a company finds
Regiocentric
3 Orientation
economic, cultural or political
similarities among regions in order
to satisfy the similar needs of
potential consumers.

Geocentric ► For example, countries like

4 Orientation Pakistan, India and Bangladesh are
very similar.
► They possess a strong regional
identity.
 ► Examples:

Regiocentric
3 Orientation
► Cola-Cola Zero provides real Coca-Cola
taste for variety seeking consumers. It is
sweetened with a blend of low-calorie
Geocentric
4 Orientation
sweeteners, while Diet Coke is sweetened
with aspartame. As for Coke Light, in
certain countries, the term of “diet” is not
used to describe low calorie foods and
beverages. Hence, in that countries, Coca
Cola offer Coke Light.
 ► Also known as a global or
transnational company
► The approach that view the entire world
Regiocentric as their potential market and take
3 Orientation effective and efficient steps to satiate
the needs and demands of the
customers.
► It recognize the differences and
Geocentric
4 Orientation
similarities between the native home
country and international markets &
blend their ethnocentric and polycentric
views working out a strategy for success.
► Leads to a combination of extension
and adaptation elements
 ► Example: KFC Vege & MTV

Regiocentric
3 Orientation

► KFC has a ‘vegetarian thali’ and a Chana snacker

Geocentric to cater to vegetarians in India. Viacom’s MTV
4 Orientation channels are branded according to the country
they are operated in namely MTV India, MTC
China, MTV Korea and many more. It hires more
people from these nationalities and plays
according to respective cultures.
 Forces affecting global
integration
& global marketing

Global
intergration
Driving Restraining
forces & forces
Global
marketing
 01 Multilateral trade agreements

Converging market needs and wants

02
and the information revolution

Driving 03 Transportation and communication

improvements
Forces 04 Product development cost

05 Leverage

● Experience transfers
● Scale economies
● Resource utilization
● Global strategy
 01 Management myopia and Organizational

Culture
• The managers' tendency to obtain short-term gains rather than
long-term profits.
• Most businesses have profit as a strategic goal, and management
Restraining believe that giving short-term returns to investors is a more
efficient way to do so.
• Know-it-all local teams won’t listen to management and all-

Forces 02 National
•
controls
knowing managers won’t listen to local experts.

Every country tries to protect its home industries and services

through tariff and non-tariff controls.
• Non-tariff barriers to trade include “Buy Local” campaigns, food
safety rules and other bureaucratic obstacles.
• E.g. Organizations like GATT, WTO, NAFTA, EU, and other economic
agreements, tariffs have been largely removed in high-income
countries.
 03 Opposition to globalization
• Globophobia is the term used to describe an attitude of hostility
toward trade agreements, global brands, or company policies that
appear to result in hardship for some individuals or countries while

Restraining benefiting others.

• Globaphobia manifests itself in various ways, including protests or
violence directed at policymakers or well-known global

Forces
companies.
• It include college or university students, NGOs and labor unions.
• E.g. The election of Donald Trump in the United States and the
Brexit vote in the United Kingdom.
• Shortly after being sworn in as the 45th U.S. president, Trump
pulled the United States out of the Transatlantic Trade and
Investment Partnership (TTIP) as well as the Trans-Pacific
Partnership (TPP).
THANK YOU