Global Marketing 4.4 Global marketing

a) Global marketing strategy and global localisation (glocalisation) What you need to know a) Global marketing strategy and global localisation (glocalisation) b) Different marketing approaches: domestic/ethnocentric mixed/geocentric international/polycentric c) Application and adaptation of the marketing mix (4Ps) and Ansoff’s Matrix to global markets

What is Glocalisation? Glocalisation describes a product or service that is developed and sold globally, but is also adapted to meet the needs and wants of customers in a local market

Two Examples of Glocalisation

Different Marketing Approaches to Global Markets Domestic / Ethnocentric Mixed / Geocentric International / Polycentric Assumes that work works in home markets will also work in international markets Effective if international consumers value authenticity Recognises differences in national markets But main aim of marketing strategy is to build a truly global brand Recognises that every national market requires a different marketing mix Products designed specifically to meet local needs

Alternative Model – Bartlett & Ghoshal The Bartlett & Ghoshal Model indicates the marketing strategy options for businesses wanting to manage their global marketing based on two pressures: local responsiveness & global integration

The Bartlett & Ghoshal Matrix LOW PRESSURE FOR LOCAL RESPONSIVENESS HIGH PRESSURE FOR LOCAL RESPONSIVENESS Global Transnational HIGH PRESSURE FOR GLOBAL INTEGRATION International Multi-domestic LOW PRESSURE FOR GLOBAL INTEGRATION

How Two Key Forces Impact How to Approach the Marketing Mix in Global Markets Do customers in each country expect the product to be adapted to meet local requirements? Do local (domestic competitors) have an advantage based on their ability to be more responsive? Force for local responsiveness How important is standardisation of the product in order to operate efficiently (e.g. economies of scale) Is consistent global branding required in order to achieve international success? Force for global integration

LOW HIGH Key Features Examples Global Strategy Pressure for Local Responsiveness: Pressure for Global Integration: LOW HIGH Key Features Examples Highly centralised Focus on efficiency (economies of scale) Little sharing of expertise locally Standardised products

Transnational Strategy Pressure for Local Responsiveness: Pressure for Global Integration: HIGH HIGH Key Features Examples Complex to achieve Aim is to maximise local responsiveness but also gain benefits from global integration Wide sharing of expertise (technology, staff etc.)

International Strategy Pressure for Local Responsiveness: Pressure for Global Integration: LOW LOW Key Features Examples Aims to achieve efficiency by focusing on domestic activities International operations are largely managed centrally Relatively little adaption of product to local needs

Multi-domestic Strategy Pressure for Local Responsiveness: Pressure for Global Integration: HIGH LOW Key Features Examples Aims to maximise benefits of meeting local market needs through extensive customisation Decision-making decentralised Local businesses treated as separate businesses Strategies for each country

Ansoff & Global Business: Market Development A growth strategy where the business seeks to sell its existing products into new markets

Approaches to Market Development New geographical markets; e.g. exporting to emerging markets New distribution channels (e.g. using e-commerce and mail order) Different pricing policies to attract new customers in different segments

Examples of Market Development Strategies Starbucks expansion into China is a classic example of a successful market development strategy Tesco’s market development strategy to enter the US grocery supermarket sector was a disaster for shareholders

Evaluating Market Development A logical strategy where existing markets are saturated or in decline Often more risky than product development – particularly expansion into international markets Existing products may not suite new markets: depends on customer needs