Global Marketing Management A European Perspective Warren J. Keegan Bodo B. Schlegelmilch Introduction to Global Marketing

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 2 Overview zThe Marketing Concept zThe Three Key Elements of Marketing zScope and Boundaries of Global Marketing zImportance of Global Marketing zManagement Orientation and Global Marketing zFactors Supporting or Inhibiting Global Integration zSummary

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 3 Learning Objectives zUnderstanding how the world economy developed over the past decades zKnowing the impact of globalization on the marketing discipline zLearning about the interdependencies between management orientation and marketing performance zUnderstanding the factors supporting or inhibiting international marketing activities

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 4 Marketing: A Universal Discipline zMarketing (1) : the process of focusing resources and objectives of an organization on environmental opportunities and needs zMarketing (2) : a set of concepts, tools, theories, practices, procedures, and experiences zAlthough a universal discipline, marketing practice varies from country to country

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 5 The Marketing Concept (1) zConcept has chanced dramatically z1950’s: yFocus on products z1960’s: yFocus on customer orientation yDevelopment of marketing mix: product, price, promotion, place (4P’s)

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 6 The Marketing Concept (2) z1990’s: yFocus on customer in the context of the broader external environment yE.g. competition, government policy and regulation yFocus on stakeholder value yE.g. employees, customers, shareholders, society

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 7 The Marketing Concept (3) zToday: yTwo key tasks of marketing xFocus on customer and his/her environment xCreate value for consumers and stakeholder yShift towards xFocus on managing strategic partnerships xPositioning of firm in value chain to optimize value creation yProfit as a measure of success, not an end in itself

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 8 The Three Key Elements of Marketing VALUE DIFFERENTIATIONFOCUS

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 9 The Three Key Elements of Marketing - Value zGoal: create value that is greater than the value created by competitors zStrategy: yExpand or improve product and/ or service benefits yReduce the price yCombine these two elements

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 10 The Three Key Elements of Marketing - Value V = Value B = Perceived Benefits – Perceived Costs P = Price V = B / P

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 11 The Three Key Elements of Marketing - Differentiation zGoal: create competitive advantage through differentiation zAdvantage can exist in any element of a company’s offer: e.g. product, price, advertising zCompetitive advantage should be sustainable over extended period of time zBMW: Combination of superior production skills and marketing competencies

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 12 The Three Key Elements of Marketing - Focus zGoal: a concentration of attention and resources zRequirement to create customer value at a competitive advantage zA viable way for small and medium sized companies to achieve dominant position in world market zFREQUENTIS: 90% export share with air traffic control systems

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 13 Scope and Boundaries of Global Marketing zMarketing discipline is universal but markets and customers are quite different zThree domains of knowledge relevant to international managers yCross-Cultural Knowledge yCountry/ Regional Knowledge yCross-Border Transactions Knowledge zNeed for “Global Localization”: Adjustment of global marketing strategies to local requirements

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 14 Importance of Global Marketing zActivities in the international arena are of eminent importance to companies in achieving maximum growth potential zE.g.: 94% of world market potential for German companies is outside of Germany zTrend: A large number of industries will be dominated by a handful of global companies

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 15 Management Orientation and Global Marketing (1) zDifferent Management Orientations in the Global Arena – EPRG Framework Regiocentric Ethnocentric Geocentric Polycentric

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 16 Management Orientation and Global Marketing (2) zEthnocentric Orientation: yCharacteristic for domestic and international companies yMarketing opportunities outside the home market are pursued by extending various elements of the marketing mix zPolycentric Orientation yCharacteristic for multinational companies yMarketing mix is adapted by autonomous country managers

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 17 Management Orientation and Global Marketing (3) zRegiocentric or Geocentric Orientation: yCharacteristic for global and transnational companies yMarketing opportunities are pursued by both, extension and adaptation strategies in global markets

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 18 Factors Supporting or Inhibiting Global Integration (1) zDriving Forces yTechnology yRegional Economic Agreements yMarket Needs and Wants yTransportation and Communication Improvements yProduct Development Costs yQuality yWorld Economic Trends yLeverage

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 19 Factors Supporting or Inhibiting Global Integration (2) zRestraining Forces yManagement Myopia yEthnocentric Organization Culture yNational Controls

Keegan/Schlegelmilch Global Marketing Management: A European Perspective Chapter 1/ 20 Summary zGlobal marketing is the process of focusing resources on global marketing opportunities zGoal, to create customer value and competitive advantage by maintaining focus zThree classifications of management orientation: ethnocentric, polycentric, regiocentric, geocentric zGlobal marketing importance is shaped by a variety of driving and restraining forces