Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc.1 Global Marketing Management, 4e Chapter 8 Global Marketing Strategies

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc.2 Chapter Overview 1.Information Technology and Global Competition 2. Global Strategy 3. Global Marketing Strategy 4. Regionalization of Global Marketing Strategy 5. Competitive Analysis

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc.3Introduction  On a political map, country borders are clear as ever. But on a competitive map, financial, trading, and industrial activities across national boundaries have rendered those political borders increasingly irrelevant.  Not only firms that compete internationally but also those whose primary market is considered domestic will be affected by competition from around the world.

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc.4 1.Information Technology and Global Competition  Today, we are observing the emergence of a gross information product, and it dwarfs the gross domestic product.  Electronic Commerce (E-Commerce)  Real-Time Management  Online Communications  E-Company  Faster Product Diffusion  Global Citizenship

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc.5 2. Global Strategy  Global Industry: –Those industries where a firm’s competitive position in one country is affected by its position in other countries. –The first question that faces managers is the extent of globalization of their industry. –Every industry has global or potentially global aspects.

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc.6 2. Global Strategy  Industry Globalization Drivers (see Exhibit 8-1): –Market Drivers 1. Common customer needs 2. Global customers and channels 3. Transferable marketing 4. Lead countries

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc.7 2. Global Strategy

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc.8 2. Global Strategy –Cost Drivers 1. Global economies of scale and scope 2. Steep experience curve 3. Global sourcing efficiencies 4. Favorable logistics 5. Difference in country costs 6. High product development costs 7. Fast-changing technology 8. Shorter product life cycles

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc.9 2. Global Strategy –Government Drivers 1. Favorable trade policies 2. Compatible technical standards 3. World Trading Regulations 4. High growth/low labor cost developing countries 5. Deregulation/privatization of industries –Competitive Drivers 1.High exports and imports 2.Competitors from different continents and countries 3.Interdependent countries 4.Globalized competitors

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc Global Strategy  Competitive Structure –Cost leadership –Product differentiation –Niche strategy –Nature of Competitive Industry Structure (see Exhibit 8-2): »Industry competitors »Potential entrants »Bargaining power of suppliers »Bargaining power of buyers »Threats of substitute products or services

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc Global Strategy

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc Global Strategy  Gaining Competitive Advantage –Creative destruction –First-Mover Advantage vs. F-M Disadvantage –Competitor-focused Approach –Customer-focused Approach

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc Global Strategy  Interdependency: –Interdependency of modern companies –Example: Global computer industry –Governments also play a larger role, affecting parts of the firm’s strategy.

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc Global Marketing Strategy  Benefits of Global Marketing: –Cost Reduction –Improved Products and Program Effectiveness –Enhanced Customer Preference –Increased Competitive Advantage  Limits to Global Marketing: –Standardization vs. adaptation issues –Globalization vs. localization –Global integration vs. local responsiveness –Scale vs. sensitivity

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc Global Marketing Strategy

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc Global Marketing Strategy

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc Regionalization of Global Marketing Strategy  Regional strategies are the cross-subsidization of market share battles in pursuit of regional production, branding, and distribution advantages. –Issues in regionalization of global marketing strategy:  Cross-Subsidization of Markets  Identification of Weak Market Segments  Use of “Lead Market” Concept  Marketing Strategies for Emerging Markets

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc Competitive Analysis  SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis (see Exhibit 8-5) –A SWOT analysis divides the information into two main categories: internal and external factors. –Based on SWOT analysis, marketing executives can construct alternative strategies. –The aim of any SWOT analysis should be to isolate the key issues that will be important to the future of the firm and that will be addressed by subsequent marketing strategy.

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc Competitive Analysis 5. Competitive Analysis