2. Chapter 1 Introduction to Global Marketing "Companies must learn to operate as if the world were one large market – ignoring superficial regional and national differences" Theodore Levitt

3. chapter Learning Objectives 1 1 1. Global Marketing Vs. Regular Marketing (p4) 2. Globalization or Global Localization 3. Management orientations 4. Forces Affecting Global Integration and Global marketing

4. 1. Global Marketing Vs. Regular Marketing(p4) 1. Global Marketing Vs. Regular Marketing (p4) Scope of activities are outside the home-country market

5. Global vs. “Regular” Marketing p4  A market development strategy;  A diversification strategy Product/Market Growth Matrix

6. Global Marketing: What it is and What it isn ’ t p8, p9 Single Country Marketing Strategy Target Market Strategy Marketing Mix  Product  Price  Promotion  Place Global Marketing Strategy Global Market Participation Global Market Marketing Mix Development  4 P’s: Adapt or Standardize? (p9 Nike, read) Concentration of Marketing Activities Coordination of Marketing Activities Integration of Competitive Moves Marketing Strategy involves two major activities: (i) (i) Selecting a target market and determining the desired positioning of product in target customers’ minds (ii) (ii) specifying the plan for the marketing activities to achieve the desired positioning.

7. Global markets:  The idea that regional and/or world markets are converging 趋同, allowing for a more standardized marketing strategy. The products can satisfy not only the customers at home but also the customers abroad, that means there is a global market for the products.

8. Standardization vs. localization-adaptation Concentration/Coordination 集中与协调 Integration of the Firm's Value Chain (car making)  Market entry:  STP: segmenting, targeting, positioning  Standardization vs. localization-adaptation of 4ps 3 elements of Global Marketing Strategies

9. Global Marketing: What it is and What it isn ’ t However, companies that engage in global marketing do not necessarily conduct business in every one of the world’s 200-plus country markets. Global marketing does mean widening business horizons to encompass the world in scanning for opportunity and threat. 全球营销的确意味着在审 视机会和风险时扩展商业 视野，以求包容全世界。  Task ( the extents)= extension+ adaptation  Task = standardization+ localization

10. Globalization vs. Localization “Globalization is the inexorable integration of markets, nation-states and technologies to a degree never witnessed before---in a way that is enabling individuals, corporations and nation- states to reach around the world father, faster, deeper and cheaper than ever before. Thomas Friedman 全球化是一个无情的 整合各个市场、国家 和技术的过程，将会 达到世人从未见过的 集成高度。从某种程 度上讲，它能使个人、 公司和国家走向世界， 而之前从未走得那么 远、那么块、那么深， 还那么廉价。 p5 Example  20-year-old Chinese student logs on to a American web site, orders the latest CD recorded by Madonna, and pays for it in (RMB), using a Chinese credit card issued by her local bank (ICBC).

11. Globalization or Global Localization? Global Standardization  Developing standardized products marketed worldwide with a standardized marketing mix  Essence 实质 of mass marketing 大众营销  Benefits Global localization ( Adaptation)  Mixing standardization and customization in a way that minimizes costs while maximizing satisfaction  Essence of segmentation 市场细分  Think globally, act locally

12. Standardization vs. localization-adaptation  Standardization benefits include Economies of scale Lowered costs Uniform products Shorter learning curve  Localization is preferred: Different customer preferences Different performance requirements and standards across countries Different cultural perceptions

13. Global Marketing Standardization World markets are becoming more alike Standardized products can be sold the same way worldwide Successful companies may vary products for global markets

14. Companies with Standardized Strategies

15. Standarization versus Adaptation Arabic Read right to left Chinese “delicious/happiness The Faces of Coca-Cola Around the World

16. McDonald ’ s Global Marketing Marketing Mix Element StandardizationLocalized Product Promotion Place Price Big Mac Brand name Advertising Slogan “I’m Loving It” Free-standing Big Mac is $3.10 in U.S. and Turkey McAloo Tikka potato burger (India) Slang ”Macca’s (Australia) MakDo (Philippines) McJoy magazine, “Hawaii Surfing Hula” promotion (Japan) Home delivery (India) Swiss rail system dining cars $5.21 (Switzerland) $1.31(China)

17. The Importance of Going Global For U.S, companies, 70% of total world market for goods and services is outside the country  Coca-Cola earns 75% of operating income and 2/3 of profit outside of North America For Japanese companies, 90% of world market is outside the country 94% of market potential is outside of Germany for its companies

18. Where in the World? p15 How does a company decide which markets to enter?  Company resources  Managerial mind-set 心态，思想倾向  Nature of opportunities and threats in that market

19. 4 approaches/orientations by which a firm is managed in foreign markets 1. Ethnocentric- a focus on the home market 2. Polycentric – approach global markets with discrete 分立的 strategies 3. Regiocentric – strategies target entire regions 4. Geocentric – the world is one market The EPRG Framework p15

20. Management orientations (world view, global insights) Ethnocentric: home country is superior, sees similarities in foreign countries 母国中心导向 Polycentric: each host country is unique, sees differences in foreign countries 多国中心导向 Regiocentric: sees similarities and differences in a region; is ethnocentric or polycentric in its view of the rest of the world. 地区中心导向 Geocentric: world view, sees similarities and differences in home and host countries. 全球中 心导向

21. Management Orientations Ethnocentric Orientation  Home country is superior to others  Sees only similarities in other countries  Assumes products and practices that succeed at home will be successful everywhere  Leads to a standardized or extension approach

22. Management Orientations Polycentric Orientation  Each country is unique  Each subsidiary develops its own unique business and marketing strategies  Often referred to as multinational  Leads to a localized or adaptation approach that assumes products must be adapted to local market conditions

23. Management Orientations Regiocentric Orientation  A region is the relevant geographic unit Ex: The NAFTA or European Union market  Some companies serve markets throughout the world but on a regional basis Ex: General Motors had four regions for decades

24. Management Orientations Geocentric Orientation  Entire world is a potential market  Strives for integrated global strategies  Also known as a global or transnational company  Retains an association with the headquarters country  Pursues serving world markets from a single country or sources globally to focus on select country markets  Leads to a combination of extension and adaptation elements

25. 1-24

26. Forces p19 4. Forces affecting global integration and global marketing: Page 13 Driving forces Global integration and global marketing Restraini ng forces

27. Forces Affecting Global Integration and Global Marketing Driving Forces (internal, external drivers)  Regional economic agreements  Market needs and wants  Technology  Transportation and communication improvements  Product development costs  Quality  World economic trends  Leverage Restraining Forces (internal, external restrainers)  Management myopia  Organizational culture  National controls  Opposition to Globalization

28. 1-27 STP MKT Entry MKTG Mix

29. The chapter addresses what is meant by global marketing and global marketing strategy and how it may be implemented Global firms must plan globally while acting locally. Globalization is a process of interaction and integration driven by international trade The EPRG affects a company’s response to the global opportunities The driving and restraining forces affect global integration and global marketing Any question?