1. Global Marketing Management: Planning and Organization
Chapter 11
With their domestic market crowded with competitors, Yahoo!, Lycos, America Online (AOL), and others are rushing to establish their brands in Europe, Asia, and Latin America before local competitors can create dominant franchises of their own.
The top U.S. players face tough home-grown competitors, who often have a better sense of local culture and Internet styles. In many countries, the dominant telephone companies offer portals, giving them a big leg up because customers are automatically sent to their home pages when they log on. Germany’s leading portal, T-Online, is run by Deutsche Telekom. In France, No. 1 Wanadoo is operated by France Telecom.
U.S. portals risk being viewed as digital colonists trying to flex their muscles around the world, according to industry analysts. Many advise that American companies hoping to set up shop abroad are better served by forming partnerships with local companies that understand the culture.
This chapter discusses global marketing management, competition in the global marketplace, strategic planning, and alternative market-entry strategies. It also identifies the elements that contribute to an effective international or global organization.
Follow along with the slides (or open book) as we cover Chapter 10.

2. Global Perspective Global Gateways
Multinational companies
Confronted with increasing global competition for expanding markets
Changing their marketing strategies and altering their organizational structure
Nearly 75% of North American and European corporations are revamping their business processes
Smaller companies
More flexible
May enable them to reflect the demands of global markets and redefine programs more quickly

3. Global Marketing Management
1970s – “standardization versus adaptation”
1980s – “global integration versus local responsiveness”
1990s – “global integration versus local responsiveness”
2000s – “ Think global Act local”

4. The Planning Process Phase 1 – Preliminary analysis and screening
Matching Company and Country Needs.
Phase 2 – Adapting marketing mix to target markets
Phase 3 – Developing the marketing plan
Phase 4 – Implementation and control

5. International Planning Process
Exhibit 11.1
The process illustrated in Exhibit 11.1 offers a systematic guide to planning for the multinational firm operating in several countries.

6. Global Marketing Management
The trend back toward localization
Caused by the new efficiencies of customization
Made possible by the Internet
Increasingly flexible manufacturing processes
From the marketing perspective customization is always best
Global markets continue to homogenize and diversify simultaneously
Best companies will avoid trap of focusing on country as the primary segmentation variable

7. The Nestle Way – Evolution Not Revolution
Nestle – world’s biggest marketer of infant formula, powdered milk, instant coffee, chocolate, soups, and mineral water
Nestle strategy
Think and plan long term
Decentralize
Stick to what you know
Adapt to local tastes
Long-term strategy works for Nestle
Because the company relies on local ingredients
Markets products that consumers can afford

8. Benefits of Global Marketing
When large market segments can be identified
Economies of scale in production and marketing
Important competitive advantages for global companies
Transfer of experience and know-how
Across countries through improved coordination and integration of marketing activities
Marketing globally
Ensures that marketers have access to the toughest customers
Market diversity carries with it additional financial benefits
Firms are able to take advantage of changing financial circumstances

9. Planning for Global Markets
Planning is the job of making things happen that might not otherwise occur
Planning allows for:
Rapid growth of the international function
Changing markets
Increasing competition, and the
Turbulent challenges of different national markets

10. Planning for Global Markets
Planning is both a process and philosophy
Relates to the formulation of goals and methods of accomplishing them
Corporate planning
Strategic planning
Tactical planning
Company objectives and resources
Each new market requires
A complete evaluation, including existing commitments, relative to the parent company’s objectives and resources
Defining objectives clarifies the orientation of the domestic and international divisions, permitting consistent policies

11. Planning for Global Markets
International commitment
Commitment in terms of
Dollars to be invested
Personnel for managing the international organization
Determination to stay in the market long enough to realize a return in investments.
The degree of commitment to an international marketing cause reflects the extend to a company’s involvement

12. Alternative Market-Entry Strategies
An entry strategy into international market should reflect on analysis
Market characteristics
Potential sales
Strategic importance
Strengths of local resources
Cultural differences
Country restrictions
Company capabilities and characteristics
Degree of near-market knowledge
Marketing involvement
Management commitment

13. Alternative Market-Entry Strategies
Exhibit 11.2 .

14. Alternative Market-Entry Strategies
Companies most often begin with modest export involvement
A company has four different modes of foreign market entry
Exporting
Contractual agreements
Strategic alliances
Direct foreign investments

15. Exporting Exporting accounts for some 10% of global activity
Direct exporting – the company sells to a customer in another country
Indirect exporting – the company sells to a buyer (importer or distribution) in the home country, who in turn exports the product

16. Exporting The Internet Direct sales
Initially, Internet marketing focused on domestic sales
A surprisingly large number of companies started receiving orders from customers in other countries,
Resulting in the concept of international Internet marketing (IIM)
Direct sales
Particularly for high technology and big ticket industrial products

17. Contractual Agreement
Contractual agreements
Long-term,
Nonequity association between a company and another in a foreign market
Licensing
A means of establishing a foothold in foreign markets without large capital outlays
A favorite strategy for small and medium-sized companies
Legitimate means of capitalizing on intellectual property in a foreign market

18. Contractual Agreement
Franchising
Franchiser provides a standard package of products, systems, and management services
Franchise provides market knowledge, capital, and personal involvement in management
Expected to be the fastest-growing market-entry strategy
Two types of franchise agreements
Master franchise
Gives the franchisee the rights to a specific area with the authority to sell or establish subfranchises
Licensing

19. Strategic International Alliances
A strategic international alliance (SIA)
A business relationship established by two or more companies to cooperate out of mutual need
To share risk in achieving a common objective
SIAs are sought as a way to shore up weaknesses and increase competitive strengths
Firms enter SIAs for several reasons
Opportunities for rapid expansion into new markets
Access to new technology
More efficient production and innovation
Reduced marketing costs
Strategic competitive moves
Access to additional sources of products and capital

20. Building Strategic Alliances
Exhibit 11.3

21. Strategic International Alliances
Many companies entering SIAs
To be in strategic position to be competitive
To benefit from the expected growth in the single European market
International joint ventures (IJVs)
A partnership of two or more participating companies that have joined forces to create a separate legal entity
Four characteristics define joint ventures
JVs are established, separate, legal entities
The acknowledged intent by the partners to share in the management of the JV
There are partnerships between legally incorporated entities such as companies, chartered organizations, or governments, and not between individuals
Equity positions are held by each of the partners

22. Strategic International Alliances
Consortia
Similar to joint ventures and could be classified as such except for two unique characteristics
Typically involve a large number of participants
Frequently operate in a country or market in which none of the participants is currently active
Consortia are developed to pool financial and managerial resources and to lessen risks

23. Direct Foreign Investment
Factors that influence the structure and performance of direct investments
Timing
The growing complexity and contingencies of contracts
Transaction cost structures
Technology transfer
Degree of product differentiation
The previous experiences and cultural diversity of acquired firms
Advertising and reputation barriers

24. Organizing for Global Competition
Devising a standard organizational structure is difficult
Because organizations need to reflect a wide range of company-specific characteristics
Companies are usually structured around one of three alternatives
Global product divisions responsible for product sales throughout world
Geographical divisions responsible for all products and functions within a given geographical area
A matrix organization consisting of either of these arrangements
With centralized sales and marketing run by a centralized functional staff, or a combination of area operations and global product management

25. Schematic Marketing Organization Plan Combining Product, Geographic, and Functional Approaches
Exhibit 11.4

26. Locus of decision
Considerations of where decisions will be made, by whom, and by which method constitute a major element of organizational strategy
Corporate headquarters
International headquarters
Regional levels
National levels
Local levels
Tactical decisions normally should be made at lowest possible level

27. Centralized Versus Decentralized Organizations
Most organizational patterns of multinational firms fit into one of three categories
Centralized
Regionalized
Decentralized
No single traditional organizational plan is adequate for today’s global enterprise
Seeking to combine the economies of scale of a global company with the flexibility and marketing knowledge of a local company

28. Summary
To keep abreast of the competition and maintain a viable position for increasingly competitive markets, a global perspective is necessary
Cost containment, customer satisfaction, and a greater number of players mean that every opportunity to refine international business practices must be examined in light of company goals

29. Summary
Important avenues to global marketing that must be implemented in the planning and organization of global marketing management
Collaborative relationships
Strategic international alliances
Strategic planning
Alternative market-entry strategies