1. Global Marketing Management Warren J. Keegan Chapter 1 Introduction to Global Marketing

2. Keegan: Global Marketing ManagementChapter 1/ 2 Overview zMarketing: A Universal Discipline zThe Three Principles of Marketing zGlobal Marketing:What It Is & What It Is Not zImportance of Global Marketing zManagement Orientation & Global Marketing zDriving and Restraining Forces Affecting Global Integration & Global Marketing zSummary

3. Keegan: Global Marketing ManagementChapter 1/ 3 Learning Objectives zUnderstand how the world economy developed over the past decades zKnow the impact of globalization on the marketing discipline zLearn about the interdependencies between management orientation & marketing performance zUnderstand the factors supporting or inhibiting international marketing activities

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

5. Keegan: Global Marketing ManagementChapter 1/ 5 The Marketing Concept (1) zConcept has chanced dramatically z1950’s: Focus on products z1960’s: yFocus on customer orientation yDevelopment of marketing mix: product, price, place, promotion (4P’s)

6. Keegan: Global Marketing ManagementChapter 1/ 6 The Marketing Concept (2) z1990’s: yFocus on customer in the context of the broader external environment xCompetition, government policy & regulation yFocus on stakeholder value xemployees, customers, shareholders, society

7. Keegan: Global Marketing ManagementChapter 1/ 7 The Marketing Concept (3) zToday: yTwo key tasks of marketing xFocus on customer & his/her environment xCreate value for consumers & 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

8. Keegan: Global Marketing ManagementChapter 1/ 8 The Three Principles of Marketing CUSTOMER VALUE DIFFERENTIATIONFOCUS

9. Keegan: Global Marketing ManagementChapter 1/ 9 Key Elements of Marketing – 1. Customer Value zGoal: create customer 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

10. Keegan: Global Marketing ManagementChapter 1/ 10 Elements of Marketing – Customer Value V = Value B = Perceived Benefits – Perceived Costs P = Price V = B / P

11. Keegan: Global Marketing ManagementChapter 1/ 11 Key Elements of Marketing – 2. Differentiation zGoal: create competitive advantage through differentiation zAdvantage can exist in any element of a company’s offer zOne way to penetrate a new national market is to offer a superior product at a lower price.

12. Keegan: Global Marketing ManagementChapter 1/ 12 Key Elements of Marketing – 3. Focus zGoal: a concentration of attention & resources zRequirement to create customer value at a competitive advantage zA viable way for small & medium sized companies to achieve dominant position in world market zA clear focus on customer needs & wants

13. Keegan: Global Marketing ManagementChapter 1/ 13 Global Marketing zMarketing discipline is universal but markets & customers are quite different z3 domains of knowledge yCross-Cultural Knowledge yCountry/ Regional Knowledge yCross-Border Transactions Knowledge zNeed for “Global Localization”: Adjustment of global marketing strategies to local requirements

14. Keegan: Global Marketing ManagementChapter 1/ 14 Product Design Canon/photocopier/McDonalds/Toyota/Ford Brand NameMarlboro/Coke/Pepsi/Mercedes/Caterpillar Product Positioning Colgate toothpaste/Unilever fabric softener PackagingGillette razors Advertising Strategy Coca-cola/British Airways/Benetton Sales Promotion IBM DistributionBenetton/United Distillers Customer Service American Express/Hertz Examples of Global Marketing

15. Keegan: Global Marketing ManagementChapter 1/ 15 Importance of Global Marketing zInternational arena is of great importance to companies maximizing growth potential z75% of market potential is outside the US z94% of market potential for German companies is outside of Germany zA large number of industries will be dominated by a handful of global companies

16. Keegan: Global Marketing ManagementChapter 1/ 16 Management Orientation and Global Marketing (1) zDifferent Management Orientations in the Global Arena – EPRG Framework Regiocentric Ethnocentric Geocentric Polycentric

17. Keegan: Global Marketing ManagementChapter 1/ 17 Management Orientation & Global Marketing (2) zEthnocentric Orientation: yCharacteristic of domestic & international companies yOpportunities outside the home market are pursued by extending various elements of the marketing mix zPolycentric Orientation yCharacteristic of multinational companies yMarketing mix is adapted by autonomous country managers

18. Keegan: Global Marketing ManagementChapter 1/ 18 Management Orientation & Global Marketing (3) zRegiocentric or Geocentric Orientation: yCharacteristic of global & transnational companies yMarketing opportunities are pursued by both extension & adaptation strategies in global markets

19. Keegan: Global Marketing ManagementChapter 1/ 19 Driving Forces Affecting Global Marketing yTechnology yRegional Economic Agreements yMarket Needs & Wants yTransportation & Communication Improvements yProduct Development Costs yQuality yWorld Economic Trends yLeverage yThe Global/ Transnational Corporation

20. Keegan: Global Marketing ManagementChapter 1/ 20 Restraining Forces Affecting Global Marketing yManagement Myopia & Organizational Culture yNational Controls & Barriers

21. Keegan: Global Marketing ManagementChapter 1/ 21 Summary zGlobal marketing is the process of focusing resources on global marketing opportunities zGoal, to create customer value & competitive advantage by maintaining focus zThree classifications of management orientation: ethnocentric, polycentric, regiocentric, geocentric zGlobal marketing importance is shaped by a variety of driving & restraining forces