1. Global Marketing

2. 1. Definitions of Global Marketing1. Individuals and organizations using a global vision to effectively market goods and services across national bounaries. — Lamb, Hair & Lamb The activities to plan, price, guide, and make profit in the process of goods or services flowing to the consumers or clients in more than one country. – Cateora & Graham Global localization: Think globally and act locally.

3. 2. Internationalization Process No Export Export via AgentsSales SubsidiariesProduction Abroad

4. 2.1 Different Stages for Global Marketing Domestic Marketing Exporting Marketing International Marketing Multinational Marketing Global Marketing

5. 2.2 Management Orientation and Global Marketing Different Management Orientations in the Global Arena – EPRG Framework Regiocentric Ethnocentric Geocentric Polycentric

6. 2.2.1 Global Orientation

7. 2.2.2 Ethnocentric & Polycentric Orientation Ethnocentric Orientation: Characteristic for domestic and international companies Marketing opportunities outside the home market are pursued by extending various elements of the marketing mix Polycentric Orientation Characteristic for multinational companies Marketing mix is adapted by autonomous country managers

8. 2.2.3 Regiocentric or Geocentric Orientation Regiocentric or Geocentric Orientation: Characteristic for global and transnational companies Marketing opportunities are pursued by both, extension and adaptation strategies in global markets

9. 3. Major Decisions in Int ’ l Marketing Deciding whether to go abroad Deciding which markets to enter Deciding how to enter the market Deciding on the marketing program Deciding on the marketing organization

10. 3.1 Motives for Global Marketing Saturated Domestic Market Attractiveness in Global Market Policy favoring global marketing Deregulation in foreign market Development of modern technology

11. 3.2 Challenges in Going Global Shifting borders Unstable governments Foreign-exchange Corruption Technological pirating

12. 3.3 Criteria for Entry Market Attractiveness Risk Competitive Advantage

13. 3.4 Relevant Dimensions of the Global Marketing Environment

14. 3.4.1 Economic Environments The World Economy – An Overview Economic Systems Stages of Market Development Income and Purchasing Power Parity Regionalisation of Markets

15. 3.4.1.1 World Economy-Overview World Economy has changed profoundly during the last 50 years Emergence of global markets Integration of world economy Capital movements are driving force of world economy Production is “uncoupled” from employment Macroeconomics of individual countries no longer control economic outcomes

16. 3.4.1.2 Economic System Three types of economic systems Capitalist Socialist Mixed Classification based on dominant method of resource allocation Market allocation Command or central plan allocation Mixed allocation

17. 3.4.1.3 Stages of Market Development Global country markets are at different stages of development GNP per capita provides a useful way of grouping countries into 5 categories, including: ---- High Income: GNP per capita above € 7,960, “Post- Industrial Countries”, such as Japan, Sweden; ---- Upper Middle Income: GNP per capita between € 2,575 and € 7,960, Malaysia; ---- Lower Middle Income: GNP per capita between € 650 and € 2,575, Indonesia; ---- Low Income: GNP per capita less than € 650, Bangladesh Categories are a useful basis for Global segmentation Target marketing

18. 3.4.1.4 Income and Purchasing Power Income Single most important indicator of market potential Purchasing Power Parities Comparison of goods and services that can be bought with local currency in different countries Gross National Product (GNP) Sum of the money values of all final goods and services produced during a year

19. 3.4.1.5 Regionalisation of Markets Many different forms of economic co-operation between countries Free trade areas Customs unions World Trade Organisation (WTO) Acts as mediator in global trade disputes Ensures that trade flows are as smooth, predictable and as free as possible

20. 3.4.2. Social and Cultural Environments Culture as “ways of living” Conscious and unconscious values, ideas, attitudes, and symbols that shape human behaviour Culture is learned, not innate Culture defines the boundaries between different groups All facets of culture are interrelated

21. 3.4.3. Political, Legal, And Regulatory Environments zPolitical environment is influenced by governmental institutions, political parties, and organisations. Risk assessment is crucial. zLegal environment consists of laws, courts, attorneys, and legal customs and practices. Countries follow either common-law system or code-law system. zRegulators environment consists of agencies, governmental and non-governmental, that enforce laws or set guidelines for conducting businesses.

22. 3.4.4. Information Technology Environment IT-Environment : E-Commerce; Extranet;Internet; Portals; Web Browser; World Wide Web; Virtual Reality; EDI (electronic data exchange) How the rapid advances in ICT affect:: additional distribution and communication channels (e- commerce) precise targeting (segment of one), customisation and interaction fundamentally new business models (network organisations) empowered customers

23. Direct invest- ment Joint ventures Licensing 4. Five Models of Entry Into Foreign Markets Direct exporting Indirect Exporting Amount of commitment, risk, control, and profit potential

24. 4.1 Joint Venture Licensing: Sell rights to name brand. Contract Manufacturing: make item in host country; manufacturer of product only. Management Contracting: hired as Mgmt. Consultant to host company Joint Ownership: truly partnering with a company in host country, to share expertise and mutual gains.

25. 5. Five International Product and Promotion Strategies Dual adaptation PromotionProduct Product adaptationAdaptproduct Straight extension Do not change product promotion Communi- cation adaptation Adaptpromotion Develop new product Product invention

26. 5.1 Pricing Challenges >Price Escalation >Dumping charges >Gray markets >Transfer prices

27. 5.2 Whole-channel Concept for Int ’ l Marketing Seller Seller’s international marketing headquarters Channels between nations Channels within foreign nations Final buyers

28. 6. Marketing Organization Export Department International Division Global Organization

29. 6.1 Organization The goal in organising for global marketing is to find a structure that enables the company to respond to relevant market environment differences No single correct organisational structure Leading-edge global competitors ’ corporate structure is simple and flat, rather than tall and complex Simple structures increase the speed and clarity of communication allow the concentration of organisational energy and valuable resources on learning, rather than on controlling, monitoring, and reporting

30. 6.2. Patterns of Int’l Organisational Development

31. 6.3 Patterns of Int’l Organisational Development

32. 6.4 International Division Structure II

33. 6.5 Regional Management Centres

34. 6.6 Geographic Structure

35. 6.7 Matrix Structure

36. Review Definitions of Global Marketing Different Stages for Global Marketing Major Decisions Before Going Global Global Marketing Environments Selecting Foreign Markets Foreign Market Entry Management & Organization of Global Activities