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BBA, II Sem
PRINCIPLES OF MARKETING II
Module-5
What is Globalization?
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Globalization (or globalization) is the process of international integration arising from the
interchange of world views, products, ideas and other aspects of culture.
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It involves the firms in making one or more marketing mix decisions across national borders.
Companies like Coca cola, GE, IBM, Siemens, Ford, Boeing, Toyota, Sony and several other firms have
made the world their market
Features
1. It means free access to the markets in the world without any physical (quota) or fiscal (tariff) or
any other governments) restriction. Hence, global consumers emerge demanding high quality
products and more value for their money without any restrictions like parochial, regional or national
consideration.
2. Globally standardized products need be marketed ail over the world. There are already many such
products having world market. It includes the "lead" products in a region taking care of dominant
needs of that region.
3. Globalization requires resources like raw materials, finance and technology. Free access to quality
raw materials, latest technology and cheap finance are important characteristics of this process at
less cost.
4. In globalization. Free mobility of managerial personnel and entrepreneurs result into mergers,
takeovers and structural regrouping in countries across the globe.
Major International Marketing Decisions
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Looking at the global marketing environment.
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Deciding whether to go global.
 Global competitors might attack the company’s home market by offering better
products or lower prices.
 Counterattack these competitors in their home markets to tie up their resources.
 Co’s customer might be expanding abroad and require international servicing.
 Co’s home market might be stagnating and foreign markets may present additional sales
and profit opportunities.
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Deciding which markets to enter.
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Company should define its international marketing objectives and policies.
Volume of foreign sales it wants.
How many countries it wishes to market.
Must decide on types of countries to enter.
The international markets must then be evaluated.
Deciding how to enter the market.
 Exporting- Entering a foreign market by selling goods produced in the company’s home
country, often with little modification.
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Indirect Exporting- working through independent international marketing intermediaries. Less
investment and less risk
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Direct Exporting- where they handle their own exports. Investment and risk is greater and so is
the potential return.
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Deciding on the global marketing program.
 Co’s operating in one or more foreign markets must decide how much to adapt their
marketing strategies and programs to local conditions
 Standardized global marketing- using largely the same marketing strategy approaches
and marketing mix worldwide.
 Adapted Global Marketing- The producer adjusts the marketing strategy and mix
elements to each target market, bearing more costs but hoping for a larger market
share and return
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Deciding on the global marketing organization.
Direct Investment- Entering a foreign market by developing foreign-based assembly or manufacturing
activities.
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Assembly facilities
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Manufacturing facilities
Joint Venturing- Entering foreign markets by joining with foreign companies to produce or market a
product or service. Contracting, JV is of four types:
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licensing
contract manufacturing
management contracting
joint ownership.
Challenges of Globalisation
 Exchange of Currencies
 Transport
 Time lag
 Language
 Lack of Direct Contact
 Unstable governments
 Restrictive government policies and regulations
PRODUCT
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Straight Product Extension- Marketing a product in a foreign market without any change. e.g.
Kellogg cereals, Gillette razor.
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Product Adaptation- Adapting a product to meet local conditions or wants in foreign markets.
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Product invention- Creating new products or services for foreign markets
PROMOTION
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Companies can either adopt the same communication strategy they use in the home market or
change it for each local market.
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Communication adaptation- A global communication strategy of fully adapting advertising
messages to local markets
PRICE
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Companies may face many consideration in setting their international prices.
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Foreign prices will be higher than their domestic prices for comparable products.
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When selling to less affluent consumers in developing countries, many cos make smaller
versions of their products that can be sold at lower prices.
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Dumping- when a company either charges less than its costs or less than it charges in its home
market.
Distribution channels
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Whole channel view- Designing international channels that take into account the entire global
supply chain and marketing channel, forging an effective global value delivery network.
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Two major links between the seller and the final buyer-
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Channels between nations- moves co. products from points of production to the borders of
countries within which they are sold.
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Channels within nations- moves the products from their market entry points to the final
consumers.
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The whole channel view takes in to account the entire global supply chain and marketing
channel. It recognizes that to compete well internationally, the company must effectively design
and manage an entire global value delivery network.