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Chapter 13
Global Marketing
Key Terms
Cultural Misunderstanding, Political Uncertainty, Import
Restrictions, Exchange Controls and Ownership Restrictions,
Economic Conditions, Global Company, Multidomestic Company,
Market Factors, Economic Factors, Environmental Factors,
Competitive Factors, Structure, Management Processes,
Culture, People, Language, Data Content, Timeliness,
Availability, Exporting, Licensing, Franchising, Joint Ventures,
Strategic Alliances, Direct Ownership
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Global Marketing Goals
 Offensive goals
 Increase long term growth and profit prospects
 Maximize total sales revenue
 Take advantage of economies of scale
 Improve overall market position
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Global Marketing Goals
 Defensive goals
 To compete with foreign companies on their own turf
 Gain access to technological innovations in other
countries
 Take advantage of differences in operating costs
 Preempt competitors’ global moves
 Avoid being locked out of future markets by arriving
too late
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The Competitive Advantage of
Nations
 Porter's diamond presents four factors that
determine the competitive advantage of
disadvantage of a nation
 Factor conditions
 Demand conditions
 Related and supporting industries
 Company strategy, structure, and rivalry
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Porter’s Diamond of National
Advantage
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Global Marketing Issues
 Cultural Misunderstanding
 Managers tend to use their own cultural values and
priorities as a frame of reference
 Political Uncertainty
 Government instability
 Social unrest
 Armed conflict
 Import Restrictions
 Tariffs, quotas, and other types of restrictions hinder
global business
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Global Marketing Issues
 Exchange Controls and Ownership Restrictions
 Established by nations experiencing BOP problems
 Economic Conditions
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Organizing the Multinational
Company
 Multidomestic company – Pursues different strategies
in each of its foreign markets
 The global company – Views the world as one market
and pits its resources against competition in an
integrated fashion
 Three alternative structures
 Worldwide product divisions
 Divisions responsible for all products sold within a
geographic region
 A matrix system – A combination of both these
arrangements
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Factors Fostering Global Strategy
 External Factors
 Market Factors – Degree of homogeneous market needs,
transferable brands, and the ability to globalize
distribution channels
 Economic Factors – Worldwide economies of scale,
learning curves, global resourcing, etc.
 Environmental Factors – Communications ability,
favorable governmental policies, etc.
 Competitive Factors – Global moves by competitors,
preemptive strikes
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Factors Fostering Global Strategy
 Internal Factors
 Structure – Ease of installing a centralized global
authority
 Management processes – Capabilities and resources
available to perform operational functions on a global
scale
 Culture – Ability to project a global identity, increased
tolerance
 People – Availability of foreign nationals, frequent travel,
commitments to multicountry careers
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Ten Commandments of Global
Branding
 Understanding similarities and differences in the global
branding landscape
 Do not take short cuts in global branding
 Establish marketing infrastructure
 Embrace integrated marketing communications
 Establish brand partnerships
 Balance standardization and customization
 Balance global and local control
 Establish operable guidelines
 Implement a global brand equity measurement system
 Leverage brand elements
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Global Marketing Research
 Population characteristics – Managers should be
familiar with total population and the regional, urban,
rural, and interurban distribution
 Ability to buy – Four broad measures to be examined
 Gross national product or per capita national income
 Distribution of income
 Rate of growth in buying power
 Extent of available financing
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Global Marketing Research
 Willingness to buy – Cultural framework of consumer
motives and behavior is integral to the understanding
of foreign customer
 Differences in Research Tasks and Processes
 Language barriers
 Data content
 Timeliness
 Availability in the U.S.
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Global Product Strategy
 Global marketing research can help determine
whether there is an unsatisfied need
 For which a new product could be developed to serve
foreign market
 That could be met with an existing domestic product,
either as is or adapted to foreign market
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Global Distribution Strategy
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Global Pricing Strategy
 Pricing task is more complicated in foreign markets
because of problems associated with tariffs, laws, etc.
 Import duties are major constraints for global
marketers and are encountered in many markets
 Rigidity in price structures found in many foreign
markets also poses an issue
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Global Advertising and Sales
Promotion Strategy
 Language barriers
 Media are traditionally used
 Limited media available – Unable to reach out to target
audience
 Deciding on the type of agency – To prepare and
place the firm’s advertisement
 Sales promotion
 Used as a strategy for bypassing restrictions on
advertisements placed by some foreign governments
 Effective means for reaching people in rural locations
where media support for advertising is virtually
nonexistent
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Growth Strategies for Global
Marketing
 Exporting
 Licensing
 Franchising
 Joint ventures
 Strategic alliances
 Direct ownership
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Marketing Mix Standardization
 When markets are economically similar
 When worldwide customers, not countries, are the
basis for segmenting markets
 When customer behavior and lifestyles are similar
 When the product is culturally compatible across the
host country
 When a firm’s competitive position is similar in
different markets
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Marketing Mix Standardization
 When competing against the same competitors, with
similar market shares, in different countries, rather
than competing against purely local companies
 When the product is an organizational and hightechnology product rather than a consumer product
 When there are similarities in the physical, political,
and legal environments of home and host countries
 When the marketing infrastructure in the home and
host countries is similar
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