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CHAPTER
10
Global
Marketing
Strategy
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-1
GLOBAL MARKETING STRATEGY
 World trade is driven by:
• Global competition among…
• Global organizations for…
• Global consumers
 Global marketing involves the performance
of activities designed to plan, price,
promote, and direct the flow of an
organization’s offerings in more than
one country for a profit
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-2
GLOBAL MARKETING STRATEGY
Global marketing involves two
related strategic decisions:
Where to
Compete
How to
Compete
• Is global marketing right for the firm?
• Which countries/markets should be pursued?
• What mode? Different options for entering
and competing in a foreign market.
• What means? Choice regarding market
targeting and the marketing mix within and
between countries.
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-3
CHAPTER 10: GLOBAL MARKETING
STRATEGY
THE DECISION
TO GO GLOBAL
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-4
THE DECISION TO GO GLOBAL:
REASONS
 Gain access to new buyers:
• Potential for increased revenues, profits, and
long-term growth
• Attractive if home country’s markets are mature
 Spread business risk across a wider market base
 Capitalize on an firm’s distinctive competencies
and capabilities
 Lower costs and achieve operating efficiencies,
thereby enhancing a firm’s competitiveness
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-5
CHAPTER 10: GLOBAL MARKETING
STRATEGY
IDENTIFYING
GLOBAL MARKETING
OPPORTUNITIES
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-6
IDENTIFYING GLOBAL MARKETING
OPPORTUNITIES
The process for identifying global
marketing opportunities involves:
Developing Country
Screening Criteria
Assessing Market
Attractiveness
• Establishing and prioritizing country
screening criteria
• Gathering, summarizing, and
interpreting data pertaining to the
screening criteria for each country
• Classifying countries based on
screening criteria
• Comparing countries based on the firm’s
marketing competencies/practices
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-7
IDENTIFYING GLOBAL MARKETING
OPPORTUNITIES
Developing Country Screening Criteria
Quantitative
Criteria
• Market and profit potential (chain ratio)
• Variables: demographics and usage
• Sociocultural factors that underlie behaviors
Qualitative
Criteria
• Country income and technological infrastructure
• Trade regulations or free-trade zones
• Strength of competitors (local & foreign)
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-8
IDENTIFYING GLOBAL MARKETING
OPPORTUNITIES
Assessing Market Attractiveness
 Depends on the firm’s characteristics:
• Strengths and weaknesses
• Offerings
• Marketing policies and practices
• Financial resources
 Marketing adaptations increase as the
differences between the firm’s home
country and foreign markets increase
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-9
CHAPTER 10: GLOBAL MARKETING
STRATEGY
ENTERING AND
COMPETING IN
FOREIGN MARKETS
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-10
EXHIBIT 10.2: FOUR GENERAL MODES
OF ENTRY INTO FOREIGN MARKETS
Exporting
Licensing
Joint
Venture
Direct
Investment
Increasing financial commitment, risk,
marketing control, and profit potential
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-11
ENTERING AND COMPETING IN
FOREIGN MARKETS
Exporting
 Involves producing offerings in one country
and selling them in another country
 Requires the least number of changes in
its offering, organization, and marketing
practices
 Can either be:
Indirect
Exporting
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Direct
Exporting
Slide 10-12
ENTERING AND COMPETING IN
FOREIGN MARKETS
Exporting
Indirect Exporting
A firm uses an intermediary to sell its domestic
offerings in a foreign country
 Has the least financial commitment and risk
 Returns the least profit
 May be a distributor with the expertise and
resources
 Is ideal for a firm with no foreign business contacts
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-13
ENTERING AND COMPETING IN
FOREIGN MARKETS
Exporting
Direct Exporting
A firm sells its domestic offerings in a foreign
country without an intermediary
 Used when sales volume is large enough and
easy to obtain
 Involves more risk
 Can obtain more profits
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-14
ENTERING AND COMPETING IN
FOREIGN MARKETS
Licensing
Is a contract where a firm (licensee)
is given the rights to intellectual
property (patents, trademarks, trade
secrets, etc.) by the owner (licensor)
in turn for a royalty or fee.
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-15
ENTERING AND COMPETING IN
FOREIGN MARKETS
Licensing Variations
Contract
Manufacturing
Contract
Assembly
Franchising
• A domestic firm contracts with a foreign firm
to manufacture its offerings
• The offering is then sold in the foreign country
and/or exported back to the domestic country
A domestic firm contracts with a foreign firm to
assemble parts and components of its offerings
that were shipped to the foreign country
Includes soft drink, hospitality, retailing,
fast food, car rental, and other consumer or
business services
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-16
ENTERING AND COMPETING IN
FOREIGN MARKETS
Joint Venture
 Occurs when a foreign and a local company invest
together to create a new entity in the host country
 Allows the two firms share ownership, control, and
profits of the entity
 Is popular because one firm may not have the
required resources to enter a market alone
 May be trade barriers for other entry options
 Is difficult to manage: Choice of a partner and
quality of the relationship
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-17
ENTERING AND COMPETING IN
FOREIGN MARKETS
Direct Investment
 Involves a domestic firm investing in and
owning a foreign subsidiary or division
 Is the most risky and requires the most
commitment
 Often follows the other three options
 Allows the firm to better understand local
market conditions (customers, environment)
 May have fewer local host country restrictions
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-18
CHAPTER 10: GLOBAL MARKETING
STRATEGY
CRAFTING A GLOBAL
MARKETING STRATEGY
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-19
CRAFTING A GLOBAL MARKETING
STRATEGY
“The art of global marketing
is to standardize marketing
strategies whenever possible
and customize them wherever
necessary.”
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-20
CRAFTING A GLOBAL MARKETING
STRATEGY
Global Market Segmentation and Targeting
Involves dividing the globe or large regions of
the world into distinct market segments that:
 Behave in the same way
 Have similar needs and preferences
 Certain global market segments purchase like
offerings regardless of geographic location
• Middle income
• Youth
© 2010 Pearson Education, Inc. publishing as Prentice Hall
• Elite
Slide 10-21
CRAFTING A GLOBAL MARKETING
STRATEGY
Market Segmentation Variables
Consumer
Socioeconomic
Behavioral
Psychographic
Industrial Buyers
• Demographic
• Firm size
• Geographic
• Geographic
• Benefits sought
• Purchasing goals
• Usage
• Benefits sought
• Lifestyle
• Attitudes
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-22
EXHIBIT 10.3: FIVE GLOBAL OFFERING
AND COMMMUNICATION STRATEGIES
Communication Message
Offering Emphasis
Same
Communication
Same
Offering
Adapt
Offering
Offering
Extension
Strategy
Offering
Adaptation
Strategy
Create New
Offering
Offering
Invention
Strategy
Adapt
Communication
Communication
Adaptation
Strategy
Dual
Adaptation
Strategy
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-23
CRAFTING A GLOBAL MARKETING
STRATEGY
Offering and Communication Strategies
An offering may be sold globally in 1 of 3 ways:
Offering
Extension
Offering
Adaptation
Offering
Invention
• Selling the same offering in other countries
• Works best when the offering’s target market
is alike across countries and cultures
Changing an offering in some way to match
a country’s climate or consumer preferences
Inventing new offerings to satisfy common
needs across countries
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-24
CRAFTING A GLOBAL MARKETING
STRATEGY
Marketing Channel and Pricing Strategies
 Standardization of marketing channel
and pricing strategies is a challenge due
to trade regulations and consumer buying
preferences and practices of the various
countries
 Competitive, political, tax, exchange rates,
and legal constraints affect the pricing
latitude and strategy of global marketers
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-25
CRAFTING A GLOBAL MARKETING
STRATEGY
Global Brands and Positioning
A global brand is a brand marketed
under the same name in multiple
countries with similar and centrally
coordinated marketing programs,
including positioning.
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-26
CRAFTING A GLOBAL MARKETING
STRATEGY
Global Brands and Positioning
Successful Characteristics of a Global Brand
1. High-technology products with strong
functional images
2. High-image products with strong associations
to fashionability, sensuality, wealth, or status
3. Services and business-to-business products
that emphasize corporate images in their global
marketing campaigns
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-27
CRAFTING A GLOBAL MARKETING
STRATEGY
Global Brands and Positioning
Successful Characteristics of a Global Brand
4. Retailers that sell to upper-class individuals
or specialize in a salient but unfulfilled need
5. Brands positioned primarily on the basis of
their country of origin
6. Products that do not need customization or
other special products to function properly
© 2010 Pearson Education, Inc. publishing as Prentice Hall
Slide 10-28