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MKT 3620
1-1
Name: Surej
P John
Office: MSM 3rd floor, Cabin# 01
Email: [email protected]
Website: http://surejpjohn.hpage.com/
CHAPTERS & TOPICS TO BE DISCUSSED
Chapter 1: Introduction to Global Marketing
Chapter 2: The Global Economic Environment
Chapter 3: Regional Market Characteristics and
Preferential Trade Agreements
Chapter 4: Social and Cultural Environments
Chapter 5: The Political, Legal and Regulatory
Environments
QUIZ I ***
(Chapter 1 – 5)
Chapter 7: Segmentation, Targeting, and
Positioning
Chapter 8: Importing, Exporting, and Sourcing
Chapter 9: Global Market Entry Strategies:
Licensing, Investment, and Strategic Alliances
Review for Midterm / Term Project Checking
(1st Half)
Midterm Examination ***
(Chapter 1 – 5, 7 – 9)
July 19th, 2011 at 12.00-14.00
Mark Allocations
Quizzes (2x5%)
10%
5%
10%
5%
Class Participation
Group Project
Group project presentation
30%
Midterm Examination
Comprehensive Final Examination
Total
Surej P John
40%
100%
4
Online resources
• Course syllabus, project
outline, power points
are all available in
www.lms.au.edu
• Enrollment key: MKT 30
• All students are
requested to register
online to make use of
the online resources.
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Surej P John
5
CHAPTER 1
INTRODUCTION TO
GLOBAL MARKETING
Introduction
 Global versus “regular” marketing
 Scope of activities are outside the home-country market
Product/market growth matrix
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Market Penetration
Started the first shop in 2004
In 2009, the number of shops
reached 41 including 8
University campuses
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Market Development
Product
Development
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Diversification
 Diversification is developing new products for new markets
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Global Marketing
 Create value for customers by improving
benefits or reducing price
 Improve the product
 Find new distribution channels
 Create better communications
 Cut monetary and non-monetary costs and
prices
Value = Benefits/Price
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Globalization is the inexorable integration of markets, nation-states
& technologies to a degree never witnessed before—
in a way that is enabling:
individuals, corporations & nation-states to reach around the world
farther, faster, deeper & cheaper than ever before, &
in a way that is enabling:
 the world to reach into individuals, corporations & nation-states
farther, faster, deeper & cheaper than ever before.
1-14
Competitive Advantage and Global
Industries
 Competitive advantage:
 When a company succeeds in creating more value for customers than its
competitors, that company is said to enjoy more competitive advantage.
 Global industry
 A global industry is one in which competitive advantage can be achieved by
integrating and leveraging operations on a world wide
OR
 An industry is global to the extent that a company’s industry position in
one country is interdependent with its industry position in another country
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Degree of Industrial Globalization
118%
120%
100%
80%
77%
60%
42%
40%
33%
20%
1%
16
0%
Surej P John
Consumer electronics
Apparel
Auto
Steel
IT/BPO
1/ 2011
Competitive Advantage
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Global Marketing:
What it is & What it Isn’t???
Single Country
Marketing Strategy
(Table 1-2)
• Target market strategy
• Marketing mix
– Product
– Price
– Promotion
– Place
(Domestic Marketing
activities)
p. 43
Global Marketing:
What it is & What it Isn’t???
Global Marketing Strategy (GMS)
• Global market participation
(companies have operations in more than one market)
• Marketing mix development
– 4 P’s: adapt or standardize?
• Concentration of marketing activities.
• Coordination of marketing activities.
• Integration of competitive moves. (Eg. Lenovo)
p. 43-4
1-20
Standardization versus Adaptation
 Globalization (standardization)
 Developing standardized products marketed worldwide with a
standardized marketing mix
 Essence of mass marketing
 Global localization (adaptation)
 Mixing standardization and customization in a way that
minimizes costs while maximizing satisfaction
 Essence of segmentation
 Think globally, act locally
1-21
Change in the Slogan of Nike
in European market
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Standardization
versus Adaptation
Arabic
read right to left
Chinese
“delicious/happiness”
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The faces of Coca-Cola around the world
McDonald’s Global Marketing
Marketing Mix Element
Standardization
Localized
Product
Big Mac
McAloo Tikka potato
burger (India)
Promotion
Brand name
Slang ’Macca’s
(Australia)
MakDo (Philippines)
Advertising slogan
“I’m Loving It”
Place
Free-standing
McJoy magazine, “Hawaii
Surfing Hula” promotion
(Japan)
Home delivery (India)
Swiss rail system dining
cars
Price
1-24
Big Mac is $3.10 in
U.S. and Turkey
$5.21 (Switzerland)
$1.31(China)
In India, there are no Big Macs
because the Hindu people don't
eat beef.
However, they have the Maharaja
Mac, which is a Big Mac made of
lamb or chicken meat. There is also
a vegetarian burger, the McAloo
Tikki.
MANAGEMENT ORIENTATIONS
Management
emphasis
Focus
Marketing
strategy
Stage one
Domestic
Stage two
International
Stage three
Multinational
Stage four
Global
Domestic
Ethnocentric
Polycentric
Geocentric
Domestic
Extension
Adaption
Extension
Structure
Domestic
International
Worldwide area
Adaption creation
matrix/mixed
Domestic
Centralized top
down
Decentralized
bottom up
Integrated
Mainly
domestic
Mainly domestic
Host country
Lowest cost
worldwide
Investment
policy
Domestic
Domestic used
worldwide
Mainly in each
host country
Cross
subsidization
Performance
evaluation
Domestic
market share
Management
style
Manufacturing
stance
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Against home
Each host country
country market
market share
share
Worldwide
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MANAGEMENT ORIENTATIONS
EPRG FRAMEWORK
Home country is superior to others
Sees only similarities in other
countries.
Assumes products & practices that
succeed at home will be successful
everywhere .
Leads to a standardized or
extension approach.
p. 52
Domestic going International
New true coffee shops at Vientiane, Laos &
Shanghai, China
MANAGEMENT ORIENTATIONS
EPRG FRAMEWORK
Each country is unique.
Each subsidiary develops its own
unique business & marketing
strategies.
Leads to a localized or
adaptation approach.
p. 53
Multi-National Approach
• In Polycentric stage, subsidiaries are formed in each
market and each subsidiaries operates independent
of each other and formulates its own marketing
strategies
• Separate product lines are formed in each country
and these products are modified to meet local needs
( Adaptation)
• Sales force in each country is local nationals
• Channels of distribution are those traditionally used
by each country.
MANAGEMENT ORIENTATIONS
EPRG FRAMEWORK
A region is the relevant geographic unit.
Ex: NAFTA (North American Free Trade
Agreement between: Canada, Mexico & U.S.)
Regional airline serving Malaysia and
south-east Asian destinations
p. 53
MANAGEMENT ORIENTATIONS
EPRG FRAMEWORK
Entire world is a potential market.
Strives for integrated global strategies.
Retains an association with headquarters country
HD serves world
Markets from U.S.
Pursues serving world markets from a single
country or sources globally to focus on select
country markets.
Leads to a combination of extension &
adaptation elements.
p. 53
DRIVING FORCES AFFECTING GLOBAL
INTEGRATION & GLOBAL MARKETGING
Multilateral economic agreements
Converging market needs & the information revolution
Transportation & communication improvements
Product development costs
p. 56
DRIVING FORCES AFFECTING GLOBAL
INTEGRATION & GLOBAL MARKETGING
Quality
World economic trends
Leverage
p. 59
Leverage
Scale economies.
• The global company can take advantage of its
greater manufacturing volume to obtain
traditional scale advantages within a single
factory.
• Also, finished products can be produced by
combining components manufactured in scaleefficient plants in different countries.
• The larger scale of the global company also
creates opportunities to improve corporate staff
competence and quality.
Leverage
Experience transfers.
A global company can leverage its
experience in any market in the
world.
It can draw on management
practices, strategies, products,
advertising appeals, or sales or
promotional ideas that have been
tested in actual markets and apply
them in other comparable markets.
ABB- 1400 subsidiaries in 140 countries.
Very famous for running the operations with the
minimum number of staff
Leverage
Global strategy.
• The global company's
greatest single advantage
can be its global strategy.
Leverage
Resource utilization.
A major strength of the global company is its ability to
scan the entire world to identify people, money, and raw
materials that will enable it to compete most effectively
in world markets.
This is equally true for established companies and startups.
For example, British Biotechnology Group, founded in
1986, raised $60 million from investors in the United
States, Japan, and Great Britain.
For a global company, it is not problematic if the value of
the "home" currency rises or falls dramatically, because
for this company there really is no such thing as a home
currency.
RESTRAINING FORCES AFFECTING GLOBAL
INTEGRATION & GLOBAL MARKETGING
Management myopia & Organizational
culture
Opposition to globalization
National controls – (to protect
local industries)
p. 62
Summary
• Global marketing is the process of focusing
resources on global marketing opportunities
• Goal, to create customer value & competitive
advantage by maintaining focus
• Three classifications of management
orientation: ethnocentric, polycentric,
regiocentric, geocentric
• Global marketing importance is shaped by a
variety of driving & restraining forces
Group Assignment No. 1
• Make a detailed study on the Socio-Economic
and Cultural factors of BRIC Nations and
submit the assignment as a typewritten
report.
• All groups has to prepare a short presentation
( not more than 15 mins.) and one of the
groups may be asked to do the presentation in
the class!!
IT MAY BE ANY OF YOU….. GOOD LUCK 
Looking Ahead to Chapter 2
The global economic
environment
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