PowerPoint Presentation by xQG6W57X

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									   Chapter 1
 Introduction to
Global Marketing
http://www.youtube.com/watch?v=Fucq5BoEfEI
                                             1-2
The 787 Dreamliner
 Parts                     Supplier
 Airframe sections         Kawasaki, Fuji, Mitsubishi, Japan
 Horizontal stabilizer     Alenia, Italy
 Aft Cargo door            Saab, Sweden
 Landing gear              Messier-Dowty, France (built in Gloucester, UK)
 Nose & cockpit sections   Spirit Aerosystems, Canada
 Wing body fairing         Boeing, Canada
 Trailing edge and flaps   Hawker de Havilland, Boeing Australia
 Fairing panels, rudder,   Hafei, Chengdu, Shenyang, China
 leading edge
 Airplane design           Boeing Design Center, Moscow
 Tail cone                 South Korea
 US suppliers              Puget Sound, WA; Charleston, SC; Wichita, KS, Tulsa, OK
                                                                               1-3
The Blackberry Storm
                       http://www.sou
                       rcemap.org/obj
                       ect/blackberry-
                       storm
                   UK, Singapore, South Korea,
                   China, Japan, Malaysia,
                   Scotland,
                   The Netherlands, Taiwan, US
                   (NJ, MA, CA, AZ, TX, ME)


                                           1-4
Globalization – Thomas L. Friedman
   Globalization is the inexorable integration of
   markets, nation-states and technologies to a
   degree never witnessed before—in a way that is
   enabling individuals, corporations and nation-
   states to reach around the world farther, faster,
   deeper and cheaper than every before…

   The degree of inter-dependence between nation
   states

                                                   1-5
What is a Globally Integrated
Enterprise?
   A collection of various incorporated business units in
   different countries
   Bound together by a common, shared objective
   Part of the business value chain that extends from
   product inception to final consumption
   Activities in the value chain are performed by
   business units most skilled (in that activity) and at
   the lowest relative cost (on a global basis)



                                                        1-6
Sam Palmisano (Chairman and
CEO of IBM)
  What is a globally integrated enterprise
    Global Integration allows companies to
    take advantage of talent and resources
    regardless of time zones and delivers value
    to customers regardless of geography




                                             1-7
Globalized Industries
   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
      The number of times business supply chains cross national
      borders
   Indicators of globalized industries
      Ratio of cross-border trade to total worldwide
      production (in an industry)
      Ratio of cross-border investment to total capital
      investment (in an industry)
                                                                  1-8
Global Marketing: What It Is and
What It Isn’t
     Single Country          Global Marketing
    Marketing Strategy            Strategy
   Target market strategy   Major world market
                            participation thru’ sale of its
   Marketing mix            products
     Product                Marketing mix development
     Price                      4 P’s: adapt or standardize?
     Promotion              Concentration of marketing
                            activities
     Place
                            Coordination of marketing
                            activities
                            Integration of competitive
                            moves
                                                          1-9
Why is Global Marketing
important?
  High-growth and Low-growth countries
  Relative costs
  Risk of losing domestic business to
  foreign country competitors
  Segment simultaneity



                                     1-10
The Importance of Going Global
   For U.S. companies, 70% of total world
   market for goods and services is outside the
   country
     Coca-Cola earns 75% of operating income and
     two-thirds of profit outside of North America
   For Japanese companies, 90% of world
   market is outside the country
   94% of market potential is outside of
   Germany for its companies
                                                     1-11
Product/Market Matrix
   Global versus “regular” marketing
     Scope of activities are outside the home-
     country market




               Product/market growth matrix

                                                 1-12
Competitive Advantage, Globalization,
and Global Industries
   Focus
     Concentration and attention on core business
     and competence
     Nestle is focused: We are food and beverages. We
     are not running bicycle shops. Even in food we are
     not in all fields. There are certain areas we do not
     touch. . . . We have no soft drinks because I have
     said we will either buy Coca-Cola or we leave it
     alone. This is focus.
                 Helmut Maucher, former chairman of Nestlé SA

                                                          1-13
Standarization 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



                                                               1-14
Quick example on glocalization
   Pepsi in India in 1990
      Entered through a JV with Voltas & Punjab Agro-Industries
      Corp to develop vegetable and fruit farming techniques
      Introduced Pepsi under the name ‘Lehar Pepsi’
      Advertising used local Bollywood and cricket celebrities.
        • http://www.youtube.com/watch?v=fgKgEucccUc
        • http://www.youtube.com/watch?v=is4X_Tw6nPQ
        • http://www.youtube.com/watch?v=rfiF6VSFoGc




                                                              1-15
Standarization
versus
Adaptation
       Arabic
       read right to left




     Chinese
     “delicious/happiness”




                    The faces of Coca-Cola around the world   1-16
McDonald’s Global Marketing
Marketing Mix Element   Standardization           Localized
                   Big Mac                McAloo Tikka potato burger
Product
                                          (India)

Promotion          Brand name             Slang ’Macca’s (Australia)
                                          MakDo (Philippines)

                   Advertising slogan     McJoy magazine, “Hawaii
                   “I’m Loving It”        Surfing Hula” promotion
                                          (Japan)
Place              Free-standing          Home delivery (India)
                                          Swiss rail system dining cars
Price              Big Mac is $3.10 in    $5.21 (Switzerland)
                   U.S. and Turkey        $1.31(China)
                                                                       1-17
Global Marketplace – Local
Markets
   Brands sold globally – McDonalds, Sony,
   Lego, Swatch, Burberry, etc.
   Local brands – Yum Brands’ East Dawning
   fast Food chain in China; Kiki competes with
   Vogue and Cosmo in Japan; Ford competes
   with Maruti in India
   Global brands and local brands
   Brands’ sense of identity with a country is
   blurring
                                              1-18
In what country is the parent
corporation located?
Firestone Tire & Rubber   Miller Beer

Ray Ban                   Rollerblade

Rolls Royce               Weed Eater

RCA Televisions           Holiday Inn

Jaguar                    Wild Turkey Bourbon

Dr. Pepper                ThinkPad

Ben & Jerry’s             Wilson Sporting Goods
Homemade
Budweiser                 Right Guard

Gerber                    Hummer


                                                  1-19
In what country is the parent
corporation located?
Firestone Tire & Rubber   Japan (Bridgestone)    Miller Beer             GB (SABMiller)

Ray Ban                   Italy (Luxottica)      Rollerblade             Italy (Benetton)

Rolls Royce               Germany (Volkswagen)   Weed Eater              Sweden (Electrolux)

RCA Televisions           China (TTE)            Holiday Inn             GB (Intercontinental)

Jaguar                    India (Tata Motors)    Wild Turkey Bourbon     France (Groupe Pernod
                                                                         Ricard)
Corona                    Mexico                 ThinkPad                China (Lenovo)

Ben & Jerry’s             GB / Netherlands       Wilson Sporting Goods   Finland (Amer)
Homemade                  (Unilever)
Budweiser                 Belgium (InBev)        Right Guard             Germany (Henkel)

Gerber                    Switzerland (Nestle)   Land Rover              India (Tata Motors)

                                                                                            1-20
Management Orientations
   Ethnocentric orientation
     Home country is superior to others
     Sees only similarities in other countries
     Assumes products and practices that
     succeed at home will be successful
     everywhere
     Leads to a standardized or extension
     approach
                                                 1-21
Management Orientations
   Polycentric orientation
     Each country is unique
     Each subsidiary develops its own unique
     business and marketing strategies
     Often referred to as multinational
     Leads to a localized or adaptation
     approach that assumes products must be
     adapted to local market conditions
                                               1-22
Management Orientations
   Regiocentric orientation
     A region is the relevant geographic unit
      • Ex: The NAFTA or European Union market
     Some companies serve markets throughout
     the world but on a regional basis
      • Ex: General Motors had four regions for
        decades


                                                  1-23
Management Orientations
   Geocentric orientation
     Entire world is a potential market
     Strives for integrated global strategies
     Also known as a global or transnational company
     Retains an association with the headquarters
     country
     Pursues serving world markets from a single
     country or sources globally to focus on select
     country markets
     Leads to a combination of extension and
     adaptation elements
                                                   1-24
own  control  decentralized 

                                                                                   polycentric



                                                                      geocentric




                                                      regiocentric




                                   ethnocentric


                                     Similarities  perceptions  differences       1-25
Driving Forces Affecting Global
Integration and Global Marketing
   Regional economic agreements
   Converging market needs and wants
   and the information revolution
   Transportation and communication
   improvements
   Product development costs

                                       1-26
Driving Forces Affecting Global
Integration and Global Marketing
   Quality
   World economic trends
   Leverage




                                   1-27
Restraining Forces Affecting Global
Integration and Global Marketing
   Management myopia
   Organizational culture
   National controls
   Opposition to globalization




                                 1-28

								
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