Lecture global marketing: contemporary theory, practice, and cases – chapter 1: understanding global markets and marketing

Markets Are Becoming Global Globalization - a process of interaction and integration among people, companies, and governments of many nations, is driven by international trade and

Chapter 1- Understanding Global Markets and Marketing

"Companies must learn to operate

as if the world were one large market – ignoring superficial regional and national differences"

Theodore Levitt

Markets Are Becoming Global

 Globalization - a

process of interaction

and integration among

people, companies, and

governments of many

nations, is driven by

international trade and

investment and has

resulted in what some

call a global economy

• 18-year-old Hanna logs on

to a Canadian web site, orders the latest CD recorded by Madonna, and pays for it in Kroner, using

a Danish credit card issued

by her local bank.

Global Marketing

 Increasingly mobile workforce, more

informative customers, and rapidly changing technologies and business models

 Marketing strategy is the key to attaining

competitive advantage in the global

marketplace

 How can a successful global marketing

strategy be developed and sustained?

Global Marketing Approach

 Requires the firm to focus its efforts

world-wide, rather than developing marketing

strategies on a country by country basis

 The objective: Coordination and integration

of production, marketing and other

functional activities across countries

Global Markets

 Global markets:

converging, allowing for a more standardized

marketing strategy.

 Implementing a global strategy depends on

the distance (or closeness) between regions

and countries

The Cage Distance Framework

 Differences in national income, costs of doing business,

prices, availability of human and natural resources

CAGE Distance Dimensions

Global & Domestic Marketing Compared

 Global markets are characterized by:

internal markets.

psychological distances.

Geographic or Spatial Distance

 Spatial distances between domestic and

global marketing have been reduced by the

substitution of IT media for face-to-face

contact between buyers and sellers

 However, in some instances face-to-face

communication is preferable

 One of the most dramatic developments of

the start of the new millennium was a shift

of advertising expenditures from traditional

media to the Internet

Internet Users by World Region

Figure 1-3

Internet Advertising Expenditures in the United

States

Psychic/Cultural Distance

 Cultural distance may be defined as some

measure of the extent to which cultures are similar or different

controlled by management

 Psychic distance exists in the mind of the

individual

culture and the host country culture

 Measured on the individual, rather than the country, level

The EPRG Framework

 4 approaches/orientations by which a firm

is managed in foreign markets

discrete strategies

EPRG & Global Product Strategy

3 Elements of Global Marketing Strategy

 Standardization vs localization-adaptation

 Configuration/Coordination

 Integration of the Firm's Value Chain

 Different customer preferences

 Different performance requirements and standards

across countries

 Different cultural perceptions

Companies with Standardized Strategies

Need for Localization Varies by Business

Function

Figure 1-4

 A value chain is the sequence of activities

required to make a product or provide a

Value Chain Framework

 Configuration refers to where and how

activities will be located

 Coordination refers to the governance of the activities, how they are linked together

throughout a chain which is dispersed

geographically among many countries

Global Value Chain Configuration

Framework for a Global Marketing Strategy

Measuring Global Marketing Performance

Measures of Marketing Performance

Global Vision

 Strategic vision

and why it should be successful in doing so.

 Global vision

visualize the image that the company is seeking to

create on a world-wide basis.

and global marketing strategy and how it may be

implemented

driven by international trade

performance based on the consumer, product development

and financial return.

as the agenda for topics discussed in the following chapters.