Introduction to Global Marketing Chapter 1 1

Why Global Marketing? Blaise E. Bergiel 2

• Markets ________ country borders. Customers &/or competitors cross frontiers to buy and to sell. • Significant ___________ exist among customers from different countries; segments cut across ___________ frontiers. • Improvements in ________, & _________ have lowered the cost of exporting & importing. 3

• _________ innovations and technological improvements have resulted in the development of new goods & services with international appeal. • Major advances in ________ & the emergence of e-commerce have made possible the widening and linking of markets. 4

• _____________ exists in a wide range of industries in many countries. • The ____________ 5

Marketing Mix __________ 6

Global Marketing • An organization that focuses its resources on global market _____ & _________. • Difference between “regular” marketing and “global” marketing is the ____ of activities. • Note: there is ______ number of countries that a company must offer its goods & services in to be automatically qualified as a global marketer. 7

Marketing • Marketing can be described as one of the ____________ of a business, distinct from management, finance, operations, etc. • Marketing can also be thought of as one of the activities that along with product design, manufacturing, & transportation logistics, comprise a firm’s _______________. 8

Boundaryless Marketing • Firms involve marketers in _______, _____________, and other value-related decisions from the start. • It ensures that marketing ________ permeates all value-created activities in a company. • It gives __________ at all levels & in all departments the opportunity to be involved in marketing. 9

Value Chain & Boundaryless Marketing ____________ _____________ _______ 10

• Customer Value Equation: Value =______/_____ Benefits = combination of the ________________ (distribution) Price = __________, etc. 11

General Rule of Customer Value: Value as perceived by the customer can be increased in three basic ways. 1. _______ bundle of benefits 2. _________ price (money, time, effort, etc. ) 3. ____________ 12

General principle to the customer value equation: “The smaller the _______ (i. e. , price) in the value equation, the _______ the overall value created”. 13

Note: ________ to General Principle: ________ i. e. , 14

• Competitive Advantage: When a company succeeds in creating __________ for customers than its competitors. • Global Industry: one in which __________ can be achieved by integrating and leveraging operations on a worldwide scale. (Michael Porter) 15

Marketing Myopia: The failure of a company to define its _______________ from a broad consumer orientation. 16

Note: Achieving competitive advantage requires executives and managers to maintain a welldefined _______________________. 17

Focus: the concentration of attention on a ______________. i. e. , the former chairman of Nestle told an interviewer: “We are food and beverages. Also, we have no soft drinks because I have said we either buy Coca-Cola or we leave it along. ” 18

Theodore Levitt, “The Globalization of Marketing, ” Harvard Business Review: The world is becoming more __________. 19

The Wall Street Journal: “Levitt’s comment about the world becoming homogenized is bunk. There about two products that lend themselves to global marketing and one of them is ___________. ” 20

The rally cry of the global marketer is: “_______________” A company that engages in global marketing creates both __________ and __________ products. 21

A firm’s global marketing strategy is concerned with: • _______ versus _____ of the marketing mix • Global market ________ • Coordination of _______ activities • ________ of competitive moves 22

The world's local bank: __________ 23

J Measured by national income, the U. S. represents the world’s largest single market for goods and services while Japan represents the world’s second largest single market. What percentage of world income is found outside the U. S. & Japan, respectively: A. outside U. S. 70%, outside Japan 70% B. outside Japan 85%, outside U. S. 70% C. outside U. S. 75%, outside Japan 85% D. None of the above 24

Management Orientation: the EPRG framework _____________ Home country is ________, sees ________ in foreign countries. “If it is good enough for our customers at home it’s good enough for the rest of the world. ” (An __________ company is characterized by an Ethnocentric management orientation. ) 25

Ethnocentric • This point of view leads to a ______ or _______ approach to marketing. • i. e. , Until the mid-1990 s, ________ accepted only English language messages in many of its discussion areas. • In the Ethnocentric international company, foreign operations or markets are typically viewed as being __________ to domestic ones. 26

__________ Management’s belief or assumption that each country in which a company does business is ________. The term _________ company is often used to describe such a structure 27

Polycentric • This point of view leads to a ______ or _______ approach that assumes products must be adapted in response to different market conditions. • i. e. , When ______ acquired Philips Electronics’ appliance unit, managers at the American company discovered that Philips washing machines manufactured in Germany & Italy did not have a single component or part in common. 28

_______ A region becomes relevant _______ unit; mgt. goal is to develop an ________ regional strategy. Is ethnocentric or polycentric in its view of the rest of the world. i. e. , a company decides to focus on market opportunities opened up by _____ 29

_________: ____ view, sees similarities and differences in home and host countries. “_________ must be taken for granted. ” A company in which a geocentric mgt. orientation prevails can also be called a(n) __________ or ____________ company 30

A company whose management views foreign markets as a convenient place to dispose of surplus production can be said to have a(n) _____ orientation. A. polycentric B. regiocentric C. ethnocentric D. geocentric 31

Some well-known companies & brands are listed in the left-hand column below. In what country is the parent corporation located? 1. Firestone Tire & Rubber 2. Burger King 3. RCA Electronics 4. Dr. Pepper 5. Brooks Brothers 6. Baskin-Robbins 7. Holiday Inn a. Germany b. Great Britain c. United States d. Japan e. France f. Switzerland 32

Answers: 1. Firestone Tire & Rubber = ________ (Bridgestone) 2. Burger King = ________ (Diageo) 3. RCA Electronics = ______ (Thomson SA) 33

4. Dr. Pepper = _________ (Cadbury-Schweppes) 5. Brooks Brothers = _______ (Marks & Spencer) 6. Baskin-Robbins = _______ (Allied Domecq) 7. Holiday Inn = ________ ( Bass PLC) 34

Global integration and global marketing _____ Forces Affecting Global Integration & Global Marketing 35

Driving Forces behind Global Integration 1. Regional ______ Agreements: (_______ Trade agreements): ______: North American Free Trade Agreement; ______: General Agreement on Tariffs and Trade. 2. Market ____________________________. 36

3. ______________: 4. _____________ & Communication Improvements 5. Product ___________: i. e. , the pharmaceutical industry is characterized by product development cycles of _______ years and product development costs in excess of $______ million. 37

6. _______: when a global company establishes a ________ in quality, competitors must quickly make their own improvements to come up to par. 7. ______________ Trends: 1 st. Economic growth in ________ countries have created market opportunities 2 nd. Economic growth has ________ resistance to the entry of foreign firms into domestic economies. 38

3 rd. The worldwide movement toward _____ markets, _______, and ______________. 8. _________: some type of advantage that a company enjoys by having ____________ in more than one country. 39

Four Types of Leverage: A. ___________ Transfers: Note: A company in which a _________ orientation (each country is unique) predominates cannot take advantage of experience transfers. B. Scale ____________: C. ___________ Utilization: D. ___________ Strategy: 40

• ______-U. S. operating income is growing faster than ____ operating income. • They have restaurants in approximately ____________ countries. • In_____, Mc. Donald’s restaurants have 2 kitchens, one for meat sandwiches & the other strictly vegetarian. 41