4.3.1: Marketing

global marketing strategy

global marketing strategy

• for businesses operating outside their country of origin

• aim to sell products beyond national market

• planning, producing, placing and promoting a business in a worldwide market

• various offices and facilitations

global localisation (glocalisation)

• differs from having a common strategy for all countries

• adapting local expectations in order to succeed

• ‘think global, act local’

• businesses should aim for potential customers worldwide, but consider local tastes, customs and tradition

• should be sensitive to specific preferences of different markets

different marketing approaches

• ethnocentric domestic approach:

  • overseas markets are idential to domestic markets

  • assumes what’s good for the domestic market will be good for global markets

  • make little or no attempt to adapt products to different markets

  • advantages:

    • economies of scale = standardised

    • no development costs for adaptation

    • reduced average costs due to ethnocentric marketing

      • lower prices

      • increased competitiveness

  • disadvantages:

    • may not sell well if not adapted

    • risky

• polycentric international approach:

  • adapt products to local markets

  • developing and marketing different products for the demands of local customers

  • advantages:

    • product sells well

      • specific customer needs

      • targeted precisely

    • easier to gain acceptance in new markets

    • reduced ads and promotional costs

      • less effort to push products

    • higher sales and revenue

  • disadvantages:

    • costly

    • risky

• geocentric mixed approach:

  • combination of the ethnocentric and polycentric

  • geocentric glocalisation

  • used by MNCs

  • maintains and promotes global brand name while tailoring products to local markets

application and adaptation of the marketing mix to global markets

1. price

   • need to consider local factors (income, tax, rent)

   • a business is unlikely to charge the same price in all markets

   • reflects various local factors

2. product

   • modification

   • adaptation

   • ethnocentric, polycentric, geocentric approach

3. promotion

   • conscious of language differences

   • values, beliefs, perceptions, legal and sociocultural aspects

   • identify target custimers

   • attract foreign customers

4. place

   • how local consumers buy products

   • online selling and retailing

application of ansoff’s matrix to global marketing decisions

1. market penetration

   • business adapts products for markets in which it already operates

2. market development

   • marketing of existing products in new markets

   • not always straightforward

   • varying tastes and preferences

   • relies heavily on understanding local habits, tastes and needs

   • slight modifications necessary i.e. language, labelling

   • refinement of existing product to fit in a new overseas market

   • glocalisation

3. product development

   • business promotes new or modified products in existing markets

   • appropriate for businesses that markets products with short PLCs

4. diversification

   • occurs when new products are developed for entirely new markets

   • riskiest

   • little to no experience

application of porter’s strategic matrix to global marketing decisions

1. cost leadership - attempting to be the lowest cost supplier

2. differentiation - business sucessfully distinguishes products from those of rivals

3. focus - business targets a narrow range of customers through:

   • cost focus

   • differentiation focus

used in domestic and global markets, mass markets, may be able to transfer competitive advantage from domestic market to global market