Ch. 1: What is Globalization

Globalization

Scope of activities outside the home-country market

Challenges of Marketers

• Counterfeits, bribery, culture shock

• Have to understand local excellence

Value Chain

• Marketing, prod. design, manufacturing, and logistics

• Create value to surpass the competition

• By improving benefits or reducing price

• Value=Benefits/Price

Market

People or org. that are both able and willing to buy

Value Proposition

• Percieved value to the customer

• Firm’s promise to the customer

• : Japanese cars

Competitive Advantage

• Company succeeds in creating more value

• Relative to rivals

Global Industries

• To the extent that a company’s industry’s position in one country is interdependent with its industry position in another country

• Cross-border investment

• Proportion of industry revenue generated by all companies that compete in key world regions

• Ratio of cross-border trade to worldwide production

• : Soccer

Focus

• Concentration and attention on core business and competence

: Nestle, focusing on food and beverages, but not all food and beverages

Standardization

• AKA globalization

• Standard products marketed worldwide with a standard marketing mix

• Like mass marketing

Adaptation

• Localization

• Mixing standard and customized in a way that minimizes costs while maximizing satisfaction

• Like segmentation

• Thinking global, act local

Global Marketing Strategy

• Market participation

• Marketing mix

• Four Ps: adapt or standard?

• Concentration and Coordination of Marketing Activities

• Integration of marketing moves

Coordination of Marketing Activities

The extent to which marketing activities related to the marketing mix are planned and executed interdependently around the globe

Concentration of Marketing Activities

The extent to which activities related to the marketing mix (e.g., promotional campaigns or pricing decisions) are performed in one or a few country locations

BRICS

• Brazil

• Russia

• India

• China

• South Africa

MINTS

• Mexico

• Indonesia

• Nigeria

• Turkey

Ethnocentric Orientation

• Home country superior to others

• Sees only similarities in other countries

• Assumes products succeed everywhere

• Leads to standardized or extension approach

Polycentric Orientation

• Each country is unique

• Develops unique business and marketing strategies

• Multinational

• Localized or adaptation approach

Regiocentric Orientation

• Relevant to location

• Some servearound the world but on a regional basis

• : General motors had four regions

• : NAFTA

Geocentric Orientation

• Entire world is potential market

• Integrated global strategies

• AKA global/ transnational company

• Usually with headquarter countries

• Combo. of extension and adaptation

Forces Affecting Globalization

• Trade agreements

• Market needs

• Product development costs

• Quality

• Transportation/communication improvements

Restraining Forces Affecting Global Integration and Global Marketing

• Management myopia

• Organizational culture

• National controls

• Opposition to globalization

Leverage

• Experience transfers

• Scale economies

• Resource utilization

• Global strategy