4.3 Global marketing

Glocalisation

A term used to describe a global marketing approach where a brand maintains its image globally but makes adaptations, especially to products, to suit local markets

Strengths of global brands

• Huge sales allow for economies of scale

• Many people travel abroad, and global brands can be bough since they’re familiar

  • Globalisation helps sales

• Many promotional tools are global (e.g football sponsors) and can only be effective if the product is sold globally (e.g an airline)

• Global scale helps provide strong negotiating power with retailers

  • This helps these brands get better displays and distribution)

Strengths of glocalisation

• Tailoring to local tastes should boost market share

• Many consumers assume you are a local producer which may help sales (e.g many British people thought ford was british)

• An innovative product designed for local tastes may become a global success (e.g nissan qashqai)

• Localising brands may mean localising production, which gives the brand a greener image.

Approaches to global marketing

• Domestic/ethnocentric

• International/polycentric

• Mixed/geocentric

Domestic/ethnocentric

This global marketing approach focuses on the home/origin country.

The attitudes of senior managers will be heavily influenced by their national culture.

This approach expects consumers to accept the products as they are

Ethnocentric attitudes with consumers

This is when consumers are unwilling to accept imported products.

This gives domestic producers a competitive advantage

Managers and an ethnocentric approach

When breaking into foreign markets, many managers will assume consumers will buy products just because it comes from their country.

International/polycentric

This approach comes with the belief that all markets are different, so decisions are made on a local level.

Products are specifically designed to suit the needs of local consumers.

Developing new products/brands for these markets may undo the advantages of global scale.

However, advantages of size may still occur, such as purchasing economies of scale. (buying in bulk)

Mixed/geocentric

Perhaps the best approach, this combines ethnocentric and geocentric perspectives.

This contains the belief that people all over the world share some characteristics, so the creation of global brands with a level of consistency is possible.

The approach still accepts local differences exist, necessitating localisation

The geocentric approach would empower local managers, but on the understanding that where possible, global is best. So local managers can take decisions that suit their area where the company's global approach cannot be applied effectively.

Applying the marketing mix to global markets

• Product

  • Size,taste,flavour,packaging

• Price

  • Depending on competition, this will need to be adjusted to local markets

• Place

  • A delivery service may be expected in some outlets

• Promotion

  • Methods and content

Applying Ansoff’s matrix to global markets

New market and new product is high risk

Similar market and similar product is low risk

Benefits of selling to a niche global market

• Benefits of successful niche market strategy

• Able to meet customer needs more precisely

• Able to charge a higher price than mass market products

• Less direct competition

Cultural diversity

The differing interests and values of people from different national backgrounds

What cultural diversity is driven by

• Economic factors

  • Differing levels of average disposable income in different countries

• Weather

  • Particularly temperature affects how we live our lives

• History and tradition

  • These features have wide-ranging impact on a country on many issues relevant to business such as attitudes to religion, gender, diversity, lifestyle etc.

Features of global niche markets

• Most global niche markets tend to cater to the wealthy in supplying luxuries, because there is more commonality

• Most global mass markets tend to have local variations that make a global, standardised, ethnocentric approach less likely to work.

How top end, luxury firms adopt the marketing mix

They feature

• Aspirational prices

• Products with strong brand heritage

• Distribution through world famous stores like Harrods, or through airports

• Promotion in glossy style, travel magazines and PR events

How cultural diversity affects the marketing mix

• Different features expected of the product

• Different price expectations depending on the value placed on the product/service locally as well as levels of income

• Differences in traditional distribution from country to country

• Different expectations on how promotions are received from country to country and market to market

The key to a successful global marketing mix

Staff with a deep understanding and experience of global market differences is needed

Culture

A term that describes normal, acceptable behaviours in a given context

Cultural and social factors in global marketing

• Cultural differences

• Different tastes

• Language

• Unintended meanings

• Inappropriate or inaccurate translations

• Inappropriate branding and promotions

Cultural differences

This can be as common as a greeting, different meanings of yes and no, etc.

Some stuff is more socially acceptable in one country than it is in another, and this may be due to stuff like religion

Different tastes

There are big expectations of what something should taste like in different countries. Many coffee franchises feature many more products on their China and India menu as a result.

Local tastes, such as weather, fashion, cars etc are also influenced.

Language as a cultural and social factor in global marketing

If your English is fluent, you are considered lucky in a global market, as it has the most learners.

This is even with it not being the most spoken language globally.

Speaking to a consumer in their own language helps hugely in selling to them

Benefits of fluent linguists in a business

• Customers will be impressed if spoken to in their own tongue.

• Linguistic errors in product branding, naming or promotion are less likely

Unintended meanings

Every language has phrases that shouldn’t be taken literally - “it’s raining cats and dogs”

A literal translation will cause a very different meaning to be understood by consumers in different markets

Inappropriate or inaccurate translations

The major cause of problems relating from translations include:

• Wrong wording

  • Choosing the wrong word to use in a local language can obscure meaning

• Sounds like something else

  • A brand name that sounds like something else in the language can lead to problems

• Slang

  • Local slang used in brands, or advertising may be inappropriate in other languages

Inappropriate branding or promotion

Wording and imagery used in branding may clash with local values and cultures causing negative publicity for a brand in a local market. Carefully designing a TV advert that 'works' in Western Europe does not mean that the advert's message and content will be effective, or even acceptable, in all global markets.

This is mostly because of religious and cultural diversity