Global Business Program Notes

International companies must decide how to change their marketing strategies for local markets.

Marketing Mix Choices:

  • Adaptation: Changing marketing plans for different target markets.

  • Standardization: Using the same marketing mix everywhere.

Sales Strategies

Products can be sold globally in three ways:

  1. In the same form as in the home market.

  2. With some changes.

  3. As a completely new product.

Standardization vs. Adaptation

Advantages of Standardization:

  • It helps save money in making and moving products.

  • Lower costs, same brand image, and similar marketing methods.

Disadvantages of Standardization:

  • Different people have different needs and preferences in different places.

Product Extension - Standardization

Selling nearly the same product in different countries works well for products like Coca-Cola and Levi's jeans when people's needs are similar.

Challenges:

For example, Campbell Soup failed in England because they misunderstood local tastes.

Product Adaptation

Changing products to fit local tastes or conditions.

Levels of Adaptation:

  • Regional Version: E.g., Nokia making special phones for different areas.

  • Country Version: E.g., Kraft mixing coffee differently for various cultures.

  • City Version: E.g., Beer specially made for tastes in Munich or Tokyo.

Product Extension - Communication Adaptation

Some products can meet different needs; marketing messages may need changes too.

For example, bicycles can be for transportation or fun; Perrier's marketing in Europe is different from North America.

Product Invention

This means creating new products for other countries.

Types:

  • Backward Invention: Bringing back older product styles (e.g., crank-operated cash registers).

  • Forward Invention: Making new products for emerging markets (e.g., protein-rich foods for less developed countries).

Marketing and Brand Communication

When entering new markets, companies need to change their communication strategies.

Successful global brands (like Unilever and Coca-Cola) adapt their messages while keeping the brand identity consistent.

Pricing Strategy in Global Markets

Companies face challenges with pricing when selling internationally.

Dumping: This happens when a company sells its products in another country at a price lower than what it charges in its home country. This can hurt local businesses because they cannot compete with such low prices.

Gray Market: This refers to the selling of products through unofficial channels. These products are often imported without the permission of the original manufacturer. For example, if a product is sold at a much lower price in another country and then resold in your country, that creates a gray market. This can lead to issues with warranty support and product quality, as these goods may not be covered by the manufacturer's guarantees

For example, Gucci's prices can vary a lot between countries because of added costs.

Market Entry Timing

  • Waterfall Model: Enter the home country first, then advanced markets, and finally less advanced markets.

  • Sprinkler Strategy: Launching globally at the same time, planned around one to two years, like Microsoft's marketing strategies.

Marketing Mix Elements

Product, price, place, and promotion strategies need to be adjusted based on market needs and situations.

Coca-Cola's Global Strategy

Coca-Cola is the leader in the global soft drink market by changing marketing strategies based on local cultures while keeping a consistent brand image.

An example of successful adaptation: Coca-Cola's marketing in China during the New Year included culturally relevant themes.

McDonald's International Strategy

McDonald's changes its menu based on local tastes (like teriyaki burgers in Japan and local foods in Moscow).

The company grows in international markets, even while facing challenges in the U.S.

This shows the importance of balancing a global brand with local changes.