Global Marketing: An Overview

Global Marketing Introduction

• Marketing involves planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy both individual and organizational goals.
• A modern definition emphasizes creating, communicating, and delivering value to customers while managing relationships to benefit the organization and its stakeholders.
• Marketing focuses on fulfilling customer wants and needs with products and services that offer competitive value and utilizes the marketing mix (product, price, place, and promotion).

Comparing Marketing Types

• "Global" marketing differs from "regular" marketing due to its broader scope of activities, operating on a worldwide scale.
• It considers global operational differences, similarities, and opportunities to achieve global objectives.
• Global marketing involves focusing resources and competencies on global market opportunities and threats and may entail creating new products or services for new markets.

Reasons for Global Marketing

• Global marketing enables growth by accessing new markets and resources and creating more value for customers.
• It can offer a survival strategy by gaining a competitive advantage and countering competitors with lower costs due to resource access.
• Creating customer value involves improving product benefits, reducing price, or combining these elements.
• Achieving competitive advantage requires offering superior product, distribution, or promotion benefits and lower prices than competitors.
• Focus requires concentrating attention on the core business or competence, with competitive advantage achieved through global integration and leveraging.

What Global Marketing Means

• Global marketing does not mean operating in every country but widening business horizons to scan the world for opportunities and threats.
• It is crucial for companies aiming to maximize growth potential, where globalization transforms local industries into global ones.
• Key indicators of globalization include cross-border trade and investment ratios, worldwide production, and revenue generated by companies in key world regions.

Global Marketing Strategy (GMS)

• Two core issues for a firm's GMS are choosing a target market and developing a marketing mix.
• Global market participation involves the extent of a company's operations in major world markets.
• The marketing mix can be standardized (used the same way) or adapted (used differently) in various country markets.
• Standardization involves globally marketed standardized products with a standardized marketing mix, while adaptation mixes standardization and customization to minimize costs and maximize satisfaction.
• Global localization requires marketers to think and act both globally and locally, responding to market similarities and differences, like McDonald's strategy.

Global Marketing Strategy Activities

• Concentration of marketing activities refers to where marketing mix activities (like pricing) are performed.
• Coordination of marketing activities refers to how marketing activities are planned and executed globally.
• Integration of competitive moves refers to the interdependence of competitive marketing tactics across different parts of the world.

Introduction to Culture

• Culture is defined as the collective mental programming that distinguishes groups of people, encompassing ways of living transmitted across generations.
• Culture includes conscious and unconscious values, ideas, attitudes, and symbols, both physical (clothing, tools) and nonphysical (religion, attitudes, beliefs, and values).

Culture, Society, and Global Consumer Culture

• Culture is expressed through social institutions like family, education, religion, government, and business.
• Manifestations of culture include consumption-related symbols, such as pub, coffee, and fast-food cultures.
• Global consumer cultures are emerging due to the universal appeal of products like lifestyle and convenience foods.
• Universal aspects of culture allow standardization while travel and communication improvements lead to converging tastes.

Elements of Culture

• Attitudes: Settled ways of thinking or feeling.
• Beliefs: Organized knowledge patterns held as true.
• Values: Deepest cultural level shared by most members.
• Subcultures: Smaller groups with shared attitudes, beliefs, and values.
• Aesthetics: Visual elements like color and shape.
• Masculinity/Femininity: Reflects societal expectations for men and women.

High- and Low-Context Cultures

• Low-Context Cultures: Explicit information, direct communication, reliance on words, legal paperwork, and non-personal documentation.
• High-Context Cultures: Implicit information, rank importance, shared history, nuanced communication, emphasis on emotions, personal reputation, and less legal paperwork.

Hofstede's Cultural Typology

• Power Distance: The extent to which less powerful members accept unequal power distribution. High-power distance countries have obedience to superiors while low-power distance countries have decentralized structures.
• Individualism/Collectivism: Individualistic cultures stress individual needs while collectivist cultures emphasize group needs.
• Uncertainty Avoidance: How societies react to and tolerate uncertainties.
• Time Orientation: Long-term orientation focuses on future values like persistence and short-term orientation focuses on present tradition.

Ethnocentricity and Self-Reference Criterion (SRC)

• Unconscious reference to one's cultural values leads to cultural myopia.
• Reducing this involves defining the problem in terms of home and host country traits, isolating SRC influence, and redefining the problem without SRC influence.

Environmental Sensitivity

• The greater the environmental sensitivity, the more adaptation is needed.
• Low sensitivity products include integrated circuits, while high sensitivity may be food.

Importance of Going Global

• Global market opportunities show 75% of sales potential for US-based companies lie outside the US.

Management Orientations

• Company responses to global markets depend on management's assumptions.
• Four global management orientations are: Ethnocentric, Polycentric, Regiocentric, and Geocentric.

Global Management Orientations

• Ethnocentric: Home country is superior
• Polycentric: Each country is unique.
• Regiocentric: Region is the relevant geographic unit.
• Geocentric: The entire world is a potential market.

Driving forces

• Driving Forces: 1.Multilateral Trade Agreements (NAFTA, GATT). 2. Converging Market Needs and Wants, 3. Information Revolution (Internet), 4.Transportation and communication improvements. 5.Product development costs. 6.Quality 7.World economic growth trends 8.Leverage, by gaining experience in more than one country.

Restraining forces

• Restraining Forces, 1.Management myopia. 2.Organizational culture, 3. National controls, 4.Opposition to globalization, 5. Financial crisis.

Economic system types

• Market Capitalism: Private ownership and market resource allocation, as in Western Europe and North America.
• Centrally Planned Capitalism: private ownership and government resource allocation.
• Centrally Planned Socialism: State ownership and government resource allocation, as in North Korea.
• Market Socialism: State Ownership and Market Resource Allocation, used in India

Economic Freedom

• Economic freedom rankings consider trade policy, taxation, banking policy, wage and price controls, property rights, capital flows, and black market activity.

Stages of Market Development

• The World Bank categorizes development using Gross National Income.
• High-income countries: Knowledge over capital.
• Upper-middle income countries: Rapid industrialization.
• Lower-middle income countries: Expanding consumer markets.
• Low-income countries: Limited industrialization.

Overview of International Finance

• Foreign exchange enables business across national currencies.
• Spot and forward currency trading occurs.
• Currency risk adds to turbulence in global commerce

Managing Economic Exposure

• Real operating exposure: Arises when currency fluctuations alter a company's costs and revenues, for firms with overseas sourcing or manufacturing operations.
• Transaction exposure: Transaction exposure Occurs during sales/purchases.
• Economic exposure Refers to the impact of currency fluctuations on the present value of the company's future cash flows.