Global Marketing Management: Planning and Market Strategies PDF

Global Marketing Management: Planning and market strategies ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written Planning for Global Markets Plann...

Global Marketing Management: Planning and market strategies ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written Planning for Global Markets Planning Systemized way of relating to the future Manage impact of external, uncontrollable factors Effects on firm’s strengths, weaknesses, and objectives Formulation of goals and methods to achieve them Commitment of resources to country market Allows for rapid growth of international function Planning for Global Markets Phase 1: Preliminary Analysis and Screening Evaluate potential of foreign markets Analyze environment in which company plans to operate Company and country needs must be matched Planning for Global Markets Phase 2: Defining Target Markets and Adapting Marketing Mix Accordingly Potential target markets identified and analyzed further Marketing mix evaluated in each target market Analysis answers questions about adaptation Which cultural/environmental adaptations are necessary for successful acceptance of the marketing mix? Will adaptation costs allow profitable market entry? Planning for Global Markets Phase 3: Developing the Marketing Plan Occurs once target market options are narrowed Marketing plan developed for specific markets Begins with a situational analysis Culminates in selection of entry mode and specific action program Establishes what is to be done, by whom, how, and when Includes budgets and expectations for sales and profits After, company may decide to not enter market Plan may reveal that objectives and goals can’t be met Planning for Global Markets Phase 4: Implementation and Control Planning process continues even after implementation Evaluation and control system Requires performance-objective action Utilizing a planning process and system Encourages consideration of all variables that impact success Provides basis for viewing all country markets and their interrelationships as an integrated and global unit Alternative Market-Entry Strategies 1 of 5 Four broad modes of foreign market entry 1. Exporting 2. Contractual agreements 3. Strategic alliances 4. Join ventures and direct foreign investment Figure 12.2 Alternative Market-Entry Strategies Alternative Market-Entry Strategies 2 of 5 Exporting Direct exporting Company sells to customer in another country (e.g. through the internet). Indirect exporting Company sells to importer or distributor in another country Direct sales May involve establishing office in foreign country Particularly used for high-tech and industrial products  Terms of the Sale Incoterms (international commercial terms) – Ex-works – seller places goods at the disposal of the buyer at the time specified in the contract; buyer takes delivery at the premises of – the seller and Delivery bears all risks and expenses from duty that paidpoint on. – (DDP) seller agrees to deliver the goods to the buyer at the place he or she names in the country of import with all costs, 11-10  Incoterms FAS (free alongside ship) named port of destination – seller places goods alongside the vessel or other mode of transport and pays all charges up to that point FOB (free on board) – seller’s responsibility does not end until goods have actually been placed aboard ship CFR (cost and freight) – seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier. 11-11 9-12  Contractual agreement An agreement whereby one company makes an asset available to another company in exchange for royalties or some other form of compensation The above definition is mainly associated with the licensing agreement. whereby the licensor makes an asset available to the licensee in exchange for royalties, license fees, or some other form of compensation Patent Trade secret Brand name Product formulations 9-13  Special contractual Arrangements Contract manufacturing – Company provides technical specifications to a subcontractor or local manufacturer – Allows company to specialize in product design while contractors accept responsibility for manufacturing facilities Franchising – Contract between a parent company-franchisor and a franchisee that allows the franchisee to operate a business developed by the franchisor in return for a fee and adherence to franchise- wide policies 9-14  A Different perspectives In this perceptive: franchising is an alterative to Licensing. An example of licensing here is when toy manufacturers routinely sign licensing agreements with movie studios, giving them the legal authority to produce action figures based on popular likenesses of movie characters.  Terms and vary by industry and country, even the same company will have different contractual agreements Examples (with specific numbers) of successful licensing/franchising (not fast-food) in KSA 9-16  Joint Ventures Entry strategy for a single target country in which the partners share ownership of a newly-created business entity The pharmaceutical giant GlaxoSmithKline (GSK) formed a project joint Volvo Cars, the Swedish venture with Verily, a part premium car maker, and of Alphabet (Google’s Uber, the world’s leading parent company). The ride-sharing company, are project’s objective was to to join forces to develop research, develop and next generation produce bioelectric autonomous driving cars. medicines. 9-17  Joint Ventures Advantages Disadvantages – Allows for risk sharing– – Requires more financial and political – Provides opportunity investment than a licensing agreement to learn new environment – Must share rewards – Provides opportunity as well as risks to achieve synergy by – Requires strong combining strengths of coordination partners – May be the only way – Potential for conflict to enter market given among partners barriers to entry – Partner may become a competitor 9-18 Strategic International Alliances 1 of 5 Relationship established by two or more companies Cooperate out of mutual need, share risk in achieving shared goal Firms enter SIAs for several reasons Opportunities for rapid expansion into new markets Access to new technology More efficient production and innovation Reduced marketing costs Strategic competitive moves Access to additional sources of products and capital  Global Strategic Partnerships Possible terms: Collaborative agreements Global strategic partnerships Market strategies From marketing management Is it simply geographic segmentation????? 7-23  Contrasting Views of Global Segmentation Conventional Wisdom Unconventional – Assumes Wisdom heterogeneity – Assumes emergence between countries of segments that – Assumes homogeneity transcend national within a country boundaries – Focuses on macro – Recognizes existence level of cultural of within-country differences differences – Relies on clustering of – Emphasizes micro- national markets level differences – Less emphasis on – Segments micro within-country markets within and segments between countries 7-24