Global Marketing PDF

Global Marketing Session 4  Module Objectives 1. Define Globalisation / Global Marketing. 2. Analysing the benefits and the costs of the globalisation of businesses. 3. Assessing the Global Market. 4. Identify the international financial and trade institutions w...

Global Marketing Session 4  Module Objectives 1. Define Globalisation / Global Marketing. 2. Analysing the benefits and the costs of the globalisation of businesses. 3. Assessing the Global Market. 4. Identify the international financial and trade institutions which have shaped the globalization process. 5. Identify major ways in which companies enter the global marketplace. 6. Understand global inequalities of wealth and income and the challenges presented for serving those at the “bottom of the pyramid.”  Define Globalisation “The process by which businesses or other organizations develop international influence or start operating on an international scale” (Oxford Dictionary) Global marketing is the focus on marketing an organisation's products or services in the international marketplace Some of the Globally Successful Brands  Globalisation has involved: Greater free trade. Greater movement of labour. Increased capital flows. The growth of multi-national companies. Increased integration of global trade cycle. Increased communication and improved transport, effectively reducing barriers between countries.  Impact of Globalisation Benefits Costs Lower prices/ greater Structural choice unemployment Economies of scale – Environmental costs lower prices Increased global Tax competition and investment avoidance Free movement of Brain drain from some labour countries May reduce global Less cultural diversity inequality Why Assess Global Markets Any entry into a new market, especially into a new country, requires careful planning. A formal market assessment prevents firms from making costly mistakes. Example : Why Starbucks Failed In Australia https://www.youtube.com/watch?v=_ FGUkxn5kZQ  Assessing Global Markets General economic Transportation environment Channels Market size and Communication population growth Commerce Real income Economic analysis Infrastructure and using metrics technology Power distance Tariff Uncertainty Sociocultural Government analysis actions Quota avoidance Exchange control Individualism Trade agreement Masculinity Time orientation Economic Analysis - General Economic Environment Gross domestic product - is a monetary measure of the market value of all the final goods and services produced in a specific time period by a country. GDP is most often used by the government of a single country to measure its economic health. Gross national income -is the total domestic and foreign output claimed by residents of a country. Purchasing power parity - is a measure of the price of specific goods in different countries and is used to compare the absolute purchasing power of the countries' currency. Human development index -statistical composite index of life expectancy, education, and per capita income indicators, which is used to rank countries into four tiers of human development Evaluating Real Income Firms can make adjustments to an existing product or change the price to meet the unique needs of a particular country market.  Infrastructure and Technological capabilities Transportation - Getting a product from Point A to Point B often requires more than putting it on a truck, plane, or ship and delivering it. Warehousing provides the in-between step of holding products until they can be distributed to the right locations. Distribution Channels -chain of businesses or intermediaries through which the final buyer purchases a good or service. Distribution channels include wholesalers, retailers, distributors, and the Internet. Communication Channels - When communicating to a foreign audience, businesses must analyze the many communication channels available and determine which ones would be most suitable. Commercial Infrastructure –Consist of the legal, banking and regulatory systems. Analyzing Governmental Actions Tariffs Trade Governmental Quotas agreements actions Exchange control  Tariffs and Quotas Tariffs Tax Artificially raises prices Lowers demand Quotas Maximum limit Reduces availability of imported goods Both benefit domestically made products because they reduce foreign competition  Trade Agreements Name Countries European There are 27 member countries of the EU: Union Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden. There are five official candidate countries to join the EU: Macedonia, Serbia, Turkey, Iceland, and Montenegro. NAFTA United States, Canada, and Mexico. CAFTA United States, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. Mercosur Full members: Argentina, Brazil, Paraguay, Uruguay, and Venezuela.  BRICS is an important grouping bringing together the major emerging economies from the world, Comprising 41% of the world population Having 24% of the world GDP. over 16% share in the world trade. BRICS countries have been the main engines of global economic growth over the years and new super powers  Sociocultural Analysis consists; Culture (language, colour, customs and taboos, values, aesthetics, time, business norms) Religion Family structure Educational Failure to consider cultural differences is one of the primary reasons for marketing failures overseas. Culture through Hofsted’s Value Dimensions  Examples…. If cars are marketed in a country where uncertainty avoidance is high, then playing up the safety aspects is a good idea. If mobile phones are advertised in China you might emphasise the collective experience whereas in the USA you might focus on how an individual uses their phone to save time and money. In countries with low masculinity, highly gendered products and marketing messages may be frowned up and taking a gender-neutral approach to your marketing would be a good idea. Choosing a Global Entry Strategy Franchisi ng  Global Entry Strategy Export -Send (goods or services) to another country for sale Franchising - Authorization granted by a company to an individual or business to carry out specified commercial activities, for example acting as an agent for a company's products: Strategic Alliance -An arrangement between two companies to undertake a mutually beneficial project while each retains its independence. E.g. Barnes & Noble and Starbucks: The book retailer and the coffee chain share the costs of space and offer customers a convenient and enjoyable experience of reading books while drinking coffee. Joint Ventures - Business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. Eg. BMW and Brilliance Auto Group partnered to manufacture and sell BMW cars in China. Foreign Direct Investment -Ownership stake in a foreign company or project made by an investor, company in a another country.  The Global Marketing Mix: Product or Service Strategies Sell a product or service similar to that sold in Sell the same product home country but or service in both the Sell totally new include minor products or services. home country market adaptations. and host country.  The Global Marketing Mix: Pricing Strategies Anti-dumping Policies Economic Quotas Conditions Competitive Tariffs Price factors  The Global Marketing Mix: Global Distribution Strategies Some global channels are very long and complex. Consumers shop at small, family-owned stores. Suppliers must be creative in delivering to these outlets.  The Global Marketing Mix: Global Communication Strategies Literacy levels vary by country Firms choose whether to adapt to language differences. Cultural and religious differences also matter Cultural and religious differences also matter Global inequalities of wealth & income The world is vastly unequal. Extreme wealth coexists with extreme poverty. The poorest 50% of the global population share just 8% of total income. The richest 10% of the global population earn over 50% of total income.  The Bottom of the Pyramid Represent the global population that is low income. This population is living off of $1-$3 a day. Bottom of the pyramid marketing is when a company designs a marketing plan that aims to provide products to low income earners. The product, price, promotion, and place are focused on this group of consumers. Eg- A telecommunication company taking old flip phones and refurbishing them to sell to low-income families. challenge for companies is to create a product that can be of great quality, and to a price that consumer in the BoP market can  Group Activity – (3 to 4 students in a group) Choose a less developed country for a new marketing venture. Select a product & Company that you intend to market. 1. What factors in the foreign market would you research before making the decision to enter ?. 2. What entry strategy would you recommend to the company. Explain your answer logically. 3. Explain the global marketing strategy you would adapt in relation to the 4 ‘Ps