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MKT 3620

Name: Surej P John

Office: MSM 3rd floor, Cabin# 01

Email: surejpjohn@gmail.com

Website: http://surejpjohn.com/global-marketing/

Mark Allocations

Surej P John 4

Quizzes (2x5%) 10%

Class Participation 5%

Group Project 10%Group project presentation 5%

Midterm Examination 30%

Comprehensive Final Examination 40%

Total100%

Quiz 1 Announcement

• Online quiz at SCIT Building 2nd Floor• Date

– Friday 6th January, 2012• Time

– Sec 406– 9.00-12.00– Sec 407– 12.00-16.00

• All students can choose their preferred time (1 hour ) for taking this exam

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Online resources

• Course syllabus, project outline, power points are all available in www.lms.au.edu

• Enrollment key: mkt 03• All students are

requested to register online to make use of the online resources.

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Chapter 1

Introduction toGlobal Marketing

IntroductionGlobal versus “regular” marketing

Scope of activities are outside the home-country market

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Product/market growth matrix

Market Penetration

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Started the first shop in 2004

In 2009, the number of shops reached 41 including 8 University campuses

Market Development

Product Development

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DiversificationDiversification is developing new products

for new markets

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Global MarketingCreate value for customers by

improving benefits or reducing priceImprove the productFind new distribution channelsCreate better communicationsCut monetary and non-monetary

costs and prices

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Value = Benefits/Price

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Globalization

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Globalization is the inexorable integration of markets, nation-states & technologies to a degree never witnessed before—

in a way that is enabling: individuals, corporations & nation-states to reach around the world farther, faster, deeper & cheaper than ever before, &

in a way that is enabling: the world to reach into individuals, corporations & nation-states farther, faster, deeper & cheaper than ever before.

Competitive Advantage and Global Industries

Competitive advantage:When a company succeeds in creating more value

for customers than its competitors, that company is said to enjoy more competitive advantage.

Global industryA global industry is one in which competitive

advantage can be achieved by integrating and leveraging operations on a world wide

ORAn industry is global to the extent that a

company’s industry position in one country is interdependent with its industry position in another country

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Degree of Industrial Globalization

2/ 2011Surej P John17Consumer electronics Apparel Auto Steel IT/BPO

0%

20%

40%

60%

80%

100%

120%118%

77%

42%

33%

1%

Competitive Advantage

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Global Marketing:What it is & What it

Isn’t???

Global Marketing Strategy (GMS)

• Global market participation (companies have operations in more

than one market)

• Marketing mix development– 4 P’s: adapt or standardize?

• Concentration of marketing activities.

• Coordination of marketing activities.

• Integration of competitive moves. (Eg. Lenovo)

p. 43-4

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Standardization versus Adaptation

Globalization (standardization)Developing standardized products marketed

worldwide with a standardized marketing mixEssence of mass marketing

Global localization (adaptation)Mixing standardization and customization in

a way that minimizes costs while maximizing satisfaction

Essence of segmentationThink globally, act locally

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Change in the Slogan of Nike in European market

Standardization versus Adaptation

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Arabic

read right to left

Chinese

“delicious/happiness”

The faces of Coca-Cola around the world

McDonald’s Global Marketing

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Marketing Mix Element Standardization Localized

Product

Promotion

Place

Price

Big Mac

Brand name

Advertising slogan “I’m Loving It”

Free-standing

Big Mac is $3.10 in U.S. and Turkey

McAloo Tikka potato burger (India)

Slang ’Macca’s (Australia)

MakDo (Philippines)

McJoy magazine, “Hawaii Surfing Hula” promotion (Japan)

Home delivery (India)

Swiss rail system dining cars

$5.21 (Switzerland)

$1.31(China)

In India, there are no Big Macs because the Hindu people don't eat beef.However, they have the Maharaja Mac, which is a Big Mac made of lamb or chicken meat. There is also a vegetarian burger, the McAloo Tikki.

MANAGEMENT ORIENTATIONS

Management emphasis

Stage one Domestic

Stage two International

Stage three Multinational Stage four Global

Focus Domestic Ethnocentric Polycentric Geocentric

Marketing strategy

Domestic Extension Adaption Extension

Structure Domestic International Worldwide area Adaption creation matrix/mixed

Management style

DomesticCentralized top

downDecentralized

bottom upIntegrated

Manufacturing stance

Mainly domestic Mainly domestic Host country Lowest cost worldwide

Investment policy

DomesticDomestic used

worldwideMainly in each host

countryCross subsidization

Performance evaluation

Domestic market share

Against home country market

share

Each host country market share

Worldwide

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Home country is superior to others

Sees only similarities in other countries.

Assumes products & practices that succeed at home will be successful everywhere .

Leads to a standardized or extension approach.

MANAGEMENT ORIENTATIONSEPRG FRAMEWORK

1. Ethnocentric orientation/

INTERNATIONAL

Home country

DO NOT adjust

To Host country!!p. 52

Domestic going International

New true coffee shops at Vientiane, Laos & Shanghai, China

Each country is unique.

Each subsidiary develops its ownunique business & marketing strategies.

Leads to a localized or adaptation approach.

MANAGEMENT ORIENTATIONSEPRG FRAMEWORK

2. Polycentric Orientations/

MULTINATIONAL

Focus is HOST country

p. 53

Multi-National Approach• In Polycentric stage, subsidiaries are formed in each market

and each subsidiaries operates independent of each other and formulates its own marketing strategies

• Separate product lines are formed in each country and these products are modified to meet local needs ( Adaptation)

• Sales force in each country is local nationals• Channels of distribution are those traditionally used by each

country.

A region is the relevant geographic unit.

Ex: NAFTA (North American Free Trade Agreement between: Canada, Mexico & U.S.)

MANAGEMENT ORIENTATIONSEPRG FRAMEWORK

3. Regiocentric orientation

p. 53

Regional airline serving Malaysia and south-east Asian destinations

Entire world is a potential market.

Strives for integrated global strategies.

Retains an association with headquarters country

Pursues serving world markets from a single country or sources globally to focus on select country markets.

Leads to a combination of extension & adaptation elements.

MANAGEMENT ORIENTATIONSEPRG FRAMEWORK

4. GEOCENTRIC ORIENTATIONS/

GLOBAL OR TRANSNATIONAL

p. 53

HD serves worldMarkets from U.S.

DRIVING FORCES AFFECTING GLOBAL INTEGRATION & GLOBAL MARKETGING

Multilateral economic agreements

Converging market needs & the information revolution

p. 56

Transportation & communication improvements

Product development costs

DRIVING FORCES AFFECTING GLOBAL INTEGRATION & GLOBAL MARKETGING

World economic trends

Leverage

p. 59

Quality

LeverageScale economies. • The global company can take advantage of its

greater manufacturing volume to obtain traditional scale advantages within a single factory.

• Also, finished products can be produced by combining components manufactured in scale-efficient plants in different countries.

• The larger scale of the global company also creates opportunities to improve corporate staff competence and quality.

Experience transfers. A global company can leverage its experience in any market in the world. It can draw on management practices, strategies, products, advertising appeals, or sales or promotional ideas that have been tested in actual markets and apply them in other comparable markets.

Leverage

ABB- 1400 subsidiaries in 140 countries.Very famous for running the operations with the minimum number of staff

58 Million daily customers from 119 countries

LeverageGlobal strategy.• The global company's

greatest single advantage can be its global strategy.

LeverageResource utilization. A major strength of the global company is its ability to scan the entire world to identify people, money, and raw materials that will enable it to compete most effectively in world markets. For a global company, it is not problematic if the value of the "home" currency rises or falls dramatically, because for this company there really is no such thing as a home currency.

RESTRAINING FORCES AFFECTING GLOBAL INTEGRATION & GLOBAL MARKETGING

Management myopia & Organizational culture

p. 62

National controls – (to protect local industries)

Opposition to globalization

Summary

• Global marketing is the process of focusing resources on global marketing opportunities

• Goal, to create customer value & competitive advantage by maintaining focus

• Three classifications of management orientation: ethnocentric, polycentric, regiocentric, geocentric

• Global marketing importance is shaped by a variety of driving & restraining forces

Group Assignment No. 1

• Make a detailed study on the Socio-Economic and Cultural factors of BRIC Nations and submit the assignment as a typewritten report.

• All groups has to prepare a short presentation ( not more than 15 mins.) and one of the groups may be asked to do the presentation in the class!!

IT MAY BE ANY OF YOU….. GOOD LUCK

•

Looking Ahead to Chapter 2

The global economic environment

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