8/6/2019 354384_634048583371284278

1/45

Global Marketing

Global marketing is simply said marketing on a

a worldwide scale by taking commercial advantage

of global operational difference, similarities andopportunities in order to meet global objectives.

Reasons for Global Marketing:

Proliferation of Internet and e-commerce

World becoming a smaller geographical place

Customers knowledge and expectations being increased.

8/6/2019 354384_634048583371284278

2/45

Stages in the Evolution of Global MarketingGlobal Marketing is an evolutionary process which has

happened over the years and not a revolutionary shift.

1.Domestic Marketing:

This is a type ofmarketing which is restricted to the geographical and political

boundaries of the country. In this , the Domestic marketers mainly look at the

internal competition and do not focus on the changes that are happening at the

global market place. The biggest danger is being blindsided by emerging global

marketers.

They can be considered as ethnocentric as they are mainly concerned of how

they are perceived in their country.

2.Export Marketing:

After catering to domestic markets, companies started exporting to a fewnearby countries. Earlier, there was a lot of reluctance due to many

documentation procedures.

However, the Foreign Trade Policy(FTP) announced in 2004 boosted exports

greatly. The new FTP was spelt on August 28th 09 for 2009-14 will continue the

impetus on Exports.

8/6/2019 354384_634048583371284278

3/45

3.International Marketing:

As the exports grew over a period of time, simultaneously cost of doing

business from H.q country, time differences, language barriers and cultural

ignorance hindered the companys competitiveness in the foreign market.Thus, new offices got built in the foreign countries or Companies purchased

firms in foreign countries to take advantage of the local environment.

These marketers can be termed as Polycentric as they acknowledged that

each market or country has different needs.

4.Multinational Marketing:In this stage, the company markets its products and services in many

countries around the world and also benefits from the huge economies of

scale.Consolidation of R & D, development, production and marketing is done

at a regional level. Hence, this is a typical Regiocentric approach.

5.Global Marketing:A global marketer views the world as one market and creates products that

requires only a few weeks to fit into any regional market place.

Marketing decisions are made by consulting all the marketers in the respective

countries. The objective is to sell the same thing with the same quality

everywhere.

8/6/2019 354384_634048583371284278

4/45

Elements of Global Marketing

The elements of Global marketing are essentially the Four Ps

ofmarketing. All these are affected as the company moves up

the evolutionary phases to become a global company.

At a global level, a company trying to speak with one voice is

faced with many challenges while creating a world-wide

marketing plan.

Unless a company is ONE-UP against its competition in all

markets (market leader, low cost, etc.) it is impossible to launch

identical marketing plans across the world.

8/6/2019 354384_634048583371284278

5/45

Elements of Global Marketing

1.Product

A global company is one that can create a single product and only have to

slightly change the elements for different markets. For eg., In Coca-Cola the

packaging in every country incorporates the contour bottle design and the

dynamic ribbon in some way, shape, or form. However, the pack also includes

the countrys native language and is the same size as other beverage packs in

that country.

2.Price

Price always varies from market to market. Additionally, the products position

in relation to the competition influences the ultimate profit margin. Whether

this product is considered the high-end, expensive choice, the economical,

low-cost choice, or something in-between helps determine the price point.

8/6/2019 354384_634048583371284278

6/45

Elements of Global Marketing3.Place or Distribution

The actual distribution decision varies from country to country

and is also influenced by the Competitor strategy. In the U.S, beverages

are sold by the pallet via warehouse stores. In India, this is not an option.

The distribution also depends on the products position in the market

place. For eg., an expensive product cannot be distributed by a

dollarstore in U.S. Conversely, a low-cost product will have limited success in a

posh boutique in France.

4.Promotion

This is a major factor in a global companys marketing budget. The aim is to

reduce costs, minimize redundancies in personnel and work, maximize

speed and to speak with one voice. If the goal is to send a uniform message

world-wide, then conveying that message most effectively at the minimal

cost is the challenge.

The ability to identify which elements or moments of an ad contribute to

the success helps to maximize the economies of scale.

8/6/2019 354384_634048583371284278

7/45

Advantages of Global Marketing

Economies of scale in production and distribution

Lower marketing costs

Power and scope

Consistency in brand image

Ability to leverage good ideas quickly and efficiently

Uniformity ofmarketing practices

Helps to establish relationships outside the "political arena"

Helps to encourage ancillary industries to be set up to cater for

the needs of the global player

8/6/2019 354384_634048583371284278

8/45

eMarketing Advantages in GM

1.Scope of eMarketing

This approach opens up new avenues for smaller businesses. With a very small

budget, potential consumers across the world can be accessed.

eMarketing enables the marketer to offer a wide range of products and

services. It also includes information management, public relations, customer

service and sales.

2. Two-way Interaction

eMarekting facilitates conversations between companies and consumers.

Companies can mail back the consumers responses making them more dynamic

and adaptive.

3.Speed of Action

With eMarketing you can simply buy a latest BMW car or a latest iPod offering

with just a few clicks after reading about it in your favourite magazine,

irrespective of the normal office hours. Effectively, Internet marketing makes

business hours 24 hours/day X 7 days/ week X 52 weeks per year.

8/6/2019 354384_634048583371284278

9/45

eMarketing Advantages in GM4.Demographics and Targeting

Demographics of the Internet users is a very useful information.Internet users as a group have greater buying power and represent the

vast group of the middle class segment. These users are also very focused

in their approach. Thus marketers can easily find access to the niche

markets they wish to target. Marketing message is more effective when it

is directly presented to the audience which is most interested.5.Adaptivity and Closed loop marketing

Closed loop Marketing means a constant measurement and analysis of the

results of the marketing activities. With eMarketing responses can be

analysed in real-time and campaigns can be modified accordingly.

This results in minimal advertising money wasted on ineffective campaigns.Maximal marketing efficiency provides newer opportunities to achieve

strategic competitive advantages.

All these factors result in an improved ROTI., happier customers and better

Profit margins for the Company.

8/6/2019 354384_634048583371284278

10/45

Disadvantages of Global Marketing

Differences in Consumer needs, Wants and Usage patterns for

products.

Differences in Consumer responses to the Marketing mix elements.

Differences in Brand and Product development and the Competitiveenvironment.

Differences in the legal environment, some of which may conflict

with those of the home market.

Differences in the Institutions available, some of which may require

a totally new creation. (eg. Infrastructure)

Differences in the administrative procedures, some of which may be

stringent and time-consuming.

Differences in the product Distribution networks etc.

8/6/2019 354384_634048583371284278

11/45

Global Marketing

A successful Global marketing program needsa sound understanding of the Marketing

discipline. Though, Marketing is a universaldiscipline the marketing practice varies fromcountry to country.

The importance of Global marketing stems

from the fact that the driving forces affectingglobal integration have more momentum than

the restraining forces.

8/6/2019 354384_634048583371284278

12/45

Forces affecting Global Integration

Driving Forces Restraining Forces

Technology CultureCulture Mkt differences

Mkt needs Costs

National Controls

ControlsFree Markets Nationalism

Economic Integrn Domestic Focus

Peace

Organization History

M/gment VisionStrategic Intent War

Global strategy & action

8/6/2019 354384_634048583371284278

13/45

Marketing Concept

Earlier the focus was on product and making a betterproduct based on internal standards and values.

New concept (around 1960) shifted the focus fromproduct to Customer. Means of achieving profits

included the four Ps ofmarketing. i.e. Product, Price,Place and Promotion.

By 90s, shift took place to Strategic Marketing. Thisshifted the focus to the customer in the context of a

broader external environment.

8/6/2019 354384_634048583371284278

14/45

Customer

Wants &

Needs

R & D Engineering ManufacturingCustomer

Value

Marketing

In the Strategic concept, the aim of Marketing is to create greater value for

the Customer. This expanded concept of Marketing was termed as

Boundaryless Marketing by Jack Welch, C.E.O of General Electric Co.

8/6/2019 354384_634048583371284278

15/45

Global Marketing:What It Is ?

An important task is to understand the extentto which marketing plans & programs can be extended

worldwide, and the extent to which they can be adapted.This thinking resulted in the concept ofGlobal Localization.

A successful global marketer needs to Think globally and act locally.

Cokes success in Japan is a classic example of Global Localization.

By adapting sales promotion, distribution and customer service to the localneeds, the company achieved a 78% share of the soft-drinks market.

The company built a complete local infrastructure with its sales force, vendingmachines etc .Cokes success was due to its ability to be as much of an insider asa local company but still reap the benefits resulting from world-scale operations

Global marketing essentially means widening

business horizons to encompass the world while

scanning for opportunity and threat.

8/6/2019 354384_634048583371284278

16/45

Importance of Global Marketing ?

The largest national market in the world of the UnitedStates represents only 25% of the total world market for

all products and services.

Thus, U.S companies wishing to achieve maximumgrowth must go global because approx. 75% of world

market potential is outside their own country.68% of Coca-Colas 1999 operating income and 62% of revenues

were generated outside North America.Non-U.S companies have a bigger reason to seek global

opportunities as they also have the 305 million U.Spopulation.(Feb 09)

8/6/2019 354384_634048583371284278

17/45

Global Marketing:

What It Is Not ?Global marketing does not mean to develop

standardized, high-quality world products andmarket them using standardized advertising,

pricing and distribution.Parker Pens failure in the world market is one such example.

Global marketing does not mean entering every

country in the world. The decision to enter outsidemarkets depends on the companys resources,

managerial mind-set and the nature ofopportunity and threat.

8/6/2019 354384_634048583371284278

18/45

Global Market Segmentation

It is the process of dividing the world market

into distinct subsets of customers that behave

in the same way or have similar needs or

Process of identifying specific segments like

country groups or individual consumer groups

of potential customers with homogenous

attributes who are likely to exhibit similarbuying behavior.

8/6/2019 354384_634048583371284278

19/45

Global Market Segmentation

Global companies may segment the markets as per one ormore criteria:

1. Geography

2. Demographics (national income and size of population)

3. Psychographics (values, attitudes and lifestyles)4. Behavioral characteristics and

5. Benefits sought

Another method of global segmentation is:1. Vertical segmentation and

2. Horizontal segmentation

8/6/2019 354384_634048583371284278

20/45

Geographic Segmentation

It is dividing the world into geographic segments.

Advantages: Proximity and easier to visit on the same trip.

Limitations: Despite being in the same region, markets need

not be similar.

eg. Japan and Vietnam are both in East Asia but Japan is a high-

income, postindustrial society and the other is an emerging, less

developed preindustrial society.

Hermann Simon ranked geography as the lowest in marketsegmentation, after Application, Customer group,

Product/Technology,Price level and Quality.

8/6/2019 354384_634048583371284278

21/45

Demographic Segmentation

This is based on characteristics like:Age, Gender, Income, Education & Occupation.

New demographic factors like: Aging population, fewer children,

working women, higher incomes and living standards suggest

the em

ergence of global segm

ents.

National income is the major indicator ofmarket potential for

most consumer & industrial products.

Annual per capita incom

e varies widely from

a low 81$ in Congo38587 $ in Luxembourg.

For low price products like cigarettes, soft drinks etc, population is more

important than income. China & India with a population of 1.3 & 1.0 billion are

attractive target markets.

8/6/2019 354384_634048583371284278

22/45

Psychographic SegmentationThis involves grouping people in terms of their attitudes, values &

lifestyles. Data obtained from Questionnaires require respondents

to indicate the extent to which they agree or disagree with a series of statements.

Psychographic profiles ofPorsches American customers

Porsche AG, the German sports-car

maker turned to Psychographics

after sales declined from 50,000 in

86 to 14,000 in 93.

Data was used to develop advertising

tailored to each type.

Porsches U.S sales improved by

nearly 50% in 94

Category % of all

owners

Description

Top Guns 27% Driven & ambitious, Power

minded

Elitists 24% Old money, Personality not

asscd even with an expensive

car

Proud

patrons

23% Proud to own the car as a

reward

Bon Vivants 17% Jet setters and thrill seekers

Fantasists 9% Car is a form of escape, dont

care about impressing others

8/6/2019 354384_634048583371284278

23/45

Behavior Segmentation

Focuses on whether people buy and use a productas well as how often and how much they use it.

Users can be categorized in terms of usage rates:

Heavy, Medium, Light and Non-user

Consum

ers can also be segm

ented as per user status:Potential, nonusers, ex-users, regulars, first-timers & users ofcompetitor brands.

Financial institutions has also to consider Consumer behaviortowards saving and spending money.

Japan has the highest number of cash dispensers, followed by Switzerland,Canada and the United States.

8/6/2019 354384_634048583371284278

24/45

Benefit Segmentation

This focuses on B, the numerator in the Value equation,

V = B/P

V= value

B= perceived benefits - perceived costs

P= price

This approach can achieve excellent results by virtue ofmarketers

superior understanding of the problem a product solves or the

benefit it offers irrespective of geography.

eg. Nestle found that cat owners attitudes towards feeding their pets are thesame everywhere.

A campaign was created for Friskies cat food based on the appeal that dry cat

food better suits a cats universally recognised independent nature.

8/6/2019 354384_634048583371284278

25/45

Vertical vs. Horizontal Segmentation

Vertical Segmentation

This is based on product category and price points.

In medical imaging market X-ray, C T scan, MRI etc. are segmented

based on price.

Horizontal Segmentation

For the same product, market can also be segmented by thehealth care system that is regional, national & global.

This approach worked well in domestic as well as outside markets.

8/6/2019 354384_634048583371284278

26/45

Global Targeting

Targeting- It is the act of evaluating and comparing the identifiedgroups and then selecting one or more prospect/s with thehighest potential.

A Marketing Mix is then devised which creates the maximumvalue to the customers, while providing the best return on salesto the organization.

3 basic criteria for Targeting are:

1. Current Segment Size & Growth Potential2. Potential Competition

3. Compatibility & Feasibility

8/6/2019 354384_634048583371284278

27/45

Current Segment Size & Growth Potential

Is it large enough for the Company to make a profit ?

Does the segment has a high growth potential for beingattractive in terms of the Companys long term strategy ?

Is the global segment attractive enough for a standardizedproduct to be marketed in several countries.

eg. Billion plus members of the global MTV-generation is a huge

market in terms of size.

China alone offers attractive opportunities to many industries.

eg. Financial services, personal computers, passenger cars etc.

8/6/2019 354384_634048583371284278

28/45

Potential competition

Is the segment characterized by strong competition ?

Is the local brand offering a tough fight to the new Company ?

Inspite of an established, can a new Company make inroads ?

eg. Fuji launched despite Kodak being already present as the brand leader

in the 2.4 billion $ U.S color filmmarket.Now, after two decades Fujis U.Smkt. share is in the 10 to 16 % range.

Fuji currently enjoys a 25% mkt. share in Europe whereas Kodak hasonly 40% of the color filmmarket.

8/6/2019 354384_634048583371284278

29/45

Compatibility & Feasibility

To reach global markets, does the Company has

adequate resources and money to spend on distribution,

travelling etc. ?

Whether the segment targeted is compatible with the

companys overall goals and established sources of

competitive advantage. ?

Coke waited for 15 years to make its entry in Russia, while Pepsialready had a 100% Russian cola market.

After entering in 1987, Coke has achieved a 50% mkt. share by 96.

8/6/2019 354384_634048583371284278

30/45

Global Target Market Strategy

Standardized Global Marketing

Similar to mass marketing in a single country. Involves

creating the same marketing mix for the potential buyers.

Uses extensive distribution in the maximum number ofretail outlets.

Objective : greater sales volume, lower production costs &

greater profitability.

Coca-Cola uses the appeal of youthful fun in its global advertising.Sponsorship is global and is adapted to events that are popular in

specific countries.

8/6/2019 354384_634048583371284278

31/45

Concentrated Global Marketing

In this type, marketing mix is devised to reach a singlesegment of the global market. Such companies definetheir markets narrowly. They go for a global depth ratherthan a national breadth.

In Cosmetics, this approach has been used successfully to targetthe upscale, prestigious segment. eg. Oriflame, Loreal etc.

Winterhalter ( a German company) is a silent leader in thedishwasher market. It focuses exclusively on hotel chains,restaurants etc.

This narrowing ofmarket has been one of their most importantstrategic decision as well as the foundation of their success.

8/6/2019 354384_634048583371284278

32/45

Differentiated Global Marketing

In this the marketing strategy is a variation of

concentrated global mktg.

It involves targeting two or more distinct mkt. segments

with different mktg. mixes. This allows a wider market

coverage.

In the SUV segment, Rover has Range Rover for the elite class and the

Land Rover Discoverer which is lower priced. The company has a

concentrated strategy for each segment.

Swiss Watch Co. (SWC) offers watches ranging from 50$ worldwide to

the expensive one (Blancpain) costing 1.0 lakh $.

8/6/2019 354384_634048583371284278

33/45

Global Product Positioning

It is the location of the product in the minds ofthe customer. This depends on many factors, many of whichare controlled by the marketer. It is the way to reach the targetcustomer.

Global positioning is most effective for the high-touch/ tech

consumers.

Manhattan Bank launched a 75 million $ global advertising campaignwith the theme profit from experience.

The business and private banking clients of the bank span the globeand travel the globe. Hence, a uniform experience globally results inless confusion.

8/6/2019 354384_634048583371284278

34/45

Global Product Positioning

High-Tech PositioningPersonal computers, video and stereo equipment etc are

examples for this type of promotion. They are frequently

purchased on product features. Buyers are already have

adequate technical knowledge or are keen to know more.These products can be categorised as:

technical products -ex. Computers, chemicals, financial services.

special-interest products -Characterized by shared experience &

high involvement among users.demonstrable products- Mode of use needs to be shown at

selling points ex. Microwave ovens, Food processors, Gas

geysers etc.

8/6/2019 354384_634048583371284278

35/45

Global Product Positioning

High-Touch PositioningBuyers in this segment are highly involved. They share a common

language and set of symbols relating to themes of wealth,

materialism and romance.

Products that solve a common problem- provide benefits linked tolifes little moments. ex. quenching thirst with a soft drink

Global village products- products have a global appeal by virtue of

their country of origin. Sony is synonymous with Japanese quality,

Mercedes projects German engineering.

Products that use universal themes- advertising themes & product

appeals are across the globe. BMW car has its own inhouse BMW

magazine which reinforces the high-touch concept.

8/6/2019 354384_634048583371284278

36/45

Examples of Global Marketing

Strategy Company/Country

1.Brand Name Coca-Cola (U.S)

2.Product Design McDonalds(U.S), Toyota(Japan)

3.Positioning Unilever (Great Britain)

4.Packaging Gillette (U.S)

5.Distribution Benetton (Italy)

6.Customer service Caterpillar (U.S)

7.Sourcing Toyota, Honda (Japan)

8/6/2019 354384_634048583371284278

37/45

Brand Name as a Strategy

Coke from Coca-Cola is the best known

strongest brand in the world.

This has been made possible only due to the Companys swillingness and ability to back its flagship brand with a

strong local marketing effort.

Electral from FDC Ltd. is another Indian ORS

brand sold in many countries.This brand is a popular ORS worldwide and is approved by global

NGOs for the treatment of rehydration.

8/6/2019 354384_634048583371284278

38/45

Product Design as a Strategy

McDonalds has designed a restaurant

system that can be set up anywhere

in the world.

Indias own Kamat group of hotels which set up itsfirst hotel in Hubli in 1948 have now expandedworld over with restaurants in Belgium, Japan,Singapore, United Kingdom, USA and Dubai.

They also pioneered the concept of Ecotel revolution in India asORCHID Hotel in 1997 and are now eyeing global markets like

South Africa, China, Pakistan etc.

8/6/2019 354384_634048583371284278

39/45

Positioning as a strategy

Unilever uses a teddy bear picture to

position the benefits of softness

for its fabric-softener product in

various world markets across the

globe.

8/6/2019 354384_634048583371284278

40/45

Packaging as a strategy

Gillette uses the same packaging

for its flagship brand GilletteSensor Razor everywhere in the

world. This unique and distinct

packaging has made this a leading global brandin this segment.

8/6/2019 354384_634048583371284278

41/45

Distribution as a strategy

Benetton uses a sophisticated

distribution system to quickly

deliver the latest fashions to itsworldwide net-work of stores.

Benetton produces approx. 130 Million garments every year,

sold in about 120 countries through about 5000 stores offering

clothes that have style, quality and in relevance to the markettoday.

Benettons turnover is about 1.9 Billion Euros.

8/6/2019 354384_634048583371284278

42/45

Customer service as a strategy

Since its inception 80 years ago, Caterpillar has grown tobe the worlds largest manufacturer of construction andmining equipment, diesel and natural gas engines andindustrial gas turbines.

Its major success is due to a network of dealers thatsupports a promise of

24 hour parts and service.

Caterpillar is proud to be the leader in building the Worldsinfrastructure and in enabling progress for millions ofpeople around the globe.

8/6/2019 354384_634048583371284278

43/45

Sourcing as a strategy

Toyota and Hondas success was based on

exporting cars from its factories in Japan.

Now, both companies have invested in

manufacturing facilities in the United States

and other countries from which they export toall over the world.

8/6/2019 354384_634048583371284278

44/45

8/6/2019 354384_634048583371284278

45/45

Global Marketing

Customer was the king yesterday.

Customer is the King TODAY

&

CUSTOMER WILL CONTINUE

TO BETHE KING FOR MANY MORE

YEARSTO COME!!!