Global Marketing

Coca Cola

• 16000 beverages consumed every……• Soda fountain drink in 1886• Bottling in 1894• Canada and Mexico in 1897• Bottling plant in Panama in 1906• Marketed in 76 countries by 1929• Build 63 international bottling plants during

WW-II• 100 countries in 1957

• Four international franchises account for 40% of world wide sales

• Coca Cola HBC in Greece, has operating rights in 28 countries

• Coca Cola has ownership stakes in them• JV with Inca Kola in Peru• Georgia from Coca Cola Japan• Orange drink from China now in Thailand

and India• JV with Nestle for tea products

Vizio

• Founded by William Wang• Among the top three sellers of flat TVs in

US• Employee count of around 100 and sales

of $2 billion• Very close relationship with suppliers from

Taiwan, China Korea and Japan• Assembly operations in Mexico too• Storage and transportation by 3rd party

logistics providers

Boeing

• 30% of the Boeing 777 is made by foreign companies

• Includes 8 from Japan and 3 from Italy• 65% of the Boeing 787 will be outsourced

to foreign companies• 35% will go to 3 Japanese firms

Level of Internationalization

• Telephone calls – 2%• Immigrants – 2%• University students – 5%• Management research – 6%• Private charity – 7%• Tourist arrivals – 9%• Patents – 14%• Stock investments – 15%• Trade (to GDP) – 27%

Google in Russia

• Reach is 28%• Yandex - 64%• Rambler – 54%• Linguistic differences• Adaptation to local payment mechanism • Grew only after it set up a physical

presence in 2003

Google in China

• Pullout imminent• Censorship and hacker attacks• Launched self-censored google.cn in 2006• Youtube, Blogger, Picasa already blocked• Twitter and Facebook

Coca Cola 80 to 96

• Growth fever• Economies of scale• Statelessness• Ubiquity• Centralization and standardization• From $4 bil to $140 bil in 16 years

Coca Cola 96 --

• Economic nosedive in Brazil and Japan • Asian currency crisis• Russia and East Europe• Think Local, Act Local• 6000 layoffs

CAGE

• Cultural• Administrative• Geographical• Economic

Hofstede

• Individualism and collectivism• Power distance• Uncertainty avoidance• Masculinity and femininity• Time orientation

Trompenaar

• Universalism and particularism• Individualism and collectivism• Neutral and affective relationships• Specific and diffuse relationships• Achievement and ascription• Relationship to time• Relationship to nature

Schwartz

• Conservatism and autonomy• Hierarchy and egalitarianism• Mastery and harmony

Administrative/Political risk

• Transfer risk• Operational risk• Ownership risk

• Macro risk and micro risk

Legal Differences

• International Law• Common law• Civil law• Theocratic law• Communist law

Cost Pressures and Pressures for Local Responsiveness

Firms that compete in the global marketplace typically face two types of competitive pressures

1. pressures for cost reductions

2. pressures to be locally responsive

• These pressures place conflicting demands on the firm

Pressures for Local Responsiveness

Pressures for local responsiveness arise from

1. differences in consumer tastes and preferences

2. differences in traditional practices and infrastructure

3. differences in distribution channels

4. host government demands• Firms facing these pressures need to differentiate their

products and marketing strategy in each country

Choosing a Strategy

There are four basic strategies to compete in the international environment

1. global standardization

2. localization

3. transnational

4. international

Making Alliances Work

Many international strategic alliances run into problemsThe success of an alliance seems to be a function of three

main factors1. partner selection2. alliance structure 3. the manner in which the alliance is managed

Basic Entry Decisions

A firm expanding internationally must decide• which markets to enter• when to enter them• on what scale• how to enter them (the choice of entry

mode)

Dabur• Large population• Long term GDP growth• Should not be margin-dilutive• Between China and Nigeria. If not:

– Is it a developed market– Is there a high cost of operation

• Acquisition of brands can be considered• Technology to be compatible• Keep “herbal” platform

Foreign Entry

Firms can enter foreign markets through

1. Exporting

2. Countertrade

3. Turnkey projects

4. Contract manufacturing

5. Licensing or franchising

6. A joint venture with a host country firm

7. A wholly owned subsidiary

Dunning’s O-L-I Framework

1. Ownership advantages

2. Location advantages

3. Internalization

ADDING Scorecard

• Adding volume• Decreasing costs• Differentiating• Increasing industry attractiveness• Normalizing risk• Generating knowledge

Ghemawat’s As

• Adaptation• Aggregation• Arbitrage