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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.
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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.
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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)
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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.
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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.
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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
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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.
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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.
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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
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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.
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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.
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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 $.
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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.
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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.
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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.
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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)
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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Global Marketing
Customer was the king yesterday.
Customer is the King TODAY
&
CUSTOMER WILL CONTINUE
TO BETHE KING FOR MANY MORE
YEARSTO COME!!!