Transcript Chapter 01 - MBA Program Resources

Global Marketing
Management
A European Perspective
Introduction to Global
Marketing
Warren J. Keegan
Bodo B. Schlegelmilch
Overview
The Marketing Concept
The Three Key Elements of Marketing
Scope and Boundaries of Global Marketing
Importance of Global Marketing
Management Orientation and Global Marketing
Factors Supporting or Inhibiting Global Integration
Summary
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Learning Objectives
Understanding how the world economy developed
over the past decades
Knowing the impact of globalization on the
marketing discipline
Learning about the interdependencies between
management orientation and marketing performance
Understanding the factors supporting or inhibiting
international marketing activities
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Marketing: A Universal Discipline
Marketing (1): the process of focusing resources and
objectives of an organization on environmental
opportunities and needs
Marketing (2): a set of concepts, tools, theories,
practices, procedures, and experiences
Although a universal discipline, marketing practice
varies from country to country
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The Marketing Concept (1)
Concept has chanced dramatically
1950’s:
Focus on products
1960’s:
Focus on customer orientation
Development of marketing mix: product, price, promotion,
place (4P’s)
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The Marketing Concept (2)
1990’s:
Focus on customer in the context of the broader external
environment
E.g. competition, government policy and regulation
Focus on stakeholder value
E.g. employees, customers, shareholders, society
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The Marketing Concept (3)
Today:
Two key tasks of marketing
Focus on customer and his/her environment
Create value for consumers and stakeholder
Shift towards
Focus on managing strategic partnerships
Positioning of firm in value chain to optimize value
creation
Profit as a measure of success, not an end in itself
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The Three Key Elements of
Marketing
VALUE
DIFFERENTIATION
FOCUS
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The Three Key Elements of
Marketing - Value
 Goal: create value that is greater than the value
created by competitors
 Strategy:
 Expand or improve product and/ or service benefits
 Reduce the price
 Combine these two elements
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The Three Key Elements of
Marketing - Value
V=B/P
V = Value
B = Perceived Benefits – Perceived Costs
P = Price
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The Three Key Elements of
Marketing - Differentiation
 Goal: create competitive advantage through
differentiation
 Advantage can exist in any element of a company’s
offer: e.g. product, price, advertising
 Competitive advantage should be sustainable over
extended period of time
 BMW: Combination of superior production skills
and marketing competencies
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The Three Key Elements of
Marketing - Focus
 Goal: a concentration of attention and resources
 Requirement to create customer value at a
competitive advantage
 A viable way for small and medium sized companies
to achieve dominant position in world market
 FREQUENTIS: 90% export share with air traffic
control systems
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Scope and Boundaries of Global
Marketing
 Marketing discipline is universal but markets and
customers are quite different
 Three domains of knowledge relevant to
international managers
 Cross-Cultural Knowledge
 Country/ Regional Knowledge
 Cross-Border Transactions Knowledge
 Need for “Global Localization”: Adjustment of
global marketing strategies to local requirements
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Importance of Global Marketing
 Activities in the international arena are of eminent
importance to companies in achieving maximum
growth potential
 E.g.: 94% of world market potential for German
companies is outside of Germany
 Trend: A large number of industries will be
dominated by a handful of global companies
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Management Orientation and Global
Marketing (1)
 Different Management Orientations in the Global
Arena – EPRG Framework
Polycentric
Ethnocentric
Regiocentric
Geocentric
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Management Orientation and Global
Marketing (2)
 Ethnocentric Orientation:
 Characteristic for domestic and international companies
 Marketing opportunities outside the home market are
pursued by extending various elements of the marketing
mix
 Polycentric Orientation
 Characteristic for multinational companies
 Marketing mix is adapted by autonomous country
managers
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Management Orientation and Global
Marketing (3)
 Regiocentric or Geocentric Orientation:
 Characteristic for global and transnational companies
 Marketing opportunities are pursued by both, extension
and adaptation strategies in global markets
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Factors Supporting or Inhibiting
Global Integration (1)
 Driving Forces
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Technology
Regional Economic Agreements
Market Needs and Wants
Transportation and Communication Improvements
Product Development Costs
Quality
World Economic Trends
Leverage
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Factors Supporting or Inhibiting
Global Integration (2)
 Restraining Forces
 Management Myopia
 Ethnocentric Organization Culture
 National Controls
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Summary
 Global marketing is the process of focusing
resources on global marketing opportunities
 Goal, to create customer value and competitive
advantage by maintaining focus
 Three classifications of management orientation:
ethnocentric, polycentric, regiocentric, geocentric
 Global marketing importance is shaped by a variety
of driving and restraining forces
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