Global Marketing Management
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Transcript Global Marketing Management
Global Marketing Management: Planning and Organization
Global marketing management
Benefits of Global Marketing
International Planning Process
Market-entry Strategies
The important factors for each alternative
market-entry strategy
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Multinational companies
Confronted with increasing global competition for
expanding markets
Changing their marketing strategies and altering their
organizational structure
Nearly 75% of North American and European
corporations are smarten up their business processes
Smaller companies
More flexible
May enable them to reflect the demands of global
markets and redefine programs more quickly
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1970s – “standardization versus adaptation”
1980s – “global integration versus
localization”
1990s – “global integration versus local
responsiveness”
Example of new “mass customization” by
Dell.
Risk involves with global standardization
(e.g., Barbie Doll, Coca-cola).
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The trend back toward localization
Caused by the new efficiencies of customization
Made possible by the Internet
Increasingly flexible manufacturing processes
From the marketing perspective customization
is always best
Global markets continue to homogenize and
diversify simultaneously
Best companies will avoid trap of focusing on country as the
primary segmentation variable. Other segmentation may work
better (e.g., lifestyle)
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Nestle – world’s biggest marketer of infant formula,
powdered milk, instant coffee, chocolate, soups, and
mineral water
8500 products produced in 489 factories in 193
countries
Nestle strategy
Think and plan long term
Decentralize
Stick to what you know
Adapt to local tastes
Long-term strategy works for Nestle
Because the company relies on local ingredients
Markets products that consumers can afford
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When large market segments can be identified
Economies of scale in production and marketing
Important competitive advantages for global companies
Transfer of experience and know-how
Across countries through improved coordination and
integration of marketing activities
Marketing globally
Ensures that marketers have access to the toughest
customers
Market diversity carries with it additional financial benefits
Firms are able to take advantage of changing financial
circumstances
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Planning is the job of making things happen
that might not otherwise occur
Planning allows for:
Rapid growth of the international function
Changing markets
Increasing competition, and the
Turbulent challenges of different national markets
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Planning is both a process and philosophy
Relates to the formulation of goals and methods of
accomplishing them
▪ Corporate planning
▪ Strategic planning
▪ Tactical planning
Company objectives and resources
Each new market requires
▪ A complete evaluation, including existing commitments,
relative to the parent company’s objectives and resources
Defining objectives clarifies the orientation of the
domestic and international divisions, permitting
consistent policies
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International commitment
Commitment in terms of
▪ Dollars to be invested
▪ Personnel for managing the international organization
▪ Determination to stay in the market long enough to
realize a return in investments.
The degree of commitment to an international
marketing cause reflects the extend to a
company’s involvement
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Exhibit 11.1
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What product, which market, and how?
Phase 1 – Preliminary analysis and screening
Matching Company and Country Needs.(SWOT
and PESTEL analyses)
Phase 2 – Adapting marketing mix to target
markets (e.g., KFC)
Phase 3 – Developing the marketing plan
Phase 4 – Implementation and control
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An entry strategy into international market
should reflect on analysis
Market characteristics
▪
▪
▪
▪
▪
Potential sales
Strategic importance
Strengths of local resources
Cultural differences
Country restrictions
Company capabilities and characteristics
▪ Degree of near-market knowledge
▪ Marketing involvement
▪ Management commitment
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Exhibit 11.2
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Companies most often begin with modest
export involvement
A company has four different modes of
foreign market entry
Exporting
Contractual agreements
Strategic alliances
Direct foreign investments
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Exporting accounts for some 10% of global
activity
Direct exporting – the company sells to a
customer in another country
Indirect exporting – the company sells to a
buyer (importer or distribution) in the home
country, who in turn exports the product
Customers include Wal-Mart and Sears
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The Internet
Initially, Internet marketing focused on domestic sales
A surprisingly large number of companies started
receiving orders from customers in other countries,
▪ Resulting in the concept of international Internet marketing
(IIM)
Direct sales
Particularly for high technology and big ticket
industrial products
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Contractual agreements
Long-term,
Nonequity association between a company and another in
a foreign market
Contractual agreement (e.g., transfer of technology,
processes, trademarks, human skills)
Licensing
A means of establishing a foothold in foreign markets
without large capital outlays.
Patent, trademark rights, and the right to use
technological processes.
A favorite strategy for small and medium-sized companies
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Franchising
A rapid growing form of licensing. Franchiser
provides a standard package of products,
systems, and management services
Franchise provides market knowledge, capital,
and personal involvement in management
Expected to be the fastest-growing market-entry
strategy as it provides an attractive form of
corporate organization for companies wishing to
expand quickly with low capital investment.
(e.g., KFC, McDonalds)
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A strategic international alliance (SIA)
A business relationship established by two or more companies to cooperate
out of mutual need
To share risk in achieving a common objective
SIAs are sought as a way to shore up weaknesses and
increase competitive strengths
Firms enter SIAs for several reasons
Opportunities for rapid expansion into new markets
Access to new technology
More efficient production and innovation
Reduced marketing costs
Strategic competitive moves
Access to additional sources of products and capital
(e.g., in airline industry One world Alliance consists of British Airways, Japan
Airlines etc.)
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International joint ventures (IJVs)
A partnership of two or more participating companies that have joined forces
to create a separate legal entity
(e.g., merge with foreign company in order to gain better access in the new
market)
Consortia
Similar to joint ventures and could be classified as
such except for two unique characteristics
▪ Typically involve a large number of participants
▪ Frequently operate in a country or market in which none
of the participants
is currently active
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Factors that influence the structure and
performance of direct investments
Timing
The growing complexity and contingencies of
contracts
Transaction cost structures
Technology transfer
Degree of product differentiation
The previous experiences and cultural diversity of
acquired firms
Advertising and reputation barriers
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Devising a standard organizational structure is difficult
Because organizations need to reflect a wide range of company-specific
characteristics
Companies are usually structured around one of three
alternatives
Global product divisions responsible for product sales throughout world
Geographical divisions responsible for all products and functions within a
given geographical area
A matrix organization consisting of either of these arrangements
▪ With centralized sales and marketing run by a
centralized functional staff, or a combination of area
operations and global product management
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Exhibit 11.4
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To keep abreast of the competition and maintain a
viable position for increasingly competitive
markets, a global perspective is necessary
Cost containment, customer satisfaction, and a
greater number of players mean that every
opportunity to refine international business
practices must be examined in light of company
goals
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Important avenues to global marketing that must
be implemented in the planning and organization
of global marketing management
Collaborative relationships
Strategic international alliances
Strategic planning
Alternative market-entry strategies
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