Global Marketing

Warren J. Keegan Mark C. Green

Introduction brought to you by to Thomas Caric Global Marketing Chapter 1

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Your lecturer
started his professional career in a full service advertising agency in Frankonia as a copy writer in the late 80s. 1991: Product Manager Boys Toys and Group Product manager Preschool for the then worlds biggest toy & games manufacturer HASBRO in Germany 1997: Set up the software retail business for Microsoft Germany as Category Manager. 2001: Launched the Xbox as Head of Marketing for Microsoft in Germany 2003: Program Manager in Microsoft Germanys Small & Medium Business Unit Since 2006: various roles and regional responsibilities in Microsoft as Windows PC and Windows Packaged Software (FPP) as well as Office Retail Marketing / Category lead in EMEA, MEA and CEE Currently Head of Windows & Office Retail Category Marketing in CEE (Russia, Poland, Czechia, Slovakia, Hungary, Romania, Greece, Ukraine)
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Your lecturer
Born 1959 in Schweinfurt, Frankonia, Germany Croatian father, German mother A son (21) and a daughter (16) Most enjoys Sailing, Opera, Fine Cooking, Tango

Euruni email: t.caric@euruni.edu Private email (dare you SPAM me! ): thomas@caric.de Business email: thomasc@microsoft.com (please only for business topics) Mobile: +49 175 584 45 91 (use only if urgent AND important)
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Some rules
Taking notes on a PC is ok (also on Macs and Tablets ) Checking the internet for an answer of a lessons question is considered as cheating (unless lecturer requests/approves it) No video or audio recording without prior consent No external sharing (blogs, Facebook etc.) Fairness is a two-way-street.
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Literature
Keegan, Warren J.
Global marketing / Warren J. Keegan, Mark C. Green 7th edition, 2013 ISBN 978-0-13-271915-5

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Book & Course Overview

Part I: Overview of Global Marketing Part II: Environments of Global Marketing Part III: Global Strategy Part IV: Global Considerations of the Marketing Mix

Part V: Integrating the Dimensions of Global Marketing

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Outlook what we will cover

Introduction to Global Marketing The Global Economic Environment The Global Trade Environment Social and Cultural Environments The Political, Legal, and Regulatory Environments Global Information Systems and Market Research Segmentation, Targeting and Positioning Importing, Exporting and Sourcing Global Market Entry Strategies: Licensing, Investment and Strategic Alliances Brand and Product Decisions in Global Marketing Pricing Decision Global Marketing Channels and Physical Distribution Global Marketing Communications Decisions 1: Advertising and Public Relations Global Marketing Comm. Decisions 2: Sales Promos, Personal Selling, Special Forms Global Marketing and the Digital Revolution Strategic Elements of Competitive Advantage Leadership, Organization, and Corporate Social Responsibility
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Global Marketing
Warren J. Keegan Mark C. Green

Introduction to Global Marketing Chapter 1

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Objectives for today

1. Understand the various ways a company can expand globally, using the product/market growth 2. Understand how companies in global industries pursue competitive advantages 3. Compare and contrast single-country marketing strategy with global marketing strategy 4. Identify the companies at the top of the global 500 rankings 5. Understand the stages a company goes through as its management orientation evolves from domestic and ethnocentric to global and geocentric 6. Understand the driving and restraining forces affecting global integration today.
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

GLOBAL MARKETING
Create value for customers by improving benefits or reducing price
Improve the product Find new distribution channels Create better communications Cut monetary and non-monetary costs and prices Value=Benefits/Price

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

GLOBALIZATION
Economic globalization constitutes integration of national economies into the international economy through trade, direct foreign investment (by corporations and multinationals), short-term capital flows, international flows of workers and humanity generally, and flows of technology. ~Jagdish Bhagwati~
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

GLOBAL INDUSTRIES
An industry is global to the extent that a companys industry position in one country is interdependent with its industry position in another country Indicators of globalization:
Ratio of cross-border investment to total capital investment Proportion of industry revenue generated by all companies that compete in key world regions Ratio of cross-border trade to worldwide production Coca Cola spent $5 billion worldwide on promotions and marketing in 2010
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

COMPETITIVE ADVANTAGE, GLOBALIZATION & GLOBAL INDUSTRIES

Focus
Concentration and attention on core business and competence

Nestle is focused: We are food and beverages. We are not

running bicycle shops. Even in food we are not in all fields. There are certain areas we do not touchWe have no soft drinks because I have said we will either buy Coca-Cola or we leave it alone. This is focus.
~Helmut Maucher, former chairman of Nestl SA~
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

GLOBAL MARKETING: What It Is & What It Isnt

Single Country Marketing Strategy
Target Market Strategy Marketing Mix
Product Price Promotion Place

Global Marketing Strategy

Global Market Participation Marketing Mix Development
4 Ps: Adapt or Standardize?

Concentration of Marketing Activities Coordination of Marketing Activities Integration of Competitive Moves

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

STANDARDIZATION vs. ADAPTATION

Globalization (Standardization)
Developing standardized products marketed worldwide with a standardized marketing mix Essence of mass marketing

Global localization (Adaptation)

Mixing standardization and customization in a way that minimizes costs while maximizing satisfaction Essence of segmentation Think globally, act locally
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

STANDARDIZATION vs. ADAPTATION

The Faces of Coca-Cola Around the World
Arabic Read right to left

Chinese delicious/happiness

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

McDonalds Global Marketing

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

The Importance of Going Global

For U.S. companies, 75% of total world market for goods and services is outside the country
Coca-Cola earns 75% of operating income and 2/3 of profit outside of North America

For Japanese companies, 90% of world market is outside the country 94% of market potential is outside of Germany for its companies even though it is the largest EU market
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

How Big Is The Global Market?

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Management Orientations
Ethnocentric Orientation
Home country is superior to others

Sees only similarities in other countries

Assumes products and practices that succeed at home will be successful everywhere Leads to a standardized or extension approach
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Management Orientations
Polycentric Orientation
Each country is unique Each subsidiary develops its own unique business and marketing strategies Often referred to as multinational Leads to a localized or adaptation approach that assumes products must be adapted to local market conditions
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Management Orientations
Regiocentric Orientation
A region is the relevant geographic unit
Ex: The NAFTA or European Union market

Some companies serve markets throughout the world but on a regional basis
Ex: General Motors had four regions for decades

European Union
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Management Orientations
Geocentric Orientation
Entire world is a potential market Strives for integrated global strategies Also known as a global or transnational company Retains an association with the headquarters country Pursues serving world markets from a single country or sources globally to focus on select country markets Leads to a combination of extension and adaptation elements

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Forces Affecting Global Integration & Global Marketing

Multilateral trade agreements Converging market needs and wants and the information revolution Transportation and communication improvements Product development costs
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Driving Forces Affecting Global Integration and Global Marketing

Quality
R&D as a percent of sales

World economic trends

2008 global crisis Growing middle class in China, India, Brazil, etc. Rapid growth in China pre2008 Movement to free markets worldwide

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Driving Forces Affecting Global Integration and Global Marketing

Leverage
Experience transfers Scale economies Resource utilization Global strategy

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Restraining Forces Affecting Global Integration and Global Marketing

Management myopia Organizational culture National controls Opposition to globalization

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Cases Assignment
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Firestone Tire & Rubber Ray-Ban Rolls-Royce Budweiser Ben & Jerrys Miller Beer Holiday Inn Wild Turkey Bourbon Jaguar Burger King Gaggia Church English shoes The Body Shop
a. b. c. d. e. f. g. h. i. j. k. l. m. n. o. Germany France Japan Great Britain United States Switzerland Italy Sweden Finland China Netherlands Belgium India Brazil South Korea

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Cases - Fortune Global 500s TOP companies - revenue

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Source: Wikipedia

Cases - Fortune Global 500s TOP companies - profit

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Source: Wikipedia

Cases - Fortune Global 500: Homework

Choose either GazProm, Walmart and Apple 1. Paint their growth strategy in the Product/Market growth matrix and explain. Be factual. 2. Describe their Standardization vs. Adaption approach. Explain. Be factual. 3. Describe their appraoch with regards to global, international, regional. Explain. Be factual. 4. Describe their management orientation in the EPRG framework (ethnocentric, polycentric, regiocentric, and geocentric). Explain. Be factual. Research, build 4 slides per each company, graphs beat text, dont forget to list your sources.
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Cases The Post PC aera?

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Cases The Post PC aera?

Source: Gfk PC Panel: RU, PL, CZ, HU, RO, GR, UKR

CONFIDENTIAL
Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Cases The Post PC aera?

Describe the assumed drivers for this development How do you think the OVERALL PC device* market grows/declines YoY?

Describe regional differences US, UK, Emerging markets, based on

market maturity time to market consumer purchase power

What should be Microsofts competitive strategy on 2 year horizon?

* PCs, Mac, Ipad, Tablets (Samsung Galaxy at al on Android)

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Looking Ahead to Chapter 2 & 3

The Global Economic Environment
The World Economy - Overview Economic Systems Stages of Market Development Balance of Payments Trade in Merchandise and Services

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall

Looking Ahead to Chapter 2 & 3

The Global Trade Environment
The WTO and GATT Preferential Trade Agreements North America (NAFTA) Latin America: SICA, Andean Community, Mercosur, and CARICOM Asia Pacific: ASEAN Western, Central and Eastern Europe - EU The Middle East Africa (ECOWAS, SADC)

Copyright 2013, Pearson Education Inc., Publishing as Prentice-Hall