Global Marketing Management

Chapter 1 Introduction to
Global Marketing

Warren J. Keegan
 Overview
 Marketing: A Universal Discipline
 The Three Principles of Marketing
 Global Marketing:What It Is & What It Is Not
 Importance of Global Marketing
 Management Orientation & Global Marketing
 Driving and Restraining Forces Affecting Global
Integration & Global Marketing
 Summary

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 Learning Objectives

 Understand how the world economy developed over

the past decades
 Know the impact of globalization on the marketing
discipline
 Learn about the interdependencies between
management orientation & marketing performance
 Understand the factors supporting or inhibiting
international marketing activities

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 Marketing: A Universal Discipline
 Marketing (1): the process of focusing the resources &
objectives of an organization on environmental
opportunities & needs

 Marketing (2): a set of concepts, tools, theories,

practices, procedures, & experiences

 Although marketing is 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, place,
promotion (4P’s)

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 The Marketing Concept (2)
 1990’s:
 Focus on customer in the context of the broader external
environment
 Competition, government policy & regulation

 Focus on stakeholder value

 employees, customers, shareholders, society

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 The Marketing Concept (3)
 Today:
 Two key tasks of marketing
 Focus on customer & his/her environment
 Create value for consumers & 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 Principles of Marketing

CUSTOMER VALUE

DIFFERENTIATION FOCUS

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 Key Elements of Marketing –
1. Customer Value
 Goal: create customer 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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 Elements of Marketing –
Customer Value

V=B/P

V = Value
B = Perceived Benefits – Perceived Costs
P = Price

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 Key Elements of Marketing –
2. Differentiation
 Goal: create competitive advantage through
differentiation
 Advantage can exist in any element of a company’s
offer
 One way to penetrate a new national market is to
offer a superior product at a lower price.

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 Key Elements of Marketing –
3. Focus
 Goal: a concentration of attention & resources
 Requirement to create customer value at a
competitive advantage
 A viable way for small & medium sized companies
to achieve dominant position in world market
 A clear focus on customer needs & wants

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 Global Marketing
 Marketing discipline is universal but markets &
customers are quite different
 3 domains of knowledge
 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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 Examples of Global Marketing

Product Canon/photocopier/McDonalds/Toyota/Ford
Design
Brand Name Marlboro/Coke/Pepsi/Mercedes/Caterpillar
Product Colgate toothpaste/Unilever fabric softener
Positioning
Packaging Gillette razors
Advertising Coca-cola/British Airways/Benetton
Strategy
Sales IBM
Promotion
Distribution Benetton/United Distillers
Customer American Express/Hertz
Service

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 Importance of Global Marketing
 International arena is of great importance to
companies maximizing growth potential
 75% of market potential is outside the US
 94% of market potential for German companies is
outside of Germany
 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 & Global
Marketing (2)
 Ethnocentric Orientation:
 Characteristic of domestic & international companies
 Opportunities outside the home market are pursued by
extending various elements of the marketing mix

 Polycentric Orientation
 Characteristic of multinational companies
 Marketing mix is adapted by autonomous country
managers

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 Management Orientation & Global
Marketing (3)

 Regiocentric or Geocentric Orientation:

 Characteristic of global & transnational companies
 Marketing opportunities are pursued by both extension &
adaptation strategies in global markets

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Driving Forces Affecting Global Marketing
 Technology
 Regional Economic Agreements
 Market Needs & Wants
 Transportation & Communication Improvements
 Product Development Costs
 Quality
 World Economic Trends
 Leverage
 The Global/ Transnational Corporation
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Restraining Forces Affecting Global
Marketing

 Management Myopia & Organizational Culture

 National Controls & Barriers

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 Summary
 Global marketing is the process of focusing
resources on global marketing opportunities
 Goal, to create customer value & competitive
advantage by maintaining focus
 Three classifications of management orientation:
ethnocentric, polycentric, regiocentric, geocentric
 Global marketing importance is shaped by a variety
of driving & restraining forces

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