Global Marketing Management Chapter 1 Introduction to Global

Global Marketing Management Chapter 1 Introduction to Global Marketing Warren J. Keegan

Overview z Marketing: A Universal Discipline z The Three Principles of Marketing z Global Marketing: What It Is & What It Is Not z Importance of Global Marketing z Management Orientation & Global Marketing z Driving and Restraining Forces Affecting Global Integration & Global Marketing z Summary Keegan: Global Marketing Management Chapter 1/ 2

Learning Objectives z Understand how the world economy developed over the past decades z Know the impact of globalization on the marketing discipline z Learn about the interdependencies between management orientation & marketing performance z Understand the factors supporting or inhibiting international marketing activities Keegan: Global Marketing Management Chapter 1/ 3

Marketing: A Universal Discipline z Marketing (1): the process of focusing the resources & objectives of an organization on environmental opportunities & needs z Marketing (2): a set of concepts, tools, theories, practices, procedures, & experiences z Although marketing is a universal discipline, marketing practice varies from country to country Keegan: Global Marketing Management Chapter 1/ 4

The Marketing Concept (1) z Concept has chanced dramatically z 1950’s: Focus on products z 1960’s: y. Focus on customer orientation y. Development of marketing mix: product, price, place, promotion (4 P’s) Keegan: Global Marketing Management Chapter 1/ 5

The Marketing Concept (2) z 1990’s: y. Focus on customer in the context of the broader external environment x. Competition, government policy & regulation y. Focus on stakeholder value xemployees, customers, shareholders, society Keegan: Global Marketing Management Chapter 1/ 6

The Marketing Concept (3) z Today: y. Two key tasks of marketing x. Focus on customer & his/her environment x. Create value for consumers & stakeholder y. Shift towards x. Focus on managing strategic partnerships x. Positioning of firm in value chain to optimize value creation y. Profit as a measure of success, not an end in itself Keegan: Global Marketing Management Chapter 1/ 7

The Three Principles of Marketing CUSTOMER VALUE DIFFERENTIATION Keegan: Global Marketing Management FOCUS Chapter 1/ 8

Key Elements of Marketing – 1. Customer Value z Goal: create customer value that is greater than the value created by competitors z Strategy: y Expand or improve product and/ or service benefits y Reduce the price y Combine these two elements Keegan: Global Marketing Management Chapter 1/ 9

Elements of Marketing – Customer Value V=B/P V = Value B = Perceived Benefits – Perceived Costs P = Price Keegan: Global Marketing Management Chapter 1/ 10

Key Elements of Marketing – 2. Differentiation z Goal: create competitive advantage through differentiation z Advantage can exist in any element of a company’s offer z One way to penetrate a new national market is to offer a superior product at a lower price. Keegan: Global Marketing Management Chapter 1/ 11

Key Elements of Marketing – 3. Focus z Goal: a concentration of attention & resources z Requirement to create customer value at a competitive advantage z A viable way for small & medium sized companies to achieve dominant position in world market z A clear focus on customer needs & wants Keegan: Global Marketing Management Chapter 1/ 12

Global Marketing z Marketing discipline is universal but markets & customers are quite different z 3 domains of knowledge y Cross-Cultural Knowledge y Country/ Regional Knowledge y Cross-Border Transactions Knowledge z Need for “Global Localization”: Adjustment of global marketing strategies to local requirements Keegan: Global Marketing Management Chapter 1/ 13

Examples of Global Marketing Product Design Canon/photocopier/Mc. Donalds/Toyota/Ford Brand Name Marlboro/Coke/Pepsi/Mercedes/Caterpillar Product Positioning Colgate toothpaste/Unilever fabric softener Packaging Gillette razors Advertising Strategy Coca-cola/British Airways/Benetton Sales Promotion IBM Distribution Benetton/United Distillers Customer Service American Express/Hertz Keegan: Global Marketing Management Chapter 1/ 14

Importance of Global Marketing z International arena is of great importance to companies maximizing growth potential z 75% of market potential is outside the US z 94% of market potential for German companies is outside of Germany z A large number of industries will be dominated by a handful of global companies Keegan: Global Marketing Management Chapter 1/ 15

Management Orientation and Global Marketing (1) z Different Management Orientations in the Global Arena – EPRG Framework Polycentric Ethnocentric Regiocentric Keegan: Global Marketing Management Geocentric Chapter 1/ 16

Management Orientation & Global Marketing (2) z Ethnocentric Orientation: y Characteristic of domestic & international companies y Opportunities outside the home market are pursued by extending various elements of the marketing mix z Polycentric Orientation y Characteristic of multinational companies y Marketing mix is adapted by autonomous country managers Keegan: Global Marketing Management Chapter 1/ 17

Management Orientation & Global Marketing (3) z Regiocentric or Geocentric Orientation: y Characteristic of global & transnational companies y Marketing opportunities are pursued by both extension & adaptation strategies in global markets Keegan: Global Marketing Management Chapter 1/ 18

Driving Forces Affecting Global Marketing y Technology y Regional Economic Agreements y Market Needs & Wants y Transportation & Communication Improvements y Product Development Costs y Quality y World Economic Trends y Leverage y The Global/ Transnational Corporation Keegan: Global Marketing Management Chapter 1/ 19

Restraining Forces Affecting Global Marketing y Management Myopia & Organizational Culture y National Controls & Barriers Keegan: Global Marketing Management Chapter 1/ 20

Summary z Global marketing is the process of focusing resources on global marketing opportunities z Goal, to create customer value & competitive advantage by maintaining focus z Three classifications of management orientation: ethnocentric, polycentric, regiocentric, geocentric z Global marketing importance is shaped by a variety of driving & restraining forces Keegan: Global Marketing Management Chapter 1/ 21