Global Marketing 1

Bab 1
The scope challenge of global marketing

Introduction :
Two decades ago, the phrase global marketing did not exist. Today, business people utilize global marketing for the realization of their companies full commercial potential
What is global marketing? How does it differ from “regular” marketing?
An organization that engages in global marketing focuses its resources on global market opportunities and threats.
Difference between “regular” marketing and “global” marketing is the scope of activities. A company that engages in global marketing conducts their business activities outside the home country market

Costumer Value :
For any organization operating anywhere in the world, the essence of marketing is to surpass the competition at the task of creating perceived value for customers.
The value equation is:
value = benefits / price (money, time, effort, etc)
As general rules, value as perceived by the customer can be increased in two basic ways. Markets can offer customers an improved bundle of benefits or lower prices (or both)
Companies that use price as a competitive weapon may enjoy an ample supply of low-wage labor or access to cheap raw materials. They can also reduce prices if cost are low because or process efficiencies in manufacturing.
Toyota, Nissan made significant gains in the American market in 1980s. They offered cars with higher quality and lower prices than those made by Chrysler, Ford and GM.
Competitive advantage, globalization, and global industry :
When company succeeds in creating value for customers that its competitors, that company is said to enjoy “competitive advantage” in an industry.
Globalization, from a marketing point of view, globalization present companies with tantalizing opportunities and challenge as executives decide whether or not to offer their products and services anywhere.
Global industry is one in which competitive advantage can be achieved by integrating and leveraging operations on a worldwide scale. >> an industry is global to the extent that a company’s imdustry position in one country is interdependent with its industry position in other countries.
Achieving competitive advantage ia a global industry requires executives and managers to maintain a well defined strategic focus.

Focus :
Focus is simply the concentration of attention on a core business or competence.
Nestle is focused : We are food and beverages.
How ever, company management may choose to initiate a chance in focus as part of an overall strategy shift. Coca Cola announced a new alliance with Nestle that will jointly develop and market coffee and tea.
Value, competitive advantage and the focus required to achieve them are universal in their relevance. Global marketing requires attention to these issues on a worldwide basis and utilization of an information system capable of monitoring the globe opportunities and threats.

Global Localization :
A successful global marketer must have the ability to “think globally and act locally”
Global marketing made Coke a worldwide success. However, that success was not based on the standardization of marketing mix elements. Coca cola achieved success in Japan by spending a great deal of time and money to become an insider >>built a complete local infrastructure with its sales force and vending machine operations. Similarly in India with local Thums Up cola brand (case study)
A central issues in global marketing is how to tailor the global marketing concept to fit particular products, business and markets.
Finally, global marketing doesn’t mean entering every country in the world. Global marketing mean widening business horizons to encompass the world in scanning for opportunity and threat.
Coke is the best known, strongest brand in the world; its enviable global position has resulted in part from the Coca Cola Company’s willingness and ability to back its flagship product with a network of local bottlers and strong local marketing effort.
Philip Morris has made Marlboro the number one cigarette brand in the world.
However, effective global marketing strategies can also be based on product or system design, product positioning, packaging, distribution, customer service, and sourcing consideration. Mc Donald has designed a restaurant system that can be set up virtually anywhere in the world. And also customized the its menus offering in accordance with local eating custome.
The particular approach to global marketing that company adopts will depend on industry condition and its source of sources of competitive advantage.
Should Harley Davidson star manufacturing motorcycles in a low wage country such as Mexico? >>>Harley’s competitive advantage is based in part on its “Made in the USA” positioning, shifting production outside the USA is not advisable.

Management Orientation :
The form and substance of company’s response to global market opportunities depend greatly on management’s assumptions or beliefs- both conscious and unconscious about the nature of the world.
Ethnocentric orientation: A person who assumes that his/her home country is superior to the rest of the world. Ethnocentrism is sometime associated with attitudes of national arrogance or national superiority.
Company personnel with an ethnocentric orientation see only similarities in markets and assume that products and practices that succeed in the home country will be successful anywhere.
Ethnocentric companies that do conduct business outside the home country can be describe as international companies; they adhere to the notion that the product that succeed in home country is superior. This point of view leads to a standardized or extension approach to marketing based on premise that products can be sold everywhere without adaptation. (Nissan case in the USA)
At some companies, the ethnocentric orientation mean that the opportunities outside the home country are largely ignored.
Polycentric Orientation : describes management’s belief or assumption that each country in which a company does business is unique. Company should develop its own unique business and marketing strategies I order to succeed; the term of multinational company is often used to describe such a structure.
This point of view leads to a localized or adaptation approach product must be adapted is response to different market condition.
Regiocentric & Geocentric Orientation : A region becomes the relevant geographic unit; management goal is to develop an integrated regional strategy.
A company with geocentric orientation views the entire world as potential market and strive to develop integrated world market strategies. A company whose management has a regiocentric or geocentric is sometimes known as a global or transnational company
The ethnocentric company is centralized in its marketing management, the polycentric company decentralized and regiocentric and geocentric companies are integrated on a regional and global scale, respectively.