Global
Marketing
Why study Global
Marketing
• Liberalized International Market
• Encouraging Trade Policies
• Evolved Digital capabilities
• Fueling Future Growth
• Customers turning Global
Key Learning
Objectives
• Analysis and Evaluation of the
choice to go Global
• Branding, Pricing and Distribution
approaches
• Planning for Diverse Markets
• Assessment of External Factors
and their impact
The global–local
dilemma
The global–local dilemma relates
to the extent to which products and
services may be standardised
across national boundaries or need
to be adapted to meet the
requirements of specific national
markets.
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Looking at the Global
Marketing Environment
The International Trade System
Restrictions on trade between nations include:
• Tariffs
• Quotas
• Exchange controls
• Nontariff trade barriers
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Looking at the Global
Marketing Environment
The International Trade System
Tariffs are taxes on certain imported products designed to raise
revenue or to protect domestic firms
Quotas are limits on the amount of foreign imports a country will
accept in certain product categories to conserve on foreign
exchange and protect domestic industry and employment
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Looking at the Global
Marketing Environment
The International Trade System
Exchange controls are a limit on the amount of foreign exchange and
the exchange rate against other currencies
Nontariff trade barriers are biases against bids or restrictive product
standards that go against a country’s product features
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Looking at the Global Marketing Environment
The International Trade System Regional Free Trade Zones
Economic communities are free trade zones
• European Union (EU): formed in 1957, currently having 27 countries
• North American Free Trade Agreement (NAFTA): Free trade zone among the
United States, Mexico and Canada.
• Central American Free Trade Agreement (CAFTA): between the United
States and a group of smaller developing economies: Costa Rica, El Salvador, Guatemala,
Honduras, Nicaragua, as well as the Dominican Republic.
• South Asian Association for Regional Cooperation (SAARC): India,
Pakistan, Nepal, Bangladesh, Bhutan, Sri Lanka and Maldives in 1985.
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Market selection and entry:
Macro-economic
Factors to consider
Micro-economic
Market Assessment
Consumer Assessment
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Modes of entry
Export
Licensing or franchising
Joint ventures
Wholly owned subsidiaries
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Comparison of entry mode strategies
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Export
Advantages Disadvantages
• No need for operational facilities in • Lose any location advantages in the
host country host country
• Economies of scale in the home • Dependence on export intermediaries
country • Exposure to trade barriers
• Internet can facilitate export marketing • Transportation costs.
opportunities.
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Licensing and franchising
Advantages Disadvantages
• Contractual source of income • Difficult to identify good partner
• Limited economic and financial • Loss of competitive advantage
exposure • Limited benefits from host nation.
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Joint ventures
Advantages Disadvantages
• Shared investment risk • Difficult to find good partners
• Complementary resources • Relationship management issues
• Maybe a requirement for market entry. • Loss of competitive advantage
• Difficult to integrate and coordinate.
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Wholly owned subsidiaries
Advantages Disadvantages
• Full control • Substantial investment and
• Integration and co-ordination possible commitment
• Rapid market entry through • Acquisitions may create integration/
acquisitions coordination issues
• Greenfield investments are possible • Greenfield investments are time
and may be subsidised. consuming and unpredictable.
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International strategies
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Export strategy:
• Leverages home country capabilities,
innovations and products in foreign
markets.
Four international • Used when pressure for both global
integration and local responsiveness is
strategies (1 of 4) low.
• Suitable for companies with strong brands
(e.g. Google).
• The key risk is a home country-centred
view in contrast to skilled local rivals.
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Multi-domestic strategy:
• Maximises local responsiveness –
different product offerings for different
countries.
Four international • A low level of international coordination.
• Organisation is like a collection of
strategies (2 of 4) relatively independent units.
• Commonly found in marketing-orientated
companies (e.g. food companies).
• Risks include manufacturing inefficiencies
and brand dilution.
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Global strategy:
• Maximises global integration with little or
no local adaptation of products/services.
Four international • Standardised products are deemed to suit
all markets and efficient production is
strategies (3 of 4) emphasised through economies of scale.
• Geographically dispersed activities are
centrally controlled from headquarters.
• Common for commodity products (e.g.
cement) but also might include IKEA.
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Transnational strategy:
• Complex strategy that maximises local
responsiveness and global coordination.
Four international • Aims to maximise learning and knowledge
exchange between dispersed units.
strategies (4 of 4) • Efficient operations but products/services
adapted to local conditions.
• Hard to achieve but General Electric is a
possible example.
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Global Marketing Strategies
Product Promotion Pricing Place
• Standard • Tools • Cost of • Type of Product
• Customized • Communication Product/Service • Distribution cost
• Culture • Competition • Alignment with
• Traditions • Compliance the other Ps
• Language • Policies
• Cost of Promotion • Exchange rates
• Inflation
• Price Differential
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