Global Marketing: Ninth Edition

Global Marketing
Ninth Edition
Chapter 1
Introduction to Global
Marketing
Copyright © 2017, 2015, 2013 Pearson Education, Inc. All Rights Reserved
Learning Objectives (1 of 2)
1.1 Use the product/market growth matrix to explain the

various ways a company can expand globally.
1.2 Describe how companies in global industries pursue
competitive advantage.
1.3 Compare and contrast single-country marketing
strategy with global marketing strategy (GMS).
1.4 Identify the companies at the top of the Global 500
rankings.
Learning Objectives (2 of 2)
1.5 Explain the stages a company goes through as its

management orientation evolves from domestic and
ethnocentric to global and geocentric.
1.6 Discuss the driving and restraining forces affecting
global integration today.
Going Global
• The post WWII era brought unparalleled expansion by

companies going outside their home markets.
• Four decades ago the phrase global marketing did not
exist.
• Today companies go global to survive as competitors will
enter the home market with lower costs, more experience
and better products.
Marketing and Global Marketing Defined
• Marketing: “the activity, set of institutions, and processes

for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners,
and society at large”
• Marketing Mix: The 4 Ps
• Global Marketing: The scope of activities outside the
home market
What is Global Marketing
• Global versus. “Regular” Marketing

– Scope of activities are outside the home-country
market
Table 1-1 Product/Market Growth Matrix
Blank Blank Product Product
Orientation Orientation
Blank Blank Existing New
Products Products
Market Existing Market Product
Orientation markets penetration development
strategy strategy
Market New markets Market Diversificatio
Orientation development n strategy
Value Chain and Value Proposition
• Value Chain • Value Proposition

– Marketing, along with – Perceived value to
all other functional the customer
business areas, – The firm’s promise to
create value for the the customer
customer
Customer Perceived Value
• 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
“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~
Global Industries
• An industry is global to the extent that a company’s

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
Competitive Advantage
• When a company succeeds in creating more value for

customers than its competitors do
• Measured relative to industry rivals
• “Created when a firm has value-creating strategy not
simultaneously being implemented by an current or
potential competitors.” ~ Jay Barney
Globalization of Pro Sports (1 of 2)
• Major league sports like the NBA, NFL, and MLS are
finding new fans abroad.
• Soccer is a global sport.
• The National Football League is focusing on Canada,
China, Germany, Japan, Mexico, and the UK.
Globalization of Pro Sports (2 of 2)
The NFL promoted a 2013 game in London with banners across a major street.
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 touch…We
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 Nestlé SA~
Global Marketing: What It Is & What It
Isn’t (1 of 2)
Single Country Marketing Strategy

• Target Market Strategy
• Marketing Mix
– Product
– Price
– Promotion
– Place
Global Marketing: What It Is & What It
Isn’t (2 of 2)
Global Marketing Strategy

• Global Market Participation
• Marketing Mix Development
– 4 P’s: Adapt or Standardize?
• Concentration of Marketing Activities
• Coordination of Marketing Activities
• Integration of Competitive Moves
2015: The Grateful Dead at 50 (1 of 2)
• Early on, the Dead were too weird to get radio air time,
unliked by critics, and not booked for tours by agents.
• They produced their own albums and tours.
• Their business practices foretold concepts like brand
equity, brand tribes, CRM, freenomics, niche marketing,
the sharing economy, and WOM marketing.
2015: The Grateful Dead at 50 (2 of 2)
The British Invasion of the music world had taken hold of the US by 1965. The
counterforce of American music was led by the Grateful Dead.
Standardization V s. Adaptation
ersu
• 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
Burberry’s GMS (1 of 2)
• Expand in BRIC, US
• Marketing Mix
• Product: emphasize handbags, belts, accessories
• Price: Affordable luxury
• Place: Independent stores in major cities like Hong
Kong, Los Angeles, San Francisco, NYC
• Promotion: New logo, use social media, Burberry
Acoustic for emerging musicians
Burberry’s GMS (2 of 2)
Global Localization
• “Think globally, act locally”

• May be a combination of standard (product) and
nonstandard approaches ( distribution or packaging)
• Cinnabon/USA developed dulce de leche flavors for Latin
America
• Kraft developed Tang flavors of mango and pineapple for
Latin America and the Mideast
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
Management Orientations (1 of 4)
• 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
• 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
• 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
• 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
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
Driving Forces Affecting Global
Integration and Global Marketing
• Leverage
– Experience transfers
– Scale economies
– Resource utilization
– Global strategy
Restraining Forces Affecting Global
Integration and Global Marketing
• Management myopia
• Organizational culture
• National controls
• Opposition to globalization
Book 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
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Global Marketing

1.1 Use the product/market growth matrix to explain the

1.5 Explain the stages a company goes through as its

• The post WWII era brought unparalleled expansion by

• Marketing: “the activity, set of institutions, and processes

• Global versus. “Regular” Marketing

• Value Chain • Value Proposition

• Create value for customers by improving benefits or

• An industry is global to the extent that a company’s

• When a company succeeds in creating more value for

Single Country Marketing Strategy

Global Marketing Strategy

• “Think globally, act locally”

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