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Thirty years ago, the phrase global marketing did not exist. Today, practically knowledgeable [savvy] businesspeople utilize global marketing for the realization of their companies full commercial potential. That is why, no matter whether you live in sia, !urope, "orth merica, or #outh merica, you may be familiar with the brands. $owever, there is another critical reason why companies need to take global marketing seriously% that is survival.
[ management team that fails to understand the importance of global marketing risks can lose its domestic business to competitors with lower costs, more experience and better products.]
Marketing:
&arketing is the process of focusing the resources and ob'ectives of an organization on environmental opportunities and needs. &arketing is an organizational function and a set of processes for creating, communicating, and delivering following% ()* +alue to customers and (,* -or managing customer relationships . . . . . . /n ways that benefit the organization and its stakeholders
[&arketing activities center on an organizations efforts to satisfy customer wants and needs with products and services that offer competitive value. The marketing mix (product, price, place, and promotion* comprises a contemporary marketers primary tools.]
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Domestic Marketing:
marketing restricted to the political boundaries of a country is called 'Domestic Marketing'.
[ company marketing only within its national boundaries only has to consider domestic competition. !ven if that competition includes companies from foreign markets, it still only has to focus on the competition that exists in its home market.]
International Marketing:
/nternational marketing is the export, franchising, 'oint venture or full direct entry of a marketing organization into another country.
[This can be achieved by exporting a company2s product into another location, entry through a 'oint venture with another firm in the target country, or foreign direct investment into the target country. [3ikipedia.org]]
Global Marketing:
4lobal marketing is an ability of an organization to market to almost all countries on the planet or around the globe. The global firm retains the capability, reach, knowledge, staff, skills, insights, and expertise to deliver value to its customers worldwide.
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n organization that engages in global marketing focuses its resources and competencies on global markets opportunities and threats. 4lobal marketing is a field of study in general business management to provide valuable products, solutions and services to customers locally, nationally, internationally and worldwide. 4lobal marketing may also take the form of a diversification strategy in which a company creates new products or services and introduces them into new geographical markets.
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). ,. 8. A. B. 1. E.
&anaging% >niversal <iscipline The Three 0rinciples of &arketing 4lobal &arketing% 3hat it is and what it is not The /mportance of 4lobal &arketing &anagement Crientations <riving and Destraining -orces ffecting 4lobal /ntegration and 4lobal &arketing #ummary
This has now been expanded to seven 0s to include% ). ,. 8. A. B. 1. E. 0roduct 0rice 0lace (channels of distribution* 0romotion 0ackagingF0hysical evidence 0ositioning 0eople
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The strategic concept of marketing is ma'or evolution in the history of marketing thought, shifted the focus of marketing from the product or customer to the customer in the context of the broader external environmental. "nowing everything H to know about the customer is not enough. To succeed, marketers must know the customer in a context including the competition, government policy I regulation, and the broader economic, social, and political forces that shape the evolution of markets.
/n 4lobal marketing this may mean working closely with home country government trade negotiators and other officials and industry competitors to gain access to a target country market.
.ro!itability:
0rofitability is not forgotten in the strategic concept. The means of the strategic marketing concept is strategic management, which integrates marketing with the other management functions. One o! the tasks o! strategic management is to make a %ro!it, which can be a source of funds for investing in the business and for rewarding shareholder and management. (hus %ro!it is still a critical ob1ective and measure o! marketing success, but it is not an end. The aim of marketing is to create value for stakeholders and the key stakeholder is the customer.
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-inally the strategic concept of marketing has shifted the focus of marketing from microeconomics to the focus of managing strategic partnerships, positioning with the aim and purpose of creating value for customers. This expanded concept of marketing was termed boundary.less marketing by Jack 3elch, ;!C of 4!.
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iii& 7ocus:
The 8rd &arketing 0rinciple is -ocus, or ;oncentration of attention. -ocus is re=uired to succeed in the task of creating customer value at a competitive advantage.
[ clear focus on customer needs and wants and on the competitive offer is re=uired to mobilize the effort needed to maintain deferential advantages. This can be achieved only be focusing or concentrating resources and efforts on customer needs and wants and how to deliver a product.]
Global ;ocali<ation:
4lobal localization means a successful global marketer must have the ability to Lthink globally and act locally.M 4lobal marketing may include an combination of standard (the actual product itself* and nonstandard (distribution or packaging* approaches.
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-inally, it is necessary to understand that global marketing does not mean entering every country in the word. =& (he Im%ortance O! Global Marketing:
The largest single market in the world in terms of national income is the >nited #tates, representing roughly ,B percent of the total world market for all products and services. >.#. companies that wish to achieve maximum growth potential must Lgo globalM because EB percent of world market potential is outside their home country. Management at Coca>Cola clearly understands this? about @A %ercent o! the com%anyBs o%erating income and two>thirds o! its o%erating revenue are generated outside -orth #merica. "on.>.#. companies have an even greater motivation to seek market opportunities beyond their own borders: their opportunities include the 899 million people in the >nited #tates. -or example, even though the dollar value of the home market for Japanese companies is the second largest in the world (after the >nited #tates*, the market outside Ca%an is DA %ercent o! the world %otential !or Ca%anese com%anies. -or !uropean countries, the picture is even more dramatic. !ven though Germany is the largest single country market in 5uro%e, *= %ercent of the world market potential for 4erman companies is outside 4ermany. &any companies have recognized the importance of conducting business activities outside their home country. /ndustries that were essentially national in scope only a few years ago are dominated today by a handful of global companies. /n most industries, the companies that will survive and prosper in the twenty.first century will be global enterprises. #ome companies that fail to formulate ade=uate responses to the challenges and opportunities of globalization will be absorbed by more dynamic, visionary enterprises. Cthers will undergo wrenching transformations and, if the effort succeeds, will emerge from the process greatly transformed. #ome companies will simply disappear. Table ).A lists the top ,B of Fortune magazines ,99N ranking of the B99 largest service and manufacturing companies by revenues.
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The world view of a companys personnel can be described as: i. !thnocentric ii. 0olycentric iii. Degiocentric iv. 4eocentric 5.$G !ramework:
5thnocentric Orientation
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person who assumes that his or her home country is superior to the rest of the world is said to have an ethnocentric orientation. t some companies, the ethnocentric orientation means that opportunities outside the home country are largely ignored. #uch companies are sometimes called domestic companies. !thnocentric companies that conduct business outside the home country can be described as international companies; they adhere to the notion that the products that succeed in the home country are superior. This point of view leads to a standardized or extension approach to marketing based on the premise that products can be sold everywhere without adaptation.
.olycentric Orientation
The polycentric orientation is the opposite of ethnocentrism. The term polycentric describes managements belief or assumption that each country in which a company does business is uni=ue. This assumption lays the groundwork for each subsidiary to develop its own uni=ue business and marketing strategies in order to succeed: the term multinational company is often used to describe such a structure.
$egiocentric Orientation
/n a company with a regiocentric orientation, a region becomes the relevant geographic unit: managements goal is to develop an integrated regional strategy. 3hat does LregionalM mean in this contextP >.#. company that focuses on the countries included in the "orth merican -ree Trade greement (" -T * Onamely, the >nited #tates, ;anada, and &exico Ohas a regiocentric orientation. #imilarly, a !uropean company that focuses its attention on !urope is regiocentric.
Geocentric Orientation
company with a geocentric orientation views the entire world as a potential market and strives to develop integrated global strategies. company whose management has adopted a geocentric orientation is sometimes known as a global or transnational company.
E& Driving and $estraining 7orces #!!ecting Global Integration and global marketing
The remarkable growth of the global economy over the past 1B years has been shaped by the dynamic interplay of various driving and restraining forces. <uring most of those decades, companies from different parts of the world in different industries achieved great success by pursuing international, multinational, or global strategies. <uring the )GG9s, changes in the business environment presented a number of challenges to established ways of 0age )) of )1
doing business. Today, despite calls for protectionism as a response to the economic crisis, global marketing continues to grow in importance. This is due to the fact that, even today, driving forces have more momentum than restraining forces.
Driving 7orces:
Technology ;ulture &arket "eeds ;ost -ree &arkets !conomic /ntegration 0eace &anagement +ision #trategic /ntent 4lobal #trategy and ction
$estraining 7orces:
;ulture &arket <ifferences ;osts "ational ;ontrol "ationalism 3ar &anagement &yopia Crganization $istory <omestic -ocus
Driving 7orces:
;onverging market needs and wants, technology advances, pressure to cut costs, pressure to improve =uality, improvements in communication and transportation technology, global economic growth, and opportunities for leverage all represent important driving forces: any industry sub'ect to these forces is a candidate for globalization
1& (echnology:
Technology is a universal factor that crosses national and cultural boundaries. Technology is truly LstatelessM: there are no cultural boundaries limiting its application. Cnce a technology is developed, it soon becomes available virtually everywhere in the world. This phenomenon supports 0rofessor 6evitts prediction concerning the emergence of global markets for standardized products. /n his $arvard @usiness Deview article, 6evitt anticipated the communication revolution that has, in fact, become a driving force behind global marketing.
person studying markets around the world will discover cultural universals as well as differences. The common elements in human nature provide an underlying basis for the opportunity to create and serve global markets. The word create is deliberate. &ost global markets do not exist in nature: marketing efforts must create them. -or example, no one needs soft drinks, and yet today in some countries per capita soft drink consumption exceeds the consumption of water.
@& Fuality
4lobal marketing strategies can generate greater revenue and greater operating margins, which, in turn, support design and manufacturing =uality. global and a domestic company may each spend B percent of sales on DI<, but the global company may have many times the total revenue of the domestic because it serves the world market.
*& ;everage
global company possesses the uni=ue opportunity to develop leverage. /n the context of global marketing, leverage means some type of advantage that a company en'oys by virtue of the fact that it has experience in more than one country. 6everage enables a company to expend less time, less effort, or less money. -our important types of leverage:
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global company can leverage its experience in any market in the world. /t can draw upon management practices, strategies, products, advertising appeals, or sales or promotional ideas that have been market.tested in one country or region and apply them in other comparable markets.
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cale 5conomies
The global company can take advantage of its greater manufacturing volume to obtain traditional scale advantages within a single factory. The importance of manufacturing scale has diminished somewhat as companies implement flexible manufacturing techni=ues and invests in factories outside the home country. $owever, scale economies were a cornerstone of Japanese success in the )GE9s and )GN9s.
$estraining 7orces:
<espite the impact of the driving forces identified previously, several restraining forces may slow a companys efforts to engage in global marketing. /n addition to the market differences discussed earlier, important restraining forces include management myopia, organizational culture, national controls, and opposition to globalization. s we have noted, however, in todays world the driving forces predominate over the restraining forces. That is why the importance of global marketing is steadily growing.
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ummary:
A company that engages in global marketing focuses its resources on global market opportunities and threats. Marketing, R&D, manufacturing, and other activities comprise a firms value chain; firms configure these activities to create superior customer value on a global basis. Global companies also maintain strategic focus hile relentlessly pursuing competitive advantage. !he marketing mi", value chain, competitive advantage, and focus are universal in their applicability, irrespective of hether a company does business only in the home country or has a presence in many markets around the orld. #ompanies that fail to pursue global opportunities risk being pushed aside by stronger global competitors. Global marketing does not necessarily mean offering identical products to consumers and organi$ations in all parts of the orld Global marketing strategies can be based on a number of different elements, including brand names, product design, product positioning, advertising, packaging, distribution, customer service, and sourcing. %hatever the si$e of the opportunity, successful industry competitors find that increasing revenues and profits means seeking markets outside the home country.
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#ompany management can be classified in terms of its orientation to ard the orld& ethnocentric, polycentric, regiocentric, or geocentric. Global marketings importance today is shaped by the dynamic interplay of several driving and restraining forces. Driving forces include market needs and ants, technology, transportation and communication improvements, product costs, 'uality, orld economic trends, and recognition of opportunities to develop leverage by operating globally. Restraining forces include market differences, management myopia, organi$ational culture, and national controls such as nontariff barriers.
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