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Global marketing

Aug 15, 2015

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Marketing

  1. 1. I woke up this morning and fixed myself a cup of coffee made by a Swiss company taking milk from a Korean fridge. I watched the news briefly on a British channel on a Japanese TV set. I shaved with an American shaving gel and splashed on an after shave made in France, distributed by an American company under the license of another Swiss company. I also shampooed my hair using a shampoo made in Thailand. I then checked for messages on my phone made in China. Before leaving for work, I quickly paid my satellite TV subscription (of partly Australian origin) with a credit card of a German bank on an American laptop made in Taiwan. I drove to work in a car made in Korea listening to music from a Jamaican band. Welcome to Global Marketing
  2. 2. Two centuries of sweeping changes In the 1800s, all products used were manufactured within a few miles Great Britain actively involved in international trade in the mid 19th century Since WWII rapid expansion into global markets Why Global? Realize your companys commercial potential Why Global? Survival..
  3. 3. Global Marketing It is different from regular marketing? Marketing : Series of Activities leading to an exchange Organizations efforts to satisfy customer wants and needs with products and services with competitive value Marketing Mix: Marketers primary tools Marketing is a universal discipline
  4. 4. Global Marketing Focuses on Global markets and opportunities Scope of activities is different Universal marketing guidelines should be combined with specific concepts, considerations and strategies to ensure success
  5. 5. MarketingAn Universal Discipline Marketing: Focusing on resources and objectives of an organization on environmental opportunities and threats Set of concepts, tools, theories, practices and procedures, and experiences Teachable and learnable body of knowledge Marketing practice varies from country to country
  6. 6. The Marketing Concept Shift of focus from the product to the consumer in the 60s The strategic Concept of Marketing evolved in the 1990s Knowing the customer in a context From profits to stakeholders benefits From profit maximization to managing strategic relationships Positioning the firm in the value chain
  7. 7. Boundary-less Marketing Marketing Customer Needs & Wants R & D Engineering MFG CV
  8. 8. Three Principles of Marketing Customer Value Competitive or Differential Advantage Focus
  9. 9. Customer Value Value(V)= B(Benefits)/P(Price) Task is to create better customer value than competitors Companies with cost advantage: Price competitive weapon Knowledge of Customer+ Innovation & Creativity can lead to offerings of superior customer value
  10. 10. CRM empowers & delivers superior CV Example: SAP Business All-in-One Solution adds new CRM functionality Delivers key CRM capabilities to marketing sales and services with ability to analyze results Enables companies to generate more sales leads, close more deals and provide better service and support
  11. 11. Competitive or Differential Advantage CA: Total offer that is more attractive to customers vis--vis competitors Could come from any element of the offer Product Price Promotion Distribution
  12. 12. Designa competitive advantage Unicorn Industrial Sewing Machines Company in China Makes Sewing Machines for Consumers and Industrial Users Industrial sewing machines can have over 1000 precision parts and assemblies Uses Autodesk Invention software to make product design more efficient and reduce design cycle time and potential errors Makes it possible even for new engineers to design in a third of the time
  13. 13. Global Marketing: What it is and what it is not? Markets and customers are different from country to country Marketing practices must vary Experiences not directly applicable from country to country Example: Kellogg Breakfast cereals
  14. 14. Coca Cola.A major global Marketing Success Success not based on standardization of marketing mix elements Global Localization Think Global, Act Local Combination of standard (actual product itself) and nonstandard (distribution or packaging)
  15. 15. Group DanoneA truly Global company Worlds No. 1 in Fresh Dairy Products Worlds No. 2 in Bottled Water Worlds No. 2 in Biscuits
  16. 16. Group Danone Presence in 120 countries 40% Revenues from outside Europe Key to Danones success: extensive knowledge of local market Focus: Innovation and local market autonomy Groups Identity Worldwide business with local presence
  17. 17. Group Danone Priority: Develop a strong brand that reflect consumer needs in that market as closely as possible Danone: seen as French in France Spanish in Spain Mexican in Mexico Dannon in America In Argentina, fresh dairy brand Le Serenissiree 65% market share
  18. 18. Group Danone Most new product ideas come from specific needs in a country Usually tested in the country Drinking yoghurt Actimel first tested in Belgium Juice brand Dano first tested in France If product works, local office takes and adapts it Role of HQ: For each product, the pureness of the concept
  19. 19. Group Danone Local office: can adapt to individual markets, encouraged to Some change advertising, some change name Some opt for sweeter tasting yoghurt, some will have simpler packaging
  20. 20. Global Marketing No imposition of a standardized approach Does not mean entering every market in the world Means widening business horizons to encompass the world when scanning for opportunities and threats Decision to enter markets will depend on several factors like resources, managerial mind-set and nature of opportunities and threats
  21. 21. The Importance of Global Markets Largest Market in the world: USA: 25% Second largest market: China: 23% Third largest Market: Japan: 15% Largest European Market: Germany: 8% Rise of the global corporation is happening faster Inefficient companies will disappear
  22. 22. Management Orientations Cos responses depends on managements assumption or beliefs Ethnocentric Polycentric Regiocentric Geocentric
  23. 23. Ethnocentric Orientation Home country is superior Sees similarities in foreign countries Assumption is: successful products in home countries can be sold anywhere without adaptation Foreign operations viewed as secondary or subordinate Assumption is HQ knowledge and capabilities applicable anywhere For MFG cos, foreign markets means of disposal of surplus
  24. 24. Ethnocentric Orientation No systematic marketing research outside home country No major modification in product Differences in consumer needs ignored Ethnocentrism big internal threat
  25. 25. Polycentric Orientation Belief that each country is unique Each subsidiary develops its unique business and marketing strategies Called a Multinational Company
  26. 26. GE in Korea GE Capital, financing arm Started with fully owned subsidiary in Korea For six years, tried to market auto, personal loans and leasing of office equipment Negligible market share Folded ops of its two subsidiaries in 2004 into two subsidiaries of Hyundai Motors-Hyundai Capital(car financing arm) and Hyundai Card(credit card arm)
  27. 27. GE in Korea Since 2004, invested $ 3 billion in these two subsidiaries Owns 43% of the shares GEs biggest minority investments in the world Now, among GEs most profitable investments Model for GEs marketing and branding strategies worldwide Before Hyundai, GE strongly preferred management control in JVs
  28. 28. GE in Korea GE success in Korea led to similar decisions25.4% of Bank of Ayudha in Thailand Hyundai had 75% of the Korean auto market Korean operations provide 5.1% of GEs worldwide profits of the consumer financing business GE: moving from ethnocentricity to polycentricism
  29. 29. Regiocentric Orientation Regions as Unique Integrated Regional Strategy US company focusing on the NAFTA countries European company focusing on EU or Europe
  30. 30. Geocentric Orientation Entire world as potential market Integrated world marketing strategy Worldview: similarities and differences in markets and countries Global strategy fully responsive to local needs and wants
  31. 31. Ford and the World car Modelled after the BMW world car the 3 Series Sports Sedan
  32. 32. Ford and the World Car Ford planning the world car Simple premise Building one product for multiple markets Basic belief: To make money on small cars, development and other costs to be spread over one huge global market First test: the subcompact Fiesta Fiesta selling well in Europe and Asia, to debut in the USA early 2010
  33. 33. Ford and the World Car Risky strategy, failures earlier Potential for huge profits Regional divisions disagreement CEO has organized the company around the world car Global version of other models planned
  34. 34. Ford and the World Car Potential savings: up to $ 700 million per model Plus factor: European and US tastes seem to be converging Midsize sedans earlier much smaller in EU than USA, now almost comparable Tastes to a degree are globalizing
  35. 35. The Inspirationthe BMW 3 Series Sports Sedan Virtually the same in every market Secret of success Show consumers what the next big thing is,not relect what they know now Ubiquity engenders trust while design creates inspiration
  36. 36. The Research Ford researched small car buyersowners of VW in EU, Honda in USA and Toyota in China Consumer: Aged 20-30 Limited funds Big appetite for fashion and design Imaginary Global archetype customer: Isabella Recent college graduate living near Milan Creative, thinking about pursuing journalism
  37. 37. Isabel