Global marketing notes

Global strategy versus global localisation

A global marketing strategy means that the same products and strategy can be
used in all markets.
- Producing on a large scale is cheaper, designs can be standardised and
there may be economies of scale.
- The product range can be smaller.
- The same marketing campaign can be used everywhere.
- Less time has to be spent on researching individual markets.
- Less time is spent on developing individual markets
However:
- Some sales will be lost if not all segments are catered for.
- Turnover and profits may not then be maximised.
- Marketing tactics and or products may cause negative reactions from
segments of the market.
For most businesses a global marketing strategy wont be effective. Its likely
that some degree of adaptation to local conditions and preferences will be
needed. The business will face very different kinds and levels of competition in
its various different markets; these will require a differentiated response.
Global localisation
Where markets differ, businesses need to plan marketing strategies that will fit
individual market preferences.
- Market segments will often vary in nature, reflecting local cultural norms,
fashions and individual tastes. The marketing plan must take account of
customers expectations and aspirations.
- Promotion strategies must fit in with local media availability. Potential
customers first have to be identified and then promotion must focus on
the media to which those customers have access.
Global localisation means that although the business operates on a global basis,
it may adapt or change its products and marketing plans to suit individual
countries or market segments. Global localisation is sometimes referred to as
glocalisation.
- Sales are likely to increase as each market is specifically targeted. Product
features are tailored to customer needs, preferences and incomes.
Promotion reflects local media facilities.
- Turnover and profits are maximised.
- Marketing tactics and/or products are ideally suited to the local situation.
But:
-

The business cant fully exploit economies of scale.

Researching each market and adapting or developing products takes time
and is costly.
Wider product ranges and multiple marketing campaigns are harder to
manage.
Average costs are therefore likely to be higher.

Glocalisation the idea that a global product or service is more likely to succeed if
its adapted to the specific requirements of local practices and cultural expectations.

There is a trade-off between the very cost effective approach of the global
strategy and the painstaking procedures involved in global localisation.
Three different approaches
The domestic approach (ethnocentric model)
No adaptation of products and marketing tactics to suit local preferences and
tastes: uniform approach world-wide.
The mixed approach (geocentric model)
Some adaptation of products and marketing tactics to suit local preferences and
tastes.
The international approach (polycentric model)
All products and marketing tactics are adapted to suit local preferences and
tastes.
Ethnocentric Model an approach to marketing based on the tendency to look
at the world primarily from the perspective of ones own culture. A business
believes that what was a success story in the domestic market will also be so in
other countries in which it operates.
Geocentric approach sees the world as a potential market with both
similarities and differences in domestic and foreign markets. An effort is made to
develop integrated world market strategies to gain the best from both of these
strands.
Polycentric model an approach that considers each host country to be
unique. Each of its subsidiary businesses develops its own unique business and
marketing strategies in order to suit these particular needs.
The marketing mix product
- Industries with high product development costs and rapidly changing
technology need globally standardised products and services; this applies
to many electronic products.
- By serving large markets, development costs can be quickly recovered.
Price
- For some markets price will need to be low to attract customers. Within a
mass market, the level of income will be a crucial factor.
- The level of economic development may not permit standard western
pricing tactics.
Promotion
- This has to link in with the potential customers culture and background if
it is to work.
- A celebrity in one country can be completely unknown in the next.
- Sense of humour can be different as can cultural norms and taboos.
- Promotion strategies have to fit in with local media development and
cultural expectations.

Place
- In some countries traditional methods of distribution will not work.
- Tradition retail networks dont exist in many remote areas.