The Scope and Challenges of

International Marketing

Module 1

Learning Outcome:
The student will understand:
What is a Global Firm/Company
Global Marketing Evolution
Meaning of Global Marketing
Features of Global Marketing
Why firms go Global?
Scope of Global Marketing
Challenges of Global Marketing
EPRG Framework

AMAs Definition :

Planning
and

Executing

Marketing

To create
exchanges that
satisfy individual
and
organizational
Objectives

 Distinguishing Features of AMAs Definition

1. Includes nonprofit and for profit activities
2. Includes products, ideas, and services
3. Includes activities that precede and follow
the production process
4. Includes the four Ps and regards them each
as equally important

Example Discussion
Boeing Company: Americas largest exporter,
is the most prominent example.
Customers in more than 90 countries, and its
158,000 employees work in 70 countries.

Secret Recipe: Secret Recipe has established

its brand name in Malaysia(1997), Singapore,
Philippines, Australia, Indonesia, Thailand,
Brunei, Pakistan and Cambodia.

What is a
Global Company/Firm?
It is a business that operates all over the world
and;
Treats the world as one country,
Locates in low wage countries,
Purchases raw materials from cheapest country,
Borrows from cheapest country,
Moves managers around,

Global Company
Operates in more than one
country & captures R&D ,
Production, Marketing,
Financial advantages &
Reputation than the
Competitors

Global Marketing Evolution

Develop Core
Business Strategy

Core Business Strategy

Internationalize
the Strategy
Globalize
the Strategy

Country
A

Country
B

Country
C

Country
D

Deciding to go
abroad
Which market
to enter

How to enter market

Decide marketing
program

Major Decisions
Decide marketing
organization

Overview: Global Marketing

Global marketers consider the world as their
market and different country markets as
components of this world market
Global marketing is simply marketing to
the entire world and destroy the differences
between barriers and meet the expectations
of varieties of consumers all over the world.

Introduction
Marketing
Process of planning and
executing the conception
pricing, promotion and
distribution of ideas,
goods and services to
create exchanges that
satisfy individual and
organization goals

Global Marketing
Focuses resources on
global market
opportunities and threats;
the main difference is the
scope of activities because
global marketing occurs in
markets outside the
organizations home
country

Global Marketing: What It Is and

What It Isnt
Single Country
Marketing Strategy
Target market strategy
Marketing mix

Product
Price
Promotion
Place

Global Marketing
Strategy

Global market participation

Marketing mix development
4 Ps: adapt or standardize?

Concentration of marketing
activities
Coordination of marketing
activities
Integration of competitive
moves

Global Marketing
The coordinated performance of marketing activities to
create exchanges across countries that satisfy individual,
organizational , and societal objectives

Global Marketing coordinates activities across different

country markets

Global Marketing is conducted across countries (not

domestic or foreign)
Global Marketing should be motivated by individual,
organizational and societal goals

Standarization versus Adaptation

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

Standardization versus Adaptation

Arabic
read right
to left

Chinese
delicious/hap
piness
The faces of Coca-Cola around the world

Defining Global Marketing

the coordinated performance of marketing activities
to create exchanges across countries that satisfy
individual, organizational , and societal objectives
The Oxford University Press defines Global
Marketing as marketing on a worldwide scale
reconciling or taking commercial advantage of global
operational differences, similarities and opportunities
in order to meet global objectives.

Global Marketing( features)

Global Marketing is conducted across
countries (not domestic or foreign)
Global Marketing coordinates activities
across different country markets
Global Marketing should be motivated by
individual, organizational, and societal goals
Companies treat the world as one market

Global Marketing
Some of the most successful companies to
achieve global marketing include auto
manufacturers such as Toyota, Ford, Honda,
General Motors, and Volkswagen.
These companies all started as small
entities in their own countries and
eventually achieved successful global
implementation.

Global Marketing
Global Marketing is more than just exporting goods to
another country; it is successful implementation of a
product into a foreign trade market.
Marketing decisions are made at the home front and sent
overseas and expected to sink or swim.
The foreign customer is very different from the domestic
customer. Language barriers, customs, paperwork, and
shipping costs deter many companies from becoming
global entities.

Why consider going Internationalization/Global ?

As the process of increasing involvement in international
operations.
Why consider going International/Global?
To increase overall customer base.
To offset seasonal fluctuations in local markets
To minimize risk of losing market share to clients who
themselves use internet to find goods / services in
overseas markets
To offset increasing costs of doing business at home
To gain prestige with customers at home .

Why Go Global?
For US-based companies, 75% of sales
potential is outside the US.
About 90% of Coca-Colas operating income is
generated outside the US.

For Japanese companies, 85% of potential is

outside Japan.
For German and EU companies,94% of
potential is outside Germany

Examples of Global Marketers

Coca-Cola
Daimler-Chrysler
McDonalds
Toyota
Ford
Unilever
Gillette
IBM

USA
Germany
USA
Japan
USA
UK/ Netherlands
USA
USA

McDonalds Global Marketing

Marketing Mix Standardization
Product

Big Mac

Promotion

Brand name

Advertising
slogan Im
Loving It
Place

Free-standing

Localized
McAloo Tikka potato
burger (India)
Slang Maccas
(Australia)
MakDo (Philippines)
McJoy magazine,
Hawaii Surfing Hula
promotion (Japan)
Home delivery (India)
Swiss rail system dining
cars

Big Mac is

$5.21 (Switzerland)

The International Marketing Task

Foreign environment
(uncontrollable)

Political/legal
forces

Domestic environment
(uncontrollable)

7
Cultural
forces

Political/
legal
forces

(controllable)

Price

Promotion

6
Geography
and
Infrastructure

Economic
forces

Competitive
structure Competitive
Forces

Product
Channels of
distribution

Level of
Technology

Economic climate

4
Structure of
distribution

Environmental
uncontrollables
country market A
Environmental
uncontrollables
country
market B
Environmental
uncontrollables
country
market C

Why Should Firms Engage in

Global Marketing?
To Survive and Grow
1. Learn to satisfy consumers in diverse conditions
2. Manage marketing tasks more efficiently and
effectively
3. Prevent or counter competitive attacks in more than
one market
4. Expand customer base to include developed and
developing nations

Why Should Firms Engage in

Global Marketing?
To Diversify Product and Market
Portfolios and Improve competitiveness
1. Effects of seasonal and cyclical
fluctuations in one market offset by others
2. Diversification increases market size
and enhances economies of scale

Why Should Firms Engage in

Global Marketing?
To Capitalize on the Attractiveness of Additional
Country Markets
Expand market size by expanding into other countries
Take advantage of growing opportunities in Europe and
the Pacific

Why Should Firms Engage in

Global Marketing?
To Operate Within a Global Marketplace
1. Goods, services, capital, technology, and
labor are going global
2. Reduced government restrictions are
affecting global marketing
3. Bilateral and multilateral negotiations are
reducing restrictions

Scope of Global Marketing

(a) Opening a branch / subsidiary abroad for processing,
packaging, assembly or even complete manufacturing
through direct investment.
(b) Negotiating licensing / franchising arrangements
whereby foreign enterprises are granted the right to use
the exporting company's knowhow, viz., patents processes
or trade marks, with or without financial investment;

Scope of Global Marketing

(c) Establishing joint ventures in foreign countries
for manufacturing and/or marketing;
(d) Offering consultancy services and undertaking
turnkey(type of project that is constructed by a
developer and sold or turned over to a buyer in a
ready-to-use condition) projects abroad;
(e) Sub- contracting and counter trade; and
(f) Important for export production;

Domestic and Global Marketing

Similarities:
Success depends upon satisfying the basic
requirements of the consumers
It is necessary to build goodwill in both the
market
R&D for product improvement and
adaptation is necessary for both the market.

Domestic and Global Marketing

Differences:
Sovereign political entities
Different legal system
Different monetary system
Lower mobility of factors of production
Differences in market characteristics
Differences in procurement and documentation

Challenges of Global Marketing

Market research.
Concept & idea generation.
Product design.
Prototype development & test marketing
Positioning
Choice of brand name
Selection of packaging material, size and labelling

Challenges of Global Marketing

Choice of advertising agency

Development of advertisement copy
Execution of advertisements
Recruitment and posting of sales force
Pricing
Sales Promotion
Selection and management of distribution channels.
Consumer Behaviour

Management Orientations- EPRG

framework

Ethnocentric
Polycentric
Regiocentric
Geocentric

Ethnocentric Orientation
Assumes home country is superior to the
rest of the world; associated with attitudes
of national arrogance and supremacy
Management focus is to do in host countries
what is done in the home country
Sometimes called an international company
Products and processes used at home are used
abroad without adaptation

Polycentric Orientation
Management operates under the assumption
that every country is different; the company
develops country-specific strategies
Sometimes called a multinational company
Company operates differently in each host
country based on that situation

Opposite of ethnocentrism

Regiocentric Orientation
Region becomes the relevant geographic
unit (rather than by country)
Management orientation is geared to
developing an integrated regional strategy
European Union
NAFTA(North American Free Trade
Agreement)

Geocentric Orientation
Entire world is a potential market
Managerial goal is to develop integrated world
market strategies
Global companies serve world markets from a
single country and tend to retain association
with a headquarters country
Transnational companies serve global markets
and acquire resources globally; blurring of
national identity

Conclusion
International marketing is hard work.
International marketing is important work.
It can enrich you, your family, your company,
and your country.
And ultimately, when international marketing
is done well, by large companies or small, the
needs and wants of customers in other lands
are well understood, and prosperity and peace
are promoted along the way.

Thank You