You are on page 1of 61

Introduction

Global Marketing can be defined as marketing on a worldwide scale reconciling or


taking commercial advantage of global operational differences, similarities and
opportunities in order to meet global objectives.
The main objective of the study is to find how the NISSAN works as a global marketer.
Nissan is the fourth worldwide automaker with sales of 6,129,254 units in 2005, up
5.9% over 2004. Considering the traditional position of mistubishi in the actual market,
the analysis of Nissan alliance case would provide you with valuable element on how
to approach the growing and competitive manufacturing global market.
As such, the success of Carlos Ghosn is correlated to his extensive vision of synergies
between the Renault and Nissan, thus he believes that the transfer of knowledge
between foreign engineering world only occur within a framework of quality. The
reason he didnt merge Renault and Nissan relay on the advantage of mutual challenge
the push both firms to seek new cost reductions, economies of scale and scope
opportunities. Consequently, Renault and Nissan both managed to reach their goal by
remaining profitable.

Nissan Motor Company Ltd, usually shortened to Nissan is


a multinational automaker headquartered in Japan. It was formerly a core member of
the Nissan Group, but has become more independent after its restructuring
under Carlos Ghosn (CEO).
It formerly marketed vehicles under the "Datsun" brand name and is one of the largest
car manufacturers in the world. As of 2011, the company's global headquarters is
located in Nishi-ku, Yokohama. In 1999, Nissan entered a two way alliance
with Renault S.A. of France, which owns 43.4% of Nissan while Nissan holds 15% of
Renault shares, as of 2008. The current market share of Nissan, along
with Honda and Toyota, in American auto sales represent the largest of the automotive
firms based in Asia that have been increasingly encroaching on the historically
dominant US-based "Big Three" consisting of GM, Ford and Chrysler. In its home
market, Nissan became the second largest car manufacturer in 2011, surpassing Honda
with Toyota still very much the dominant first. Along with its normal range of models,
Nissan also produces a range of luxury models branded as Infiniti.
The Nissan VQ engines, of V6 configuration, have been featured among Ward's 10 Best
Engines for 14 straight years.

History

Beginnings of Datsun name from 1914


Masujiro Hashimoto founded The Kwaishinsha Motor Car Works in 1911. In
1914, the company produced its first car, called DAT.
The new car's name was an acronym of the company's investors' family names:

Kenjiro Den

Rokuro Aoyama

Meitaro Takeuchi

It was renamed to Kwaishinsha Motorcar Co., Ltd. in 1918, and again to DAT
Motorcar Co. in 1925.[1] DAT Motors built trucks in addition to the DAT and Datsun
passenger cars. The vast majority of their outputs were trucks, due to an almost nonexistent consumer market for passenger cars at the time. Beginning in 1918, the first
DAT trucks were produced for the military market. It was the low demand of the
military market in the 1920s that forced DAT to merge in 1926 with Japan's 2nd most
successful truck maker, Jitsuyo Motors.
In 1926 the Tokyo-based DAT Motors merged with the Osaka-based Jitsuyo Jidosha
Co., Ltd. Jitsuyo Motors (established 1919, as a Kubota subsidiary) to become DAT
Automobile Manufacturing Co., Ltd. in Osaka until 1932. (Jitsuyo Jidosha began
producing a three-wheeled vehicle with an enclosed cab called the Gorham in 1920,
and the following year produced a four-wheeled version. From 1923 to 1925, the
company produced light cars and trucks under the name of Lila.)
In 1931, DAT came out with a new smaller car, the first "Datson", meaning "Son of
DAT". Later in 1933 after Nissan took control of DAT Motors, the last syllable of
Datson was changed to "sun", because "son" also means "loss" in Japanese, hence the
name "Datsun.
In 1933, the company name was Nipponized to Jidosha-Seizo Co., Ltd. "Automobile
Manufacturing Co., Ltd.") and was moved to Yokohama.

Nissan name first used in 1930s


In 1928, Yoshisuke Aikawa founded the holding company Nippon Sangyo (Japan
Industries or Nippon Industries). "The name 'Nissan' originated during the 1930s as an
abbreviation" used on the Tokyo stock market for Nippon Sangyo. This company was
the famous Nissan "Zaibatsu" (combine) which included Tobata Casting and Hitachi.
At this time Nissan controlled foundries and auto parts businesses, but Aikawa did not
enter automobile manufacturing until 1933.
Nissan would eventually grow to include 74 firms, and to be the fourth-largest combine
in Japan during World War II.
In 1930, Aikawa purchased controlling shares in DAT Motors, and then in 1933 it
merged Tobata Casting's automobile parts department with DAT Motors. As Tobata
Casting was a Nissan company, this was the beginning of Nissan's automobile
manufacturing.

Nissan Motors founded in 1934

In 1934, Aikawa "separated the expanded automobile parts division of Tobata Casting
and incorporated it as a new subsidiary, which he named Nissan Motor (Nissan)".
Nissan Motor Co., Ltd. The shareholders of the new company however were not
enthusiastic about the prospects of the automobile in Japan, so Aikawa bought out all
the Tobata Casting shareholders (using capital from Nippon Industries) in June, 1934.
At this time Nissan Motors effectively became owned by Nippon Sangyo and Hitachi.
Nissan built trucks, airplanes, and engines for the Japanese military. The company's
main plant was moved to China after land there was captured by Japan. The plant made
machinery for the Japanese war effort until it was captured by American and Russian
forces. From 1947 to 1948 the company was called Nissan Heavy Industries Corp.

Nissan's early American connection

DAT had inherited Kubota's chief designer, American William R. Gorham. This, along
with Aikawa's inspiring 1908 visit to Detroit, was to greatly affect Nissan's future.
Although it had always been Aikawa's intention to use cutting-edge auto making
technology from America, it was Gorham that carried out the plan. All the machinery,
vehicle designs and engine designs originally came out of the United States. Much of
the tooling came from the Graham factory and Nissan had a Graham license under
which trucks were made. The machinery was imported into Japan by Mitsubishi on
behalf of Nissan, which went into the first Yokohama factory to produce cars.

Foreign expansion

In the 1950s, Nissan decided to expand into worldwide markets. Nissan management
realized their Datsun small car line would fill an unmet need in markets such as
Australia and the world's largest car market, the United States. They first showed cars
at the 1959 Los Angeles Auto Show and sold a few that year in the United States. The
company formed a U.S. subsidiary, Nissan Motor Corporation U.S.A., in 1959, headed
by Yutaka Katayama. Nissan continued to improve their sedans with the latest
technological advancements and chic Italianate styling in sporty cars such as theDatsun
Fairlady roadsters, the race-winning 411 series, the Datsun 510 and the worldclass Datsun 240Z, and by 1970, they had become one of the world's largest exporters
of automobiles.

U.S. market) began turning in rapidly increasing numbers to high-quality small


economy cars. To meet the growing demand, the company built new factories in
Mexico, Australia, Taiwan and South Africa.
The "Chicken Tax" of 1964 placed a 25% tax on imported commercial vans. In
response, Nissan, Toyota Motor Corp. and Honda Motor Co. began building plants in
the U.S. in the early 80s.
Nissan's initial assembly plant, in Smyrna, Tennessee, at first built only trucks such as
the 720 and Hardbody, but has since expanded to produce several car and SUV lines,
including the Altima, Maxima, Xterra and Pathfinder. An engine plant in Decherd,
Tennessee followed, and most recently a second assembly plant in Canton, Mississippi.
In 1998 Nissan announced that it was selling one of its headquarter buildings to the
Mori Group for $107.8 million.
In order to overcome export tariffs and delivery costs to its European customers, Nissan
contemplated establishing a plant in Europe. After an extensive review, Sunderland in
the north east of the United Kingdom was chosen for the local availability of a highly
skilled workforce and its position near major ports. The plant was completed in 1986 as
the subsidiary Nissan Motor Manufacturing (UK) Ltd. By 2007, it was producing
400,000 vehicles per year, landing it the highly coveted title of the most productive
plant in Europe.

Products

Automotive products
Nissan has produced an extensive range of mainstream cars and trucks, initially for
domestic consumption but exported around the world since the 1950s. There was a
major strike in 1953.
It also produced several memorable sports cars, including the Datsun Fairlady 1500,
1600 and 2000 Roadsters, the Z-car, an affordable sports car originally introduced in
1969; and the GT-R, a powerful all-wheel-drive sports coupe.

In 1985, Nissan created a tuning division, NISMO, for competition and performance
development of such cars. One of Nismo's latest models is the 370Z NISMO.
Until 1982, Nissan automobiles in most export markets were sold under
the Datsun brand. Since 1989, Nissan has sold its luxury models in North America
under the Infiniti brand.
Nissan also sells a small range of kei cars, mainly as a joint venture with other Japanese
manufacturers like Suzuki or Mitsubishi. Nissan does not develop these cars. Nissan
also has shared model development of Japanese domestic cars with other
manufacturers, particularly Mazda, Subaru, Suzuki and Isuzu.
In China, Nissan produces cars in association with the Dongfeng Motor
Group including the 2006 Nissan Livina Geniss. This is the first in the range of a new
worldwide family of medium sized cars and is to make its world debut at
the Guangzhou International Motor Show.

Non-automotive products
Nissan has also had a number of ventures outside the automotive industry, most
notably the Tu-Ka mobile phone service (est. 1994), which was sold to DDI and Japan
Telecom (both now merged into KDDI Corporation) in 1999. Nissan also owns Nissan
Marine, a joint venture with Tohatsu Corp that produces motors for boats and other
maritime equipment.

Global sales figures


Calendar Year

Global Sales

1998

2,555,962

1999

2,629,044

2000

2,632,876

2001

2,580,757

2002

2,735,932

2003

2,968,357

2004

3,295,830

2005

3,597,851

2006

3,477,837

2007

3,675,574

2008

3,708,074

2009

3,358,413

2010

4,080,588

Manufacturing locations

Japan

Oppama, Yokosuka, Kanagawa (Oppama Plant & Research Center)

Kaminokawa, Tochigi (Tochigi Plant)

Kanda, Fukuoka (Kyushu Plant & Nissan Shatai Kyushu Plant)

Kanagawa-ku, Yokohama, Kanagawa (Yokohama Plant)

Iwaki, Fukushima (Iwaki Plant)

Hiratsuka, Kanagawa (Nissan Shatai Shonan Plant)

Nagoya, Aichi (Aichi Machine Industry Atsuta & Eitoku Plants)

Matsusaka, Mie (Aichi Machine Industry Matsusaka Plant)

Tsu, Mie (Aichi Machine Industry Tsu Plant)

Uji, Kyoto (Auto Works Kyoto)

Ageo, Saitama (Nissan Diesel Motor, currently owned by the Volvo Group)

Samukawa, Kanagawa (Nissan Kohki)

Zama, Kanagawa (Zama Plant closed in 1995, currently Global Production


Engineering Center and storage unit for its historic models)

India

Brazil

Sao Jose dos Pinhais, Parana


Indonesia

Cikampek, West Java


Iran

Karaj, Tehran
Malaysia

Segambut, Kuala Lumpur

Serendah, Selangor

Oragadam, Chennai

Mexico

Aguascalientes, Aguascalientes

Cuernavaca, Morelos

Morocco

Tangier, Tangier Med port (Under construction, Renault-Nissan plant)

Egypt

6th of October City, October 6 Governorate

Pakistan

Karachi, Sindh

Philippines

Santa Rosa City, Laguna

South Africa

Rosslyn, Pretoria, Gauteng.

Spain

Barcelona

Avila

Cantabria

Montcada i Reixac

Thailand

Republic of China

Taipei, Taiwan
United Kingdom

10

Bangna, Samutprakarn

Sunderland, County Durham, North East England


United States

Smyrna, Tennessee

Canton, Mississippi

GLOBAL MARKETING
Two decade ago, the global marketing did not even exist. Today, global

11

Marketing is essential not only for the realization to the full success potential of a
business, but even more critically for their survival of a business. A company
which fails to go global is in longer of losing its domestic business to competitors
with lower costs, greater experience, and better products and in a nutsheel, more
value for the customers. The importance of going global is to ensure company
survival; it is a more powerful motive for many companies than the attraction of
opportunity abroad. Industries that were entirely national in scope only a few
years ago are dominated today by a handful of global companies. International
marketing (IM) or global marketing refers to marketing carried out by companies
overseas or across national borderlines. This strategy uses an extension of the
techniques used in the home country of a firm. It refers to the firm-level
marketing practices across the border including market identification and
targeting, entry mode selection, marketing mix, and strategic decisions to
compete in international markets. According to the American Marketing
Association (AMA) "International marketing is the multinational process of
planning and executing the conception, pricing, promotion and distribution of
ideas, goods, and services to create exchanges that satisfy individual and
organizational objectives."

Meaning of Marketing

12

Marketing is essentially a creative corporate activity involving the planning and


execution of the conception, pricing, promotion, and distribution of ideas, products, and
services in an exchange that not only satisfies customers current needs but also
anticipates and creates their future needs at a profit. Marketing is not only much
broader than selling; it also encompasses the entire companys market orientation
towards customer satisfaction in a competitive environment. In other word marketing
strategy requires close attention to both customers and competitors. The aim of
marketing is to create value for stakeholders, and the key stakeholders is the customer.

Customer
needs & wants

Research &
development

Meaning of Global Marketing

13

Manufacturing

Customer
Value

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 refers to marketing activities by companies that emphasize activities


the following:

Reduction of cost inefficiencies and duplication of efforts among their national


and regional subsidiaries

Opportunities for the transfer of products, brands, and other ideas across
subsidiaries

Emergence of global customers


Improved linkages among national marketing infrastructures leading to the
development of a global marketing infrastructure.

Although Levitts view that global marketing does not necessarily mean standardization
of products, promotion, pricing, and distribution worldwide but rather, it is a companys
proactive willingness to adopt a global proactive perspective instead of a country
country-by-country or region-by- region perspective region in developing a marketing
strategy.

Evolution of Global Marketing

14

Global marketing is not a revolutionary shift, it is an evolutionary process. While the


following does not apply to all companies, it does apply to most companies that begin
as domestic-only companies.

Domestic Marketing
A marketing restricted to the political boundaries of a country, is called
"Domestic Marketing". A company marketing only within its national
boundaries only has to consider domestic competition. Even if that competition
includes companies from foreign markets, it still only has to focus on the
competition that exists in its home market. Products and services are developed
for customers in the home market without thought of how the product or service
could be used in other markets. All marketing decisions are made at
headquarters. The biggest obstacle these marketers face is being blindsided by
emerging global marketers. Because domestic marketers do not generally focus
on the changes in the global marketplace, they may not be aware of a potential
competitor who is a market leader on three continents until they simultaneously
open 20 stores in the Northeastern U.S. These marketers can be considered
ethnocentric as they are most concerned with how they are perceived in their
home country.

Export Marketing

15

Generally, companies began exporting, reluctantly, to the occasional foreign


Customer who sought them out. At the beginning of this stage, filling these
orders was considered a burden, not an opportunity. If there was enough
interest, some companies became passive or secondary exporters by hiring an
export management company to deal with all the customs paperwork and
language barriers. Others became direct exporters, creating exporting
departments at headquarters. Product development at this stage is still focused
on the needs of domestic customers. Thus, these marketers are also considered
ethnocentric.

International Marketing
If the exporting departments are becoming successful but the costs of doing
business from headquarters plus time differences, language barriers, and
cultural ignorance are hindering the companys competitiveness in the foreign
market, then offices could be built in the foreign countries. Sometimes
companies buy firms in the foreign countries to take advantage of relationships,
storefronts, factories, and personnel already in place. These offices still report to
headquarters in the home market but most of the marketing mix decisions are
made in the individual countries since that staff is the most knowledgeable
about the target markets. Local product requires weeks to fit into any regional
marketplace. Marketing decisions are made by consulting with marketers in all
the countries that will be affected. The goal is to sell the same thing the same
way everywhere.

16

Objective of the study

PRIMARY OBJECTIVE
The primary objective of the project is to know the concept of Global Marketing as a
whole.
SECONDARY OBJECTIVE
To study the main area of the Global Marketing:
To study the advantages & disadvantages of global marketing
To study the Global marketing environment
To study global marketing strategies
To study the Five Global Considerations Every Marketer needs to think
about.
To know the Global Marketing 5 Steps to Succession

17

Literature review
1. Marketing of products and services in the Muslim countries presents a very
challenging task to multinational companies (MNC) due to the difference in
political, economy and socio-cultural aspects. At the same time, MNC could not
avoid targeting Muslim countries as their source of expansion as these
countries represent almost 20% of the worlds population. Furthermore, this
figure is expected to increase to 30% by 2025. One of the most important
concepts in Islam is the concept of halal, which means permissible. Halal
covers the aspects of slaughtering, storage, display, preparation, hygiene and
sanitation. It covers food as well as non-food category of products. Given the
speed of trade globalization, the advancement in science and technology, and
the ongoing initiatives to simplify manufacturing processes, it is essential that
the halal concept be fully understood by marketers. This paper discusses the
marketing challenges in dealing with the halal issue. It makes reference to
Malaysias halal certification policy and procedure as the country has set itself
to become the major player in providing halal products and services. This
complements well with Malaysias role as the Chairman of the 57-nation
Organization of Islamic Conference (OIC) and its vision to become the global
halal hub.
SORUCE: Halal Certification: an international marketing issues and challenges
by Shahidan Shafie, Prof. Dr. Md Nor Othman, Faculty of Business &
Accountancy, University Malaya, Kuala Lumpur, Malaysia.

18

2. International market selection is one of the most important decisions to be made


by organisations engaging in international trade. Yet, despite its importance, the
approaches taken by many organisations in identifying profitable and servable
markets in the international context are often based on ad hoc decisions and
intuition, rather than a formalised attempt to match the organisation with
appropriate foreign target markets. This paper attempts to clarify some of the
issues arising in international market selection. A rationale for international
trade is outlined, followed by an assessment of firm-related factors that need to
be considered before market selection and market entry can occur. An overview
of current methodologies for market selection based on the literature on
international marketing is then given. Subsequent to the presentation and
evaluation of these models, salient elements within the models are discussed in
more detail. The conclusion will provide a short executive summary to identify
the key elements to be considered by management in choosing international
markets.
SORUCE: International Market Selection Issues and Methodologies, a Global
Marketing Paper, Kai F. Mahnert, Sarah McGauley, Laura McGrath, Liz McGrath
(March 2004).

19

Research Methodology
Research Design:Research design used was descriptive.

Descriptive research describes data and

characteristics about the population or phenomenon being studied. Descriptive research


answers the questions who, what, where, when and how. Although the data description
is factual, accurate and systematic, the research cannot describe what caused a
situation. Thus, Descriptive research cannot be used to create a causal relationship,
where one variable affects another. In other words, descriptive research can be said to
have a low requirement for internal validity.
Descriptive research can be either quantitative or qualitative. It can involve collections
of quantitative information that can be tabulated along a continuum in numerical form,
such as scores on a test or the number of times a person chooses to use a-certain feature
of a multimedia program, or it can describe categories of information such as gender or
patterns of interaction when using technology in a group situation. Descriptive research
involves gathering data that describe events and then organizes, tabulates, depicts, and
describes the data collection (Glass & Hopkins, 1984). It often uses visual aids such as
graphs and charts to aid the reader in understanding the data distribution.

20

TYPES OF DATA COLLECTED:Data collected included both primary and secondary data.
PRIMARY DATA:Primary data is that kind of data which is collected by the investigator himself for the
purpose of the specific study. The data such collected is original in character. The
advantage of third method of collection is the authenticity. A set of questions were put
together in the form of questionnaire.
SECONDARY DATA:When an investigator uses the data that has been already collected by others is called
secondary data. The secondary data could be collected from Journals, Reports and
Various Publications. The advantages of secondary data can be economical, both in the
term of money and time spent. The researcher of the reporter also did the same and
collected secondary from various internet sites like Google.com. Altavista.com and
many more. The researchers of the reporter also visited various libraries for collection
of the introduction part.

Sources of Data collection:Primary Data Collection: - Primary data was collected directly from the respondents.
Secondary Data Collection: - Secondary data was collected with the help of books,
magazine, internet and company brochures.
TOOLS OF DATA COLLECTION: The popular ways to collect primary data consist of surveys, interviews and focus
groups, which show that direct relationship between potential customers and the
companies.
Survey method was used in the study and the tool used was the questionnaire.

21

Questionnaire (interview): - questionnaire is a research instrument consisting of a


series of questions and other prompts for the purpose of gathering information from
respondents.
SAMPLING:Sampling is the process of selecting units (e.g., people, organizations) from a
population of interest so that by studying the sample we may fairly generalize our
results back to the population from which they were chosen.
Sampling Design: - Sampling design used was non-probability sampling that include
convenience and judgmental sampling.
Non- probability sampling:Non-probability sampling is a sampling technique where the samples are gathered in a
process that does not give all the individuals in the population equal chances of being
selected.
Convenience sampling is probably the most common of all sampling techniques. With
convenience sampling, the samples are selected because they are accessible to the
researcher. Subjects are chosen simply because they are easy to recruit. This technique
is considered easiest, cheapest and least time consuming.
Judgmental sampling is more commonly known as purposive sampling. In this type of
sampling, subjects are chosen to be part of the sample with a specific purpose in mind.
With judgmental sampling, the researcher believes that some subjects are fit for the
research compared to other individuals. This is the reason why they are purposively
chosen as subjects.
The research conducted for this report was done purely with the help of interviews
conducted with top officials of three companies. Every company has its own
environmental strategy and thus the efforts made by each company cannot be measured
on a common scale.

22

Global Marketing Advantages & Disadvantages


Advantages
The advantages of global market we can introduce our product by using

advertising

Economies of scale in production and distribution

Lower marketing costs

Power and scope

Consistency in brand image

Ability to leverage good ideas quickly and efficiently

Uniformity of marketing practices

Helps to establish relationships outside of the "political arena"

Reach
The nature of the internet means businesses now have a truly global reach. While
traditional media costs limit this kind of reach to huge multinationals, E-Marketing
opens up new avenues for smaller businesses, on a much smaller budget, to access
potential consumers from all over the world.

Scope
Internet marketing allows the marketer to reach consumers in a wide range of ways and
enables them to offer a wide range of products and services. E-Marketing includes,
among other things, information management, public relations, customer service and
sales. With the range of new technologies becoming available all the time, this scope
can only grow.

23

Interactivity
Whereas traditional marketing is largely about getting a brands message out there, EMarketing facilitates conversations between companies and consumers. With a two way
communication channel, companies can feed off of the responses of their consumers,
making them more dynamic and adaptive.

Immediacy
Internet marketing is able to, in ways never before imagined, provide an immediate
impact. Imagine youre reading your favorite magazine. You see a double-page advert
for some new product or service, maybe BMWs latest luxury sedan or Apples latest
iPod offering. With this kind of traditional media, its not that easy for you, the
consumer, to take the step from hearing about a product to actual acquisition. With
eMarketing, its easy to make that step as simple as possible, meaning that within a few
short clicks you could have booked a test drive or ordered the iPod. And all of this can
happen regardless of normal office hours. Effectively, Internet marketing makes
business hours 24 hours per day, 7 days per week for every week of the year. By
closing the gap between providing information and eliciting a consumer reaction, the
consumers buying cycle is speeded up and advertising spend can go much further in
creating immediate leads.

Demographics and targeting


Generally speaking, the demographics of the Internet are a marketers dream. Internet
users, considered as a group, have greater buying power and could perhaps be
considered as a population group skewed towards the middle-classes. Buying power is
not all though. The nature of the Internet is such that its users will tend to organize
themselves into far more focused groupings. Savvy marketers who know where to look
can quite easily find access to the niche markets they wish to target. Marketing
messages are most effective when they are presented directly to the audience most
likely to be interested. The Internet creates the perfect environment for niche marketing
to targeted groups.

24

Adaptively and closed loop marketing


Closed Loop Marketing requires the constant measurement and analysis of the results
of marketing initiatives. By continuously tracking the response and effectiveness of a
campaign, the marketer can be far more dynamic in adapting to consumers wants and
needs. With eMarketing, responses can be analyzed in real-time and campaigns can be
tweaked continuously. Combined with the immediacy of the Internet as a medium, this
means that theres minimal advertising spend wasted on less than effective campaigns.
Maximum marketing efficiency from eMarketing creates new opportunities to seize
strategic competitive advantages. The combination of all these factors results in an
improved ROI and ultimately, more customers, happier customers and an improved
bottom line.

Disadvantages

Differences in consumer needs, wants, and usage patterns for products

Differences in consumer response to marketing mix elements

Differences in brand and product development and the competitive environment

Differences in the legal environment, some of which may conflict with those of
the home market

Differences in the institutions available, some of which may call for the creation
of entirely new ones (e.g. infrastructure)

Elements of the global marketing mix

25

The Four Ps of marketing: product, price, placement, and promotion are all affected
as a company moves through the five evolutionary phases to become a global company.
Ultimately, at the global marketing level, a company trying to speak with one voice is
faced with many challenges when creating a worldwide marketing plan. Unless a
company holds the same position against its competition in all markets (market leader,
low cost, etc.) it is impossible to launch identical marketing plans worldwide. Nisant
Chakram (Marketing Management)

Product
A global company is one that can create a single product and only have to tweak
elements for different markets. For example, Coca-Cola uses two formulas (one with
sugar, one with corn syrup) for all markets. The product packaging in every country
incorporates the contour bottle design and the dynamic ribbons in some way, shape, or
form. However, the bottle or can also includes the countrys native language and is the
same size as other beverage bottles or cans in that same country.

Price
Price will always vary from market to market. Price is affected by many variables: cost
of product development (produced locally or imported), cost of ingredients, cost of
delivery (transportation, tariffs, etc.), and much more. Additionally, the products
position in relation to the competition influences the ultimate profit margin. Whether
this product is considered the high-end, expensive choice, the economical, low-cost
choice, or something in-between helps determine the price point.

Placement
How the product is distributed is also a country-by-country decision influenced by how
the competition is being offered to the target market. Using Coca-Cola as an example

26

again, not all cultures use vending machines. In the United States, beverages are sold
by the pallet via warehouse stores. In India, this is not an option. Placement decisions
must also consider the products position in the market place. For example, a high-end
product would not want to be distributed via a dollar store in the United States.
Conversely, a product promoted as the low-cost option in France would find limited
success in a pricey boutique.

Promotion
After product research, development and creation, promotion (specifically advertising)
is generally the largest line item in a global companys marketing budget. At this stage
of a companys development, integrated marketing is the goal. The global corporation
seeks to reduce costs, minimize redundancies in personnel and work, maximize speed
of implementation, and to speak with one voice. If the goal of a global company is
to send the same message worldwide, then delivering that message in a relevant,
engaging, and cost-effective way is the challenge.
Effective global advertising techniques do exist. The key is testing advertising ideas
using a marketing research system proven to provide results that can be compared
across countries. The ability to identify which elements or moments of an ad are
contributing to that success is how economies of scale are maximized. Market research
measures such as Flow of Attention, Flow of Emotion and branding moments provide
insights into what is working in an ad in any country because the measures are based on
visual, not verbal, elements of the ad .

Global Marketing Environment


Demographic environment

27

Demography is the study of human populations in terms of size, density, n


location, age, gender, race, occupation, and other stat statistics. The
demographic environment is of major interest to marketers because it involves
people, and people make up markets.
The world population is growing at an explosive rate. It now totals more ion
explosive than 5.9 billion and will exceed 7.9 billion by the year 2025. The
explosive world population growth has major implications for business. A
growing population means growing human needs to satisfy. Depending on ion
purchasing power, it may also mean growing market opportunities.
The worlds large and highly diverse population poses both opportunities and
challenges. Thus, marketers keep close track of demographic trends and
developments in their markets, both at home and abroad. They track changing
age and family structures, geographic population shifts, educational
characteristics, and population diversity.

Economic environment
The economic environment consists of factors that affect consumer purchasing power
and spending patterns. Nat ions vary great ly in their levels and distribution of income.
Some countries have subsistence economies they consume most of their own
agricultural and industrial output. These countries offer few market opportunities. At
the other extreme are industrial economies, which constitute rich markets for many
different kinds of goods. Marketers must pay close attention to major trends and
consumer spending patterns both across and within their world markets.
Marketers should pay attention to income distribution as well as average income.
Income distribution is still very poor. At the top are upper class consumers, whose
spending patterns are not affected by current economic events and who are a major
market for luxury goods. There is a comfortable middle class that is somewhat careful

28

about its spending but can still afford the good life some of the time. The working class
must stick close to the basics of food, clothing, and shelter and must try hard to save.
Finally, the poor class must count their pennies when making even the most basic
purchases. Over the past three decades, the rich have grown richer, the middle class has
shrunk, and the poor have remained poor.

Natural environment
The natural environment involves the natural resources that are needed as inputs
by marketers or that are affected by marketing activities. Marketers should be
aware of several trends in the natural environment. The first involves growing
shortages of raw materials. Air and water may seem to be infinite resources, but
some group see long-run dangers. Air pollution chokes many of the worlds
large cities and water shortages are already a big problem in some parts of the
world. Renewable resources, such as forests and food, also have to be used
wisely. Nonrenewable resources, such as oil, coal, and various minerals, pose a
serious problem. Firms making resources, such as oil, coal, and various
minerals, pose a serious problem.

Technological environment
The technological environment is perhaps the most dramatic force now shaping
our destiny. Technology has released such wonders as antibiotics, organ
transplants, computers, and the Internet. It also has released such horrors as

29

nuclear missiles, chemical weapons, and assault rifles. It has released such
mixed blessing as the automobile, television, and credit cards. New
technologies create new markets and opportunities. However, every new
technology replaces an older technology. Transistors hurt the vacuum-tube
industry, xerography.

Hurt the carbon-paper business, the auto hurt the railroads, and compact disks
hurt phonograph records. When old industries fought or ignored new
technologies, their businesses declined. Thus, marketers should watch the
technological environment closely. Companies that do not keep up with
technological change soon will find their products outdated. And they will miss
new product and market opportunities.

Political environment
Marketing decisions are strongly affected by developments in the political
environment. The political environment consists of laws, government agencies,
and pressure groups that influence and limit various organizations and
individuals in a given society. Even the most liberal advocates of free-market
economies agree that the system works best with at least some regulation. Wellconceived regulation can encourage competition and ensure fair markets for
goods and services. Thus, governments develop public policy to guide
commerce-sets of laws and regulations that limit business for the good of
society as a whole. Almost every marketing activity is subject to a wide range of
laws and regulations. Legislation affecting business around the world has

30

increased steadily over the years. The States has many laws covering issues
such as competition, fair trade practices, environmental protect ion, product
safety, truth in advertising, packaging and labeling, pricing, and other important
areas. The European Commission has been active in establishing a new
framework of laws covering competitive behavior; product standards, product
liability, and commercial transact ions for the nations of the European Union.
Several countries have gone farther than the United States in passing strong
consumerism legislation. For example, Norway bans several forms of sales
Promotion trading stamps, contests, premiums as being inappropriate or unfair
ways of promoting products. Thailand requires food processors selling national
brands to market low price brands also, so that low-income consumers can find
economy brands on the shelves. In India, food companies must obtain special
approval to launch brands that duplicate those already existing on the market.

Cultural environment
The cultural environment is made up of institutions and other forces that affect a
societys basic values, percept ions, preferences, and behaviors. People grow up
in a particular society that shapes their basic beliefs and values. They absorb a
world view that defines their relationships with others. People in a given society
hold many beliefs and values. Their core beliefs and values have a high degree
of persistence. For example, most Indians believe in working, getting married,
giving to charity, and being honest. These beliefs shape more-specific attitudes
and behaviors found in everyday life. Core beliefs and values are passed on
from parents to children and are reinforced by schools, churches, business, and
government.

31

The notion of various environmental forces to global company is shown in


Figure:-

Micro context of international marketing:Organizational and consumer behavior:


organizational buying behavior

32

international negotiations
consumer behavior
Country of origin.

Marketing entry decisions:


initial mode of entry
specific modes of entry
exporting
joint ventures
Local market expansion: marketing mix decisions:

global standardization vs. local responsiveness

Marketing mix

product policy
Advertising
Pricing
Distribution

Global Marketing Strategies

33

Competitive strategy
conceptual development
competitive advantage vs. competitive positioning
sources of competitive advantage and performance implications
Strategic alliances
learning and trust
recipes for alliance success
performance of different types of alliance
Global sourcing
global sourcing in a service context
benefits of global sourcing
country of origin issues in global sourcing
Although some would stem the foreign invasion through protective legislation,
protectionism in the long run only raises living costs and protects inefficient
domestic firms (national controls). The right answer is that companies must
learn how to enter foreign markets and increase their global competitiveness.
Firms that do venture abroad find the international marketplace far different
from the domestic one. Market sizes, buyer behavior and marketing practices all
vary, meaning that international marketers must carefully evaluate all market
segments in which they expect to compete.
Whether to compete globally is a strategic decision (strategic intent) that will
fundamentally affect the firm, including its operations and its management. For
many companies, the decision to globalize remains an important and difficult

34

one (global strategy and action). Typically, there are many issues behind a
company`s decision to begin to compete in foreign markets. For some firms,
going abroad is the result of a deliberate policy decision (exploiting market
potential and growth); for others, it is a reaction to a specific business
opportunity (global financial turmoil, etc.) or a competitive challenge
(pressuring competitors). But, a decision of this magnitude is always a strategic
proactive decision rather than simply a reaction (learning how to business
abroad). Reasons for global expansion are mentioned below:

35

Opportunistic global market development (diversifying markets)

Following customers abroad (customer satisfaction)

Pursuing geographic diversification (climate, topography, space, etc.)

Exploiting different economic growth rates (gaining scale and scope)

Exploiting product life cycle differences (technology)

Pursuing potential abroad

Globalizing for defensive reasons

Pursuing a global logic or imperative (new markets and profits)

36

Global Market Entry Strategies


Exporting as an Entry Strategy:
Exporting represents the least commitment on the part of the firm entering a foreign
market. Exporting to a foreign market is a strategy many companies follow for at least
some of their markets. Since many countries do not offer a large enough opportunity to
justify local production, exporting allows a company to centrally manufacture its
products for several markets and therefore to obtain economies of scale. Furthermore,
since exports add volume to an already existing production operation located
elsewhere, the marginal profitability of such exports tends to be high.
A firm has two basic options for carrying out its export operations. The form of
exporting can be directly under the firm`s control or indirect and outside the firm`s
control. It can contact foreign markets through a domestically located (in the exporter`s
country of operation) intermediary-an approach called indirect exporting. Alternatively,
it can use an intermediary located in the foreign market-an approach termed direct
exporting.

Indirect Exporting:
Indirect exporting includes dealing through export management companies of foreign
agents, merchants or distributors. Several types of intermediaries located in the
domestic market are ready to assist a manufacturer in contacting international markets
or buyers. The major advantage for managers using a domestic intermediary lies in that
individual`s knowledge of foreign market conditions. Particularly, for companies with
little or no experience in exporting, the use of a domestic intermediary provides the
exporter with readily available expertise. The most common types of intermediaries are
brokers, combination export and manufacturers` export agents. Group selling activities
can also help individual manufacturers in their export operations

Direct Export

37

Direct exporting includes setting up an export department within the firm or having the
firm`s sales force sell directly to foreign customers or marketing intermediaries. A
company engages in direct exporting when it exports through intermediaries located in
the foreign markets. Under direct exporting, an exporter must deal with a large number
of foreign contacts, possibly one or more for each country the company plans to enter.
Although a direct exporting operation requires a larger degree of expertise, this method
of market entry does provide the company with a greater degree of control over its
distribution channels than would indirect exporting. The exporter may select from two
major types of intermediaries: agents and merchants. Also, the exporting company may
establish its own sales subsidiary as an alternative to independent intermediaries.
Successful direct exporting depends on the viability of relationship built up between the
exporting firm and the local distributor or importer. By building the relationship well,
the exporter saves considerable investment costs.
The independent distributor earns a margin on the selling price of the products.
Although the independent distributor does not represent a direct cost to the exporter, the
margin the distributor earns represents an opportunity that is lost to the exporter. By
switching to a sales subsidiary to carry out the distributor`s tasks, the exporter can earn
the same margin. With increasing volume, the incentive to start a sales subsidiary
grows. On the other hand, if the anticipated sales volume is small, the independent
distributor will be more efficient since sales are channeled through a distributor who is
maintaining the necessary staff for several product lines. The lack of control frequently
causes exporters to shift from an independent distributor to wholly owned sales
subsidiaries.
Many companies export directly to their own sales subsidiaries abroad, sidestepping
independent intermediaries. The sales subsidiary assumes the role of the independent
distributor by stocking the companys products and/or services, sometimes jointly
advertising & promoting the products, selling to buyers and assuming the credit risk.
The sales subsidiary offers the manufacturer full control of selling operations in a
foreign market. Such control may be important if the company`s products require the

38

use of special marketing skills such as advertising or selling. The exporter finds it
possible to transfer or export not only the product but also the entire marketing program
that often makes the product a success.
The operation of a subsidiary adds a new dimension to a company`s international
marketing operation. It requires the commitment of capital in a foreign country,
primarily for the financing of account receivables and inventory. Also, the operation of
a sales subsidiary entails a number of general administrative expenses that are
essentially fixed in nature. As a result, a commitment to a sales subsidiary should not be
made without careful evaluation of all the costs involved.

Foreign Production as an Entry Strategy


Many companies realize that to open a new market and serve local customers better,
exporting into that market is not a sufficiently strong commitment to realize strong
local presence. As a result, these companies look for ways to strengthen their base by
entering into one of several ways to manufacture.

Licensing
Licensing is similar to contract manufacturing, as the foreign licensee receives
specifications for producing products locally, but the licensor generally receives a set
fee or royalty rather than finished products. Licensing may offer the foreign firm access
to brands, trademarks, trade secret or patents associated with products manufactured.
Under licensing, a company assigns the right to a patent (which protects a product,
technology or process) or a trademark (which protects a product name) to another
company for a fee or royalty. Using licensing as a method of market entry, a company

39

can gain market presence without an equity (capital) investment. The foreign company,
or licensee gains the right to commercially exploit the patent or trademark on either an
exclusive (the exclusive right to a certain geographic region) or an unrestricted basis.
Due to advantages of low risk and low investment, licensing is a particularly attractive
mode for small and medium-sized firms. Licensing also is an effective mode for testing
the future viability of more active involvement with a foreign partner.
Licenses are signed for a variety of time periods. Depending on the investment
needed to enter the market, the foreign licensee may insist on a longer licensing period
to pay off the initial investment. Typically, the licensee will make all necessary capital
investments (machinery, inventory and so forth) and market the products in the
assigned sales territories, which may consist of one or several countries. Licensing
agreements are subject to negotiation and tend to vary considerably from company to
company and from industry to industry.
Companies use licensing for a number of reasons. For one, a company may not
have the knowledge or the time to engage more actively in international marketing. The
market potential of the target country may also be too small to support a manufacturing
operation.

Strategic Alliances
A more recent phenomenon is the development of a range of strategic alliances.
Alliances are different from traditional joint ventures in which two partners contribute a
fixed amount of resources and the venture develops on its own. In an alliance, two
entire firms pool their resources directly in a collaboration that goes beyond the limits
of a joint venture. Although a new entity may be formed, it is not a requirement.
Sometimes, the alliance is supported by some equity acquisition of one or both of the
partners. In an alliance, each partner brings a particular skill or resource-usually they

40

are complementary-and by joining forces, each expects to profit from the other`s
experience. Typically, alliances involve distribution access, technology transfers or
production technology with each partner contributing a different element to the venture.
Alliances can be in the forms of technology-based alliances, production- based
alliances or distribution-based alliances.
Although many alliances have been forged in a large number of industries, the
evidence is not yet in as to whether these alliances will actually become successful
business ventures. Experience suggests that alliances with two equal partners are more
difficult to manage than those with a dominant partner. In particular, it is important to
recognize that the needs and aspirations of partners may change over the life of an
alliance and do so in divergent ways. Predicting what the goals and incentives of the
various parties will be under various circumstances is a critical part of effective
planning. Furthermore, many observers question the value of entering alliances with
technological competitors, such as between western and Japanese firms. The challenge
in making an alliance work lies in the creation of multiple layers of connections or
webs that reach across the partner organizations. Eventually such connections will
result in the creation of new organizations out of the cooperating parts of the partners.
In that sense, alliances may very well be just an intermediate stage until a new company
can be formed or until the dominant partner assumes control.

Entering Markets through Mergers and Acquisitions


Although international firms have always made acquisitions, the need to enter markets
more quickly than through building a base from scratch or entering some type of
collaboration has made the acquisition route extremely attractive. This trend has
probably been aided by the opening of many financial markets, making the acquisition
of publicly traded companies much easier. Most recently even unfriendly takeovers in
foreign markets are now possible. Nevertheless, international mergers and acquisitions
are difficult to make work. A major advantage of acquisitions is that they can quickly
position a firm in a new business. By purchasing an existing player, a firm does not

41

have to take the time to establish its presence or develop for itself the resources it does
not already possess. This can be particularly important when the critical resources are
difficult to imitate or accumulate. Acquiring an existing firm also takes a potential
competitor out of the market. Despite these advantages, acquisitions can have serious
drawbacks. First and foremost, acquisitions can be a very expensive way to enter a
market. In addition to the likelihood of overbidding, acquisitions pose a number of
other challenges. Most targets contain bundles of assets and capabilities, only some of
which are of interest to the acquirer. Disposing of unwanted assets or maintaining them
in the portfolio is often done at significant cost, either in real terms or in management
time. Although these obstacles are serious, a number of acquisitions fail on another
account: the post acquisition integration process fails. Integrating an acquired company
into a corporation is probably one of the most challenging tasks confronting top
management.

Preparing an Entry Strategy Analysis


Of course, assembling accurate data is the cornerstone of any entry strategy analysis.
The necessary sales projections have to be supplemented with detailed cost data and
financial need projections on assets (managerial, financial, etc. resources). The data
need to be assembled for all entry strategies under consideration. Financial data are
collected not only on the proposed venture but also on its anticipated impact on the
existing operations of the international firm. The combination of the two sets of
financial data results in incremental financial data incorporating the net overall benefit
of the proposed move for the total company structure.
For best results, the analyst must take a long-term view of the situation. Asset
requirements, costs and sales have to be evaluated over the planning horizon of the
proposed venture, typically three to five years for an average company. Furthermore, a
thorough sensitivity analysis must be incorporated. Such an analysis may consists of
assuming several scenarios of international risk factors that may adversely affect the
success of the proposed venture. The financial data can be adjusted to reflect each new
set of circumstances. One scenario may include a 20 percent devaluation in the host

42

country, combined with currency control and difficulty of receiving new supplies from
foreign plants. Another situation may assume a change in political leadership to a group
less friendly to foreign investments. With the help of a sensitivity analysis approach, a
company can quickly spot the key variables in the environment that will determine the
outcome of the proposed market entry. The international company then has the
opportunity to further add to its information on such key variables or at least to closely
monitor their development. It is assumed that any company approaching a new market
is looking for profitability and growth. Consequently, the entry strategy must support
these goals. Each project has to be analyzed for the expected sales level, costs and asset
levels that will eventually determine profitability. Sales, costs and assets levels have to
be estimated before. Also, profitability has to be estimated (past sales analysis, market
test method). In order to do this, assessing international risk factors, maintaining
flexibility and assessing total company impact are required. Market research that
focuses on buying patterns, customer segmentation on ability to pay especially in
developing countries, etc. (survey of buyers` intentions, composite of sales force
opinion, expert opinion) (SWOT Analysis-strengths, weaknesses, opportunities, threats)

Exit Strategies
Circumstances may make companies want to leave a country or market. Other than the
failure to achieve marketing objectives, there may be political, economic or legal
reasons for a company to want to dissolve or sell an operation (management myopia).
International companies have to be aware of the high costs attached to the
liquidation of foreign operations; substantial amounts of severance pay may have to be
paid to employees and any loss of credibility in other markets can hurt future prospects.
Sometimes, an international firm may need to withdraw from a market to consolidate
its operations. This may mean a consolidation of factories from many to fewer such
plants. Production consolidation when not combined with an actual market withdrawal

43

is not really what we are concerned with here. Rather, our concern is a company`s
actual abandoning its plan to serve a certain market or country. This is differentiation
between production withdrawal or consolidation and brand withdrawal. A firm can
consolidate production elsewhere while retaining a strong brand and marketing
presence.
Changing political situations have at times forced companies to leave markets.
Changing government regulations can at times pose problems, prompting some
companies to leave a country. Exit strategies can also be the result of negative reactions
in a firm`s home market.
Several of the markets left by international firms over the past decades have changed in
attractiveness, making companies reverse their exit decisions and enter those markets a
second time.

Global marketing system

44

Five Global Considerations Every Marketer Needs to think about

45

Each year we ask, Will this be the year of truly global marketing? In 2006 we saw
many companies, large and small, wake to the opportunities abroad. This year we are
seeing many more marketing executives highlight the international experience on their
rsums as they increase revenue, share, and brand awareness in other countries. They
will target the right populations, the right mix of channels to reach them, and the right
products to offer them.
As these marketers write their business plans for the coming years, many will cite an
evergreen litany of reasons for targeting global markets. Among them will be the need
to
1. Prepare for continued growth beyond the North Atlantic:
Not every international market matters, but some matter a lot. Im actually
writing this column from Shanghai, a booming city in the Peoples Republic of
China. Ignore China - now the worlds fourth largest economy -at your peril. Its
middle class today totals 130 million consumers and is expect to grow to some
650 million by 2010. Within 20 years, one of every three consumers in the
world will speak Chinese from birth. Meanwhile, Indias middle class already
equals in size the entire population of the United States. And aging populations
in Europe and Japan will join the retiring baby boomers in the U.S. with
demands for new products, services, and leisure options.
2. Reinforce brand in international markets:
Higher prices and customer demand come from the goodwill associated with a
brand, a hard-won value resulting from the trust that a strong name engenders
among buyers and partners. As they begin to saturate the demand in their
domestic markets, companies spending hundreds of millions of dollars annually
to manage and refine their brand will want to extend beyond the small patch of
their headquarters country.
3.

46

Balance your business:

When buyers in one region are slow to reach for their wallets, buyers in other
geographies might take up the slack. Global firms with diversified regional
portfolios can always focus their energy on the markets that are doing well.
Closely monitoring economic indicators will let you redeploy assets as
worldwide market conditions dictate.
4. Improve corporate information flow:
Many multinational companies conduct business exclusively in English, but this
works best at the executive- management and director levels. In the operational
trenches and the factories, local languages and customs dominate. To optimize
the output of staff and enable collaborative efforts across a global enterprise,
companies have to make critical communication systems such as e-mail, human
resources, data portals, and decision support available in the language that their
employees are most comfortable with.
5. Satisfy the customer - wherever that customer might be:
People buy from you today, from your competitors tomorrow. Whether theyre
buying iPods or I-beams, international customers begin their buying cycle
online, where they can get answers to their frequently asked questions, product
information, and transactions - all in their local languages. Prospects can review
product offerings, safety advisories, technical data, and competitive
descriptions. Tailoring services to local languages and customs is a natural
extension to personalized marketing, creating a personally and culturally
relevant experience that will strengthen the customer relationship and improve
customer satisfaction.

Global Marketing 5 Steps to Succession

47

Companies decide to expand their organizations globally and are unsuccessful


because they fail to realize one very important thing. They do not change their
marketing efforts to adapt to those of another country. Some people feel one
countrys values, beliefs, culture, economic conditions and competitive conditions
are not very different from another. But a message that works in one country can
fail miserably in another because countries are very different from each other.
Companies need to make variations to their marketing approach when doing
business internationally.
To overcome global marketing struggles and conquer your competition, we have
created Global marketing process to guide. Which are as follows:
1. Do The Research:
With any kind of marketing there should always first be some kind of ting
research when developing your marketing strategies. This is especially
important when a business is expanding internationally because their targeted
audience is much different than their home land audience. Researching the
demographics and also doing some kind of research to searching figure out if
there will be a demand for your product or service is very important. Make sure
there is a want or need for your product and then figure out for that country who
your audience is and what will be the best way to target them.
2. Recognize Cultural Differences:
Countries differ in many ways including language, religion, social structure and
education. These differences have significant impact on a businesss marketing
strategies. Through ones research they also need to find what. Traditions, tastes
and preferences are of other countries, so their marketing ideas can
accommodate to the country and be effective.
3. Develop a Unique Marketing Mix to Appeal to the Purchasing Behavior of
a Certain Segment in a Given Country:

48

This secret also includes some research. One needs to identify groups of
consumers whose purchasing behavior differs from others in an important way.
These segments can be found though the geographies, demographics, socialcultural factors and psychological factors. The segment that would best benefit
the company is the one that then needs to have a unique marketing mix that will
appeal to those purchasing behaviors. The marketing mix will include a firms
choice about product attributes, communication strategy, distribution strategy
and pricing strategy that they will offer their targeted segment.
4. Identify Market Segments that Transcend National Borders:
In order to do this, a company needs to find the similarities among the
consumers in a certain segment. Such similarities like values, age, and lifestyle
choices which need to translate into similar purchasing behaviors. Once these
similarities are found, a company can then view the global marketplace as a
single entity and sell a standardized product worldwide using their same basic
marketing mix to help them position and sell that product in a variety of
national markets.
5. Decide if standardized advertising will work for your company:
If a companys advertisements legally and ethically can be viewed in their home
land country but also in other countries, then standardized advertising is a great
idea. If the advertisements are not offensive and abide by that countrys laws
then most likely using the same ads instead of developing new ones for different
countries is going to be a significant cost saver. Also, there is concern that
creative talent is limited and that one large marketing effort has better results
than 40 or 50 smaller efforts. On the other hand, cultural diversity makes it
exceptionally hard to develop a single advertising theme that will be successful
worldwide. Also, advertising regulations might block implementation of
standardized advertising. Laws vary from country to country and so what might
be acceptable in one country is breaking the law in another. Differentiating

49

between the two and then deciding what will work for your company might
save you money or avoid a lawsuit.

Findings

50

The Japanese company Matsushita Electric was promoting a new Japanese PC


for internet users. Panasonic created the new web browser and had received
license to use the cartoon character Woody Woodpecker as an interactive
internet guide. The day before the huge marketing campaign, Panasonic realized
its error and pulled the plug. Why? The ads for the new product featured the
following slogan: "Touch Woody - The Internet Pecker." The company only
realized its cross cultural blunder when an embarrassed American explain what

"touch Woody's pecker" could be interpreted as!


The Swedish furniture giant IKEA somehow agreed upon the name

"FARTFULL" for one of its new desks.


In the late 1970s, Wang, the American computer company could not understand
why its British branches were refusing to use its latest motto "Wang Cares". Of
course, to British ears this sounds too close to "Wankers" which would not

really give a very positive image to any company.


"Traficante" and Italian mineral water found a great reception in Spain's

underworld. In Spanish it translates as "drug dealer".


In 2002, Umbro the UK sports manufacturer had to withdraw its new trainers
(sneakers) called the Zyklon. The firm received complaints from many
organizations and individuals as it was the name of the gas used by the Nazi

regime to murder millions of Jews in concentration camps.


Sharwoods, a UK food manufacturer, spent 6 million on a campaign to launch
its new 'Bundh' sauces. It received calls from numerous Punjabi speakers telling

them that "bundh" sounded just like the Punjabi word for "arse".
Honda introduced their new car "Fitta" into Nordic countries in 2001. If they
had taken the time to undertake some cross cultural marketing research they
may have discovered that "fitta" was an old word used in vulgar language to
refer to a woman's genitals in Swedish, Norwegian and Danish. In the end they

renamed it "Honda Jazz".


American Motors tried to market its new car, the Matador, based on the image
of courage and strength. However, in Puerto Rico the name means "killer" and
was not popular on the hazardous roads in the country.

51

Proctor & Gamble used a television commercial in Japan that was popular in
Europe. The ad showed a woman bathing, her husband entering the bathroom
and touching her. The Japanese considered this ad an invasion of privacy,

inappropriate behaviour, and in very poor taste.


Leona Helmsley should have done her homework before she approved a
promotion that compared her Helmsley Palace Hotel in New York as

comparable to the Taj Mahal--a mausoleum in India.


A golf ball manufacturing company packaged golf balls in packs of four for
convenient purchase in Japan. Unfortunately, pronunciation of the word "four"
in Japanese sounds like the word "death" and items packaged in fours are

unpopular.
Pepsodent tried to sell its toothpaste in Southeast Asia by emphasizing that it
"whitens your teeth." They found out that the local natives chew betel nuts to

blacken their teeth which they find attractive.


A company advertised eyeglasses in Thailand by featuring a variety of cute
animals wearing glasses. The ad was a poor choice since animals are considered
to be a form of low life and no self respecting Thai would wear anything worn

by animals.
The soft drink Fresca was being promoted by a saleswoman in Mexico. She
was surprised that her sales pitch was greeted with laughter, and later
embarrassed when she learned that fresca is slang for "lesbian."

Recommendations
Recommendation 1: Clarify what is driven globally and what is managed locally
A global marketing approach does not mean the absence of local, market-specific plans
and initiatives. These should, in fact, be complementary.

52

Global marketing will typically set the framework and parameters within which local
marketing operates, whilst giving in-market teams the freedom to control local success
levers.
Some areas of marketing that lend themselves to being led at a global or central
level include branding and brand guidelines, strategic marketing planning and
budgeting (with autonomy given to markets within their allocated budget), large-scale
marketing campaigns, social media strategy and guidelines, research strategy, and
global PR.
Other areas best managed locally include local outreach initiatives and more tactical
campaigns, local social media channels and PR initiatives, local partnerships and
events, etc. Markets need to have some control over the local channels that contribute
to driving their success.
In practice, it might be useful to divide your markets into tiers.
A tiered market will help you identify territories that might drive the highest potential
returns. It also allows top tier markets to access bigger budgets, giving them autonomy;
for example, research into local users behaviours to inform product development.
Global and local areas of ownership may differ from company to company. However, it
is critical you define the areas clearly to avoid friction and inefficiencies. Take the time
to do this upfront - dont wait until issues start arising.
Recommendation 2: Understand local market needs and develop a collaborative
approach
Too often, operating globally is seen as an excuse to avoid spending time understanding
local cultures, customer needs and behaviours, as well as successful and less successful
marketing approaches.
And yet, it is obvious that a US-based customer is likely to be very different from a
customer located in India or SEA. Their lives, cultures, and needs are different, so it
makes sense they will interact very differently with your products or services.
For a global model to work, global teams need to develop an understanding of local
markets and establish a close relationship with local marketing teams.
So, if you are in a global marketing role:

53

Research the markets and take the time to get to know the international teams
you will be working with.
Trust them to be the experts on local customs and users.

Recommendation 3: Develop and socialise a global marketing plan early (seek


feedback)
So, you have established key relationships, researched local markets, and defined
global marketing plans which you think accommodate local needs where required.
Thats a great start, but dont wait for the campaign to begin to validate your
assumptions. Socialise these plans with your international teams as soon as possible,
seek their feedback and ensure that there are no legal issues to prevent your plans from
working in certain markets.
A proactive approach will give you time to adjust and revise your plans in the event of
a problem. It will also allow you to get buy-in from your local colleagues. And, after
all, a huge part of the success will rest on their shoulders during execution.

Recommendation 4: Manage campaigns like an army operation plan ruthlessly


As the time for your campaign to kick-off approaches, there are a few key elements to
consider to help it succeed; starting with outstanding project planning.

Appoint a global campaign manager - with responsibility for all


communication and coordination around the campaign. Make sure his/her
overall accountability is understood by all. Failing to do this will result in crosscommunication, misunderstandings and missed deliverables.
Plan ruthlessly make sure deadlines, responsibilities and deliverables are
clear to everyone involved. Plan your campaigns official launch at a time and
date that works for all the countries in the campaign. And, at every step of the
way, get all parties to confirm when deliverables have been completed so you
can stay on top of the project at a global level.
Consider time-zones - your timelines must reflect these so all relevant
materials are ready concurrently across all markets. And dont forget to factor in
time for translation, localisation, reviews and iterations.
Communicate - plans, deliverables and expectations across different channels
and multiple times. Touch base with in-country teams regularly to provide
support and advice and to stay on top of the campaign as it unfolds.

Recommendation 5: Make sure you track and adjust in real time


Running a campaign in multiple markets means you will have to be particularly
disciplined about tracking results. The campaign manager is a good person to
coordinate this.

54

Here are a few suggestions:

Define key metrics and goals at the start of the campaign at both global and
market level (clicks, click-through rate%, conversion rate, average customer
spend, etc.)
Get buy-in from in-market teams on these targets. Share these metrics early
and share them all. Seeing how each market contributes to the overall success
of the campaign might help drive a bit of healthy competition!
Keep a centralised shared template where market metrics are updated every
week/day/any other relevant frequency
Review metrics weekly with the team, preferably on a call or video call, and
take actions to address under-performance. These discussions should be active
and vibrant, allowing all local teams to chip in and contribute. This is also a
good opportunity to leverage best practice across markets.

Recommendation 6: Consolidate and share insight


Once your campaign comes to an end, make sure you consolidate the insight gained
and organise a debrief.
It is important results are both shared upward and reviewed with in-market teams.
Discuss what worked, what didnt; which markets the campaign was most successful in
and why. Learnings will be invaluable in planning future activity.
Recommendation 7: Over-communicate
Effective communication is important at all times, not only when running campaigns.
Being in a global marketing role inevitably means you will be working with colleagues
around the globe; most of whom will be sitting thousands of miles away from you. In
these circumstances its easy to feel disconnected. And, if you are disconnected, so is
your strategy, plans and activities.
A critical element that makes global marketing work is the relationship you
establish with in-market teams. An open communication channel is vital in
developing trust and nurturing these relationships. Regular (video) calls are a great way
to keep the teams up-to-date with the latest global plans and changes, as well as to learn
about the latest competitive developments in-market, or to discuss new campaign ideas.

Reap the benefits of operating globally :

55

Yes, global marketing requires some effort to work, but it does have a number of
benefits.
Most obviously, it ensures your marketing strategy is applied consistently (but smartly)
across territories and it allows you to operate more efficiently through economies of
scale.
Beyond this, one of the biggest benefits of operating globally with a local presence is
the opportunity it provides to develop a deeper understanding of the markets in which
your company operates and their potential. It enables you to prioritise and optimise
your efforts and budgets effectively.
And last but not least, it gives you as many territories to test and learn from. For each
campaign or activity you run, you will gather feedback and suggestions from a range of
markets. This is invaluable insight you can leverage by developing a repository of best
practice and ideas which will help drive your long term success.

Conclusion

56

Global marketing is a proactive response to the intertwined nature of proactive business


opportunities and competition that know no political boundaries. Global marketing
does not necessarily mean that companies should market the same product in the same
way around the world as world markets are converging. Global marketing is a
companys willingness to willing adopt a global perspective instead of a country-bycountry or region-by region perspective in developing a marketing strategy for growth
and profit. The six forces making up the companys macro global environment macroglobal include demographic, economic, natural, technological, political and cultural
forces. These forces shape opportunities and pose threats to the company. Global
market possesses great importance of less developed countries (LDCs) it provides all
urge to develop knowledge and experience that make development possible in LDCs.
The remarkable growth of the global economy over the post 50 years has occurred
because of many driving forces contributing to the growth of international contributing
business, namely, market needs, modern technology, minimum cost, application, and
higher quality, and information revolution and leverage ion, advantages. Several
restraining forces also occurred in international trade in the form of tariff barriers and
non non-tariff barriers. There are four identifiable stages in the evolution of marketing
across national evolution boundaries. These are known as Ethnocentrism, poly
centrism, regiocentrism and geocentrism. Companies have the plan of entry strategy
choices to implement their global expansion efforts. Each alternative has its pros and
cons. Global companies often adopt a phased and entry strategy. They start off with a
minimal risk strategy. Once the perceived risk declines, they switch to higher
commitment mode. It is made clear that, a broad range of variables impact the entry
mode choice. The three major dimensions include the resource commitment a firm is
willing to make, the amount of risk the firm is willing to take and the degree of control
that is desirable.

Questionnaire
Name:
Occupation:
Name of the company:

57

Address:
Contact no.:
Designation:
Q1. Are you?
Male ( )
Female ( )
Q2. Which of the following categories include your age?
Under age 18 ( )
18 to 24
( )
25 to 34
( )
35 to 44
( )
45 to 54
( )
55 to 64
( )
65 or older
( )
Q3. What is your total annual household income? (Per annum)
Less than 50,000
( )
50,000 to 1,00,000
( )
1,00,000 to 2,00,000
( )
2,00,000 to 5,00,000
( )
Q4. Do you own a car?
Yes ( )
No ( )
Q5. Which car do you own?
Mercedes ( )
Audi
( )
Hyundai ( )
Nissan
( )
Renault ( )
Toyota
( )
Q6. Do you think that you would be buying a car in the near future?
Yes ( )
No ( )

58

Q7. Which factors do yon think would influence your purchasing decision the most?
Price
( )
Finance
( )
Past financial records
( )
Brand name
( )
After sales service
( )
Income
( )
Q8. Do you have faith in Indian car manufacturer or you prefer multinational?
Not at all
( )
Not too much ( )
Significant
( )
Q9. Which kinds of advertisement attract you to Nissan?
Newspaper Ads
( )
Television Ads
( )
Hoardings
( )
Other (please specify)
Q10. What do you prefer the most in a car?
Features
( )
Space
( )
Shape
( )
Technology
( )
Price
( )

Q11. Do you think that the name Nissan is going to invoke internationalist feelings in
the public and lead to rise in sales?
Yes ( )
No ( )
Q12. Please write one positive point that you attribute to each of the following models.
Brand Name
Hyundai

59

Positive Point

Toyota
Mercedes
Audi
Nissan
Renault

Q13. . Please write one negative point that you attribute to each of the following
models.
Brand Name
Hyundai
Toyota
Mercedes
Audi
Nissan
Renault
Q14. Please rate Nissan out of 10.

Negative Point

( )

THANK YOU.

Bibliography

60

Kotabe, Masaki and Helsen, Kristiaan, Global


Marketing management -3rd Edition, John Wiley & Sons, Inc Publishers,
copyright 2004.

http://www.wfanet.org/ World Federation of advertisers aef.com


Kotler & Keller, Marketing Management - 12th Edition, 2005, ISBN81-203-

2799-3
Theodore Levitt, The Globalization of Markets, Harvard Business Review 61

(May June 1983): 92-102


Young, Charles E., Advertising Research Handbook, Ideas in Flight, Seattle,

WA, April 2005, ISBN0-9765574-0-1 Ryan mil


Isnare.com Free Articles Directory -

http://www.isnare.com/

HTTP://WWW.EASYSEO.COM
http://EzineArticles .com/
Doole, I. and Lowe, R. (2001), International Marketing Strategy Analysis,

Development and Implementation, Thomson Learning, 3rd Ed.


Johansson, J.K. (2000), Global Marketing Foreign Entry, Local Marketing,
and Global Management, Johansson, International Edition.

61