International Marketing

th
15 edition

Chapter 12

Global Marketing Management:

Planning and Organization

Philip R. Cateora, Mary C. Gilly, and John L. Graham

 Global Marketing
Management
• The trend back toward localization
– Caused by the new efficiencies of customization
– Made possible by the Internet
– Increasingly flexible manufacturing processes
• From the marketing perspective customization is
always best
• Global markets continue to homogenize and
diversify simultaneously
– Best companies will avoid trap of focusing on
country as the primary segmentation variable
Benefits of Global Marketing
• When large market segments can be identified
– Economies of scale in production and marketing is
important competitive advantages for global companies
• Transfer of experience and know-how
– Across countries through improved coordination and
integration of marketing activities
• Marketing globally
– Ensures that marketers have access to the toughest
customers (Testing ground))
– Market diversity carries with it additional financial benefits
– Firms are able to take advantage of changing financial
circumstances
 International Planning
Process
Exhibit 12.1
 Phase 1: Preliminary analysis and screening –
matching company and country needs
• Evaluation of potential market doesn’t matter
whether New or heavily involved in international
marketing.
• Company’s strength, weakness, products,
philosophies, modes of operation and objective
must be matched.
• Screening out unpromising possibilities.
• Emerging Market special problem inadequate
marketing infrastructure, underdeveloped
distribution channels.
 Phase 1: Preliminary analysis and screening –
matching company and country needs
• it is important to determine the reasons for
entering a foreign market and the returns
expected from the investment.
• Evaluation criteria; such as, minimum market
potential, minimum profit, ROI, acceptable
competitive levels, standard of political stability,
legal requirements.
• Environmental analysis (Uncontrollable both
home and host)
 Phase 2: Defining target markets and adapting the
marketing mix accordingly
• A more detailed examination of the components
of the marketing mix is the purpose phase 2.
• Once target markets are selected, the marketing
mix must be evaluated in light of data generated
in phase 1.
• Incorrect decisions inappropriate product or
costly mistakes in pricing, advertising and
promotion.
• Primary goal marketing mix adjusted to the
cultural constraints.
 Phase 2: Defining target markets and adapting the marketing
mix accordingly

• The answers to three major questions are

generated in Phase 2:
1. Are there identifiable market segments that allow
for common marketing mix tactics across countries?
2. Which cultural/environmental adaptations are
necessary for successful acceptance of the
marketing mix?
3. Will adaptation costs allow profitable market
entry?
 Phase 3: Developing the Marketing Plan

• Marketing plan is developed for the target

market – whether it is a single country or a
global market set.
• The plan starts with –situation analysis, selection
of entry mode, and specific action program for
the market.
• What is to be done, by whom, how it is to be
done, and when.
 Phase 4: Implementing and Control
• The go decision in phase 3 triggers
implementation of specific plans and
anticipation of successful marketing.
• All marketing plans need coordination and
control during the period of implementation.
• The planning process is a dynamic, continuous
set of interacting variables with information
continuously building among phases.
Alternative Market-Entry
Strategies (1 of 2)
• An entry strategy into international market should reflect
on analysis
– Market characteristics
• Potential sales
• Strategic importance
• Strengths of local resources
• Cultural differences
• Country restrictions
– Company capabilities and characteristics
• Degree of near-market knowledge
• Marketing involvement
• Management commitment
 Alternative Market-Entry
Exhibit 12.2 Strategies
Alternative Market-Entry
Strategies (2 of 2)
• Companies most often begin with modest export
involvement
• A company has four different modes of foreign
market entry
– Exporting
– Contractual agreements
– Strategic international alliances
– Direct foreign investments
 Exporting
• Exporting can be either Direct or Indirect.
• Internet
• Direct sales: setting up an office with local or
expatriate managers and staffs.
 Contractual Agreement
(1 of 2)
• Contractual agreements
– Long-term,
– Nonequity association between a company and another in
a foreign market
– Transfer of technology, processes, trademark, human
skills.
• Licensing
– A means of establishing a foothold in foreign markets
without large capital outlays
– A favorite strategy for small and medium-sized companies
– Legitimate means of capitalizing on intellectual property in
a foreign market
 Contractual Agreement
(2 of 2)
• Franchising
– Franchiser provides a standard package of
products, systems, and management services
– Franchise provides market knowledge, capital,
and personal involvement in management
– Expected to be the fastest-growing
market-entry strategy
 Strategic International
Alliances
• Four characteristics define joint ventures:
– JVs are established, separate, legal entities
– The acknowledged intent by the partners to share
in the management of the JV
– There are partnerships between legally
incorporated entities such as companies,
chartered organizations, or governments, and not
between individuals
– Equity positions are held by each of the partners
 Strategic International
Alliances
• Consortia
– Similar to joint ventures and could be classified as
such except for two unique characteristics
• Typically involve a large number of
participants
• Frequently operate in a country or market in
which none of the participants
is currently active
– Consortia are developed to pool financial and
managerial resources and to lessen risks
– Sematech (R&D in Texas by IBM, Intel, HP,
Motorola)
Direct Foreign Investment
• Factors that influence the structure and
performance of direct investments
– Timing (First movers have advantages but Risky)
– The growing complexity and contingencies of
contracts
– Transaction cost structures
– Technology transfer
– Degree of product differentiation
– The previous experiences and cultural diversity of
acquired firms
– Advertising and reputation barriers
 The End

AKJ International Marketing IUB Summer

2012