Chapter 21

Global Marketing Strategy

 Key terms

1. Foreign market-entry modes

2. International marketing strategies

3. International marketing mix decisions

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 1. Foreign market-entry modes

Foreign market
entry

Exporting Cooperative Direct

Indirect Direct investment
• Domestic based • Foreign based • Licensing
export merchants agents or distributors • Joint • New facilities
• Domestic based • Domestic based ventures • Acquisitions
export agents sales representatives
• Piggy backing • Overseas
• Co-operative sales/marketing
organisations office or subsidiary
• The Internet

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 Selecting a foreign market entry mode

Risk of losing
Resources Control
proprietary information
High Direct investment Direct investment
Exporting (own staff)
Level

Medium Licensing Joint venture Joint venture

Joint venture Exporting (own staff) Licensing

Low Exporting (own staff) Licensing Exporting (middlemen)

Exporting (middlemen) Exporting (middlemen)
Direct Investment

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 2. Developing international marketing strategy

Standardization versus adaptation

• Standardization: the process of maintaining uniformity of a marketing mix
sold in different markets (see, Jain (1989), Levitt (1983).)
• Adaptation: the process of modifying the existing marketing mix in order to
reach to each market (see, Szymanski, Bharadwaj & Varadarajan (1993); Cavusgil, Zou
& Naidu (1993).)
• Standardization can create massive economies of scale but full
standardization can be difficult.
• Adaptation allows local tastes and preferences to be met but increases costs.
• A useful rule is to standardize where you can, stay local where you must.

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 3. International marketing mix

3.1 Advertising positioning strategies (Promotion) (Alden, Steenkamp & Batra (1999)
1. Global consumer culture positioning (GCCP)
2. Foreign consumer culture positioning (FCCP)
3. Local consumer culture positioning (LCCP)
3.2 Cross-national pricing decisions (Price)
Calculating
extra costs
and making
price
quotations
Counter Understanding
the competition
-trade and customers
Cross-
national
pricing
Using
decisions pricing
Transfer tactics to
pricing undermine
competitor
actions
Parallel
importing

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 Critical evaluation standardization & adaptation

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 Conclusion

1. International marketing is an evolutionary process that moves a

company from a domestic market focus to an international market focus.

2. Companies should build a strong global marketing strategy with the

proper structure, mindset and operating behaviours that achieve a
successful balance between standardization and adaptive initiatives.

3. The “Four P’s” of marketing — product, price, placement, and promotion

—are all affected as a company moves through the different phases to
become and maintain dominance as a global company.

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 Recommended reading & study questions

• Jonsson, A., & Foss, N. J. (2011). International expansion through flexible replication: Learning from the
internationalization experience of IKEA. Journal of International Business Studies, 42(9), 1079-1102.
• Taylor, M. (2000). Cultural variance as a challenge to global public relations: A case study of the Coca-
Cola scare in Europe. Public Relations Review, 26(3), 277-293.Dale, C. (2000). The UK tour-operating
industry: A competitive analysis. Journal of Vacation Marketing, 6(4), 357-367.
• Patterson, P. G., Scott, J., & Uncles, M. D. (2010). How the local competition defeated a global brand:
The case of Starbucks. Australasian Marketing Journal (AMJ), 18(1), 41-47.
• Witkowski, T. H., Ma, Y., & Zheng, D. (2003). Cross-cultural influences on brand identity impressions:
KFC in China and the United States. Asia Pacific Journal of Marketing and Logistics, 15(1/2), 74.

Q1: Use advertising positioning strategies to analyse this IKEA ad in Japan (

https://www.youtube.com/watch?v=deRCE-HWYmo) and consider what feature(s) are
emphasized in the ad and why?

Q2: Examine the website of Tesla Gigafactory 3 (Shanghai, China) and identify the
particular market-entry mode it adopts. What are the advantages and disadvantages for
Tesla to choose such a mode entering the Chinese market?
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