PMAR01-6 Topic 6 – Summary

(Study Guide)
Important Outcomes

• Global markets: cultural environment

• Global markets: assessing opportunities
• Global markets: developing strategies
• Ethics in marketing management
– Sustainable marketing
– Ethical marketing communication
– Marketing regulation in South Africa
Topic 6 Summary
Global markets: cultural environment
• Culture = customs & social behaviour that a group of individuals share
• In global markets, there will be various cultures that marketers need to understand
• There are 4 main cultural dimensions to be aware of and understand:
1) Individualism/collectivism – either people take care of themselves (individualism)
OR people are close-knit in their social setting (collectivism).
2) Power distance – how society is made up of those who have lots of power vs.
those who have very little.
3) Masculinity/femininity – the distribution of roles between genders. Masculinity is
associated with materialism; power; strength and achievement. Femininity is the
opposite.
4) Uncertainty avoidance - the degree to which society feels threatened by uncertain,
ambiguous or undefined situations.
Topic 6 Summary
Global markets: assessing opportunities
Marketplace forces that prompt global opportunities
• Excess stock
• Limited growth in domestic markets; transnational market segments
• Comparative advantage
• Trade liberalisation; International product life cycle
• Technological advancement
• Organisational sustainability
What makes a market attractive?
• Accessibility and size
• Geographic and psychological proximity
• Competition, cost to enter the new market and the market’s profit potential
Topic 6 Summary
Global markets: assessing opportunities

• Entering international markets is an important market development strategy for

organisational growth.
• A tool called the EPRG classification highlights four approaches to market
development – an approach is selected depending on the resources available, the
industry, the consumer and the type of product.

Ethnocentric – domestic market is most important, foreign markets come next

Polycentric – domestic market and foreign markets are equally important - their own unit
Regional - countries group together on a geographical basis are seen as a market
Geocentric - one global market
Topic 6 Summary
Global markets: developing strategies - entry strategies
• Exporting – sale of local goods to other countries.
• Piggybacking – sale of goods in a foreign market through a foreign company’s distribution
facilities.
• Licensing – using another company’s trademark/patent & paying a fee.
• Franchising –the franchisee pays the franchisor royalty (a fee) for their intellectual property,
operating systems & distribution systems.
• Strategic international alliances – (SIA) when 2 companies have a mutual objective and
cooperate to achieve this together.
• Joint ventures – when 2 companies join together and form a 3rd company
• Consortia (consortium) – similar to a JV, but there are many companies involved and they
form a consortium to reduce the risk
• Manufacturing – when there is long-term future in a foreign market in order to avoid high
import taxes. This also draws the company closer to the consumer so that it can adapt to local
tastes and needs
Topic 6 Summary
Ethics in marketing management
• As marketers we need to be highly aware how our business and
communications are impacting society, the environment around us and the
financial wellbeing of the organisation.
• We therefore consider ethics is advertising, personal selling, promotions etc.
• There are 5 key issues for ethical consideration:
• 1.) Bid rigging - subcontractors submit false bids or a company agrees to not
submit a bid so that another company can win the contract
• 2.) Price collusion – companies collaborate in submitting bids for some
competitors, but not others. Aim is to limit competition
• 3.) Bribery
• 4.) Falsifying research data
• 5.) Advertising deception (false advertising)
Topic 6 Summary
Ethics in marketing management – 3 main communications:
Green marketing
Gearing business activities, products and packaging towards environmentally friendly
Cause related marketing
Joining up of a non-profit and for-profit business to raise awareness and funds
Social marketing
In support of communities, social projects and improving the lives of others
[Corporate Social Responsibility (CSR) – the overall concern of a business over
society’s welfare]
How is marketing regulated?
ASASA – Advertising Standards Authority of South Africa
Legislation (laws) – e.g. Consumer Protection Act