Introduction to Global Marketing

By
Dr. Amir: 22 Sep, 2023
12-1
 International Business (IB)

International Business (IB) is any

business activity organized and
carried out across national borders by
business firms in pursuit of their
stated aims and objectives.

12-2
 Domestic and IB compared

i.Cultural differences

ii.Currency differences

iii.Legal environment differences

iv.Differences in consumer tastes and preferences

v.Different factor endowments with different

qualities

12-3
Importance of international business

Every company is trying to expand its business

by entering foreign markets. International
business helps in the following ways:-

1.Helps as growth strategy: -Geographic

expansion may be used as a business strategy.
Even though companies may expand their
business at home.

2.Helps in managing product life cycle:- every

product has to pass through different stages of
product life cycle- when the product reaches the
last stages of life cycle in present market, it
may get proper response at other markets. 12-4
 Importance of international business

3. Technology advantages: -some companies

have outstanding technology advantages
through which they enjoy core competency. This
technology helps the company in capturing
other markets.

4.New business opportunities:- business

opportunities in overseas markets help in
expansion of many companies. They might have
reached a saturation point in domestic market

12-5
Importance of international business

5. Earning foreign exchange:-international

business helps in earning foreign exchange
which may be used for strategic imports .India
needs foreign exchange to import crude oil,
raw material and machinery.

6.Investment in infrastructure:- international

business necessitates proper development of
infrastructure.

12-6
 What is Marketing ?

➢Philip Kotler defines marketing as :-

marketing is about Satisfying needs and
wants through an exchange process.

➢The Chartered Institute of Marketing

defines marketing as: "the management
process responsible for identifying,
expecting and satisfying customer needs
and wants profitably “
12-7
 What is Marketing ?
➢It includes the coordination of four
elements called the 4 P's of marketing:
➢identification, selection and development of
a product,
➢determination of its price,
➢selection of a distribution channel to reach
the customer's place, and
➢development and implementation of a
promotional strategy.
12-8
 Global Marketing ?

➢ Global marketing is defined as: the process

of adjusting the marketing strategies of
your company to adapt to the conditions of
other countries.
➢ Global marketing is more than selling your
product or service globally.
➢ It involves planning, producing, placing,
and promoting a business’ products or
services in the worldwide market.
Walmart & Apple is example of global
marketing.
12-9
 Reasons for Global Marketing

➢ Growth
▪ Access to new markets
▪ Access to resources
➢ Survival
▪ Against competitors with lower costs (due to
increased access to resources).
• Create value for customers:
– Improve the product
– Find new distribution channels
– Create better communications
12-10
 Benefits of Global Marketing

➢ Economies of scale in production and

marketing can be important competitive
advantages for global companies
➢ Unifying product development, purchasing,
and supply activities across several countries it
can save costs
➢ Transfer of experience and know-how across
countries through improved coordination and
integration of marketing activities
➢ Diversity of markets by spreading the portfolio
of markets served brings an important stability
of revenues and operations to many global
firms
12-11
 What is international marketing?

➢ International marketing refers to the

process of business expansion across
the domestic geographical boundaries
by setting up subsidiaries in the
target markets of different countries.

➢ These subsidiaries design and adopt

the marketing principles and
strategies according to the needs of
the target local market.
12-12
 What is international marketing?

➢ It includes adjusting menus, translating across

multiple languages, and adapting to the social
system to avoid blunders. For example, Pepsi used
the slogan “Come Alive with Pepsi” in Taiwan, or so
they thought. Meanwhile, it actually translates
as “Pepsi brings your ancestors back from the dead.”

➢ McDonald's is another brand that has adapted its

products to local markets (and food regulations).
They do this by creating different menus in different
countries or regions based on the flavors and dishes
that are popular in each place.
12-13
 Characteristics of International
Marketing?

➢ It involves two or more countries

➢ Unique marketing strategies for

specific countries

➢ It enables exchange between a company

and foreign customers

➢ Decisions are taken with reference to

the global business environment

12-14
 The roles of International Marketing?

➢ It opens door for future opportunities

➢ Brand reception
➢ It expands target market

12-15
Advantages of International Marketing

➢ International marketing provides for expansion of

the business units or establishing subsidiaries in
various countries.
➢ The sales of the organization can be increased as
the company penetrates other global markets,
instead of operating only in the domestic market.
➢ All the marketing strategies are framed and
customized according to the customer’s needs in
the target market.
➢ The business risks like fluctuation in
market demand, economic conditions,
government policies, etc. can be diversified when
the business operates in multiple countries.
12-16
Advantages of International Marketing

➢ International marketing promotes two-way

communication with consumers due to the
company’s physical existence in the market
place. Thus, keeping customers engaged and
enhancing the product or service provided.
➢ The company develops a robust economy by
meeting the needs of consumers in the local
markets.
➢ The company can easily combination with the
local markets and can very well understand the
marketing strategies or practices of the
domestic players.

12-17
 Disadvantages of International
Marketing

•The cost of operating multiple subsidiaries

in different countries is quite high.

•The foreign government’s policies and

regulations impose restrictions on overseas
business operations.

•Competition with Local Companies: The

local business organizations which have
been existing in the global target market,
emerge as significant competitors for the
company
12-18
 Global marketing and international
marketing?
BASIS GLOBAL MARKETING INTERNATIONAL MARKETING
Meaning Global marketing is the application of a International marketing refers to the
single marketing strategy in the company's penetration into the
worldwide market, for a product or prospective markets of different
service. countries by directly engaging in the
local marketing environment.

Product or Standard product or service Customized product or service

Service
Offerings

Marketing Cross-cultural marketing personnel Native marketing employees placed in

People employed at the company’s head office the target foreign markets

Marketing It requires intense market research due It comparatively needs less research
Research and to the company's physical absence in the and development since the company
Development prospective global market. has a physical existence in the
international market and can analyze
the market.

Customer Less customer engagement due to the Customer engagement is quite high
Engagement distant presence and low customer due to the local presence and multiple
interactions. communication channels.
12-19
 Global marketing and
international marketing?
Marketing Budget All the budgeting activities for The international subsidiaries
global marketing are performed perform budgeting activities at the
at the company's headquarters. local level.

Social Media Company has a unanimous social Here, there are multiple social
Marketing media page for its global media pages of the company, on
operations. Twitter, Instagram or Facebook
segregated according to the
country.

Advertising Here, a single commercial runs Advertisements in the international

throughout the world in various market are tailored exclusively for
regional languages of different the local market and vary
countries. drastically from country to country.

Promotion Promotion tactics are adopted The promotional strategies are

Strategy keeping in mind the global designed individually for every
audience perspective. local market.
Marketing Limited to the company's Spread across the subsidiaries
Autonomy headquarters. located in different countries.
12-20
 Examples of Global Marketers

➢ Coca-Cola ➢ USA
➢ Philip Morris ➢ USA
➢ Daimler-Chrysler ➢ Germany
➢ McDonald’s ➢ USA
➢ Toyota ➢ Japan
➢ Ford ➢ USA
➢ Unilever ➢ UK/ Netherlands
➢ Gillette ➢ USA
➢ IBM ➢ USA
12-21
 PHASES OF INETRNATIONAL MARKETING

INTERNATIONAL MARKET INTERNATIONAL MODE OF

SEGMENTATION TARGETING ENTRY SELECTION

MACROENVIRONMENT

INTERNATIONAL MARKET INTERNATIONAL

RESEARCH 4PS

MICROENVIRONMENT

ORGANISATIONAL
MOTIVATORS OBSTACLES FRAMEWORK

COMPANY
12-22
Market Orientations of International
Marketing

Different attitudes towards company’s

involvement in international marketing
process are called international
marketing orientations.

The EPRG framework addresses the way

strategic decisions are made and how the
relationship between headquarters and
its subsidiaries is established.

12-23
Different Orientations of International
Marketing

There are 4 different types of orientations or

dimensions of International Marketing known
as EPRG framework;

➢ Ethnocentrism (home country orientation)

➢ Polycentrism (host country orientation)
➢ Regiocentrism (regional orientism)
➢ Geocentrism (world orientation)

12-24
International marketing concepts

Polycentric:
Each host country Is
Ethnocentric:
Unique, sees differences
Home country is
In foreign countries
Superior, sees
Similarities in foreign
Countries

Regiocentric:
Sees similarities and Geocentric:
differences in a world World view, sees
Region; is ethnocentric or Similarities and
polycentric in its view of Differences in home
the rest of the world And host countries

12-25
 Market Orientations of International
Marketing

Ethnocentric Orientation: The ethnocentric

orientation of a firm considers that the products,
marketing strategies and techniques applicable in
the home market are similar to that in the overseas
market.
In such a firm, all foreign marketing operations are
planned and carried out with little or no difference in
product formulation and specifications, pricing
strategy, distribution and promotion measures.
➢ For example, Walmart’s offerings remain the
same throughout.
12-26
Market Orientations of International
Marketing
Regiocentric: In regiocentric approach,
the firm accepts a regional marketing
policy covering a group of countries which
have comparable market characteristics
such as economic, cultural or political
similarities and formulates operational
strategies based on region instead of
countries.
➢ For example, countries like Pakistan,
India and Bangladesh are very similar.
They possess a strong regional identity.
12-27
 Market Orientations of International
Marketing
Geocentric: In geocentric orientation, the
firms accept a worldwide approach to
marketing and target “global consumers”
with similar tastes.
There are similarities between geocentric
and regiocentric approaches in the
international market except that the
geocentric approach calls for a much greater
scale of operation.
➢ For example, Nokia offers products to a
similar kind of consumer worldwide.
12-28
 Market Orientations of International
Marketing
Polycentric: When a firm adopts polycentric
approach to overseas markets, it attempts to
organize its international marketing activities
on a country to country basis.
Polycentric approach works better among
countries which have significant economic,
political and cultural differences.
➢ For example, McDonald’s tailoring its
offerings to the country of operation such as
Maharaja Mac in India, McItaly in Italy,
McLobster in Canada.
12-29
 Internationalization Stages
➢ Domestic Company: Most international
companies have their origin as domestic
companies.
➢ The orientation of a domestic company
essentially is ethnocentric. A purely domestic
company “operates domestically because it never
considers the alternative of going international.

➢ The growing stage-one company, when it

reaches growth limits in its primary market,
diversifies into new markets, products and
technologies instead of focusing on penetrating
international markets.
12-30
 Internationalization Stages

➢ A domestic company may extend its products to

foreign markets by exporting licensing and
franchising. The company, however is primarily
domestic and the orientation essentially is
ethnocentric.

12-31
 Internationalization Stages

➢ International Company: International

company is normally the second stage in
the development of a company towards
the transnational corporation.

➢ The orientation of the company is basically

ethnocentric and the marketing strategy is
extension, i.e, the marketing mix
„developed‟ for the home market is
extended into the foreign markets.

12-32
 Internationalization Stages

➢ Multinational Company: When the orientation

shifts from ethnocentric to polycentric, the
international company becomes multinational.
➢ In other words, “when a company decides to
respond to market differences, it evolves into
a stage-three company is multinational that
pursues a multi-domestic strategy.
➢ The focus of the stage-three company is
multinational or, in strategic terms, multi-
domestic (that is, the company formulates a
unique strategy for each country in which it
conducts business).
12-33
 Internationalization Stages

➢ Global/Transnational Company: Global

company re presents stage four and
transnational company stage five in the
evolution of companies.
➢ The global company will have either a global
marketing strategy or a global sourcing
strategy but not both. It will either focus on
global markets and source from the home or
a single country to supply these markets, or it
will focus on domestic market and source
from the world to supply its domestic
channel.
12-34
 Internationalization Stages

➢ The Transnational Corporation is much

more than a company with sales,
investments and operations in many
countries.

➢ This company, which is increasingly

dominating markets and industries around
the world, is an integrated world enterprise
that links global resources with global
markets at a profit.
12-35