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Submitted In Partial Fulfillment Of the Requirement Of Bachelor of Business Administration
Submitted To: Banarsidas Chandiwala Institute of Professional Studies, Dwarka, New Delhi (Affiliated to Guru Gobind Singh Indraprastha University)
I hereby declare that this Minor Project Report titled Global Marketing submitted by me to Banarsidas Chandiwala Institute of Professional Studies, Dwarka is a bonafide work undertaken during the period from July to Sept 2011 by me and has not been submitted to any other University or Institution for the award of any degree diploma / certificate or published any time before.
(Signature of the Student)
Name: Enroll No: 04661201709 Date: 2 July 2011
This is to certify that as per best of my belief the project entitled “Global Marketing” is the bonafide research work carried out by student of BBA, BCIPS, Dwarka, New Delhi, in partial fulfillment of the requirements for the Minor Project Report of the Degree of Bachelor of Business Administration.
She has worked under my guidance.
Name : Mrs. Tanushree Baluni Project Guide (Internal) Date: 2 November 2011
Counter signed by Name: Dr.Satish Taneja Director, Bcips, Dwarka Date: 2 November 2011
At the very outset, I would like to take golden opportunity of thanking those persons without whose guidance, co-operation, inspiration and suggestion it would have been impossible for me to accomplish the project successfully. I also take this opportunity to extend my heartfelt gratitude to others who directly of indirectly helped me, by providing me necessary information required for successful completion of the project.
Table of Contents
Topic Introduction Objective of the study
2) 3) 4)
5) 1) 6)
Literature review And/or Theoretical Background Research Methodology Data Analysis Findings & Conclusions Bibliography
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 didn’t 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 it’s 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.
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. 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.
Merger with Prince Motor Company
In 1966, Nissan merged with the Prince Motor Company, bringing more up market cars, including the Nissan Skyline and Nissan Gloria, into its selection. The Prince name was eventually abandoned, and successive Skylines and Glorias bore the Nissan name. "Prince," was used at the Japanese Nissan dealership "Nissan Prince Shop" until 1999, when "Nissan Red Stage" replaced it. Nissan Red Stage itself has been replaced as of 2007. The vehicles that were the result of Prince manufacturing and development,
such as the Gloria and the Skyline live on in the internationally established dealership chain, called Infiniti.
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. Financial difficulties (approaching billions) in Australia in the late 1980s caused Nissan to cease production there. Due to the "Button Plan" the Australian operation was unique as the Nissan products were also rebranded both by General Motors Holden: Pulsar as the Holden Astra), and Ford: Bluebird as the Ford Corsair). In 2001 established a manufacturing plant in Brazil, in 2005, Nissan setup operations in India, through its subsidiary Nissan Motors India Pvt. Ltd. With its global alliance partner, Renault, Nissan is investing $920 million to set up a manufacturing facility in Chennai to cater to the Indian market as well as a base for exports of small cars to Europe. Nissan sold nearly 520,000 new vehicles in China in 2009 in joint venture with Dongfeng Motor, and aims for 1 million in 3 or 4 years. To meet that target, Dongfeng-Nissan is expanding its production base in Guangzhou, which would become Nissan's largest factory around the globe in terms of production capacity upon completion.
Prior to announcements about the Nissan Leaf, Nissan Motors has had no special environmental record, at least as perceived relative to its competition. This may change in the future owing to a new emphasis on the development, production and marketing of electric automobiles. Nissan is planning to sell electric cars in the US coastal markets by December 2010, and within the US interior by June 2011. The company claims its EV model, the Nissan Leaf, has a maximum speed of 90 mph (140 km/h) and can go 100 miles per charge. It is projected to take eight hours to charge the car fully. Nissan's car uses a lithium ion battery. The vehicle is intended for short distances, and is not meant for replacing traditional cars for long trips. As with other electric cars these products from Nissan won't emit pollutants from their exhaust. Any pollution involved in their operation would come from the production of the electricity needed to charge the car, depending on the type of power generation facility. Nissan has chosen to develop 100 percent electric cars rather than biofuel or ethanol running cars based upon cost analysis. On May 12, 2009, Nissan announced the company will produce EVs at its Oppama plant from fall 2010 with capacity of 50,000 units a year. Batteries for EVs will be supplied by Automotive Energy Supply Corporation, a joint-venture between Nissan (51%), NEC Corporation (42%) and NEC TOKIN Corporation (7%). In July 2011, the solar charging port of Nissan – construction on a 30-car solar charging station outside of the future Smyrna Vehicle Assembly Plant in Tennessee – is expected to be completed. And it will use renewable energy to charge the Nissan Leafs that will be produced there in 2012.
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. Nissan launches Qashqai SUV in South Africa, along with their new motorsport Qashqai Car Games. In 2010, Nissan created another tuning division, IPL, this time for their premium/luxury brand Infiniti.
Japanese Dealership Channels As of 2007 in Japan, Nissan sells its products at an internationally recognized "Nissan" signage, using a chrome circle with "Nissan" across the front. Previously, Nissan used two dealership names called Japanese: Nissan Blue Stage , Japanese: Nissan Red Stage , and Japanese: Nissan Red and Blue Stage , established in 1999. Before that, Nissan Red Stage was the result of combining an older sales channel of dealerships under the names "Nissan Prince Sho, established in 1966 after the merger of Prince Motors by Nissan that sold the Nissan Skyline, "Nissan Satio Shop”. That sold cars developed from the Nissan Sunny at its introduction in 1966, and "Nissan Cherry Shop", cars associated with the Nissan Cherry and established in 1970. Nissan Blue Stage was the result of combining older sales channels, called "Nissan Shop", or "Nissan Exhibition" , selling cars associated with the Nissan Bluebird in 1959, and "Nissan Motor Shop", cars associated with the Nissan Laurel starting in 1968. In 1970, Nissan also set up a separate sales chain that sold used cars including auctions, called Japanese: Nissan U-Cars , which they still maintain.
Electric vehicles Nissan will launch electric cars in Europe in 2010 with different business models in different countries. Nissan Motor Co. has nearly completed development of a lithium-ion battery using a lithium nickel manganese cobalt oxide cathode (NMC). The new system, which will reportedly offer almost double the capacity of Nissan/AESC’s current manganese spinel cell. The new Nissan Leaf is expected to be marketed in North America, Europe, and Japan, beginning in late 2010. Nissan has announced it will manufacture the new Leaf compact electric car at its Sunderland plant in the UK. The annual production capacity will be 50,000 vehicles at Sunderland.
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 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Global Sales 2,555,962 2,629,044 2,632,876 2,580,757 2,735,932 2,968,357 3,295,830 3,597,851 3,477,837 3,675,574 3,708,074 3,358,413 4,080,588
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 Samukawa, Kanagawa (Nissan Kohki) Zama, Kanagawa (Zama Plant closed in 1995, currently Global
Production Engineering Center and storage unit for its historic models)
India Oragadam, Chennai Brazil
Sao Jose dos Pinhais, Parana Indonesia Cikampek, West Java Iran
Karaj, Tehran Malaysia
Segambut, Kuala Lumpur Serendah, Selangor Mexico
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
Bangna, Samutprakarn Republic of China
Taipei, Taiwan United Kingdom
Sunderland, County Durham, North East England United States
Smyrna, Tennessee Canton, Mississippi Decherd, Tennessee
Russia St. Petersburg, Russia (Completion 2010)
GLOBAL MARKETING Introduction
Two decade ago, the global marketing did not even exist. Today, global 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." In contrast to the definition of marketing only the word multinational has been added. In simple words international marketing is the application of marketing principles to across national boundaries. However, there
is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term.
Meaning of Marketing
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 customer’s 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 company’s 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 stakeholder’s is the customer.
Customer needs & wants
Research & development
Meaning of Global Marketing
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 Levitt’s view that global marketing does not necessarily mean standardization of products, promotion, pricing, and distribution worldwide but rather,
it is a company’s 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
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
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 company’s 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. The Four’s 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 global 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.
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
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 world’s 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 Malaysia’s 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 Malaysia’s 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.
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).
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. 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.
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.
Global Marketing Advantages & Disadvantages Advantages
The advantages of global market we can introduce our product by using 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" Helps to encourage ancillary industries to be set up to cater for the needs of the Benefits of E-Marketing over traditional marketing
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.
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.
Whereas traditional marketing is largely about getting a brand’s 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.
Internet marketing is able to, in ways never before imagined, provide an immediate impact. Imagine you’re reading your favorite magazine. You see a double-page advert for some new product or service, maybe BMW’s latest luxury sedan or Apple’s latest iPod offering. With this kind of traditional media, it’s not that easy for you, the consumer, to take the step from hearing about a product to actual acquisition. With eMarketing, it’s 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 consumer’s 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 marketer’s 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.
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 there’s 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.
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 Differences in the institutions available, some of which may call for the creation Differences in administrative procedures Differences in product placement. Differences in the administrative procedures and product placement can occur
the home market
of entirely new ones (e.g. infrastructure)
Elements of the global marketing mix
The “Four P’s” 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)
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 country’s native language and is the same size as other beverage bottles or cans in that same country.
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 product’s 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.
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 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 product’s 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.
After product research, development and creation, promotion (specifically advertising) is generally the largest line item in a global company’s marketing budget. At this stage of a company’s 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
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 world’s 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 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 world’s 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. Firms making products that require these scarce resources face large cost increases, even if the materials do remain available.
A second environmental trend is increased pollution. Industry will almost always damage the quality of the natural environment. Consider the disposal of chemical and nuclear wastes; the dangerous mercury levels in the ocean; the quantity of chemical pollutants in the soil and food supply; and the littering of the environment with non- biodegradable bottles, plastics, and other packaging materials.
• 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 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 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 society’s 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. 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 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 Competitive strategy
• • • conceptual development competitive advantage vs. competitive positioning sources of competitive advantage and performance implications
• learning and trust
recipes for alliance success performance of different types of alliance
• • • 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 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:
• • • • • • • •
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)
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 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 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 company’s 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 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 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 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 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 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
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)
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 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
Five Global Considerations Every Marketer Needs to think about
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
résumés 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. I’m actually writing this column from Shanghai, a booming city in the People’s Republic of China. Ignore China - now the world’s 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, India’s 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. 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 they’re 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
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 country’s 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 business’s marketing strategies. Through one’s 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. If one does not take the cultural differences into account then most likely their marketing likely campaigns will
be considered meaningless or offensive and could damage the credibility of that company.
3. Develop a Unique Marketing Mix to Appeal to the Purchasing Behavior of a Certain Segment in a Given Country: 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 firm’s 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 company’s 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 country’s 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 between the two and then deciding what will work for your company might save you money or avoid a lawsuit.
• 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.
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."
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 company’s 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 company’s 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 LDC’s. 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.
• 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, ISBN81-2032799-3 • 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.
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