This action might not be possible to undo. Are you sure you want to continue?
Global Marketing: A Definition: “Global marketing is defined as the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit.” Marketing concepts, processes, and principles are universally applicable all over the world The Difference More than one nation, Competition, Legal constraints, Govt. Control, Ecological factors, Consumer traditions, or any uncontrollable elements. Reasons for Internationalisation Growth – – Access to new markets Access to resources
Survival – • • • • • • Against competitors with lower costs (due to increased access to resources) Leveraging Key Success Factors Abroad Follow Customers Abroad Pursuing Diversification Taking Advantage of Different Growth Rates of Economies Exploiting Product Life Cycle Differences Internationalising for Defensive Reasons
For Japanese companies.g. SAARC 2. An increasingly larger share of corporate profits are generated by international operations 2. Global peace & Dependence (No world war. 5. the European Union. 94% of potential is outside Germany. Technology & Excess surplus 10. The rapid growth of the World Trade Organization and regional free trade areas. e. 75% of sales potential is outside the US. – About 90% of Coca-Cola’s operating income and 73 % of total revenue is generated outside the US.Need for global marketing 1. 4. For German and EU companies. India) 9. UK & emergence of it in certain market (China. USA. 7. Saturation of Demand in certain big market eg. now it is not so. General acceptance of the free market system among developing countries in Latin America. NAFTA. 85% of potential is outside Japan.. Till last decade competition for the company comes from the local market only. Asia.3) The Importance of International Marketing For US-based companies. and Managing global environmental resources Increasing globalization of markets Firms face competition on all fronts Changing ownership structure (TATA CORUS) . 8. . 6. and Eastern Europe 3. Impact of the Internet and other global media on the dissolution of national borders. It comes from all the country Global Business Trends 1.
structure of distribution.The effects of uncontrollable and controllable both in the domestic and foreign environments . price. 2. Economy. Culture & . Domestic International . (c) World Market Potential. Competition.International marketers deals with at least two uncontrollable Elements 1. Social and Political Trends . and Knowledgeable of: (a) Culture. Competition. Culture.Controllable elements . (d) Global Economic.Domestic Uncontrollable elements Technology : 4 ps (MARKETING MIX) : Political & Legal.Foreign Uncontrollable elements : Political & Legal. and place) Developing a Global Awareness To be globally aware is to have 1. Technology.As the number of international market increases: uncontrollable layer increases . promotion. Tolerant of Cultural Differences. Economy. Geography & infrastructure Environmental Adaptation Needed · Differences are in the uncontrollable environment of international marketing · Firms must adapt to uncontrollable environment of international marketing by adjusting the marketing mix (product. (b) History. 2.
. and responding to problems. 4. travel and other factors which have led to the markets of the world being more aware of different products and processes. this phenomenon has resulted from new communications technology. As a result of this awareness. 2. The second phase includes domestic firms which have temporary surpluses which are sold abroad. The fourth phase includes the international company that produces a product for the world market. evaluating potential. Three factors necessary to achieve global awareness. These common needs are described as a demand for high quality. objective in assessing opportunities. Too often mistakes are made because companies are swept away with generalities and make investments only later to find out that their commitment or abilities were not sufficient to succeed. reasonably priced. Therefore. firms go through five different phases in going international: 1. The first phase includes those domestic firms which have no foreign business activity except those sales made to foreign customers who come directly to the firm. The third phase includes the domestic firms that have permanent productive capacity which is utilized to produce goods which are sold on a continuing basis in foreign markets. standardized products. There is a strong feeling that within each country’s market there is a growing segment that has been exposed to ideas from around the world and thus have had their tastes and perceived needs affected. 1) Objectivity. sales are made on an availability basis with little or no intention for continuing market representation. 3.Stages of International Marketing Involvement In general. Conditions that have led to the development of global markets According to the Professor Levitt and others who suggest that there is a global market for goods. there are segments in each market who have had similar experiences and thus have common needs.
3) Knowledgeable.2) Tolerance toward cultural differences: tolerance is understanding cultural differences and accepting and working with others whose behavior may be different from yours. a person needs to keep abreast of the enormous changes occurring throughout the world. world market potentials. history. Driving Forces in International Market Regional economic agreement Market need & Wants Technology Transportation & Communication Product development Cost Product quality World economic trend Restraining Forces Management myopia Organizational culture National controls International World Order Fight against International terrorism . and global economy and social trends is critical for a person to be culturally aware. To be successfully in international business and globally aware. knowledgeable about cultures.
The challenge was to change the form of the worldwide popular Hamburger to make an entry into India. Muslims did not eat pork. Absorption of newer cultures was faster in the Metros than other areas. The more one knew and understood about consumers. it was important for any company to understand the consumer market. The company outlets in Delhi and Mumbai initially were opened due to the increased affordability of people with western exposure and brand recognition factors in metros. An ideal strategy was to focus on customer’s ability to pay and tap the rich and upper middleclass population in India. Cow being sacred and worshipped. an alternative to beef and pork was necessary. Additionally. Pricing Food pricing was a sensitive issue in India. The food retailers had been doing business for years. buying motives and the buying processvi. . Word of mouth and advertising was expected to reveal the experience of eating at McDonald’s. its products were perceived to be expensive. There were numerous eating joints which offered snacks and meals with affordable price tags. Although McDonald’s strategy was to increase sales volumes by making products available at affordable price. consumer needs. people in the metros were open to experiment with variety of foods. Four aspects of consumer behaviour which needed to be examined to understand a consumer market were the ability of the people to buy. Target Marketing: Value propositions had to be directed to the right target market to establish a new product. Competition from Local Food Retailers The competition from the local food retailers was intense.The positive factors were the growth in consumer markets with rapid growth in disposable incomes. beef could not be served. The mass markets in India were price sensitive.EXAMPLE: Problems and challenges while globalizing McDonald’s: Challenges for McDonald’s in India Vegetarianism: The major issue was beef. Their familiarity with the market and the understanding of the local taste gave them a competitive edge. development of modern urban lifestyles and the demand for value. An interesting question was who would eat at McDonald’s? In order to develop the marketing strategy. With 25-30% of the population being lacto vegetarian and a large majority eating meat. The initial attempt of McDonald’s was to induce trials and get the customers into the restaurants. the more effectively one could communicate and market to them.
used for just a few minutes before being discarded. Issues McDonald’s had been accused of destruction of vast areas of the rainforest for the production of cattle to produce beef.Eating Habits Eating out was a special occasion to many Indian families. Meals had been an essential medium for social sharing and relationshipxii. hygiene etc. ozone destruction. The environmental effect of the production and disposal of all this needed to be taken into account.Whenever families decided to eat out. Lunch and dinner menus were complete meals providing the right balance in terms of nutrition. With more nuclear families and dual income households. McDonald’s needed to find ways and methods to motivate the customers opt for initial trials and acceptance. depletion of mineral resources and the destruction of natural habitats. . and cruelty to animals.. the choices available were abundant. But the company spent a fortune promoting itself as environmentally friendly. lunch and dinner. Environment Conservationists had often focused on McDonald's as an industry leader promoting business practices detrimental to the environment. They annually produced over a million ton of packaging. promoting unhealthy food with a risk of cancer and heart disease. The needs of the growing working population stimulated the need for new products and services. Indian culture was relatively new to the use of technology and streamlined process in food service. Multinational companies operating on such a scale contributed to global warming. There had been complaints as regards the nutrition. The trend in metropolitan cities was however changing. Breakfast was conventional as per the family culture and upbringing. Burgers were likely to be slotted in the category of snacks. The conventional eating pattern of Indians involved breakfast. the demand for fast and readymade food was growing. The market situation called for focus on the environment within the restaurant and western association. Thus these are the various issues that McDonald’s faces while globalizing and establishing them in India. taking advantage of children with its advertising and marketing. But globally burgers and beverage brands were linked with poor eating habits.