Global marketing and R&D

Global advertising
What is global advertising?
basically when a company looks at the entire world as one market the advertising strategy a
company takes to are known global advertising .
Standardized global advertising worldwide has both pros and cons .

Standardized advertising makes sense when:

• Creative talent is scarce and one large effort to develop a campaign will be more successful than
numerous smaller efforts
• Brand names are global
• It has significant economic advantage.
 Global advertising
Standardized advertising does not make sense when:

• Country differences in advertising regulations block the implementation of standardized

advertising.
• Some firms use tactics to capture the benefits of global standardization while responding to
individual cultural and legal environments.
• Significant Cultural differences among nations
• Some features of a campaign are standardized while others are customized to local markets
 Pricing strategy
International pricing strategy is an important component of marketing mix .pricing strategy has three issue to
consider :
1. Price discrimination: price discrimination exist whenever consumers in different countries are charged different
price for the same product.
Two condition are necessary for profitable price discrimination
• First the firm must be able to keep its national market separate .if fail to do this then price discrimination
wouldn't work.
• Second is different price elasticities of demand in different countries.

Firms use price discrimination hope it will boost profit.

 Price discrimination
Price discrimination elasticity and inelasticity demand curves
 Strategic pricing
The components of strategic pricing has three aspect:
1. Predatory pricing: predatory pricing is the use of price as a competitive weapon to drive weaker
competitors out of a national market. Once the competitor have left the market, the firm can rise
prices and enjoy high profit .
2. Multipoint pricing: M Multipoint pricing Multipoint pricing occurs when two or more firms compete
in two or more national markets and the pricing strategy in one market may have an impact on the
rival pricing strategy in another national market. Multipoint pricing, especially if it is aggressive in a
national market, may bring forth a competitive response from a rival firm that operates in another
national market. For this kind of pricing strategy to work, marketing managers need to develop a
mechanism that can centrally scrutinize pricing decisions in each national market around the globe.
ultipoint pricing Multipoint pricing occurs when two or more firms compete in two or more national
markets and the pricing strategy in one market may have an impact on the rival pricing strategy in
another national market. Multipoint pricing, especially if it is aggressive in a national market, may
bring forth a competitive response from a rival firm that operates in another national market. For this
kind of pricing strategy to work, marketing managers need to develop a mechanism that can
centrally scrutinize pricing decisions in each national market around the globe.
 Strategic pricing
Experience curve pricing Firms around the globe aim at gaining market share and achieve
global sales volume by lowering their prices. However, as the accumulated production volume
increases, the unit costs decline as a result of lower fixed costs per unit, lower material costs,
and better production skills. The experience curve is the milestone that makes or breaks the
pricing strategy: firms that move down the experience curve may experience large losses in the
beginning, but are expected not only to make considerable profits in the near future, but most
importantly to have a cost advantage over less-aggressive competitors.
 Regulatory Influences on price
The ability to engage in either price discrimination or strategic pricing maybe limites by national or international
regulation. A firms ability to set its own price maybe limited by:
1. Antidumping regulation: dumping occurs whenever a firms sells a product for a price that is less then the cost
of producing . Anti dumping regulation rules set a floor under export prices and limit firms ability to pursue
strategic pricing .
2. Competition policy: Competition policy is the structures governments have in place for the regulation
of markets and monopolies. Competition policy generally aims to: Prevent growth of Monopoly
power.
 Configuring the marketing mix
Standardization versus customization is not an all or nothing concept
• Most firms standardize some things and customize others
• Firms should consider the costs and benefits of standardizing and customizing each element of the
marketing mix
 New product development
New product development: Firms that successfully develop and market new
products can earn enormous returns. Competition is as much about technological
innovation as anything else:
-pace of technological change is faster than ever. -product life cycle are often very
short.
-Companies need to make product innovation a priority.
-Requires close links between R&D, marketing and manufacturing.
 Location of R&D

.The location of R&D: Ideas for new products are stimulated by the interactions of
scientific research, demand conditions and competitive conditions. Other things being
equal, the rate of new product development seems to be greater in countries where:
1) More money is spent on basic and applied research and development.
2) 2) Underlying demand is strong.
3) 3) Consumers are affluent.
4) 4) Competition is intense.
 Integrating R&D, Marketing, and production
New product development has a high failure rate
- To reduce the chance of failure, new product development efforts should involve close coordination between
R&D, marketing, and production .
This integration will ensure that:
- Customer needs drive product development
-New products are designed for ease of manufacture Development costs are kept in check
-Time to market is minimized
 GM global research network question
What is the previous and current R&D strategies ?
Answer: Senior executives in every large or mid-size company in the United States and Europe routinely face questions
regarding their plans and strategies for conducting a part of their R&D overseas, especially in low-cost countries such
as India, China, Israel, or Hungary. A confluence of technological and macroeconomic factors—digital connectivity,
emerging scientific and technical talent in the developing world, improved intellectual property protection, substantial
cost differentials, and the potential of large markets—make it imperative for global companies to consider conducting
some R&D in low-cost locations. While current cost advantages are expected to diminish over time, economists believe
that substantial labor arbitrate will exist for the next 10–15 years. Nevertheless, companies are making their global
R&D decisions based on both cost and strategic advantages. Case studies in six industries suggest that companies
"assign" five key types of roles for such R&D locations, depending on the global organization structure and the extent
of strategic tasks at the location. Each such R&D location then needs to be managed differently in terms of
organizational and operational processes
 GM global research network question
What is GM’s general opinion about where the best technical capability is located?

Answer: GM’s general opinion about the best technical capability is located in charlotte region. General Motors will
open a new technical center focused on performance and racing in the Charlotte region, a major racing hub in the
United States. The facility will expand GM’s performance and racing capabilities, with a focus on transferring
knowledge and resources from the racing programs to core vehicle engineering. The goal for the Charlotte Technical
Center is to eventually house future technology and engineering development capabilities.
GM global research network question
is this good news or bad news for people in the automobile technical field?
 Cross functional teams
Cross-functional integration is facilitated by cross-functional product development teams.
Effective cross functional teams should:
-Be Led By a Project Manager With Status In The Organization.
- Include Members From All The Critical Functional Areas.
- Have Members Located Together Establish Clear Goals .
- Develop An Effective Conflict Resolution Process
 Building global R&D capabilities
• To adequately commercialize new technologies, firms need to integrate R&D and
marketing.
•
Commercialization of new technologies may require firms to develop different
versions for different countries.
-This may require R&D centers in North America, Asia, and Europe that are closely linked by formal and informal
integrating mechanisms with marketing operations in each country in their regions, and with the various manufacturing
facilities