Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc.1 Global Marketing Management, 4e Chapter 8 Global Marketing Strategies

Chapter 8Chapter 8 Copyright (c) 2007 John Wiley & Sons, Inc.Copyright (c) 2007 John Wiley & Sons, Inc. 11

Global Marketing Management, 4eGlobal Marketing Management, 4e

Chapter 8

Global Marketing Strategies


Chapter OverviewChapter Overview

1.1. Information Technology and Global Information Technology and Global CompetitionCompetition

2. 2. Global StrategyGlobal Strategy

3. 3. Global Marketing StrategyGlobal Marketing Strategy

4. 4. Regionalization of Global Marketing Regionalization of Global Marketing StrategyStrategy

5. 5. Competitive AnalysisCompetitive Analysis


IntroductionIntroduction

On a political map, country borders are clear as On a political map, country borders are clear as ever. But on a competitive map, financial, trading, ever. But on a competitive map, financial, trading, and industrial activities across national boundaries and industrial activities across national boundaries have rendered those political borders increasingly have rendered those political borders increasingly irrelevant.irrelevant.

Not only firms that compete internationally but also Not only firms that compete internationally but also those whose primary market is considered those whose primary market is considered domestic will be affected by competition from domestic will be affected by competition from around the world.around the world.


1.1. Information Technology and Information Technology and Global CompetitionGlobal Competition

Today, we are observing the emergence of a Today, we are observing the emergence of a gross information productgross information product, and it dwarfs the gross , and it dwarfs the gross domestic product.domestic product.

Electronic Commerce (E-Commerce)Electronic Commerce (E-Commerce) Real-Time ManagementReal-Time Management Online CommunicationsOnline Communications E-CompanyE-Company Faster Product DiffusionFaster Product Diffusion Global CitizenshipGlobal Citizenship


2. Global Strategy2. Global Strategy

Global Industry:Global Industry:– Those industries where a firm’s competitive Those industries where a firm’s competitive

position in one country is affected by its position in one country is affected by its position in other countries.position in other countries.

– The first question that faces managers is The first question that faces managers is the extent of globalization of their industry.the extent of globalization of their industry.

– Every industry has global or potentially Every industry has global or potentially global aspects.global aspects.



Industry Globalization DriversIndustry Globalization Drivers (see Exhibit 8-1): (see Exhibit 8-1):– Market DriversMarket Drivers

1. Common customer needs1. Common customer needs

2. Global customers and channels2. Global customers and channels

3. Transferable marketing3. Transferable marketing

4. Lead countries4. Lead countries





– Cost DriversCost Drivers1. Global economies of scale and scope1. Global economies of scale and scope2. Steep experience curve2. Steep experience curve3. Global sourcing efficiencies3. Global sourcing efficiencies4. Favorable logistics4. Favorable logistics5. Difference in country costs5. Difference in country costs6. High product development costs6. High product development costs7. Fast-changing technology 7. Fast-changing technology 8. Shorter product life cycles8. Shorter product life cycles



– Government DriversGovernment Drivers1. Favorable trade policies1. Favorable trade policies2. Compatible technical standards2. Compatible technical standards3. World Trading Regulations3. World Trading Regulations4. High growth/low labor cost developing countries4. High growth/low labor cost developing countries5. Deregulation/privatization of industries5. Deregulation/privatization of industries

– Competitive DriversCompetitive Drivers1.1.High exports and importsHigh exports and imports2.2.Competitors from different continents and Competitors from different continents and

countriescountries3.3.Interdependent countriesInterdependent countries4.4.Globalized competitorsGlobalized competitors



Competitive StructureCompetitive Structure– Cost leadershipCost leadership– Product differentiationProduct differentiation– Niche strategyNiche strategy– Nature of Competitive Industry Structure (see Exhibit 8-2):Nature of Competitive Industry Structure (see Exhibit 8-2):

»Industry competitors»Industry competitors

»Potential entrants»Potential entrants

»Bargaining power of suppliers»Bargaining power of suppliers

»Bargaining power of buyers»Bargaining power of buyers

»Threats of substitute products or services»Threats of substitute products or services





Gaining Competitive AdvantageGaining Competitive Advantage

– Creative destructionCreative destruction

– First-Mover Advantage vs. F-M First-Mover Advantage vs. F-M DisadvantageDisadvantage

– Competitor-focused ApproachCompetitor-focused Approach

– Customer-focused ApproachCustomer-focused Approach



Interdependency:Interdependency:

– Interdependency of modern companiesInterdependency of modern companies

– Example: Global computer industryExample: Global computer industry

– Governments also play a larger role, Governments also play a larger role, affecting parts of the firm’s strategy.affecting parts of the firm’s strategy.


3. Global Marketing Strategy3. Global Marketing Strategy Benefits of Global Marketing:Benefits of Global Marketing:

– Cost ReductionCost Reduction– Improved Products and Program EffectivenessImproved Products and Program Effectiveness– Enhanced Customer PreferenceEnhanced Customer Preference– Increased Competitive AdvantageIncreased Competitive Advantage

Limits to Global Marketing:Limits to Global Marketing:– Standardization vs. adaptation issuesStandardization vs. adaptation issues– Globalization vs. localizationGlobalization vs. localization– Global integration vs. local responsivenessGlobal integration vs. local responsiveness– Scale vs. sensitivityScale vs. sensitivity


3. Global Marketing Strategy3. Global Marketing Strategy


3. Global Marketing Strategy3. Global Marketing Strategy


4. Regionalization of Global 4. Regionalization of Global Marketing StrategyMarketing Strategy

Regional strategies are the cross-subsidization of Regional strategies are the cross-subsidization of market share battles in pursuit of regional market share battles in pursuit of regional production, branding, and distribution advantages.production, branding, and distribution advantages.– Issues in regionalization of global marketing Issues in regionalization of global marketing

strategystrategy:: Cross-Subsidization of MarketsCross-Subsidization of Markets Identification of Weak Market SegmentsIdentification of Weak Market Segments Use of “Lead Market” ConceptUse of “Lead Market” Concept Marketing Strategies for Emerging MarketsMarketing Strategies for Emerging Markets


5. Competitive Analysis5. Competitive Analysis

SWOT (Strengths, Weaknesses, Opportunities, SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysisand Threats) Analysis (see Exhibit 8-5) (see Exhibit 8-5)– A SWOT analysis divides the information into A SWOT analysis divides the information into

two main categories: internal and external two main categories: internal and external factors.factors.

– Based on SWOT analysis, marketing executives Based on SWOT analysis, marketing executives can construct alternative strategies.can construct alternative strategies.

– The aim of any SWOT analysis should be to The aim of any SWOT analysis should be to isolate the key issues that will be important to isolate the key issues that will be important to the future of the firm and that will be addressed the future of the firm and that will be addressed by subsequent marketing strategy.by subsequent marketing strategy.


5. Competitive Analysis5. Competitive Analysis

Documents

Chapter 8Copyright (c) 2007 John Wiley & Sons, Inc.1 Global Marketing Management, 4e Chapter 8 Global Marketing Strategies