Global marketing notes

Global strategy versus global localisationA global marketing strategy means that the same products and strategy can be used in all markets.

- Producing on a large scale is cheaper, designs can be standardised and there may be economies of scale.

- The product range can be smaller.- The same marketing campaign can be used everywhere.- Less time has to be spent on researching individual markets.- Less time is spent on developing individual markets

However:- Some sales will be lost if not all segments are catered for.- Turnover and profits may not then be maximised.- Marketing tactics and or products may cause negative reactions from

segments of the market.

For most businesses a global marketing strategy won’t be effective. It’s likely that some degree of adaptation to local conditions and preferences will be needed. The business will face very different kinds and levels of competition in its various different markets; these will require a differentiated response.

Global localisationWhere markets differ, businesses need to plan marketing strategies that will fit individual market preferences.

- Market segments will often vary in nature, reflecting local cultural norms, fashions and individual tastes. The marketing plan must take account of customers’ expectations and aspirations.

- Promotion strategies must fit in with local media availability. Potential customers first have to be identified and then promotion must focus on the media to which those customers have access.

Global localisation means that although the business operates on a global basis, it may adapt or change its products and marketing plans to suit individual countries or market segments. Global localisation is sometimes referred to as glocalisation.

- Sales are likely to increase as each market is specifically targeted. Product features are tailored to customer needs, preferences and incomes. Promotion reflects local media facilities.

- Turnover and profits are maximised.- Marketing tactics and/or products are ideally suited to the local situation.

But:- The business can’t fully exploit economies of scale.- Researching each market and adapting or developing products takes time

and is costly.- Wider product ranges and multiple marketing campaigns are harder to

manage.- Average costs are therefore likely to be higher.

There is a trade-off between the very cost effective approach of the global strategy and the painstaking procedures involved in global localisation.

Glocalisation – the idea that a global product or service is more likely to succeed if it’s adapted to the specific requirements of local practices and cultural expectations.

Three different approachesThe domestic approach (ethnocentric model)No adaptation of products and marketing tactics to suit local preferences and tastes: uniform approach world-wide.

The mixed approach (geocentric model)Some adaptation of products and marketing tactics to suit local preferences and tastes.

The international approach (polycentric model)All products and marketing tactics are adapted to suit local preferences and tastes.

The marketing mix – product- Industries with high product development costs and rapidly changing

technology need globally standardised products and services; this applies to many electronic products.

- By serving large markets, development costs can be quickly recovered.

Price- For some markets price will need to be low to attract customers. Within a

mass market, the level of income will be a crucial factor.- The level of economic development may not permit standard western

pricing tactics.

Promotion- This has to link in with the potential customer’s culture and background if

it is to work.- A celebrity in one country can be completely unknown in the next.- Sense of humour can be different as can cultural norms and taboos.- Promotion strategies have to fit in with local media development and

cultural expectations.

Place- In some countries traditional methods of distribution will not work.- Tradition retail networks don’t exist in many remote areas.

Ethnocentric Model – an approach to marketing based on the tendency to look at the world primarily from the perspective of one’s own culture. A business believes that what was a success story in the domestic market will also be so in other countries in which it operates.

Geocentric approach – sees the world as a potential market with both similarities and differences in domestic and foreign markets. An effort is made to develop integrated world market strategies to gain the best from both of these strands.

Polycentric model – an approach that considers each host country to be unique. Each of its subsidiary businesses develops its own unique business and marketing strategies in order to suit these particular needs.