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8/9/2019 Lecture 12a (1)
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MAR002-6 Brand Mgt. & Research
Global Branding Strategy
Lecture 12
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What is marketing?
Marketing Involves: Focusing on the needs and wants of
customers
Identifying the best method of satisfyingthose needs and wants
Orienting the company towards the process
ofproviding that satisfaction Meeting organisational objectives
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What is international marketing?
Different Levels of InternationalMarketing Export marketing
International marketing
Global marketing
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Environmental influences oninternational marketing
Socio/CulturalLanguageReligion
AestheticsValues and
attributesSocialorganisation
Material culture
PoliticalOperationalrestrictions
Discriminatoryrestrictions
Physical actions
Environmental
Influences onInternationalMarketing
LegalLocal domestic laws
International lawHome domestic law
TechnologicalSatellite
Communications
ISDNInternetWWW
The ElectronicSuperhighway
EconomicDeveloped economiesEmerging economies
Less developedeconomies
Currencymovements
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Social/cultural influences
Coca-Cola: 2 Litre bottles too big for Spanish fridges Pronunciation in China Kooke Koula
A thirstymouthful of candle wax Johnsons Floor Wax:
Made Japanese floors slippery The Japanese do not wear shoes indoors
McDonalds: The white face ofRonald McDonald A white face is seen as a death mask in Japan
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Social influences
"Future consumer markets will be concentratedin the fast growing emerging markets wheresmall and large enterprises will find profitableopportunities tomeet health ,education and
nutrition needs" UN people & tomorrows markets
80% world population currently live in developingcountries
By 2025, 85%population will live in emergingmarkets
2 out of every 5 people currently live in China andIndia
In the next 50years, the African population will
treble
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Regional breakdown of globalpopulation (bn)
Other Asia
Africa
India
China
Latin America
Europe
North America
0 0.5 1.0 1.5 2.0 2.5
Source: United Nations (1996)
1995
2050
0 2.5
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Worlds mega cities
By 2010, 50%ofpeople will live in urbanareas
By 2015, the top 5 largest cities will be: Tokyo-Japan 26.4 million Bombay- India 26.1 million
Lagos- Nigeria 23.2 million
Dhala-Bangladesh 21.1 million San Paulo-Brazil 20.4 million
Source: United Nations
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Environmental influences oninternational marketing
Environmental
Influences onInternationalMarketing
LegalLocal domestic lawsInternational lawHome domestic law
EconomicDeveloped economiesEmerging economiesLess developedeconomies
Currencymovements
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The legal environment
3 dimensions in the legal environment:
local domestic law:
different in every country
international law: issues include piracy, treaties, patents etc
domestic laws in the home country: export controls, plus duty to abide by national laws in all
activities
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The economic environmentGross National Income per capita (US$)
Luxembourg 48 560 USA 34 280 Denmark 28 490 Netherlands 27 390
Germany 25 420 United Kingdom 24 340 Singapore 21 630 Greece 17 520 Hungary 11 990
South Africa 10 910 Poland 9 370 Chile 8840 Uruguay 8 250
Brazil 7 070 Thailand 6 230 Turkey 5 830 Philippines 4 240
China 4 070 Indonesia 2 890 India 2 820 Zimbabwe 2 220 Vietnam 2 070
Bangladesh 1 620 Nigeria 790 Tanzania 520 Sierra Leone 460
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Economic environment
Developed triad Economies account for 80%of world trade
Emerging Economies
huge and growing consumer demand government directed economic reforms dual economy
Less Developed Countries (LDCs)
low GDP, limited manufacturing base infrastructure weaknesses heavy reliance on one product/one trading partner
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Environmental influences oninternational marketing
Political
Operational restrictions
Discriminatory restrictions
Physical actions
Environmental
Influences onInternationalMarketing
Technological
Satellite
Communications
ISDN
InternetWWW
The Electronic
Superhighway
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Political environment
A risk due to asudden or gradualchange in a local
political environmentthat isdisadvantageous orcounter productive
toforeign firms andmarkets
Government actionswhich may constitutepotential risk for thefirm:
Operational restrictionseg. exchange controls oremployment policies
Discriminatoryrestrictions eg. specialtaxes and tariffs
Physical actions egnationalisation, riots andwar
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Technological considerations
Increased ease and speed ofcommunication
High rate of technological change Global access to the World Wide Web
Projected 765 million users by end 2005
Importance ofEnglish language for webusers
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Global communications...
Globally e-business; US $200bill (nearly all B2B) By 2005 estimated to reach US $10
trillion
HOWEVER.....
50%of world has never used a telephone Only 7% have access to a pc Only 4% have direct internet access
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Diversity of stakeholder interest
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The challenges of the internationalmarketing environment #1
Culture Often diverse and multicultural
Markets
Widespread and sometimes fragmented Data
Difficult toobtain and sometimes expensive
Politics Regimes vary in stability, political risk becomes an
important variable
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The challenges of the internationalmarketing environment #2
Governments Can be a strong influence in regulating
importers and foreign business ventures
Economies Varying levels of development
Finance
Many differing finance systems andregulatory bodies
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The challenge of internationalmarketing environment #3
Stakeholders Commercial, home country and host country
Business Diverse rules, culturally influenced
Control Difficult to control and co-ordinate across
markets
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International marketing strategiesSuccess and Failure
Failure arises from: inability tofind right market niche unwilling to adapt products
products not perceived as sufficiently unique vacillating commitment assigning the wrong people picking the wrong partners
inability tomanage local stakeholders mutual distrust/lack of respect between HQ &
management inability to leverage ideas to all countries
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Regional Market Segments
Regionalization is an important recent trendthat, perhaps on the surface, seems to runcounter to globalization.
Reasons for regional marketing Need for more focused targeting The shift from national advertising to sales
promotions
Drawbacks Production headaches Marketing efficiencymay suffer and costs may rise
Keller 2007
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Other Demographic and CulturalSegments
For example, the importance formarketers to consider age segments andhow younger consumers can be brought
into the consumer franchise As another example, the 2000 census
revealed that Asians and Hispanics
accounted for 79 million of 281 millionpeople in the United States and anestimated $1 trillion in annualpurchasing power.
Keller 2007
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Rationale for Going International
Perception of slow growth and increasedcompetition in domestic markets
Belief in enhanced overseas growth and
profit opportunities Desire to reduce costs from economies of
scale
Need to diversify risk Recognition of global mobilityofcustomers
Keller 2007
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Advantages ofGlobal Marketing Programs
Economies of scale in production anddistribution
Lower marketing costs
Power and scope Consistency in brand image
Ability to leverage good ideas quickly andefficiently
Uniformityofmarketing practices
Keller 2007
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Disadvantages ofGlobal Marketing Programs
Differences in consumer needs, wants,and usage patterns for products
Differences in brand and product
development and the competitiveenvironment
Differences in the legal environment
Differences in marketing institutions Differences in administrative procedures
Keller 2007
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Standardization vs. Customization
According to Levitt, because the world isshrinkingdue to leaps in technology,communication, and soforthwell-managed companies should shift theiremphasis from customizing items tooffering globally standardized products
that are advanced, functional, reliable,and low priced for all.
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Standardization vs. Customization
Blending global objectives with local orregional concerns
Think global. Act local. A global brand has a clear consistentequity across geographies: samepositioning, same benefits plus localtailoring if needed
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Building a Global Brand
How valid is the mental map in the newmarket?
What is the level of awareness? How valuable are the associations?
What changes need to be made to the
mental map? By what means should this new mentalmap be created?
Keller 2007
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Global Customer-Based Brand Equity
To build customer-based brand equity,marketers must:
1. Establish breadth and depth of brand awareness
2. Create points-of-parity and points-of-difference3. Elicit positive, accessible brand responses
4. Forge intense, active brand relationships
Achieving these four steps, in turn, requiresestablishing six core brand building blocks.
Keller 2007
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Core Brand Building Blocks
Creating brand salience
Developing brand performance
Crafting brand image Eliciting brand responses. Example:
positive brand judgments
Creating brand feelings Cultivating resonance
Keller 2007
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Questions for Global BrandingPositioning
How valid is the mental map in the new market? Howappropriate is the positioning? What is the existinglevel of awareness? How valuable are the core brandassociations, points-of-parity, and points-of-difference?
What changes sh
ould we
make t
othe
positi
oning? D
owe need to create any new associations? Should we
not re-create any existing associations? Should wemodify any existing associations?
How should we create this new mental map? Can westill use the same marketing activities? What changes
should we make? What new marketing activities arenecessary?
Keller 2007
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Building Global Customer-Based BrandEquity
In designing and implementing amarketing program to create a strongglobal brand, marketers want to realizethe advantages of a global marketingprogram while suffering as few of itsdisadvantages as possible
Keller 2007