15 e
Chapter 13
Global Marketing
© McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
Chapter Outline
• The competitive advantage of nations
• Organizing for global marketing
• Programming for global marketing
• Entry and growth strategies for global marketing
© McGraw-Hill Education
Global Marketing
Firms invest in foreign countries for the same basic reasons they
invest in their own country
• Reasons vary from firm to firm but fall under the categories of
achieving offensive or defensive goals
Goals of Global Marketing
Offensive goals
•
•
•
•
Increase long-term growth and profit prospects
Maximize total sales revenue
Take advantage of economies of scale
Improve overall market position
Defensive goals
•
•
•
•
•
Compete with foreign companies on their own turf
Gain access to technological innovations in other countries
Take advantage of differences in operating costs
Preempt competitors’ global moves
Avoid being locked out of future markets by arriving too late
Jump to Goals of Global Marketing, Appendix
Figure 13.1: Porter’s Diamond of
National Advantage
Source: The Competitive Advantage of Nations by Michael E. Porter.
Jump to Figure 13.1: Porter’s Diamond of National Advantage, Appendix
Competitive Advantage of Nations
Factor conditions
• Nation’s ability to turn its natural resources, skilled labor, and
infrastructure into a competitive advantage
Demand conditions
• Nature of domestic demand and the sophistication of domestic customers
for the industry’s product or service
Related and supporting industries
• Existence or absence in the country of supplier and related industries that
are also internationally competitive
Company strategy, structure, and rivalry
• Conditions in the nation that govern how companies are created,
organized, and managed, and how intensely they compete domestically
Jump to Competitive Advantage of Nations, Appendix
Problems with Entering Foreign Markets, 1
Cultural misunderstanding
• Areas in which differences occur
• Communication
• Spatial boundaries
• Perception of time
• Behavior
• Managers must make the necessary efforts to learn, understand,
and adapt to the cultural norms of customers and managers and
sales team members in countries in which they do business
• Sensitivity to cultural differences is essential
Problems with Entering Foreign Markets, 2
Political uncertainty
• Government instability
• Social unrest
• Armed conflict
Import restrictions
• Tariffs, quotas, and other types of restrictions
• Established to promote self-sufficiency and can be a roadblock for
multinational firms
Problems with Entering Foreign Markets, 3
Exchange controls and ownership restriction
• Established by nations experiencing balance-of-payment problems
• Important considerations in the decision to expand into a foreign
market
Economic conditions
• Differences in economies due to political upheaval or social changes
Organizing the Multinational Company
Types global companies
• Multidomestic company: Pursues different strategies in each of its
foreign markets
• Global company: Views the world as one market and pits its
resources against competition in an integrated fashion
Alternatives to organizing global companies
• Worldwide product divisions
• Divisions responsible for all products sold within a geographic
region
• Matrix system that combines elements of both of these
arrangements
Factors Affecting Global Strategy
External factors
•
•
•
•
Market factors
Economic factors
Environmental factors
Competitive factors
Internal factors
•
•
•
•
Structure
Management processes
Culture
People
Jump to Factors Affecting Global Strategy, Appendix
Organizational Issues to Be Considered in Global
Marketing Research, 1
Population characteristics
• Demographic variables, such that the number and size of families,
education, occupation, and religion, are important
Ability to buy
• Gross national product or per capita national income
• Distribution of income
• Rate of growth in buying power
• Extent of available financing
Organizational Issues to Be Considered in Global
Marketing Research, 2
Willingness to buy
• Related to cultural values and attitudes, tastes, and habits
Differences in research tasks and processes
• Language
• Data content
• Timeliness
• Availability in the United States
Global Product Strategy
Global marketing research helps determine whether there is:
• Unsatisfied need for which a new product could be developed to
serve a foreign market
• Unsatisfied need that could be met with an existing domestic
product, either as is or adapted to the foreign market
Global Distribution Strategy
• Role of the distribution network is as important in foreign
markets as it is at home
• Channel arrangements range from no control to almost
complete control of the distribution system by manufacturers
• Influencing both home country and foreign country channels
is challenging
Global Pricing Strategy
Pricing task is more complicated in foreign markets because of
problems associated with tariffs, antidumping laws, taxes,
inflation, and currency conversion
Constraints
• Import duties
• Rigidity in price structures
Global Advertising Strategy
Issues related to advertising
• Language barrier
• Selection of media
• Limited media availability and their inability to reach out to potential
buyers
• Lack of accurate media information
• Type of agency to be used to prepare and place the firm’s
advertisements
Sales promotion
• Used as a strategy for bypassing restrictions on advertisements
placed by some foreign governments
• Effective means for reaching people in rural locations where media
support for advertising is virtually nonexistent
Entry and Growth Strategies for Global Marketing
Strategy depends on analysis of market opportunities, company
capabilities, degree of marketing involvement and commitment,
and risk tolerance
Company can decide to:
• Make minimal investments of funds and resources by limiting its
efforts to exporting
• Make large initial investments of resources and management effort
to try to establish a long-term share of global markets
• Take an incremental approach
Growth Strategies for Global Marketing: Exporting
Firm produces the product outside the final destination and then
ships it there for sale
Advantages
Disadvantages
• Avoids the cost of
establishing manufacturing
operations in the host
country
• It may help a firm achieve
experience-curve and
location economies
• Higher cost associated with
the process
• Necessity of the exporting
firm to pay import duties or
face trade barriers
• Delegation of marketing
responsibility for the product
to foreign agents
Jump to Growth Strategies for Global Marketing: Exporting, Appendix
Growth Strategies for Global Marketing: Licensing
Organization’s granting of patent rights, trademark rights, and
the right to use technological processes to foreign markets
Advantages
• Firm does not have to bear
the development costs and
risks associated with
opening up a foreign
market
• Attractive option in
unfamiliar or politically
volatile markets
Disadvantages
• Firm does not have tight
control over manufacturing,
marketing, and strategy
• There is the risk that foreign
companies may capitalize
on the licensed technology
Jump to Growth Strategies for Global Marketing: Licensing, Appendix
Growth Strategies for Global Marketing: Franchising and
Joint Ventures
Franchising: Franchisor sells limited rights to use its brand name
in return for a lump sum and share of the franchisee’s future
profits
• Employed by service firms, as opposed to manufacturing firms
• Offers an effective mix of centralized and decentralized decision
making
Joint ventures: Sharing management with one or more
collaborating foreign firms
Advantages and Disadvantages of Joint ventures
Advantages
• Firm may be able to benefit from a partner’s knowledge of the
host country
• Firm gains by sharing costs and risks of operating in a foreign
market
• Sole option when political considerations make joint ventures the
only feasible entry mode
• Firms can take advantage of a partner’s distribution system,
technological know-how, or marketing skills
Disadvantages
• Firm may risk giving up control of proprietary knowledge to its
partner
• Firm may lose the tight control over a foreign subsidiary needed to
engage in coordinated global attacks against rivals
Jump to Advantages and Disadvantages of Joint ventures, Appendix
Growth Strategies for Global Marketing: Strategic
Alliances
Partnerships where two or more firms invest in each other to
gain competitive advantages on a worldwide versus local level
Long term in nature
Advantages
• Reduced manufacturing costs, accelerated technological diffusion,
and new product development
• Legal and trade barriers can be overcome
Disadvantage: Increased risk of competitive conflict between the
partners
Growth Strategies for Global Marketing: Direct
Ownership
Establishment of a wholly owned subsidiary or acquisition where
it owns 100 percent of the stock
Advantages
• Complete control over its technology and operations
• Immediate access to foreign markets
• Instant credibility and gains in the foreign country
• Ability to install its own management team
Disadvantages: Huge costs and significant risks
15e
Chapter 12
The Marketing of Services
© McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
Chapter Outline
• Important characteristics of services
• Providing quality services
• Overcoming the obstacles in service marketing
• Implications for service marketers
© McGraw-Hill Education
Services: Definitions
Service products: Products that are intangible, or at least
substantially so
• Difficult to identify as they come into existence at the same time
they are bought and consumed
Services: Activities performed by sellers and others that
accompany the sale of a product and that aid in its exchange or
its utilization
© McGraw-Hill Education
Figure 12.2: Unique Characteristics Distinguishing
Services from Goods, 1
Characteristic
Services
Goods
Intangibility
The customer owns only memories,
outcomes, or feelings.
The customer owns objects that
can be used, resold, or given to
others.
Inseparability
Services often cannot be separated
from the person providing them.
They are often produced and
consumed at the same time.
Goods are usually produced and
sold by different people.
Perishability
Services can be used only at the
time they are offered. They cannot
be inventoried, stored, or
transported.
Goods can be placed in inventory
for use at another time.
© McGraw-Hill Education
Figure 12.2: Unique Characteristics Distinguishing
Services from Goods, 2
Characteristic
Services
Client
relationship
Services often involve a long-term
Goods often involve an
personal relationship between buyer impersonal short-term
and seller.
relationship although in many
instances relationship strength
and duration are increasing.
Customer effort
Customers are often heavily involved Customer’s involvement may be
in the production.
limited to buying the completed
product and using it.
Uniformity
Because of inseparability and high
involvement on the part of the
buyer, each service may be unique,
with the quality likely to vary.
© McGraw-Hill Education
Goods
Variations in quality and
variance from standards can be
corrected before customers
purchase products.
Providing Quality Services, 1
Determination of good service quality is difficult because of the
gap between:
• Consumer expectations and management perceptions of consumer
expectations
• Management perceptions of consumer expectations and the firm’s
service quality specifications
• Service quality specifications and actual service quality
• Actual service delivery and external communications about the
service
© McGraw-Hill Education
Providing Quality Services, 2
Determinants of service quality
• Tangibles: Physical evidence of the service
• Reliability: Consistency and dependability of the service
performance
• Responsiveness: Willingness or readiness of employees or
professionals to provide service
• Assurance: Knowledge and competence of service providers and
the ability to convey trust and confidence
• Empathy: Service provider’s efforts to understand the customer’s
needs and to then provide individualized service delivery
© McGraw-Hill Education
Customer Satisfaction Measurement or C M S, 1
Research on service quality and customer satisfaction
concentrates on the following issues:
• Understanding the expectations and requirements of the customer
• Determining how well a company and its major competitors are
succeeding in satisfying these expectations and requirements
© McGraw-Hill Education
Customer Satisfaction Measurement or C M S, 2
Research on market leaders’ C S Ms have the following aspects in
common:
• Marketing and sales employees were primarily responsible for
designing C S M programs and questionnaires
• Top management and the marketing function championed the
programs
• Measurement involved a combination of qualitative and
quantitative research methods that primarily included mail
questionnaires, telephone surveys, and focus groups
• Evaluations included both the company’s and competitors’
satisfaction performance
© McGraw-Hill Education
Customer Satisfaction Measurement or C M S, 3
• Results of all research were made available to employees, but not
necessarily to customers
• Research was performed on a continual basis
• Customer satisfaction was incorporated into the strategic focus of
the company via the mission statement
• Commitment to increasing service quality and customer satisfaction
was found in employees at all levels within the organization
© McGraw-Hill Education
Internal Marketing
• Continual process by which managers actively encourage,
stimulate, and support employee commitment to the
company, its goods and services, and its customers
• Successful internal marketing efforts are instrumental to
success in service marketing
© McGraw-Hill Education
Critical Components of Successful Internal Marketing
Careful selection process in hiring frontline employees
Clear, concrete message
Significant modeling by managers
Energetic follow-through process
Emphasis on good attitudes
Jump to Critical Components of Internal Marketing, Appendix
© McGraw-Hill Education
Obstacles in Service Marketing
Reasons for lack of innovative marketing on the part of service
marketers
• Limited view of marketing
• Lack of strong competition in the past
• Lack of creative management
• No obsolescence
© McGraw-Hill Education
Implications for Service Marketers
• Overdependence on one or two elements of the marketing
mix should be avoided by service marketers
• Services must be made available to prospective users
• New services should be developed
© McGraw-Hill Education
BUOL 533
BUOL 533 - Marketing Management
Your Name Here
University of Cumberlands
Week Seven – Discussion Board
1
BUOL 533
2
Introduction
Start your paper here. An introduction paragraph is a good idea. It should state the
TOPIC of your paper and provide a roadmap for the reader. Indent five spaces the first sentence
in each paragraph.
Chapter Twelve(12)
Indent first sentence in each paragraph five spaces. Provide marketing concepts covered
in Chapter 12. Make sure to cite your textbook properly if you quote directly from this source.
Chapter Thirteen (13)
Indent first sentence in each paragraph five spaces. Provide marketing concepts covered
in Chapter 13. Make sure to cite your textbook properly if you quote directly from this source.
Conclusion
Your final paragraph should provide a summary of your paper. This reminds the reader of
where you took them on your road trip. It is similar to reviewing your photographs after a
vacation. There should be no new information included in the conclusion. You should have
exceeded the 500-words minimum word count.
BUOL 533
References
Peter, J.P. & Donnelly, J.H. (2019) A Preface to Marketing Management. (17 th Edition)
McGraw-Hill Education. New York, New York.
3
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