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,Global Marketing Management: Planning and Organization,Chapter 9,Chapter Learning Objectives,1. How global marketing management differs from international marketing management,2. The increasing importance of international strategic alliances,3. The need for planning to achieve company goals,4. The important factors for each alternative market-entry strategy,Introduction,Increasingly firms are entering foreign markets Execution of international marketing requires planning, organization, and a willingness to try new approachescollaborative relationships, new operation scope,Introduction,This chapter discusses global marketing management, competition in the global marketplace, strategic planning, and alternative market-entry strategies The chapter also identifies the elements that contribute to an effective international or global organization.,Global Marketing Management,Global Marketing Management thought has undergone substantial revision In the 1970s the argument was framed as “standardization vs. adaptation” In the 1980s it was “globalization vs. localization”- “Think local, act local” In the 1990s it was “global integration vs. local responsiveness” The basic issue is whether the global homogenization of consumer tastes allowed global standardization of the marketing mix,Global Marketing Management: An Old Debate and a New View,Global Marketing Management,Easy communication for customization Flexible manufacturing process Other reasons,Why localization?,The Nestle Way,The “Nestl way” is to dominate its markets can be summarized in four points: think and plan long term decentralize stick to what you know adapt to local tastes,Nestl sells more than 8,500 products produced in 489 factories in 193 countries,Nestl is the worlds biggest marketer of infant formula, powdered milk, instant coffee, chocolate, soups, and mineral water,Benefits of Global Marketing,Economies of scale in production and marketing for a larger market segment can be important competitive advantages for global companies Unifying product development, purchasing, and supply activities across several countries it can save costs Transfer of experience and know-how across countries through improved coordination and integration of marketing activities Diversity of markets by spreading the portfolio of markets served brings an important stability of revenues and operations to many global firms In some cases: reduce labor cost,The merits of global marketing include:,Planning for Global Markets,Planning may be viewed as Corporate plan - goal strategic plan , tactical plan,Planning is a systematized way of relating to the future,Plan deals with external, uncontrollable factors + firms strengths, weaknesses + objectives and goals,Planning for Global Markets,Company objectives and resources Commitment relative to the parent companys objectives and resources are to be planned and re-planned.,The Planning Process,Phase 1: Preliminary Analysis and Screening Matching Company and Country Needs,Planning, which offers a systematic guide to planning for the multinational firm operating in several countries, includes the following 4 phases:,Phase 2: Adapting the Marketing Mix to Target Markets,Phase 3: Developing the Marketing Plan,Phase 4: Implementation and Control,The answers to three major questions are sought in Phase 2: Are there identifiable market segments that allow for common marketing mix tactics across countries? Which cultural/environmental adaptations are necessary for successful acceptance of the marketing mix? Will adaptation costs allow profitable market entry?,Planning for Global Markets,Phase 1: Preliminary Analysis and Screening Matching Company and Country Needs: 1. Analyze countries potential for international marketing, considering the constrains factors and market potentials.,Planning for Global Markets,Phase 1: Preliminary Analysis and Screening Matching Company and Country Needs: 2. Establish criteria for those prospective countries. Min potential / Min profit / ROI Competitive levels Political / legal etc.,Planning for Global Markets,Phase 1: Preliminary Analysis and Screening Matching Company and Country Needs: 3. Analyze the environment of each prospective countries. Potential of market Problems that eliminate the country from consideration Environment elements for further study 4Ps: standardize or adapt?,Planning for Global Markets,Phase 2: Adapting the market mix to target markets - decide market mix which are adjusted to the cultural constrains and effectively achieve corporate objectives and goals. ways of consuming the product Preference of the product Apply marketing tactics in several countries? Quit from entering because of big difference?,Planning for Global Markets,Phase 3: Developing a market plan - for a single country or a market segment Situation analysis Entry mode Specific action program Quit or not?,Planning for Global Markets,Phase 4: Implementation and Control Performance-objective action,Foreign Market-Entry Strategies,market characteristics (potential sales, strategic importance, cultural differences, and country restrictions) company capabilities and characteristics (near-market know-ledge, marketing involvement) commitment that management is prepared to make,The choice of entry strategy depends on:,Alternative Market-Entry Strategies,exporting contractual agreements strategic alliances, and direct foreign investment,Import regulations may be imposed to protect health, conserve foreign exchange, serve as economic reprisals, protect home industry, or provide revenue in the form of tariffs,Four different modes of foreign market entry:,Exporting,Exporting can be either direct or indirect In direct exporting the company sells to a customer in another country In contrast, indirect exporting usually means that the company sells to a buyer (exporter or distributor) in the home country who in turn exports the product The Internet is becoming increasingly important as a foreign market entry method,Exporting,The International Internet Marketing - multilingual websites e-tailing website - credit card companies express service companies - German bans “ad gimmicks” - EU want to tax Internet sales,Contractual Agreements,A means of profit from transferring technology, processes, trademarks, or human skills. A supplement to exporting and manufacturing Contractual forms include: Licensing: Entering without large capital outlays is licensing of patent rights, trademark rights, and the rights to use technological Franchising: In licensing the franchiser provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management,Contractual agreements are long-term, non-equity associations between a company and another in a foreign market,Two types of franchise agreements: 1.Master franchise: the authority to sell products and establish sub-franchises in a specific area (can be a country) 2.licensing: the right to use a product, good, service, trademark, patent, or other asset (eq) for a fee. e.g. Coke (syrup),Contractual Agreements,Strategic International Alliances,SIAs offer opportunities for rapid expansion into new markets, access to new technology, more efficient production and marketing costs,Strategic alliances have grown in importance as a competitive strategy in global marketing.,A strategic international alliance (SIA) is a business relationship established by two or more companies to cooperate for a common objective e.g. air liners alliance; chicken products P211,The steps below can lead to successful and high performance strategic alliances,International Joint Ventures,International joint ventures (IJVs) have been increasingly used since 1970s IJVs are used as a means of lessening political and economic cost and risks by the amount of the partners contribution to the venture IJVs provide a less risky way to enter markets that pose legal and cultural barriers than would be the case in an acquisition of an existing company - P213,International Joint Ventures,International joint ventures (IJVs) A joint venture is different from strategic alliances or collaborative relationships in that a joint venture is a partnership of two or more participating companies that have joined forces to create a separate legal entity,Consortia,They typically involve a large number of participants, and They frequently operate in a country or market in which none of the participants is currently active,Consortia are similar to joint ventures and could be classified as such except for two unique characteristics:,Consortia,Consortia are developed to pool financial and managerial resources and to lessen risks: consortium arrangement - a huge construction project - Airbus four partners. Now a company,Contractual Agreement,Contractual agreements can run into problems: Partners can stop cooperation due to shift of ownership Partner who have learned technologies can become a competitor after the agreement close. Control and anti-control never stops,Direct Foreign Investment,Companies may manufacture locally to capitalize on low-cost labor, to avoid high import taxes, to reduce the high costs of transportation to market, to gain access to raw materials, or as a means of gaining market entry Firms may either invest in or buy local companies or establish new operations facilities,A fourth means of foreign market development and entry is direct foreign investment,Direct Foreign Investment,FDI is often used in free trade zone, in order to enter all countries in the zone. - Nestles Thailand milk factory. - Samsungs TV tube plant in Mexico,Organizing for Global Competition,(1) global product divisions responsible for product sales throughout the world; (2) geographical divisions responsible for all products and functions within a given geographical area;,An international marketi
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