Global

MKTG 1064 Lecture One:

INTRODUCTION
TO GLOBAL
MARKETING

JAN 2013 Semester

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LEARNING OUTCOMES OF THE COURSE
(READ YOUR COURSE GUIDE !!!)

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ASSIGNMENT: GROUP REPORT (50%)
(3000- 5000 word Marketing Plan/ Feasibility Study)

Note: make
sure the
proportion of
content that
you write
matches the
marks
distribution

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 PREPARING FOR THE GM PROJECT REPORT

1. The project must be researched progressively- last

minute work would lead to poor grades
2. You have been given guideline by RMIT lecturer on
“minimum research requirements” standards
3. A lot of work is needed on secondary data sources
for the country analysis and company analysis
4. I will be posting progressive guidelines on how to
approach the project BUT you must take the
initiative and start on the work early!

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 THE REQUIRED TEXT
International Marketing: Asia-Pacific Edition
3rd Edition
BY: Masaaki Kotabe, Sween Hoon Ang, Kathleen
Griffiths, Al Marshall, Ranjit Voola, Kristiaan Helsen
Wiley (2011)

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 INTERNATIONAL VERSUS GLOBAL MARKETING

1. Book is International Marketing

2. Course is called ‘Global Marketing’
3. Is there a difference?
4. Yes and No depending on different definitions
5. We will deal with global strategy later
6. For the time being, lets assume we are dealing with
common material

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 THE TEXT AND LEARNING RESOURCES:
1. Will use the Kotabe text as a framework for each
lecture
2. But may also include additional materials to
supplement the concepts
3. Notes are NOT sufficient – MUST read the text!
4. Back of chapter questions and short answers
5. Sample examination questions shown by relevant
topics
6. Videos shown in lecture to supplement learning
concepts- make sure you are present

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 IMPORTANCE OF STUDYING GLOBAL MARKETING

1. Career prospects
2. The rapid globalization of markets
3. Cross-cultural adaptation
4. Dealing with foreign customers
5. Marketing research capabilities
6. Widening your horizons and current affairs
7. On the whole, an interesting course to study
a. Get to apply your previous learning of marketing
b. Knowing how to adapt the marketing strategies in
different global markets

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 Chapter 1
INTRODUCTION TO
INTERNATIONAL MARKETING
 LEARNING OBJECTIVES OF CHAPTER ONE
1. Discuss the evolution of global marketing
2. Outline key processes involved in planning,
implementing and monitoring an international
marketing strategy
3. Understand the comparative advantage,
international product cycle and internalization
theories in relation to international trade and
investment

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Overview of International
Marketing

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 DEFINITIONS:
1. The process of planning and conducting
transactions across national borders to create
exchanges that satisfy the objectives of individuals
and organizations (Czinkota, et al. 2007).
2. International marketing is the performance of
business activities designed to plan, price, promote,
and direct the flow of a company’s goods and
services to consumers or users in more than one
nation for a profit (Cateora, 2008)

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 OVERVIEW

1. International / Global Marketing: recognizes

competitive pressures and market opportunities
2. Companies cannot be insulated
3. Concept of ‘borderless’- transcending national and
political boundaries
4. Many organizations today have complex networks
of inter-related production and sales operations
located across the world

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 DOMESTIC AND INTERNATIONAL MARKETING

1. Concepts and principles nearly the same

2. Similar processes for strategy development and
implementation
3. But greater complexity for IM
a. Language
b. Culture
c. Legal and political systems
4. Managers must have cross-cultural empathy

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 What is Global Marketing?
• Domestic Marketing
– Carried out within a defined national or
geographic boundary
– Relatively free to plan, implement and control
marketing plans within a known marketing
environment
• International Marketing
– Begins to explore markets outside national boundaries of
domestic market
– Direct and indirect exporting to neighbouring countries
– The need to manage uncontrollable international
environmental elements
– Emphasis on central production, planning, implementation
and control, with deference paid to different market
conditions
Lee and Carter: Global Marketing Management, 3rd edition
 What is Global Marketing?

• Global Marketing
– The notion that the world has no centre, but a
„borderless‟ global marketplace that encompasses the
participation of all countries
– Marketing operations that seeks to lever its assets
across political and cultural boundaries
– Maximising opportunities and exploiting marketing
similarities and differences in search for global
competitive advantage
– Seek to add stakeholders‟ values by:
• organising world-wide efforts
• researching of domestic and foreign markets
• pursuing international partnerships
• Sourcing of raw materials and support services
• Managing international transactions

Lee and Carter: Global Marketing Management, 3rd edition

 LINKAGES
You covered topics in Macro Economics
INTERNATIONAL relevant to this course- matters like
International Trade, Comparative Advantage,
ECONOMICS Balance of Payments, etc

INTERNATIONAL International Marketing is a ‘sub-set’ of

BUSINESS
International Business. Globalization of
business impacts on other functional areas-
not just marketing. There are issues of
International Finance, International HR Mgt,
International Operations and Supply Chain

INTERNATIONAL
MARKETING

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 THERE ARE REALLY 3 BIG ISSUES IN INTERNATIONAL
MARKETING:
1. Studying the market environments of the country
the firm wishes to enter
a. PEST and Country Screening
2. Deciding how to enter (market entry strategy)
3. Adapting the International Marketing Plan
a. Pertaining to the Marketing Mix:
 How much ‘changes’ are needed? (adaptation)
 Or can we simply replicate what we do in the home
market? (standardize)

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KOTLER’S MODEL ON GLOBAL MARKETING

If you have our Principles of Marketing text, revise that chapter on

Global Marketing; it will give you a good overview of this course

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Marketing: Domestic versus International

 The concepts are nearly the same, but the

applications are different

 Marketing uses the concept of MC+CB+STP+ +4Ps+

MP

 We are going to use these concepts again but this

time EXPAND them into the international marketing
context

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 The key tools / concepts in Marketing

MC

+
CB

+
STP

+
4 Ps

+
MP

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Differences in the application of the marketing concepts
between domestic and global marketing

Issue Domestic Marketing International Marketing

MC: marketing concept Understand the local market Understand further the needs of
(marketing philosophy) needs foreign country customers needs
Adaptive marketing mindset

Consumer buying behavior Understand motivation, attitudes, Same as DM but apply greater
perceptions of customers understanding of CULTURE to
appreciate differences

Segmentation, Targeting Segment local market Segmentation by country market

and Positioning Position the brand for local Knowing which country to target
consumption at
Positioning differently across
countries
Marketing Mix Develop marketing mix for Knowing how to ADAPT or
different segments in the local STANDARDIZE the marketing
market programs across different
countries
Marketing Planning Develop a single marketing plan Need to develop multiple plans in
for local market order to enter and expand into
different country markets

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The Asian Century

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 THE ASIAN CENTURY
1. Historically for most of the 20th century the
triad regions have dominated world trade
a. North America, Western Europe and
Japan
2. Increasingly, it is the Big Emerging Markets
(BEMs) which are now having an impact
a. CEA, India, South Korea, Mexico, Brazil,
Argentina, South Africa, Poland, Turkey
& ASEAN
Also note what is meant
by the „BRIC‟ countries
 THE ASIAN CENTURY
1. Increasing amount of competition
coming from the BEMs
2. There is a desire for modernity in these
markets which fuels their
competitiveness and growth
3. Infrastructure and energy needs will
prove to be problematic as they grow
A good contemporary reference book to
read:

http://www.theemergingmarketscentury.com/
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Why understanding international
marketing is imperative

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 The international marketing imperative (why must
firms look to global markets) : 6 reasons

1. Saturation of domestic markets forces companies to look

elsewhere
 Local companies need to expand overseas

2. The nature of competition has changed

 No market can be insulated from global competition
 Most Asian markets have foreign companies and
brands
 How are the local companies going to compete?

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 PUSH VERSUS PULL FACTORS

1. Push factors
a. Local competition
b. Mature domestic market
c. Brand not performing well
d. Overseas competitors enter local market
e. Home government incentives
2. Pull factors
a. Overseas markets have higher growth opportunities
b. Host government incentives

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The international marketing imperative (why must
firms look to global markets)

3. International competition also brings

about global cooperation
 Joint ventures and strategic alliances
between local and foreign firms
 Any examples you know of?
4. The impact that the internet and
e-business has made on the global
business landscape

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The international marketing imperative (why must
firms look to global markets)

5. Changing nature of the world economy

 Shift in the world‘s largest companies
 Less US and Japanese centric
 Consider the make up of the largest 100
companies in the world
6. Domestic companies cannot avoid
competitive pressure from globally
oriented firms

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 Changes in the Global Market Environment

Lee and Carter: Global Marketing Management, 3rd edition

Coming of Age: China produces its first
Airbus
June 23 2009-- Airbus SAS, the world‘s largest commercial plane maker, rolled
out the first aircraft assembled at its China factory as it seeks to win more
orders in the world‘s second-largest aviation market.
The plane maker aims to deliver 10 more A320s this year from its factory in
Tianjin, near Beijing, it said in a statement today. Production at the plant,
Airbus‘s first outside Europe, will be raised to four aircraft a month by the end
of 2011

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International trade versus
international business

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 International Trade vs. International Business
36

 International Trade
 The process of exporting and importing goods
between a nation and other countries in the world

 International Business
 A combination of international trade and foreign
production of goods for sale
Evolution of international and
global marketing

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Reactive versus proactive strategies

 Reactive
 Responding to changes

 Push factors

 Proactive
 Anticipating changes

 Early mover advantage

 International marketing is a key aspect of strategic

marketing

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 framework for International Marketing

Ethnocentric

Geocentric Polycentric

Regiocentric

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Why the framework?
• Because it offers the ‗logic‘ that supports the kind
of strategies that companies follow when seeking
global markets
• Ethnocentric is home-country oriented
• Polycentric is host-country oriented
• Regio-centric strategy is focused on a cluster of
countries (regional)
• Geocentric is the foundation for ―global strategy‖-
takes a global perspective of marketing
operations

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International Marketing „evolves‟

 A marketing firm cannot become global

overnight- only very few can
 Most firms expand gradually
 Each time it enters a new market, there will
be risk factors
 Its like testing the water before going for
a swim

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The road to global marketing

 Companies don‘t become global overnight

 They go through different stages of evolution
 Start with exporting
 Expand to many different countries
 Set up planning and coordination systems to manage
global operations
 After many years of successful international
operations, they may emerge as ‗global companies‘
→ Check out the next figure

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Evolution of international and global marketing

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EVOLUTION OF GLOBAL MARKETING

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Evolution of international and global marketing

Domestic Marketing
 First stage in evolution

 Organizations focus on the domestic market

and domestic competition only

 Ethnocentric

 Product development for home country

customers
 Marketing mix decisions made at HQ

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Example:

Domestic Marketing
 Your local food vendor or restaurant; but a KFC
vendor is a global brand
 Your mechanic or dentist; but some doctors and

hospitals operate regionally

 A national bank that does not operate outside
the boundaries of the country (POSB, but DBS is
regional and one day might become global)

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Evolution of international and global marketing

Export Marketing
 Organizations sell their product or service

directly or indirectly to overseas buyers

 Ethnocentric

 Product development mainly determined

by home market needs; not much changes
made to adapt the product
 Marketing mix decisions made at HQ

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Example:

Export Marketing

 A clothing company that exports to the

country adjacent to it (Thailand to Singapore)
 A food company that exports its produce to
another country without changing anything
about the product such as soft drinks or
snacks

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Evolution of international and global marketing

International (country-by-country)
marketing

 Marketing functions are adapted to foreign

market demands
 Polycentric

 Local product development based on local

needs; major adaptations
 Marketing mix decisions made in each
country
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Multi-domestic marketing (some refer to it
as ―multi-nation‖ marketing)
 Involves developing entry to a number of different country markets or
regions
 Each with their own versions of marketing programs

Marketing
program for
Marketing China
program for
India

Marketing
program for
Vietnam

Marketing
program for
Malaysia

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© Strategy in Marketing (Pearson Asia 2008)
Example:

International (country-by-country) marketing

 A food marketer who changes the taste of

the product to suit local tastes

 A retailer who adapts their stores to allow

for aesthetics and tastes of locals

 Can also include „multi-domestic‟
 Foreign subsidiaries operating
independently of one another without
control from HQ
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Evolution of international and global marketing

Multinational (region-by-region) marketing

 The organization realizes economies of scale by
standardizing operations on a regional basis
 Regiocentric

 Product planning is standardized within region but

not across
 Standardization seeks to look for “common
denominators”
 Marketing mix decisions made regionally

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 Regional Marketing Strategies

Marketing
program for
North Asia
Regional
Markets

Marketing
program for
South Asia
Regional Marketing
Markets program for
SEA
Regional
Markets

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Evolution of international and global marketing

Multinational (region-by-region) marketing examples:

 A bookstore chain that makes adjustments to its store

layout and product range within (rather than across)
regions (Kino bookstores)

 A jewelry store that uses a different celebrity

endorsement in Asian markets compared to North
American markets

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Evolution of international and global marketing

Global Marketing

 An organization strives for efficiencies of

scale by developing a standardized
marketing mix across national, regional and
global markets
 Geocentric
 Global products with local variations
 Marketing mix decisions made jointly with
mutual consultation

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 Evolution of international and global marketing
56

Global Marketing
Note the three points on page 15:
 Standardization Efforts

 Coordination across Markets

 Global Integration

Read up further on the implications of these three

points- vital for understanding of International
Marketing

Global Marketing Strategy will be developed further in Chapters 9 and 15

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Examples:

Global Marketing
 A global retailer opens
 A global hair care in overseas markets but
brand adjusts the sources for more local
product formula to allow products to suit local
for different conditions needs. However it still
in different countries uses its global brand
name and follows the
same kind of retail
format (example
More on global marketing will be hypermarket concept)
discussed later in this lecture

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After going through these 5 stages of evolution, go back and review Figure1-
2 again.. Note the key differences in the marketing strategies at each stage of
evolution

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Evolution of international and global marketing

 Global marketing – key concerns

 Impact of environmental factors on

global marketing
 Impact of the Internet on global

marketing

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Global Marketing — Impact of Environmental
Factors

 Location
 Singapore and its central location in Asia
 Dubai in Middle East
 Culture
 Halal products produced in Dubai or Pakistan
 There could be commonalities in life styles across
country markets- coffee drinking and Starbucks

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Global Marketing — Impact of Environmental
Factors

 Availabilityof human resources

 Education in Bangalore, India especially in IT
and services
 How is Singapore positioning for customer
service expertise?
 Geographic/physical landscape
 Hong Kong and its deep water port
 Natural beaches in Thailand for developing
resorts and spas

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Impact of internet on global
marketing

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Impact of the Internet in International marketing

 Global Marketing — Impact of the internet

 Information and Computer Technology (ICT) allow
global reach for small and medium-sized companies
in what has traditionally been a big player‘s
market
 Liberating and empowering consumer and
marketer
 Does location really matter now in global
marketing?
 Internet provides a ‗new mode‘ for the marketing
mix elements such as Promotions and Place (e-
commerce) 1-63
International marketing planning
and strategy

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International Marketing Planning and Strategy
Development

 Changing the  The necessity for

controllable variables effective planning
 The ‗Marketing Mix‘  Same concerns as
domestic marketing
planning, except
 Understanding the
the major interest is
need to fit the
with international
strategy to the
marketing
environment
variables

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International Marketing Planning and Strategy
Development

 Essentiallythe same
“Marketing planning is
message in
concerned with the
international
specification of the
existing situation and marketing
future trends, and on  but with a focus
this basis, the on the global
development of a set environment and
of alternatives for the opportunities
action‖ Kotabe et, al, p.17 and challenges
this brings

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Some implications of international marketing on
strategic marketing planning

Issue in Strategic Marketing Implications for International Marketing

Planning
Mission Aligning global marketing as part of the mission of the business;
attaching significance of global markets in the mission statement

SWOT analysis Undertake a more extensive analysis of many different markets (PEST
of several country markets). Matching country market opportunities
to the company’s capabilities to operate in those markets

Objectives Listing market penetration objectives as part of marketing plan.

Market share by country markets
Determining the proportion of total sales that will be derived from
overseas markets as compared to domestic market

Strategies What countries with what product mix?

Basis of competition in foreign markets- differentiation or cost
advantage?
Leveraging on the Value Chain
Marketing Mix Target market segments across country markets
Positioning strategies
Issues of standardization versus adaptation of the Marketing Mix

Evaluation and Controls Tracking market performance by countries and regions

Portfolio analysis by country markets and product lines

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 Additional Notes: What is Globalization?

• The text does not have a good discussion of

this issue.
• Here are a few additional slides to help you
understand the meaning and impact of the
phenomenon of globalization.

Lee and Carter: Global Marketing Management, 3rd edition

 What is Globalization?
• A cliché in today‟s language, but the concept is not new
• In modern history, there are three waves of Globalization
• First wave: 1870-1914
– Triggered by reduction in transportation costs and trade barriers
– 60 million people migrated from Europe to the New World
• Second wave: 1950-1980
– Post World War Two – integration of economies among OECD
countries
– Multilateral trade liberalisation treaties including GATT
• Third wave: 1980‟s onwards
– Technological advances in computing, telecommunications and
transportation
– Rise of multinational corporations in search of new markets,
cheaper resources and skilled labour
– Economic growth in many developing countries

Lee and Carter: Global Marketing Management, 3rd edition

 Different „aspects‟ of Globalization

Lee and Carter: Global Marketing Management, 3rd edition

 Opportunities of Globalization
Market Access
• Increased integration and independence of trade,
capital, direct investment, technology, information
and labour across national borders
• GATT and its successor WTO made significant
achievements in liberalising trade by reducing
tariff barriers for over 50,000 products
• By 1995, tariffs reduced from an average of 40%
in 1940 to 5%
• Reduction of non-tariff barriers such as excessive
bureaucracy and government subsidies
• Many previously inaccessible countries such as
India, China and previous Soviet Union are now
opened up for trade
Lee and Carter: Global Marketing Management, 3rd edition
 Opportunities of Globalization
Financial Integration
• Movement of goods and services needs to be
facilitated by financial exchange and transaction
• Two important types of cross-border financial
flow to facilitate international business
• Portfolio Capital:
– Consists of investment short-term in nature
– E.g. loans between banks, traded bonds and equities
etc.
– Global daily flow of foreign exchange is >US$2 trillion
• Foreign Direct Investment:
– Consists of longer-term investment by international
companies to establish local presence to do business
– Financial flow mainly from developed countries to less
developed countries to take advantage of lower labour
costs, emerging markets and cheaper resources
Lee and Carter: Global Marketing Management, 3rd edition
 Opportunities of Globalization
Reduction in Communication and Transportation Costs

Transportation Costs: 1930-1990

Year Ocean transport Average air transportation
Wheat, % of production costs Revenue per passenger
1920 = 100 mile (1990 US$)
1930 100 0.68
1950 38 0.30
1990 30 0.11

Communication and Computing Costs: 1960-2000

Year Cost of a 3-minute phone call from New York Price of computers
to London relative to GDP deflator
(2000 = 1000)
1960 60.42 1,869,004
1980 6.32 27,938
2000 0.40 1,000

Lee and Carter: Global Marketing Management, 3rd edition

 Opportunities of Globalization
Global Sourcing, Purchasing and Production

• Increasing complexity in product design,

production process and logistical infrastructure
means that companies need global sourcing,
purchasing and production
• For example, a car can be designed by a
Japanese company, components sourced in
South East Asia, then shipped to Czech Republic
for assembly before shipping to the US for sale
• Locating production in strategic target markets
can help overcome market entry and trade
barriers, and tap into fresh ideas for new
products

Lee and Carter: Global Marketing Management, 3rd edition

 Threats of Globalization
Macroeconomic Volatility
• Increased vulnerability of national economies to
global macroeconomic volatility
– Erratic speculations, sudden shifts of investor sentiments,
and rapid movements of capital in and out of countries
– Approximately 95% of international capital flows are
speculative
• A number of financial crises have brought
catastrophic economic repercussions especially to
developing countries
• Volatility of short-term capital flows leads to large
fluctuations in foreign exchange and interest rates.
This creates difficulties for global companies to
manage long-term borrowing, financial risks and
market expansion
Lee and Carter: Global Marketing Management, 3rd edition
 Threats of Globalization - The
Globalization of Competition
• Growth of competition on a global basis facilitated
by liberalization, deregulation and privatization
• Dynamics of market more turbulent and
unpredictable as companies now compete with
greater number of international competitors
• Greater competition has meant companies need to
manage shorter product life cycle and learn to
harness opportunities made available globally
• Developing technological competence is crucial to
managing successful global operations - MNCs
need advanced computing technologies to align
processes and information flows throughout their
entire supply chains
Lee and Carter: Global Marketing Management, 3rd edition
 Threats of Globalization
Growing Anti-Globalization Sentiments
• Growing number of anti-globalization
demonstrations at international meetings such as
WTO
• Many protestors see globalisation as mis(used)
to justify and legitimise free market capitalism
that benefits rich MNCs
• Globalisation has been blamed for exacerbating:
– Global warming and climate change
– Environmental degradation
– Global poverty and inequalities
– Systematic exploitation of cheap labour

Lee and Carter: Global Marketing Management, 3rd edition

 Global Economic Disparities
The “Champagne Glass” Phenomenon

“income inequalities”

Lee and Carter: Global Marketing Management, 3rd edition

 Global Migration
• Cross-border migration has become a widely debated
global social issue
– United Nations estimates 175million persons (3% of world
population) reside outside the country of their birth
– Most of world‟s migrants live in Europe (56million; Asia
(50million); North America (41million)
• Migration and Economic Growth
– For receiving countries, international migration can ease
labour shortages especially skilled labour
– For sending (especially poor) countries, transfer of talented
skilled labour can be dire for their developments. But transfer
of unskilled labour can ease poverty
• Migration and Humanitarian Crisis
– End of 20th century, total number of refugees is 16 million
(9million in Asia; 4million; 3 million in developed countries)
– The increase number of humanitarian crises are directed
linked to international migration
Lee and Carter: Global Marketing Management, 3rd edition
 Environmental Sustainability
• Climate Change
– Most discussed but least quantitatively understood global issue
– IPCC claims that global warming in the last 50 years most likely
caused by increase of green house gas emission
– Warming of 2◦-3◦ Celsius can cause damage of up to US$500
billion per year
• Climate Change and Food Security
– Hunger and malnutrition are widespread and persistent in
developing countries
– Progressive loss of cultivable lands, degradation of coastal areas
and shortage of fresh water – affecting livelihood
• Energy Security
– Strong correlation between energy consumption and economic
growth
– Demand for energy sources has increased significantly
– The increasing scarcity and costs of non-renewable energy
sources such as oil and gas will threaten global economic growth

Lee and Carter: Global Marketing Management, 3rd edition

 Components of Global Climate Change

Lee and Carter: Global Marketing Management, 3rd edition

 Energy Consumption and Economic
Income

Lee and Carter: Global Marketing Management, 3rd edition

83

Theories of international trade and the

multinational organization

1-83
Optional: but read up the different
theories:
1. Comparative Advantage (should have learnt this in
your Macro Econ class)
 Absolute and Comparative Advantages

 Terms of Trade

2. International PLC Theory

 Theory explains how changes in international
competition occurs over time and places
3. Internationalization/transaction cost theory
 Focuses on the internal costs of economic changes
within an MNC
1-84
 Comparative Advantage:
85

 Comparative advantage theory

 English economist, David Ricardo

 A country can gain from engaging in trade even if

it has an absolute advantage or disadvantage

• Absolute advantage
 The situation in which one region can produce
goods with lower unit labour requirements than any
other region and so is able to export these goods
 International Trade Theories:
86

 Principles of international trade

 Countries benefit from international trade

 International trade increases worldwide production

through specialisation
 Exchange rates are determined primarily by
traded goods
 Factor endowment theory
 Based on notions that nations possess different
amounts of land, labour, capital that determine a
nation's comparative advantage
1-86
 An extension to the model: moving from Economics to Strategic
Management (M Porter)- Competitive Advantage of Nations

 The Diamond Model:

http://www.valuebasedmanagement.net/methods_porter_diamond_model.html
http://www.quickmba.com/strategy/global/diamond/ 1-87
 International Product Life Cycle Theory
88

 Explains a realistic, dynamic change in

international competition over time and place
through:
 Economies of scale and scope
 Technological gap
 Preference similarity

1-88
 Summary
You should now have an understanding of:
• The growth of Asian markets and
the implication for global trade and
international marketing
• The aspects of the international
trade and business environment that have
made understanding international marketing
imperative
• The evolution of global marketing
1-89
 Summary
• The key processes involved in planning,
implementing and monitoring an international
marketing strategy
• The role of comparative advantage,
international product cycle and internalization
theories in relation to international trade and
investment

1-90
Selected Practice Questions and Short
Answers

1-91
Why is international business is much more complex today
than it was 20 years ago.

Among the commonly cited reasons for increasingly complex

international business environments are:
 Saturation of domestic markets and more sophisticated consumers.
 More consumers and markets to analyse.
 Increasing global competition that impacts the international as well as
the domestic environment.
 Need for global cooperation and expanding international
opportunities.
 Political and governmental barriers.
 Ethical and moral concerns.
 Cultural barriers.
 Shifting multinational environments.
 Role of the internet and electronic commerce, especially in B2B
commerce.

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Why is it important for students to understand international
marketing?

 Factors that make understanding international marketing

important are:
 the saturation of markets in developed countries forcing
companies to look at international markets for opportunities.
 the change in how competition is viewed around the world in
terms of market share, country source and global reach.
 international competition bringing about global pressure.

 because of the proliferation of the internet and e-business.

 Today‘s business environment is characterised not only by more

competition from other parts of the world but also by more
fluid and international market conditions than in the past.
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How is global marketing different from international
marketing?

 Global marketing is a more advanced phase of international

marketing. Once export marketing becomes an integral part of a
company‘s marketing activity, it begins to seek growth and expansion
through international marketing. The emphasis is polycentric (emphasis
on product and promotional adaptation in foreign markets--wherever
necessary). In global marketing, fragmentation caused by international
marketing is overcome.
 Global marketing refers to marketing activities by companies that
emphasise:
 Standardisation efforts — standardising marketing programs across
different countries.
 Coordination across markets — reducing cost inefficiencies and
duplication of efforts at the national and regional levels.
 Global integration — participating in many major world markets to
gain competitive advantage.

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Why do you think a company should or should not market the
same product in the same way around the world?

 Think about the standardisation versus the adaptation

alternative.
 Standardisation has the advantages of efficiencies in
production and communication as well as economies of scale.
 Adaptation has the advantages of customisation, matching
the true unique desires and wants of the customer, and the
ability to compete against local competition more
effectively.
 Think of product examples for standardisation and then
adaptation. Try to make a case for each form being
effective

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How is global strategy different from a multidomestic
strategy?

1. The implications of a distinction between a global strategy and a

multidomestic strategy are quite profound. In a multidomestic
strategy, a firm manages its international activities as a portfolio.
2. Each of the firm‟s subsidiaries around the world controls all the
important activities necessary to maximise their returns in their area
of operation independent of the activities of other subsidiaries in the
firm. The subsidiaries enjoy a large degree of autonomy and the
firm‟s activities in each of its national markets are determined by the
competitive conditions in that national market.
3. In contrast, a global strategy integrates the activities of a firm
worldwide to capture the linkages among countries and to treat the
entire world as a single, borderless market. This requires more than
the transferring of intangible assets between countries.

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How is a global marketing strategy distinct from
standardisation?

 Global marketing is not about standardising the marketing process

globally.
 Although every element of the marketing process — product design,
product and brand positioning, brand name, packaging, pricing,
advertising strategy and execution, promotion and distribution — may be a
candidate for standardisation, it is only part of a global marketing
strategy and it may or may not be used by a company, depending on the
mix of product-market conditions, stage of market development and the
inclinations of the firm‘s management.
 A marketing element can be global without being 100 per cent uniform in
content or coverage. A global marketing strategy is just one component of
a firm‘s global strategy.


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Discuss the conditions that have led to the development of global
markets

 According to the Professor Levitt and others who suggest that there is a
global market for goods, this phenomenon has resulted from new
communications technology, travel and other factors which have led to the
markets of the world being more aware of different products and
processes.
 As a result of this awareness, there are segments in each market who have
had similar experiences and thus have common needs.
 These common needs are described as a demand for high quality,
reasonably priced, standardized products.
 There is a strong feeling that within each country‘s market there is a
growing segment that has been exposed to ideas from around the world
and thus have had their tastes and perceived needs affected.
 There is a strong feeling that world markets are being driven toward a
converging commonality of taste and needs leading toward global
markets.

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How is the internet reshaping global marketing?

 The internet is one of the most useful inventions of the twentieth

century. In the global marketplace, the internet and its web-
related activities have brought a multitude of benefits to
consumers and producers.
 The internet‘s future prospects and fundamentals seem very
strong especially in the area of B2B e-commerce. There is still
a ‗digital divide‘ between developed and developing
countries regarding the availability of internet marketing and
its web-related activities.
 In the coming years, many companies will be using this medium
to reach far flung places on the earth. In short, the internet will
help connect buyers and suppliers in most efficient and
effective ways.

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“Think globally act locally.” Discuss your understanding of this
statement in relation to international marketing strategies. What
are the benefits and/or disadvantages of this approach?

 This question requires you to consider the

globalisation/standardisation–localisation/adaptation debate. The
statement suggests a hybrid approach — that international
corporations adopt a global mindset in the development of their
marketing strategies (think global) but that they recognise there may
be a need for adaptation of these strategies, or aspects of them,
when implemented in individual countries or regions (act local).
 Discuss the benefits of such an approach such as companies
capitalising on the advantages of a globalised approach (e.g.
economies of scale, consistent image) in aspects of their strategies
that can be globalised.
 By localising the aspects that require such adaptation, companies
can better serve local consumers and operate in the local
environments (e.g. legal, political, economic, social). Such an
approach has disadvantages (e.g. additional costs, increased co-
ordination). 1-100