Instructor
Manual
?
, CHAPTER 1
INTRODUCTION TO GLOBAL MARKETING
SUMMARY
A. Marketing is an organizational function and a set of processes for creating,
communicating, and delivering value to customers and for managing customer
relationships in ways that benefit the organization and its stakeholders. A company that
engages in global marketing focuses resources on global market opportunities and threats.
Successful global marketers such as Nestlé, Coca-Cola, and Honda use familiar
marketing mix elements—the four Ps—to create global marketing programs.
B. Marketing, R&D, manufacturing, and other activities compose a firm’s value chain. The
value equation (V = B/P) expresses the relationship between values and the marketing
mix.
C. Global companies also maintain strategic focus while pursuing competitive advantage.
The marketing mix, value chain, competitive advantage, and focus are universal in their
applicability, irrespective of whether a company does business only in its home country
or has a presence in many markets around the world. However, in a global industry,
companies that fail to pursue global opportunities risk being pushed aside by stronger
global competitors.
D. A firm’s global marketing strategy (GMS) can enhance its worldwide performance. The
GMS addresses several issues. First is the nature of the marketing program in terms of the
balance between a standardization (extension) approach to the marketing mix elements
and a localization (adaptation) approach that is responsive to country or regional
differences. Second is the concentration of marketing activities in a few countries or the
dispersal of such activities across many countries. Companies that engage in global
marketing can also engage in coordination of marketing activities. Finally, a firm’s GMS
addresses the issue of global market participation.
E. The importance of global marketing today can be seen in the company rankings compiled
by the Wall Street Journal, Fortune, Financial Times, and other publications. Whether
ranked by revenues or some other measure, most of the world’s major corporations are
active regionally or globally. The size of global markets for individual industries or
product categories helps explain why companies “go global”. Global markets for some
product categories represent hundreds of billions of dollars in annual sales; other markets
are much smaller. Whatever the size of the opportunity, successful industry competitors
1-1
, find that increasing revenues and profits means seeking markets outside the home
country.
F. Company management can be classified in terms of its orientation toward the world:
ethnocentric, polycentric, regiocentric, or geocentric. These terms reflect progressive
levels of development or evolution. An ethnocentric orientation characterizes domestic
and international companies; international companies pursue marketing opportunities
outside the home market by extending various elements of the marketing mix. A
polycentric worldview predominates at a multinational company whose country
managers operate autonomously and adapt the marketing mix. When management moves
to integrate and coordinate activities on a regional basis, the decision reflects a
regiocentric orientation. Managers at global and transnational companies are geocentric
in their orientation and pursue both extension and adaptation strategies in global markets.
G. The dynamic interplay of several driving and restraining forces shapes the importance of
global marketing. Driving forces include market needs and wants, technology,
transportation and communication improvements, product costs, quality, world economic
trends, recognition of opportunities to develop leverage by operating globally, and
innovation and entrepreneurship. Restraining forces include market differences,
management myopia, organizational culture, and national controls such as nontariff
barriers (NTBs).
OUTLINE OF THE BOOK
The book is divided into five parts.
Part 1: An overview of global marketing and the basic theory of global marketing
Part 2: The environment of global marketing
Part 3: Approaching global markets (global strategy)
Part 4: The global context of marketing mix decisions
Part 5: Issues of corporate strategy and leadership in the 21st century
LEARNING OBJECTIVES
1-1 Use the product/market growth matrix to explain the various ways a company can expand
globally.
1-2 Describe how companies in global industries pursue competitive advantage.
1-2
, 1-3 Compare and contrast a single-country marketing strategy with a global marketing strategy
(GMS).
1-4 Identify the companies at the top of the Global 500 rankings.
1-5 Explain the stages a company goes through as its management orientation evolves from
domestic and ethnocentric to global and geocentric.
1-6 Discuss the driving and restraining forces affecting global integration today.
DISCUSSION QUESTIONS
1-1. What are the basic goals of marketing? Are these goals relevant to global marketing?
Marketing activities represent an organization’s efforts to satisfy customer wants and
needs by offering products and services that create value. These goals are relevant in
virtually every part of the world; however, when an organization pursues market
opportunities outside of its home country (domestic) market, managers need an
understanding of additional conceptual tools and guidelines in order to do business in
these other countries—in other words, to create value and satisfy consumer needs and
wants.
1-2. What is meant by “global localization?” Is Coca-Cola a global product? Explain.
The phrase “global localization” represents an attempt to capture the spirit of the rallying
cry for organizations in the 21st century, namely, “think globally, act locally, and manage
regionally.” Most students will agree that Coca-Cola is a global product by virtue of the
fact that it is available in more than 195 countries in red cans bearing the distinctive
signature style. It must be noted, however, that customer service efforts are adapted to the
needs of particular markets (for example, vending machines in Japan). Thus, Coca-Cola
is both global and local.
1-3. A company’s global marketing strategy (GMS) is a crucial, competitive tool. Discuss some
of the global marketing strategies available to companies. Give examples of companies that use
the different strategies.
Strategies include global branding (Coca-Cola, Apple), product design (McDonald’s
restaurants and menu items), positioning (Harley-Davidson), packaging (Gillette Sensor),
distribution (Benetton), customer service (Caterpillar), and sourcing (Toyota, Gap).
1-3
Manual
?
, CHAPTER 1
INTRODUCTION TO GLOBAL MARKETING
SUMMARY
A. Marketing is an organizational function and a set of processes for creating,
communicating, and delivering value to customers and for managing customer
relationships in ways that benefit the organization and its stakeholders. A company that
engages in global marketing focuses resources on global market opportunities and threats.
Successful global marketers such as Nestlé, Coca-Cola, and Honda use familiar
marketing mix elements—the four Ps—to create global marketing programs.
B. Marketing, R&D, manufacturing, and other activities compose a firm’s value chain. The
value equation (V = B/P) expresses the relationship between values and the marketing
mix.
C. Global companies also maintain strategic focus while pursuing competitive advantage.
The marketing mix, value chain, competitive advantage, and focus are universal in their
applicability, irrespective of whether a company does business only in its home country
or has a presence in many markets around the world. However, in a global industry,
companies that fail to pursue global opportunities risk being pushed aside by stronger
global competitors.
D. A firm’s global marketing strategy (GMS) can enhance its worldwide performance. The
GMS addresses several issues. First is the nature of the marketing program in terms of the
balance between a standardization (extension) approach to the marketing mix elements
and a localization (adaptation) approach that is responsive to country or regional
differences. Second is the concentration of marketing activities in a few countries or the
dispersal of such activities across many countries. Companies that engage in global
marketing can also engage in coordination of marketing activities. Finally, a firm’s GMS
addresses the issue of global market participation.
E. The importance of global marketing today can be seen in the company rankings compiled
by the Wall Street Journal, Fortune, Financial Times, and other publications. Whether
ranked by revenues or some other measure, most of the world’s major corporations are
active regionally or globally. The size of global markets for individual industries or
product categories helps explain why companies “go global”. Global markets for some
product categories represent hundreds of billions of dollars in annual sales; other markets
are much smaller. Whatever the size of the opportunity, successful industry competitors
1-1
, find that increasing revenues and profits means seeking markets outside the home
country.
F. Company management can be classified in terms of its orientation toward the world:
ethnocentric, polycentric, regiocentric, or geocentric. These terms reflect progressive
levels of development or evolution. An ethnocentric orientation characterizes domestic
and international companies; international companies pursue marketing opportunities
outside the home market by extending various elements of the marketing mix. A
polycentric worldview predominates at a multinational company whose country
managers operate autonomously and adapt the marketing mix. When management moves
to integrate and coordinate activities on a regional basis, the decision reflects a
regiocentric orientation. Managers at global and transnational companies are geocentric
in their orientation and pursue both extension and adaptation strategies in global markets.
G. The dynamic interplay of several driving and restraining forces shapes the importance of
global marketing. Driving forces include market needs and wants, technology,
transportation and communication improvements, product costs, quality, world economic
trends, recognition of opportunities to develop leverage by operating globally, and
innovation and entrepreneurship. Restraining forces include market differences,
management myopia, organizational culture, and national controls such as nontariff
barriers (NTBs).
OUTLINE OF THE BOOK
The book is divided into five parts.
Part 1: An overview of global marketing and the basic theory of global marketing
Part 2: The environment of global marketing
Part 3: Approaching global markets (global strategy)
Part 4: The global context of marketing mix decisions
Part 5: Issues of corporate strategy and leadership in the 21st century
LEARNING OBJECTIVES
1-1 Use the product/market growth matrix to explain the various ways a company can expand
globally.
1-2 Describe how companies in global industries pursue competitive advantage.
1-2
, 1-3 Compare and contrast a single-country marketing strategy with a global marketing strategy
(GMS).
1-4 Identify the companies at the top of the Global 500 rankings.
1-5 Explain the stages a company goes through as its management orientation evolves from
domestic and ethnocentric to global and geocentric.
1-6 Discuss the driving and restraining forces affecting global integration today.
DISCUSSION QUESTIONS
1-1. What are the basic goals of marketing? Are these goals relevant to global marketing?
Marketing activities represent an organization’s efforts to satisfy customer wants and
needs by offering products and services that create value. These goals are relevant in
virtually every part of the world; however, when an organization pursues market
opportunities outside of its home country (domestic) market, managers need an
understanding of additional conceptual tools and guidelines in order to do business in
these other countries—in other words, to create value and satisfy consumer needs and
wants.
1-2. What is meant by “global localization?” Is Coca-Cola a global product? Explain.
The phrase “global localization” represents an attempt to capture the spirit of the rallying
cry for organizations in the 21st century, namely, “think globally, act locally, and manage
regionally.” Most students will agree that Coca-Cola is a global product by virtue of the
fact that it is available in more than 195 countries in red cans bearing the distinctive
signature style. It must be noted, however, that customer service efforts are adapted to the
needs of particular markets (for example, vending machines in Japan). Thus, Coca-Cola
is both global and local.
1-3. A company’s global marketing strategy (GMS) is a crucial, competitive tool. Discuss some
of the global marketing strategies available to companies. Give examples of companies that use
the different strategies.
Strategies include global branding (Coca-Cola, Apple), product design (McDonald’s
restaurants and menu items), positioning (Harley-Davidson), packaging (Gillette Sensor),
distribution (Benetton), customer service (Caterpillar), and sourcing (Toyota, Gap).
1-3
