Session: Global Marketing (BMEL)
Global Competitiveness
Global Marketing Mix
Marketing is more important than ever
Global competition
• The idea is that competition is on a much greater scale
• It means services and products provided by businesses compete against each other,
on an international level
• It is important because you have enhanced communications, much improved
shipping channels (shipping is still cheapest way to send goods), reduction of trade
barriers (EU, NAFTA) and countries have fewer barriers. Membership of World Trade
organisations.
• Centralised finance authorities (World Bank, IMF) means competition not limited to
national aspect, but very much international.
• Most countries in the world participate in the international competition.
Why is global competition important?
• Allows businesses to expand their market share
• Allows them to reduce cost - produce at cheaper unit cost
• Enables businesses to become more competitive
• More importantly: they can access new markets and customers. E.g. Virgin/Richard
Branson can produce goods in markets that would not be possible and gain access to
new markets. Also applies to MS, Apple, Amazon.
• Global business important for multi-national companies.
Impact of globalisation
Main ideas of this:
Positives:
• Increased trade, greater choice of goods
• More competition, in theory lower prices (but not always)
• Economies of scale, more efficient production. First noticed by Henry Ford, producing
Model T in 1908 - mass producing cars drove down operation costs
• Increased capital = more money flowing around. Also increasing labour mobility
which allows costs to go down and access skilled labour more easily
Page 1 of 7
, Negatives:
• Easy for multinationals to avoid paying tax
• Structural unemployment - leaving people behind (e.g. GB in 1970s/80s
industrialisation led to unemployment when it went to a more services-based
economy
• They can assume monopoly power or virtual monopoly power. They have a lot of
influence.
Understanding the market place
All must understand how the market place operates and how it can function and
change over time.
Important thing is that anybody involved in competition needs to be aware of :
- what customer needs or wants or demands
- (most important in marketing/competition: see what the business is offering and
what the competition offers)
- Keeping customer happy so they come back; advertising and marketing is
needed for this
- Exchanges and relationships between business and customers; tey want to be
treated properly
- Markets and how they work; basic economics: demand and supply. If nobody
wants to buy your product you are wasting your time. Need to be able to offer
something customer needs, wants or demands. If business fails to do that then
no customers.
Understanding the customer
NEEDS, WANTS, DEMANDS all part of Business, Management, Economics and Law
subject areas.
NEEDS: These are states of deprivation.
Physical: food, clothing, warmth.
Social: belonging and affection.
Individual: knowledge and self-expression
WANTS: Shaped by culture and personality
DEMANDS: Backed by buying power.
NOTE: This is where marketing is interesting.
Page 2 of 7
Global Competitiveness
Global Marketing Mix
Marketing is more important than ever
Global competition
• The idea is that competition is on a much greater scale
• It means services and products provided by businesses compete against each other,
on an international level
• It is important because you have enhanced communications, much improved
shipping channels (shipping is still cheapest way to send goods), reduction of trade
barriers (EU, NAFTA) and countries have fewer barriers. Membership of World Trade
organisations.
• Centralised finance authorities (World Bank, IMF) means competition not limited to
national aspect, but very much international.
• Most countries in the world participate in the international competition.
Why is global competition important?
• Allows businesses to expand their market share
• Allows them to reduce cost - produce at cheaper unit cost
• Enables businesses to become more competitive
• More importantly: they can access new markets and customers. E.g. Virgin/Richard
Branson can produce goods in markets that would not be possible and gain access to
new markets. Also applies to MS, Apple, Amazon.
• Global business important for multi-national companies.
Impact of globalisation
Main ideas of this:
Positives:
• Increased trade, greater choice of goods
• More competition, in theory lower prices (but not always)
• Economies of scale, more efficient production. First noticed by Henry Ford, producing
Model T in 1908 - mass producing cars drove down operation costs
• Increased capital = more money flowing around. Also increasing labour mobility
which allows costs to go down and access skilled labour more easily
Page 1 of 7
, Negatives:
• Easy for multinationals to avoid paying tax
• Structural unemployment - leaving people behind (e.g. GB in 1970s/80s
industrialisation led to unemployment when it went to a more services-based
economy
• They can assume monopoly power or virtual monopoly power. They have a lot of
influence.
Understanding the market place
All must understand how the market place operates and how it can function and
change over time.
Important thing is that anybody involved in competition needs to be aware of :
- what customer needs or wants or demands
- (most important in marketing/competition: see what the business is offering and
what the competition offers)
- Keeping customer happy so they come back; advertising and marketing is
needed for this
- Exchanges and relationships between business and customers; tey want to be
treated properly
- Markets and how they work; basic economics: demand and supply. If nobody
wants to buy your product you are wasting your time. Need to be able to offer
something customer needs, wants or demands. If business fails to do that then
no customers.
Understanding the customer
NEEDS, WANTS, DEMANDS all part of Business, Management, Economics and Law
subject areas.
NEEDS: These are states of deprivation.
Physical: food, clothing, warmth.
Social: belonging and affection.
Individual: knowledge and self-expression
WANTS: Shaped by culture and personality
DEMANDS: Backed by buying power.
NOTE: This is where marketing is interesting.
Page 2 of 7
