Global marketing
Table of contents
Chapter 1. Global marketing in the firm ..................................................................................... 2
Chapter 2. Initiation of internationalization ................................................................................ 7
Chapter 3. Internationalization theories ..................................................................................... 9
Chapter 4. Development of the firm’s international competitiveness ...................................... 12
Chapter 6. The political and economic environment ............................................................... 19
Chapter 8. The international market selection process ........................................................... 24
Part III. Market entry strategies ............................................................................................... 28
Chapter 9. Some approaches to the choice of entry mode ..................................................... 29
Chapter 10. Export modes ....................................................................................................... 31
Chapter 11. Intermediate entry modes .................................................................................... 34
Chapter 12. Hierarchical modes .............................................................................................. 39
Chapter 13. International sourcing decisions and the role of the supplier .............................. 42
Part IV. Designing the global marketing programme............................................................... 43
Chapter 14. Product decisions ................................................................................................. 44
Chapter 15. Pricing decisions and terms of doing business ................................................... 49
Chapter 16. Distribution decisions ........................................................................................... 54
Chapter 17. Communication decisions (promotion strategies) ............................................... 59
Chapter 19. Organization and control of the global marketing programme ............................ 62
1
,Global marketing
Chapter 1. Global marketing in the firm
Going into an export adventure or not?
It is often the case that a firm going into export adventures should have stayed in the home
market because it did not have the necessary competences to start exporting.
The five-stage decision model in global marketing
Globalization
- The world is a level playing field all players and competitors have an equal
opportunity (because the world is getting smaller, we have techniques to
communicate and we can travel easily).
- Home matters, but so do countries abroad when distances increase, cross-border
trade tends to decrease.
Global strategy should not be based on elimination of differences and distances, but on
understanding them.
Developing the global marketing plan
- The purpose of a marketing plan is to create sustainable competitive advantages.
Not all types of companies follow the same process.
- LSEs: more than 250 people
- SMEs: small is less than 50 people, medium between 50 and 250 people.
The systemized process of SMEs: figure 1.2 (heel groot model in Global Marketing)
Formation of strategy
- As the environment changes, continual adjustments will be needed.
2
,Global marketing
The less systemized process of SMEs
- The entrepreneurial decision-making model
SMEs
- Organization
o Compared to LSEs the employees are closer to the entrepreneur and these
employees must conform to the entrepreneur’s personality and style if they
are to remain employees.
- Risk-raking
o Normally the LSEs will be risk-averse because of their use of a decision
making model that emphasizes small incremental steps wth a focus on long-
term opportunities
o On the other hand, there are some circumstances in which an SME will be
risk-averse. This often occurs when an enterprise has been damaged by
previous risk-taking and the entrepreneur is reluctant to take any kind of risk
until confidence returns.
- Flexibility
o Because of the shorter communication lines between the enterprise and its
customers, SMEs can react in a quicker and more flexible way to customer
enquiries.
Internationalize or not?
- The nine strategic windows
It is not all strategy, a lot depends on the firm’s management’s assumptions or beliefs.
3
,Global marketing
The world view of a firm according to the EPRG framework.
1. Ethnocentric: the home country is superior and the needs of the home country are
most relevant.
2. Polycentric: each country is unique and should therefore be targeted in a different
way
3. Region centric: the world consists of regions.
4. Geocentric: the world is getting smaller and smaller.
- Understand what kind of assumptions manager make based on their beliefs and
experiences
- Use it as a tool to analyse how a certain company thinks and works
Think global, act local
- The globalization framework
- The principle of transferring knowledge and learning across borders
Internationalizing the value chain:
4
, Global marketing
The global integration/market responsiveness grid: the future orientation of LSEs and SMEs
Forces for global coordination / integration
- Removal of trade barriers
- Global accounts / customers
- Relationship management / network organization
- Standardized worldwide technology
- Worldwide markets
- ‘Global village’
- Worldwide communication
- Global cost drivers
Forces for market responsiveness
- Cultural differences
- Regionalism / protectionism
- Deglobalization trend
Value chain by Porter:
The value chain provides a systemic means of displaying and categorizing activities. The
activities performed by a firm in any industry can be grouped into the nine categories shown.
In understanding the competitive advantage of an organization, the strategic importance of
the following types of linkage should be analysed in order to assess how they contribute to
cost reduction or value added. There are two kinds of linkage:
- Internal linkages between activities within the same value chain, but perhaps on
different planning levels within the firm.
o The main value chain activities are connected to all 3 strategic levels in the
firm: strategic level, managerial level, operational level.
- External linkages between different value chains ‘owned’ by different actors in the
total value system.
5
Table of contents
Chapter 1. Global marketing in the firm ..................................................................................... 2
Chapter 2. Initiation of internationalization ................................................................................ 7
Chapter 3. Internationalization theories ..................................................................................... 9
Chapter 4. Development of the firm’s international competitiveness ...................................... 12
Chapter 6. The political and economic environment ............................................................... 19
Chapter 8. The international market selection process ........................................................... 24
Part III. Market entry strategies ............................................................................................... 28
Chapter 9. Some approaches to the choice of entry mode ..................................................... 29
Chapter 10. Export modes ....................................................................................................... 31
Chapter 11. Intermediate entry modes .................................................................................... 34
Chapter 12. Hierarchical modes .............................................................................................. 39
Chapter 13. International sourcing decisions and the role of the supplier .............................. 42
Part IV. Designing the global marketing programme............................................................... 43
Chapter 14. Product decisions ................................................................................................. 44
Chapter 15. Pricing decisions and terms of doing business ................................................... 49
Chapter 16. Distribution decisions ........................................................................................... 54
Chapter 17. Communication decisions (promotion strategies) ............................................... 59
Chapter 19. Organization and control of the global marketing programme ............................ 62
1
,Global marketing
Chapter 1. Global marketing in the firm
Going into an export adventure or not?
It is often the case that a firm going into export adventures should have stayed in the home
market because it did not have the necessary competences to start exporting.
The five-stage decision model in global marketing
Globalization
- The world is a level playing field all players and competitors have an equal
opportunity (because the world is getting smaller, we have techniques to
communicate and we can travel easily).
- Home matters, but so do countries abroad when distances increase, cross-border
trade tends to decrease.
Global strategy should not be based on elimination of differences and distances, but on
understanding them.
Developing the global marketing plan
- The purpose of a marketing plan is to create sustainable competitive advantages.
Not all types of companies follow the same process.
- LSEs: more than 250 people
- SMEs: small is less than 50 people, medium between 50 and 250 people.
The systemized process of SMEs: figure 1.2 (heel groot model in Global Marketing)
Formation of strategy
- As the environment changes, continual adjustments will be needed.
2
,Global marketing
The less systemized process of SMEs
- The entrepreneurial decision-making model
SMEs
- Organization
o Compared to LSEs the employees are closer to the entrepreneur and these
employees must conform to the entrepreneur’s personality and style if they
are to remain employees.
- Risk-raking
o Normally the LSEs will be risk-averse because of their use of a decision
making model that emphasizes small incremental steps wth a focus on long-
term opportunities
o On the other hand, there are some circumstances in which an SME will be
risk-averse. This often occurs when an enterprise has been damaged by
previous risk-taking and the entrepreneur is reluctant to take any kind of risk
until confidence returns.
- Flexibility
o Because of the shorter communication lines between the enterprise and its
customers, SMEs can react in a quicker and more flexible way to customer
enquiries.
Internationalize or not?
- The nine strategic windows
It is not all strategy, a lot depends on the firm’s management’s assumptions or beliefs.
3
,Global marketing
The world view of a firm according to the EPRG framework.
1. Ethnocentric: the home country is superior and the needs of the home country are
most relevant.
2. Polycentric: each country is unique and should therefore be targeted in a different
way
3. Region centric: the world consists of regions.
4. Geocentric: the world is getting smaller and smaller.
- Understand what kind of assumptions manager make based on their beliefs and
experiences
- Use it as a tool to analyse how a certain company thinks and works
Think global, act local
- The globalization framework
- The principle of transferring knowledge and learning across borders
Internationalizing the value chain:
4
, Global marketing
The global integration/market responsiveness grid: the future orientation of LSEs and SMEs
Forces for global coordination / integration
- Removal of trade barriers
- Global accounts / customers
- Relationship management / network organization
- Standardized worldwide technology
- Worldwide markets
- ‘Global village’
- Worldwide communication
- Global cost drivers
Forces for market responsiveness
- Cultural differences
- Regionalism / protectionism
- Deglobalization trend
Value chain by Porter:
The value chain provides a systemic means of displaying and categorizing activities. The
activities performed by a firm in any industry can be grouped into the nine categories shown.
In understanding the competitive advantage of an organization, the strategic importance of
the following types of linkage should be analysed in order to assess how they contribute to
cost reduction or value added. There are two kinds of linkage:
- Internal linkages between activities within the same value chain, but perhaps on
different planning levels within the firm.
o The main value chain activities are connected to all 3 strategic levels in the
firm: strategic level, managerial level, operational level.
- External linkages between different value chains ‘owned’ by different actors in the
total value system.
5
