Concept and scope of international and global marketing, Stages of International Marketing Involvement, Importance of international and global marketing, opportunities and challenges of international and global markets, participants in international and global marketing, Historical and Geographical perspective in Global business, Dynamics of Global Population Trends

1. DBBA 501C
Dr. Chhavi Jain

2. Global Marketing

3. DBBA 502C

4. Unit 1
• Global Marketing: Concept and scope of
international and global marketing, Stages of
International Marketing Involvement,
Importance of international and global
marketing, opportunities and challenges of
international and global markets, participants
in international and global marketing,
Historical and Geographical perspective in
Global business, Dynamics of Global
Population Trends

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• https://www.youtube.com/watch?v=nMITXMr
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7. Concept of international and global
marketing
Domestic
Marketing
Export
Marketing
International
Marketing
Multinational
Marketing
Multiregional
Marketing
Global
Marketing

8. • Domestic Marketing
– Single Market,
– Domestic Market,
– Only one set of competitive, economic and
market issues
– Deals only with one set of customers or
several segments in one market

9. • Export Marketing
– When firm markets its products outside its main
(domestic) base of operation
– Products are physically shipped from one market or
country to another
– Domestic operations remain of primary importance
– Major challenge-
• Selection of appropriate market or country through
marketing research
• Determination of appropriate product modification to
meet demand of export market
• Development of export channels through which the
company can market its products abroad

10. • International Marketing
– Company goes beyond exporting and
becomes much more directly involved in the
local marketing environment within a given
country or market.
– It has its own sales subsidiaries and will
participate in and develop entire marketing
strategies for foreign markets.
– Understanding different cultural, economic,
political environments becomes necessary for
success

11. • Multinational Marketing
• They are characterized by extensive development
of assets abroad and operate in a number of
foreign countries or markets as if they were local
companies.
• The firm competes with many strategies, each one
tailored to a particular local market.
• Major challenge- find the best possible adaptation
of a complete marketing strategy to an individual
country.
• This leads to a maximum amount of localisation
and to a large variety of marketing strategies.
• Thus duplication of some key resources.
• Benefit- ability to completely tailor a marketing
strategy to the local requirements.

12. • Multiregional Marketing
– Due to diseconomies of individualized
marketing strategies, each tailored to a specific
local environment, companies have begun to
emphasize strategies for larger regions.
– These regional strategies encompass a number
of markets- NAFTA- US Canada Mexico
– Companies considering regional strategies look
to tie together operations in one region, rather
than around the globe, the aim being
increased efficiency.

13. • Global Marketing
– Opportunities for economies of scale and
enhanced competitiveness are greater if they
can manage to integrate and create marketing
strategies on a global scale.
– Global marketing strategy involves the creation
of a single strategy for a product, service or
company, for the entire global market, that
encompasses many markets or companies
simultaneously and is aimed at leveraging the
commonalities across many markets.
– Challenge- design marketing strategies that
work well/ fits across many markets.

14. • Global Marketing
– Markets appear increasingly similar in
environmental and customer requirements.
– Large investments in technology, logistics or
other key functions force the companies to
expand their market coverage.

15. • Global Marketers
– They include some exporting in their strategies
– Includes international marketing because
designing one global strategy requires a sound
understanding of the cultural, economic and
political environment of many countries.

17. Scope of International and Global Marketing
• Exporting
• Service industries- advertising firms, banks,
investment bankers, public accounting firms,
consulting companies, hotel chains, airlines,
etc.
• Product industries
• Entertainment industry

18. International Business
Global Marketing
International Marketing
International Trade

19. Stages of International Marketing Involvement
• Factors which favour faster internationalisation:
– Companies with either high technology and/or
marketing based resources appear to be better
equipped to internationalize, than more traditional
manufacturing kinds of companies
– Smaller home markets and larger production
capacities
– Firms with key managers well networked
internationally

20. • In general, one of five stages can describe the
international marketing involvement of a
company. Although the stages are linear, but a
firm may begin its involvement at any stage or be
in more than one stage simultaneously.
• Because of a short product life cycle and a thin
but widespread market for many technology
products, many high-tech companies, large and
small, see the entire world, including their home
market, as a single market and strive to reach all
possible customers as rapidly as possible.

21. 1. No Direct Foreign Marketing
2. Infrequent Foreign Marketing
3. Regular Foreign Marketing
4. International Marketing
5. Global Marketing

22. No Direct Foreign Marketing
• Company does not actively cultivate customers outside
national boundaries
• Company’s products may reach foreign markets
• Sales may be made to trading companies as well as
foreign customers who directly contact the firm
• Products may reach foreign markets via domestic
wholesalers or distributors who sell abroad without the
explicit encouragement or even knowledge of the
producer.
• Buyer can approach the firm through internet too.

23. Infrequent Foreign Marketing
• Temporary surpluses caused by variations in
production levels or demand may result in
infrequent marketing overseas.
• The surpluses are characterized by their
temporary nature with little or no intention of
maintaining continuous market representation.
• When domestic demand increases and absorbs
surpluses, foreign sales activity is reduced or even
withdrawn.

24. Other approach
1. Regular foreign marketing
2. Multidomestic or international marketing
3. Global marketing

25. Regular Foreign Marketing
• The firm has permanent productive capacity
devoted to the production of goods and
services to be marketed in foreign markets.
• Firm may employ foreign or domestic
overseas intermediaries or it may have its own
sales force or sales subsidiaries in important
foreign markets.

26. International Marketing
• They seek markets all over the world and sell
products that are a result of planned
production for markets in various counties.
• it entails not only the marketing but also the
production of goods outside the home
market.

27. Global Marketing
• The most profound change is the orientation of the
company toward markets and associated planning
activities.
• Companies treat the world, including their home market, as
one market.
• Market segmentation decisions are no longer focused on
national borders.
• Instead, market segments are defined by income levels,
usage patterns, or other factors that frequently span
countries and regions.
• Entire operations- organisational structure, sources of
finance, production, marketing, etc. – began to take on
global perspective.

28. Importance of International and Global Marketing
• Reduction of cost efficiencies and duplication
of efforts between national and regional
subsidiaries
• Opportunities to transfer products, brands,
ideas to other subsidiaries
• Appearance of global clients
• New insights into consumer behaviour
• Alternative distribution strategies

29. Opportunities of International and
Global markets
• Large customer bases
• Larger volume of sales and exchange
• Larger growth rates in GDP
• Empowered individuals and political systems
• Additional resources and capital
• Lower labour cost
• Realization of economies of scale by mass
producing goods
• Cheaper costs, strong margins large revenues

30. Challenges of International and Global markets
 International product
restrictions and regulatory
requirements and ethical
business practices
 Organisational structure
 Technology
 Infrastructure
 Pricing- shipping, taxes,
currency value,
surcharges, Customs,
duties
 Package loss and damage
 Political environment
 Reputation management
 Delays and mail
disruptions
 Language barriers
 Intellectual property
infringement and copy
cats
 Consumer fraud and
Returns

31. Major Participants in International and Global
Marketing
• Several types of companies are major participants in
international and global marketing. Among the leaders
are MNCs, exporters, importers and service companies.
• These firms may be engaged in:
– manufacturing consumer or industrial goods,
– in trading or
– in the performance of a full range of services.
• Service companies include:
– Commercial banks,
– Investment bankers,
– Brokers,
– Airlines and hotel companies

32. Driving
Forces
Technology
Culture
Market Needs
Cost
Free Markets
Economic Integration
Peace
Management Vision
Strategic Intent
Global Strategy and Action
Restraining
Forces
Culture
Market Differences
Costs
National Controls
Nationalism
War
Management Myopia
Organisation History
Domestic Focus

34. Globalisation
Drivers
Market
Drivers
Competitive
Drivers
Cost Drivers
Technology
Drivers
Government
Drivers

35. Market Drivers
– Common Customer Needs
– Global Customers
– Global Channels
– Transferable Marketing
• https://www.mccann.com/work/pro
tect-like-a-mother

36. Competitive Drivers
American
Mobile Phone
Market during
late 90s
Swedish
Ericsson
Finnish
Nokia

37. Competitive Drivers
Honda’s Acura
Toyota’s
Lexus
Nissan’s
Infiniti
Luxury
Cars
The Limited
The
GAP
Benetton

38. Cost Drivers
• Economies of scale- unit cost reduction
• Economies of scope- gains fro spreading activities
• Global sourcing advantages- cost savings via
supply from a low wage country, improved
logistics and distribution systems
• Growth of inexpensive global
telecommunications
• Federal Express – computerized tracking system

39. Technology Drivers
• Internet –
– online presence,
– receive orders from abroad,
– get paid via credit card,
– ship products instantly

40. Government Drivers
• Favourable trade policies
• Acceptance of foreign investment,
• Compatible technical standards
• Common marketing regulations

41. Three Hats
• To get a better grip on the complex job faced
by the global marketing manager, it is useful
to distinguish between three roles he or she
may assume as a company goes global and
becomes more extensively involved in
international markets.
1. The Foreign Entry Role
2. The Local Marketing Role
3. The Global Management Role

42. The Foreign Entry Role
The manager has to learn:
• the intricacies of doing business overseas,
• of finding the right middlemen,
• of quantitatively or qualitatively evaluating
foreign markets,
• negotiating for joint marketing ventures,
• helping to set up a sales subsidiary, and learning
to understand foreign customers’ product and
service requirements.

43. The Local Marketing Role
• In many countries like Japan, the company can’t be
satisfied using independent middlemen for the
marketing effort. Especially in the leading markets, the
company needs to be closer to the ultimate consumer.
• Establishing a sales subsidiary and sending some
expatriates to work there is common. In this way the
company can ensure that the potential of the market is
exploited, that the company capabilities are properly
leveraged, that customer trends are monitored and
that moves by the competitor are anticipated.
• Day-to-day management is left for natives and
expatriates play a more strategic role.

44. The Global Management Role
• It is the truly global part of the job. Using the learning and
experience gained from foreign entry and local marketing, the
marketer now works on deriving global benefits from the firm’s
presence in various markets.
• The idea is to capture the scale advantages and other synergies to
be created by more coordinated marketing.
• It involves questions of global segmentation and positioning,
standardization of products and services, uniform pricing around
the globe, prototype advertising with a similar theme across
countries, global brand names and international logistics.
• The basic notion is to rationalize the global marketing operations in
order to capture spillovers, scale advantages and lower costs and to
coordinate the marketing campaigns across countries for maximum
effect.

45. Historical and Geographical Perspective in
Global Business
• In order to understand fully a society’s actions
and its points of view , one must have an
appreciation of historical events and the
geographical uniqueness to which a culture
has had to adapt.
• To interpret behaviour and attitudes in a
particular culture or country, a marketer must
have some idea of a country’s history and
geography.

46. Historical perspective in Global Business
• History helps define:
– A nation’s mission
– How it perceives its neighbours
– How it sees its place in the world
– How it sees itself
• Insights into the history of a country are
important for understanding attitudes about the
role of government and business, the relations
between managers and managed, the sources of
management authority and attitudes toward
foreign corporations.

47. Historical perspective in Global Business
• To understand, explain and appreciate a people’s
image of itself and the attitudes and unconscious
fears that are reflected in its view of foreign
cultures , it is necessary to study the culture as it
is now as well as to understand the culture as it
was- that is, a country’s history.
• History also influences business decisions such as
foreign direct investments, market entry and
even personal choices.

48. • Many people throughout the history have
gained pre-eminence in the world through
their trade activities. Among them were
Itruscans, Phoenicians, Egyptians, Chinese,
Spaniards, Portugese, etc.

49. Trade with Rome

50. • Romans placed primary emphasis on
encouraging international business activities.
The principal approaches used to implement
this emphasis were the Pax Romana or Roman
Peace and the common coinage.
• Rome developed a systematic law, central
market locations through the finding of cities
and an excellent communication system.

51. Trade with Europe

52. • Europe imported rice, oranges, dyes, cotton
and silk. It exported timber, arms and woollen
clothing in exchange for these luxury goods.

53. Trade with China

54. UK China

55. China
Tea
Silk
Sugar
Mother-of-pearl
Paper
Camphor
Cassia
Copper and Alum
Various oils
Bamboo
Porcelain
OPIUM
UK
Cotton and Woollen Textiles
Iron
Tin
Lead
Diamonds
Watches
Clocks

56. • First Opium War and the Treaty of Nanjing
(1839-1842)
• Second Opium War (1857- 1860)
• Taiping Rebellion (1851-1864)

57. Trade with Japan

58. • Loyalty to family, to country, to company and
to social groups and the strong drive to
cooperate, to work together for a common
cause, permeate many facets of Japanese
behaviour.
• Historically, loyalty and service, a sense of
responsibility, and respect for discipline,
training and artistry were stressed to maintain
stability and order.

59. Geographical perspective in Global Business
• Altitude, humidity and temperature extremes
are climatic features that affect the uses and
functions of product and equipment.
• Products that perform well in temperate
zones may deteriorate rapidly or require
special cooling or lubrication to function
adequately in tropical zones.

61. Taiwan to Middle East

62. • Geography answers questions related to the
location of different kinds of economic activity
and the transactions that flow across national
boundaries.
• It provides insight into the natural and human
factors that influence patterns of production and
consumption in different parts of the world.
• More of emphasis is placed on location, place,
interaction, movement and region.

63. 1. Location
Marco Polo
Christopher
Columbus
Vasco Da Gama
James Cook
Leading manufacturer of disk
drives and other electronic
components....light weight,
heavy value goods

64. 2. Place
• Natural/ Physical Features- it includes natural
resources and influence the type of economic
activities in which people engage.
• Human Features-

65. Place
• Natural/ Physical Features-
– Geological Characterisitcs- Gold and Diamond South
Africa, Rich Deposits of Iron ore Amazon Basin in
Brazil, Copper Chile, Petroleum Saudi Arabia
– Terrain- Silk Route, Mountain Passes for collecting
taxes
– Hydrology- Bangladesh frequent flooding
– Climate-
– Soil more commercial crops are grown in US while
the Amazon basin of Brazil has less fertile soil thus
deals in less commercial crops.

66. Place
• Human Features-
– Population skills and qualifications.
• Swiss have emphasized high levels of education and
training in order to maintain a labour force that
manufactures sophisticated products for export all
around the world.
• Japan, Korea, Taiwan have increased the productivity of
their workers to become major industrial exporters.
– Rural/Urban

67. 3. Interaction
• Managers seek to take advantage of
opportunities present in different places and not
to view each place separately.
• The way a place functions depends on the
presence and form of certain characteristics as
well as the interactions among them.
– Natural resources such as coal, iron ore and limestone
enabled the iron and steel industry to develop in
the Ruhr valley of Germany. The chemical and textile
industries also grew due to good transport links and
available workforce. Canals and rivers such as the
Rhine were used for transport and power.

69. 4. Movement
• International marketing exists because
movement permits the transportation of
people and goods and communication of
information and ideas among different places.
– New York became the largest city in NORTH
AMERCIA because its harbour provided sheltered
anchorage for ships crossing the Atlantic and the
Hudson River provided access leading into the
interior of the continent.

70. 5. Region
• A region is a set of places that share certain characteristics. Many
regions are defined by characteristics that all of the places in the
group have in common.
• When economic characteristics are used, the delimited regions
include places with similar kind of economic activity.
• Agricultural regions include areas where certain farm products
dominate.
• Regions can also be defined by patterns of movement.
Transportation or communication linkages among places may draw
them together into configurations that differentiate them from
other locales.
• Economic aspects of movement may help define functional regions
by establishing areas where certain types of economic activity are
more profitable than others.

71. Dynamics of Global Population Trends
• Current population, rural/ urban population
shifts, rated of growth, age levels and
population control help determine today’s
demand for various categories of goods.
• Changes in the composition and distribution
of population among the world’s countries will
affect future demand.

72. • Controlling population growth
– Economics, self esteem, religion, politics and
education play critical roles in attitudes about
family size.
– The prerequisites to population control are
adequate incomes, higher literacy levels,
education for women, universal access to
healthcare, family planning, improved nutrition, a
change in basic cultural beliefs, regarding the
importance of large families.

73. • Rural / Urban Migration
– Migration from rural to urban areas, which can consist
of domestic or international moves, is largely a result
of a desire for greater access to sources of education,
healthcare and improved job opportunities.
– Although migrants experience some relative
improvement in their living standards, intense urban
growth without investment in services eventually
leads to serious problems.
– Slums populated with unskilled workers living hand to
mouth put excessive pressure on sanitation systems,
water supplies and social services.

74. • Population Decline and Aging
– While the developing world faces a rapidly
growing population, the industrialized world’s
population is in decline and rapidly aging.
– The problems caused by an increasing percentage
of elderly people must be supported by a
declining number of skilled workers.

75. • Worker shortage and immigration
– The free flow of immigration will help ameliorate
the dual problems of explosive population in less
developed countries and worker shortage in
industrialised regions.

76. • The trends of increasing population in the developing
world, with substantial shifts from rural to urban areas,
declining birth rates in the industrialised world, and
global population aging, will have profound effects on
the state of world business and world economic
conditions.
• Without successful adjustments to these trends, many
countries will experience slower economic growth,
serious financial problems for senior retirement
programs and further deterioration of public and social
services, leading to possible social unrest.