Chapter 1 Global marketing refers to marketing activities that take place across national borders and outside of the firm’s home country Involvement in global marketing does not mean that a firm must sell its products in every country or region of the world Coordination and integration of marketing strategy with an emphasis on standardization are central tenet of GM Evolution of the concept
Domestic marketing – International sales are incidental to marketing strategy Multidomestic marketing – unique strategy for each country market Global marketing – Focus now on standardization and global segments Local marketing – Standardization but with a focus on the needs of local customers “Glocal Marketing” reflects the need for balance between global marketing, with a focus on standardization, and local marketing, with its focus on adaptation to country differences Globalization
Globalization refers to the increased integration of the world’s economies. Ongoing global technological innovation in marketing has direct effect on the efficiency and effectiveness of all business activities. Globalization reflects a business orientation based on the belief that the world is becoming more homogeneous and that distinctions between national markets are not only fading but, for some products, will eventually disappear. Forms of globalization: Globalization of markets vs. Globalization of production Drivers of Globalization Market factors – convergence of markets, diffusion of telecommunication & internet. Growing # of retailers are now showing great flexibility in their strategies for entering new geographic markets * Cost factors – avoiding cost inefficiencies and duplication of effort are two of the most powerful globalization drivers. Economies of scale refers to the reduction in per unit cost of production. Economies of scope refers to reduced cost per unit as the firm spreads its total costs over a large number of brands, product lines, or target markets. Environmental factors – government barriers have fallen dramatically in the last several years and this has further facilitated the globalization of markets and the activities of marketers within them. Rapid technological evolution is contributing to the process. * Competitive factors – to remain competitive, the marketer may have to be the first to do something or to be able to match or pre-empt competitor’s moves. Without a global network, a marketer may run the risk of seeing carefully researched ideas picked off by global players.
Market presence may be necessary to execute global strategies and to prevent others from having undue advantage in unchallenged markets. The anti-globalization movement The globalization trend has drawn its fair share of critics over the years. Anti-globalists have expressed concerns about the impact of the trend on the poor, the environment, and on national sovereignty. Many anti-globalization protests have turned violent in the past Opportunities and challenges in global marketing
The growth of global business activities offers increased opportunities. International activities can be crucial to a firm’s survival and growth. By transferring knowledge around the globe, an international firm can build and strengthen its competitive position. What is needed is an awareness of global developments, an understanding of their meaning, and a development of capabilities to adjust to change. Willing or unwilling, firms are becoming participants in global business affairs.