What is Global Marketing?
The commitment to coordinate marketing activities across international boundaries to find and
satisfy global customer needs better than the competition.
● Identify similarities and differences across markets
● Exploit the knowledge of the home organisation
● Transfer knowledge and best practice
Internationalisation
Happens when a firm expands various elements of operations to international markets.
The firm's size can dictate the speed and stages undertaken at any time.
Reasons for internationalisation:
● Economies of scale
● Find new customers
● Strategically seeking assets
● Gain access to resources
Global marketing decision-making process:
1. The decision whether to internationalise
2. Deciding which markets to enter
3. Market entry strategies
4. Designing the global marketing programme
5. Implementing and coordinating the programme
PESTLE Factors influencing international marketing -
Political: operational restrictions, discriminatory restrictions, physical actions
Economic: developed, emerging & less developed economies, currency movement
Sustainability: governance, community, workforce, environment, marketplace
Technological: satellite communication, internet, WWW, Wifi
Legel: International, regional & home domestic Laws
Socio/cultural: language, religion, aesthetics, values and attributes, material culture
Key differences between international and domestic marketing:
● Culture
● Markets
● Data e.g. access prohibited, doesn't exist
● Politics
● Governments
● Economies - stability, growth of the economy
● Finance
● Stakeholders
● Businesses you might have to interact with, might lose control of some functions
● Control
The global marketing concepts
, 1. Ethnocentric - superior, replicating directly
2. Polycentric - acknowledges differences, tailors practices
3. Regiocentric - group markets into regions
4. Geocentric - global market is a single market, individual tailoring to specific needs of
countries
Glocalisation
Global = global low cost production and selling, global roll out of concepts/high speed, low
complexity
Local = culturally close to consumer, flexible response to customer needs, regional and local
market penetration
Adaptation - a flexible approach to marketing that aims to vary the marketing mix programmes to
meet the local conditions in each country's market.
Why standardise?
● Homogenous markets
● Transnational consumer segments
● Increased globalised organisations
Why adapt?
● Culture
● Usage
● Legal
● Liability
Degrees of standardisation or adaption
Marketing objectives and strategies - more readily standardised
Marketing mix - products most easily standardised, promotion less so, distribution and pricing
difficult to standardise
Operational activities - the more operational the decision the more likely it will be differentiated
The Uppsala Internationalization Model
• Stage 1: No regular export activities (sporadic export)
• Stage 2: Export via independent representatives (export modes)
• Stage 3: Establishment of a foreign sales subsidiary, permanent physical presence, increased
risk
• Stage 4: Foreign production/manufacturing units, heavy commitment
Exceptions to the use of incremental steps
• Firms with large resources can take larger internationalization steps
• Stable and homogeneous markets - relevant market knowledge can be gained in ways other
than experience
• Experience from one market might be generalisable
,Psychic Distance
• Differences in language, culture and political systems which disturb the flow of information
between the firm and the market.
• Firms start internationalisation by going first to those markets they understand.
• Perceived market uncertainty is low.
Reducing psychic distance:
● International consulting firms - hired to provide insight and do research on behalf of the
company
● Universities, business schools, and management training centres teach international
business
● The number of people with experience of working abroad is increasing
● Information technology makes it easier for firms to find out about foreign markets
Critics of Uppsala:
● Too deterministic/rigid
● Ignores interdependence between different markets
● Not valid for:
○ Service industries
○ New entrants - might be able to leap frog/skip a stage
○ Highly internationalised firms/indutries - workforces, IT etc.
● Psychic distance has decreased
Tansaction cost analysis model
How to internationalise in the cheapest/most cost efficient way.
Firms vertically integrate to reduce transaction costs
Limitations of TCA model
● Narrow assumptions of human nature
● Excludes internal transaction costs
● Relevance of intermediate forms for SME’s
● Importance of production cost is understated
The network model
The relationships of a firm in a domestic network can be used as bridges to other networks in
other countries.
Linked together through their exchange relationship.
There is flexibility to cope with change within the model, businesses need to have the ability to
change.
Businesses are looking for longer lasting relationships.
Access to resources is gained through the network.
Entering an existing network may be difficult
, Networks can speed up internationalisation & domestic networks can become an international
one.
Characteristics of born globals
● SMEs with less than 500 employees
● Annual sales under $100million
● Reliance on cutting edge technology
Factors supporting born globals
● Role of niche markets
● Advances in process/technology production
● Flexibility of SME’s/born globals
● Global networks
● Advances and speed in IT
Global Competitiveness and strategy
Global competitiveness:
● Takes place interactively with the environment
● A business must be able to adjust to:
○ Customers - demand a lot from businesses
○ Competitors
○ Public authorities, governments
● The basis of competitiveness looks at:
○ Resources
○ Competences, what they do better than the competition
○ Relations to others - customers, suppliers etc.
● Must be established, if they're not already competitive within the home country then not
worth going global
National competitiveness: Porter's Diamond
Factor conditions:
● Basic - natural resources
● Advanced - human research and research
capabilities, what the environment is like
Demand conditions:
● Early home demand
● Market size and growth
● Market sophistication
Related and supporting industries:
● Suppliers
● Labour - enough staff to support globalisation
● Clustering, Collaboration
