Chapter 1: Introduction to Global
Marketing
1.1 Introduction and Overview
Marketing: the activtty set of vnsttttonsy and processes for creatnny commtnvcatnny
delviervnny and exchannvnn ofervnns that haie ialte for ctstomersy clventsy partnersy and
socvett at larne. Marketnn activtes center on an ornanvzatonns eforts to satsft ctstomer
wants and needs wvth prodtcts and serivces that ofer compettie ialte.
Global marketing: Focts on resotrces and competencves on nlobal market opporttnvtes
and threats. Dvference between rentlar marketnn: scope of activtes (ottsvde home-
cotntrt)
Growth stratenves (table 1.1y p.25):
- Market penetration: exvstnn marketsy exvstnn prodtcts
- Product development: exvstnn marketsy new prodtcts
- Market development: new marketsy exvstnn prodtcts
- Diversification: new marketsy new prodtcts
1.2 Principles of Marketing: A Review
Value Chain
Value chain: set of activtes and processes. Decvsvons at eiert staney from vdea concepton
to stpport afer the saley shotld be assessed vn terms of thevr abvlvtt to create ialte for
ctstomers. Value = Benefit Price (monety tmey eforty etc.)
- Value proposition: the ftll amotnt of benefts of a prodtct.
Competitive Advantage
Competitive advantage: creatnn more ialte for ctstomers than compettors do. To achveie
market stccessy there needs to be a combvnaton of a stpervor prodtcty dvstrvbttony
promoton and lower prvces than the competton.
Globalization
Globalization: presentnn opporttnvtes and challennes on a nlobal scale. Also dealvnn wvth
nlobal competton.
Global Industry
Global industry: compettie adiantanes achveied bt vntenrated operaton on a worldwvde
scale.
1.3 Global Marketing: What It Is and What It Isn’t
Global marketing strategy (GMS): the wat a compant addresses the task of reconnvzvnn vf vt
vs possvble to extend worldwvde and vf adaptaton vs reqtvred.
Dvferences compared to svnnle-cotntrt marketnn (table 1.,y p.,)):
- Ctstomer preferences
- Compettors
- Channels of dvstrvbtton
- Medva and commtnvcaton vn the medva
- One marketnn stratent nloballt (choosvnn one partctlar tarnet market and
deielopvnn a dvferent market mvx)
1
,The compant can make tse of standardvzaton or adaptaton:
- Standardization: homoneneots prodtcts & exectted the same wat
- Adaptation: ctlttral enivronments & specvalvzed endless ctstomvzaton
Three other dvmensvons:
- Conceniraton of marketnn actiitet: whvch mvx of activtes are performed and/or
aiavlable vn cotntrves
- Coordinaton: exectton and plannvnn of activtes hverarcht
- Inienraton of compettie moiet: how to work on compettie marketnn tactcs vn
dvferent parts of the world
1.4 Management Orientations
Mananement orventatons are asstmptons abott the nattre of the world:
- Ethnocentric Orientation: thvnkvnn that totr cotntrt vs stpervor to the world
(national arrogance). Opporttnvtes ottsvde the home cotntrt shotld beter be
vnnored.
- Polycentric Orientation: each cotntrt vn whvch a compant does btsvness vs tnvqte.
Each partt shotld deielop vts own tnvqte btsvness (plan) and marketnn stratenves
mtltnatonal companves.
- Regiocentric Orientation: a renvon becomes the releiant neonraphvc tnvt. It vs tsed
to deielop an vntenrated renvonal stratent.
- Geocentric Orientation: the entre world vs a potental market. The compant strvies
to vntenrate nlobal stratenves worldwvde nlobal/transnatonal compant. Series the
world from one svnnle cotntrt.
1.5 Forces Afecting Global Integration and Global
Marketing
- Multilateral Trade Agreements: anreements that protect free trade.
- Converging Market Needs and Wants and the Informational Revolution:
wvdespread access and lvfesttles and standards are vmportant (nlobal prodtct
posvtonvnn).
- Transportation and Communication Improvements: reioltton vn jet avrplanesy
totrvsmy costs of vnternatonal data / iovce commtnvcaton and phtsvcal dvstrvbtton
(shvppvnn costs)
- Product Development Costs: presstre for nlobalvzaton vs vntense when new
prodtcts reqtvre major vniestments and lonn pervods of deielopment tme.
- Integration of Competitive moves: mant compettie marketnn tactcs that show
potental and nrowth.
- Global localization: thvnk nloballt btt act locallt (f.e. low vncome
cotntrvesy low prvce)
- Quality: nlobal companves own the resotrces to vmproie desvnn of prodtcts and the
mantfacttrvnn qtalvtt.
- World Economic Trends: Rvse vn capvta vncomesy redtced resvstance anavnst stranne
prodtcts (protect local posvtons and new presstre to protect domestc markets).
- Leverage: some ttpe of adiantane that a compant enjots bt ivrtte of the fact that vt
has expervence vn more than one cotntrt. It allows a compant to conserie resotrces
when ptrstvnn opporttnvtes vn nlobal markets (less tme/efort/monet).
- Experience in transfers
2
, - Scale economies: mantfacttrvnn ioltme
- Resource utilization: fnd the best possvble opporttnvtt to serie a
need
- Global strategy: a desvnn to create a wvnnvnn proft on a nlobal scale.
Forces to slow down (restravnvnn forces):
- Management myopia and ornanvzatonal ctlttre: a nearsvnhted compant.
- National controls: eiert cotntrt protects the commercval vnterests of local
enterprvses.
- Opposvton to nlobalvzaton (globaphobia): ivolence and protest anavnst forevnn
forces.
Chapter 2: The Global Economic
Environment
2.1 The World Economy – Overview of Major Changes
- Capvtal moiements (forevnn exchanne transactons) replacvnn tradesy whvch restlt vn
an vncreased ioltme of capvtal moiements.
- Relatonshvp between prodtcton and emplotment. Less emplotees wvll do more
work becatse technolont vs takvnn oier prodtcton.
- Channe vn ivew from vndvivdtal cotntrt economves to domvnatnn world economves.
- Growth vn e-commerce becatse of the comptter reioltton. Internet dvmvnvshes
natonal botndarves.
2.2 Economic Systems (fgure 2.1, p.64)
Resotrce Allocaton (market or command) is. Resotrce Ownershvp (prviate or state).
Command economy: a ststem where the noiernment (rather than the free market)
determvnes what noods shotld be prodtced and the prvce at whvch the noods wvll be ofered
for sale. It vs a centralvzed state of atthorvtt.
- Market Capitalism: constmers decvde what noods shotld be prodtced and how
mtch of these noods mtst be prodtced (market orvented). – North Amervca and
Etrope.
- Centrally Planned Socialism: state has broad powers to serie the ptblvc vnterest as vt
sees ft and makes top-down decvsvons (we know what tot want). Constmer can
spend thevr monet on whateier vs aiavlable. – Chvnay Soivet Unvony Indva.
- Centrally Planned Capitalism: command resotrce allocaton vs ttlvzed extensvielt vn
an oierall enivronment of prviate resotrce ownershvp (modern market economt and
market svmtltaneotslt).
- Market Socialism: market-allocaton polvcves are permvted wvthvn an oierall
enivronment of state ownershvp. It vs ioter orvented.
2.3 Stages of Market Development
Fotr catenorves of gross national income (GNI):
,
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