Artikel 4- Internationell marknadsföring PDF

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global marketing strategy Johny K. Johansson

INTRODUCTION A global marketing strategy (GMS) is a strategy that encompasses countries from several different regions in the world and aims at coordinating a company’s marketing efforts in markets in these countries. A GMS does not necessarily cover all countries but it should apply across several regions. A typical regional breakdown is as follows: Africa, Asia, and the Pacific (including Australia) Europe and the Middle East, Latin America, and North America. A ‘‘regional’’ marketing strategy is one that coordinates the marketing effort in one region. A GMS should not be confused with a global production strategy. Outsourcing and foreign manufacturing subsidiaries, common features of a global production strategy, can be used with or without a GMS for the finished products. As listed in Table 1, GMSs can involve one or more of several activities. The coordination involved in implementing a GMS unavoidably leads to a certain level of uniformity of branding, of packaging, of promotional appeal, and so on (Zou and Cavusgil, 2002). This also means that a GMS, in some ways, goes counter to a true customer orientation (see MARKETING PLANNING ). The product and marketing mix are not adapted to local preferences, as a customer orientation suggests. This is a potential weakness of GMSs, Table 1 Components of a global marketing strategy. Items Listed in Order of Descending Occurrence • • • • • • •

Identical brand names Uniform packaging Standardized products Similar advertising messages Coordinated pricing Synchronized product introductions Coordinated sales campaigns

and leaves opportunities open for local products and brands. As the notion of integrated marketing communications (see INTEGRATED MARKETING COMMUNICATION STRATEGY ) suggests, the ensuing consistency can have positive revenue benefits because of reinforcement of a unique message, spillovers between countries, and so on. But the main driving force behind the adoption of a GMS is the scale and scope of cost advantages from such uniform marketing strategies. These cost advantages include elimination of unnecessary duplication of effort, savings on multilingual and same-size packaging, use of the same promotional material, quantity discounts when buying media, and so on. The pros and cons of a GMS are given in Table 2.

THE ORGANIZATIONAL CONTEXT Firms typically contemplate adopting a more coordinated GMS, once they have significant presence in several countries and regions. Since local markets will never be exactly the same, a proposed global strategy will generally not be welcomed by the country managers. The existing local operations will have to be convinced to adopt the new global strategy. Thus, a GMS is always top-down, not bottom-up, and it is easy for antiglobalization sentiments to stir even within a multinational company. The typical solution to this problem is to allow country managers to be involved in the formulation of the GMS, and to form cross-national teams to participate in the implementation. It is also common to designate one country the ‘‘lead’’ market for the strategy, and use its current strategy as a starting point for the global strategy. This lead country is typically one of the larger markets and one where the firm has a strong market share. In multibrand firms, it is also common to limit a global strategy to one or two brands, allowing the local subsidiaries to keep control of some of their own brands.

GLOBAL SEGMENTATION AND POSITIONING The firms most likely to engage in GMSs are those present in global markets. Global markets are those where customer needs, wants,

Wiley International Encyclopedia of Marketing, edited by Jagdish N. Sheth and Naresh K. Malhotra. Copyright © 2010 John Wiley & Sons Ltd

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global marketing strategy

Table 2 General pros and cons of global marketing strategies. Pros

Cons

• Revenue side

Reinforced message, unique idea Spillover of brand awareness Enhanced liking (mere exposure)

Culturally insensitive Antiglobal target Vulnerable to gray trade

• Cost side

Reduces duplication, waste Uniform product design, packaging, advertising Quantity discounts in media buy

Requires managerial time Lowers morale in subsidiaries, agencies

and preferences are quite similar across the globe (see MARKET DEFINITION). Typical product categories are technology products, including consumer electronics, cameras and computers, branded luxury products, and also apparel, personal care, and entertainment categories where, for certain segments, globally standardized products are desired by all. By contrast, in multidomestic markets such as food and drink, where preferences are more culturally determined, global coordination is less common (see CUSTOMER ANALYSIS ). For example, ACNielsen’s cross-national data suggest there are only 43 global brands in the consumer packaged goods categories found in the typical supermarket (ACNielsen, 2001). Global segmentation. The need to target similar segments in different countries is an attempt to minimize the drawbacks of a coordinated global strategy (see MARKET SEGMENTATION AND TARGETING ). A typical cross-national segment targeted with a standardized product is the teenage and young adult segments, where preferences are allegedly very similar even for food and drink categories. Coca Cola uses the same one-word slogan ‘‘Always’’ around the world. Nike is positioned with a rebellious image in many countries, even though the particular sports associated with Nike differ by country. Technology brands such as the iPod have usually even more coordinated global strategies, with synchronized rollouts of new models across countries. Global marketers might use a two-stage approach to market segmentation (see MARKET SEGMENTATION AND TARGETING ), first grouping countries into similar regions to

increase the chances of finding homogeneous subgroups within each region. Often the first step amounts to selecting a trade bloc, such as the European Union. As research has documented, many global strategies are, in fact, more regional than global (Rugman, 2005). A GMS can also be successful if the f irm has managed to change local preferences. A new product entering a local market will usually change preferences to some degree, whether by new features, promotion, or price. This is the basis for the extreme standardization proposed by Levitt in his seminal 1983 HBR (Harvard Business Review) article, where he suggests that ‘‘everybody’’ likes the same products. Examples of this abound. IKEA, the Swedish furniture retailer, has changed the market for furniture in many countries – it uses a very standardized and coordinated marketing strategy, focusing around its simple and functional furniture, annual catalog, and warehouse stores. Starbucks, the American coffee chain, also has re-created and enlarged a mature market in several countries with its new coffee choices, novel store layouts, and wider menu. In other cases, changes in the environment have affected preferences so as to make standardization possible. ‘‘Green’’ products are naturally targeting global segments, as are the lighter beers, the bottled waters, and the shift to wines. Such global segments naturally induce companies to adopt GMSs. Global positioning. The main issue in global positioning (see POSITIONING ANALYSIS AND STRATEGIES ) is whether the product offering should be positioned the same way everywhere or not. Complicating the issue is the fact that even with complete uniformity of the marketing mix,

global marketing strategy 3 the arrived-at position may still differ between countries. A classic example are Levi’s jeans, whose rugged outdoors image places it in a mainstream American lifestyle segment, but becomes a stylish icon in other countries. Also, as this example illustrates, even if a brand wants to be seen as ‘‘global,’’ its position is typically affected positively or negatively by its country of origin. A fundamental factor affecting transferability of a position is the actual use of the product. A food product such as apples might be consumed as a healthy snack in the West (‘‘An apple a day keeps the doctor away’’ as the saying goes). But in Japan, apples are a favorite item in the gift-giving season, placing a premium on color, packaging, and price – hardly the same positioning. Even without such dramatic usage differences, differences in economic development and cultural distance, in general, are main factors influencing the potential for an identical position. A Ford car may be positioned as a functional value product in Europe, but might be a status symbol in a poor country. First-time buyers in emerging markets rarely view products the same way as buyers in the more mature markets, where preferences are well established. For example, the successful Buicks offered to new customers in China offer quite different benefits from those offered Buick customers in the United States, even though the product is largely the same. The strength of local competition (see COMPETITIVE ANALYSIS) is also likely to vary across countries, affecting the positioning. Where domestic competitors are strong, a foreign brand that is a mainstream brand at home will typically attempt to target a niche abroad. This applies to many European brands including Heineken, Illycaffe, and Volvo. In other cases, a company with a niche position at home may target a more mainstream position in another market – an example is Japanese Honda in the US auto market. In global markets, where often the same global players compete in the major foreign markets, positioning is more likely to remain constant across the mature markets. Examples include automobiles, with the global players occupying very similar positions in most markets. This is less true for new product categories that are still in the growth stage in many countries and the brands are not equally well known everywhere. Cell phone makers

Nokia, Samsung, and Sony-Ericsson occupy quite different positions in each market. The stage of the life cycle (see STAGES OF THE PRODUCT LIFE CYCLE ) is also likely to vary across countries, affecting how well a particular position can be transferred. In the early stages, with preferences still in flux, a strategy based on the positioning in a lead country may not be very effective in a new country. Thus, the first automatic single-lens reflex camera was introduced by Canon as a mainstream product in Japan, but a specialty product for more professional photography overseas. In emerging countries with their pent-up demand, however, even new consumers aspire for the best products in the leading markets. This is why some Western companies (such as Electrolux, the home appliance manufacturer) will position themselves at the top of the market even in a country like Russia. The typical strategic assumption is that a globally uniform positioning requires similarity of culture, of competition, and of life cycle stage. However, even in countries where one or more of these requirements are not met, a standardized global positioning may still work. For example, when global communications have made the brand name already well known, a global strategy may work even in a multidomestic market. McDonald’s successful entry into many emerging markets is a case in point. And even where domestic competition is strong and would suggest a niche positioning, external events may shift the market in favor of a newcomer. This happened, for example, when the Japanese autos entered the American market and gained strength during the 1970s oil crisis. But these are exceptions and are certainly not automatic, as Coca Cola learned in India when local ThumsUp rebounded (see the section Global Brands).

THE GLOBAL MARKETING MIX Global products and services. Standardization of the product or service is usually a major feature of a global MARKETING MIX . ‘‘Product Standardization’’ means uniformity of product or service features, design, and styling. There are several advantages to such standardization, including those listed in Table 3.

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Table 3 Advantages of product standardization. • • •

Cost reduction Improved quality Enhanced customer preference

The advantages are mainly on the cost side – scale economies from the larger number of identical units produced. But there are also quality advantages involved. With longer series, there is more reason to invest in specialized technology, machine tools, components, and parts, yielding higher and more consistent quality. Finally, there is a possible positive demand effect on customers. Because of the prevalence of the products and designs, the ‘‘mere exposure’’ of individuals to the products engenders a positive impact on preferences. This is an effect which partly depends on competitive imitation – when most cell phones feature a built-in camera, consumers ‘‘want’’ a camera with their cell phone (see COMPETITIVE ANALYSIS ). The disadvantages of product standardization are mainly on the demand side (see Table 4). Apart from the case of pent-up demand in an emerging country, standardized products rarely manage to target precisely a specific segment in a new country market. They are at least slightly off target. This is not always such an obstacle to success. First, preferences may change – the standardized product may offer features not offered before in that market. Honda’s 1970s entry into the US car market exemplifies this case, with the car offering both fuel efficiency and sportiness. Second, a mispositioning may be overcome by a strong brand name. The McDonald’s entries in emerging markets fall in this category. Third, the entering product may well be sold at a low price – its scale advantages can allow such a strategy. This was the strategy followed by Samsung before its later drive toward a strong global brand (Quelch and Harrington, 2004). Since the typical multinational company does manufacturing in a large number of country subsidiaries, the need for scale has sometimes made it necessary to designate local production sites as suppliers for the whole world. Toyota’s Kentucky plant produces the Camry for global

Table 4 Disadvantages of product standardization. • •

Off-target Lack of uniqueness

distribution. The BMW Z4 sports car is only produced in South Carolina. Apple computers are all produced in Taiwan. In general, however, the risks of local strikes and political conflict make most companies assign production to more than one site. From a marketing perspective, a uniform product or service is often less acceptable locally. Of course, some localization is always necessary in any case – electric appliances face different voltages and plugs, safety regulations differ between countries, and homologation requirements differ. But the more critical issues revolve around customer acceptance. What is seen as a good product or service in one market might not be acceptable elsewhere. The fact is that there are relatively few products and services that are identical around the world. One would expect that products in global markets, such as technology products, would be identical. But generally speaking, PCs and cell phones are smaller in Asia, automobiles have a harder suspension in Europe than in the United States, and even stereo speakers vary slightly in bass level between North America (heavy on bass) and Asia (where smaller apartments places the listener closer). The classic failure by Euro Disney to transfer its American theme park unchanged to France is a good example of misguided standardization of a service product. Despite the success of the strategy in Tokyo, the Euro effort fell flat for many reasons, one of which was the no-alcohol rule inimical to Continental Europeans. Luxury products are usually the same across the globe, and utilitarian items such as automobile tires, toothpaste, and kitchen utensils can be standardized. But products such as shampoos, soaps, and personal-care items need to take account of hair types, skin color, and water quality to perform satisfactorily. Coca Cola’s level of sweetness differs across countries, McDonald’s menu is adapted to country

global marketing strategy 5 preferences (partly to reduce antiglobalization protests), and apparel manufacturers have to make adjustments for different body proportions between Western and Asian peoples. To deal with these adaptations while trying to retain some scale economies, companies resort to two solutions. One solution is to use the same basic design or ‘‘platform’’ for the product, and then adapt by adding alternative features at the later stage of manufacturing. This is common in automobiles, where the platform involves the chassis on which the body is then fitted. But the concept is also used in the manufacturing of electronic products, computers, and home appliances. This is the solution adopted by Coca Cola and McDonald’s as well. A second related option is to break up the product into component modules that can be produced in large series to gain the scale advantages, and then produce different products by different combinations of modules. This has become a very prominent manufacturing strategy for large companies, since it allows the different modules to be outsourced and offshored. The manufacturing process then becomes a simple assembly process, which can then be done locally, if necessary, to gain lower tariff rates. This allows the company to ‘‘mix and match’’ features for different country markets, which helps adaptation to local preferences. It also helps to make the products in different markets somewhat different, helping to limit gray trade (more on gray trade below). In the end, companies do not need to offer identical products everywhere in order to gain the scale economies of product standardization. Thus, a company can develop a coordinated global strategy even without a completely standardized product. But it is almost impossible to develop a GMS without a strong global brand. Global brands. Keeping the same brand name everywhere has become the signature feature of a global marketer, and ‘‘global branding’’ has become an obsession among many multinationals. For example, the Interbrew (now InBev) company’s analysis of the Heineken advantage in profitability draws the conclusion that it is the lack of a global brand that depresses its own bottom-line performance. Hence, top management has decreed that Stella Artois be

Interbrew’s global ‘‘flagship’’ brand (Beamish and Goerzen, 2000). Three definitions follow: Global brands are brands that are well known and recognized in all major markets of the world. (e.g., Sony, Mercedes-Benz, Microsoft, Nokia). • Regional brands are brands that are the same across a region (e.g., P&G’s Ariel in Europe is Tide elsewhere; Acura is Honda Legend in Asia). • Local brands are brands found in only one or two markets (e.g., Suntory whisky in Japan, A&W root beer in the United States, and the Trabant car in former East Germany).

•

Strictly speaking, the brand may be global although the product is not available everywhere – as happens to be the case for Rolls Royce as well as for Coca Cola. This usually means there may be a pent-up demand for some global brands, as was seen when McDonald’s entered Russia in the 1990s. Global brands have received increased attention from top management in many multinationals because of the importance of brand equity as a financial asset (see PERCEPTION OF BRAND EQUITY). Expanding into new markets is an obvious way of building further financial equity, which is usually calculated by simply aggregating projected revenues across country markets. Not surprisingly, most top brands in terms of financial equity are global. But a strong brand not only needs reach across countries, it also needs allegiance from local customers. As global brands have stretched further to build financial equity, local brands have been able to defend their turf by staying closer to their customer and building a...