Global Marketing Strategy unit 4 PDF

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This course is for students who are pursuing marketing as their specialisation along with bcom....

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Global Marketing Strategy Understanding the Relationships Between Business Strategy and marketing Understanding innovation in marketing strategy & diffusion of Innovation Balancing the Pressures for Standardization vs. Adaptation Deciding whether to go global Deciding which Markets to Enter, deciding how to enter the market GLOBAL MARKETING STRATEGIES 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. Components of a global marketing strategy. •Identical brand names •Uniform packaging •Standardized products •Similar advertising messages •Coordinated pricing •Synchronized product introductions •Coordinated sales campaigns Global marketing strategies are actually important parts of a global strategy. In order to create a good global marketing strategy, you must be able to answer: “What I am trying to achieve in an international market?” “What are my company’s strengths and weaknesses for that market?” “How can I counter challenges in the market?” “What potential will I have in this market?” Moreover, a good global marketing strategy incorporates all the countries from all regions of the world and coordinates their marketing efforts accordingly. Of course, this strategy does not always cover all the countries but should be applied for particular regions. For example, you can

break down regions like North America, Latin America, Europe and the Middle East, Asia and the Pacific, and Africa. Beyond its breakdown per country or region, a global marketing strategy almost always consists of several things: (1) uniform brand names; (2) identical packaging; (3) similar products; (4) standardized advertising messages; (5) synchronized pricing; (6) coordinated product launches; and (7) harmonious sales campaigns. As a whole, these two are the most well-known global marketing strategies used by companies expanding internationally: 

Create a consistent and strong brand culture. Creating a strong and consistent brand that always seems familiar to customers is a priority for companies growing internationally. With the ever-more rising and expanding internet, brand structure has become more of a brand culture. To be more specific, it has become more prevalent nowadays that the brand you support reflects your culture. It can be damaging if you compromise your brand culture. For example, Google found out the hard way when it launched a self-censored search engine in China, even though China subjects its new media to government blocks. Google’s brand has been known to make the world access information at any time. How can Google set up something in China against its own culture? As a result, customer backlash versus Google was substantial.

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Market as if there were no borders. Due to the proliferation of digital platforms, brands cannot always adopt different strategies per country. In a way, due to the internet, companies have to adopt a marketing approach that is more or less unified.

A global marketing strategy is one component of a total global strategy. It must incorporate all functional aspects of a business from finance to operations to R&D. It must also carry a welldefined objective because without officially declaring where you are going, you will never get there. To do that, be honest with yourself and your team. Ask: What are we trying to accomplish in an overseas market? What are the weaknesses and strengths in that market? How will we overcome them? What upside potential do we have? Together with your team, answer the questions to draft a global marketing strategy. The more detailed the objective, the clearer and more focused the global marketing strategy becomes. For example, when a target market is selected (e.g., France), the market mix comprising of price, package, and promotion, that is already in place must be evaluated to determine what parts can be standardized and what parts must be adapted to meet the target overseas market requirements. Don’t think for a moment that you can minimize country-tocountry differences. Embrace them and develop your strategy in such a way as to complement the differences.

If a global marketing strategy is done right, it can have many benefits for an organization. Here are four. Improved Product and Service Effectiveness The more you grow, the faster and more you learn, the more effective you become at rolling out new and improved product and service offerings. With Facebook’s IPO, the company did a remarkable job servicing the needs of the North American market and making money. Its next expansion effort was in India. What Facebook had discovered was that Internet advertising made up just 3 percent of India's advertising market, compared to 17 percent in the United States. For Facebook to develop a global marketing strategy in India, it required improving on their already existing North American strategy to monetize all the users in India in terms of their revenue base. Stronger Competitive Advantage Many companies are naturals at competing locally, but how many companies can compete globally? If you do business on a global basis, but your local competitors can't or don't, you become a force they can't compete with. As you move forward with your global strategy, if it’s well-articulated, everyone gets on board, allowing for a better-informed and more focused organization as a whole worldwide. Further, it allows you to adapt quickly wherever needed based on customer demands or trends in the global marketplace. Heightened Customer Awareness With the Internet, customers can track the progress, or lack thereof, of a product all over the world. Apple has a uniform and consistent message with its products: deliver exceptional design and experience through superb user interfaces. The “WOW” factor also plays into the heightened customer awareness throughout the world. Cost Reduction and Savings By focusing on new markets, you can achieve economies of scale and scope through standardization in some areas. Not to mention the savings from leveraging the Internet globally. Customers from all corners of the world can find you, and you can reach potential customers with one single point of contact, such as a website, blog, or Facebook page. The cost savings can help you serve customers better worldwide. Whether you run a one-person shop or an organization with 300 employees, open and honest conversations with yourself and your team about your goals will help you create a global marketing strategy, build collective commitment, and achieve an enduring global enterprise.

Global Marketing Strategies – ‘Think globally, act locally’ is a popular strategy that is becoming more and more relevant in a globalized world where there are no boundaries when it comes to movement of goods and global marketing services. Now it has become evident that companies cannot insulate itself from Global marketing competition by remaining in the domestic market or a few select markets. Several global brands such as MacDonald’s, Coca-Cola, Domino’s Pizza, Red Bull energy drink, KFC, Nike, Starbucks have done it with great success. Global marketing goes through the same process as in local marketing strategies – as the four P’s are relevant in any market-Product, Price, Place and Promotion. Start Your Free Marketing Course Digital marketing, conversion rate optimization, customer relationship management & others Global Marketing Strategies Global marketing strategies require considerable investment in money, resources, manpower to understand various markets, the country, cultures, local tradition, manners and etiquette. Here are some strategies for companies to follow: 1.

One size doesn’ t fit all, add local flavor

When it comes to consumer tastes, preferences and interests, there is nothing universal about it. They differ from country to country, climatic zones, GDP levels (Gross Domestic Product), customs and traditions. The food industry has successfully used ‘local flavoring’ strategy with good success. In much of Asia Domino’s Pizza uses sea food for its toppings while in India they use curry. Dunkin Donuts have used flavours according to local preferences- in Russia it’s marketed as Dunclairs, in Korea as Grapefruit Coolata and Mango Chocolate Donut in Lebanon while in China they serve dry pork and seaweed donuts. MacDonald’s varies its menu according to local tastes- the Green Chilli Cheeseburger (Mexico), bulgogi burgers (South Korea), McArabia (for Arab nations). Japanese automobile manufacturer Suzuki has come up with several variants of its SX-4 model first as a hatch back for European markets, then as an SUV in US markets, subsequently as Sedan in India and S-Crossover in different markets. The engine power, fuel variants, design specifications were all altered in different countries to suit local tastes. This has made it the much talked about automobile in the past 10 years since its launch in 2006. 2.

Understand the cultural differences

When going for branding across different countries, it is better to do some global marketing research on what the word or words mean in that country. In Spain, Chevrolet’s Nova failed miserably not because it was a bad product but No-Va means ‘no-go’ in Spanish. Colgate

toothpaste brand Cue couldn’t make much headway in France as it was the name of a popular pornographi c magazine, Vicks cough drops was a failure in Germany as ‘V’ is pronounced as ‘F’ making it slang for sexual intercourse. Nike had to recall its products that featured an illustration resembling Allah in Arabic. An improper brand name in a particular cultural or linguistic milieu can cause huge damage to the company and its marketing efforts may go down the drain. T-shirt campaign by Abercrombie been dubbed racist and led to protests by consumers in US while Fitch also had similar campaign. ‘Two Wong’s can make it White was seen as offensive while ‘Get Your Buddha slogans on the Floor resulted in consumer boycotts. Naming liquor in the name of Hindu gods also had invited ire of the large Asian community in USA leading to recall of such brands. 3.

Tie-up with a local partner who understands the local market

In many countries, it is not mass media campaign, money pumped into marketing and distribution that will bring result. A good understanding of the local market is a pre-requisite for success and the best way to ensure is through a joint venture global marketing partnerships or marketing tie-up with a local partner in the same business. This will enable the global firm to attain market supremacy at a much rapid pace. Honda, Renault, Suzuki, Swedish firm Forbes launched vacuum cleaner in India in 1980’s (Eureka Forbes through a joint venture in India) Starbucks (Tatas) , Sharp (Kalyani) and several global brands by established their foothold in India through tie-ups with local companies. Tie-ups can be in the form of 50:50 joint ventures, or marketing tie-up. Companies confident of going ahead on its own can set up fully-owned subsidiaries. The joint venture arrangements can be for a specified period after which both companies are at liberty to launch their own brands. When Hero severed its ties with Honda for two wheelers, Renault for cars with Mahindra, the companies concerned launched their own products. 4.

Production, marketing, logistics

Until a few years ago, it was not easy to have multi-locational operations to deliver a product. With advances in technology, better logistics and economies of scale, it is possible for the parent company to design a product in their headquarters or in an emerging market, get them fabricated in a different country, do the manufacturing there and export it other countries. Many global brands such as HP, Toshiba, Acer follow the strategy of manufacturing in China, Taiwan, Thailand or some other nation where it is cheaper to manufacture. And it is shipped to the consuming country and still enable good margins on sale of products. 5.

Plan the global campaign

Once a product is launched the global campaign has to begin. It has to be undertaken by a global marketing agency. They have to take care of the creative, media planning, hoardings and other mass publicity campaigns in association with the marketing team in the global marketing

company. The campaigns have to be translated, localized and relevant new ones created for specific markets. It is important to set key metrics and goals such as CTR (click-through-rates), impressions per 1000 pages for web based advertising, return on investment for global ads, social media campaign targets. It is essential that the marketing team has got the budget for all these including campaigns in electronic media and got approval from the headquarters. The marketing teams across the globe should be in constant communication between themselves to evolve strategies. Sometimes, the global campaign should not be restricted to pushing more sales but to inspire to embrace a concept. Unilever did that for Dove Soap with Campaign for Real Beauty. The global marketing company focussed on raising the self-esteem of women and aligning the product with it. Email campaigns, conferences, website promotions and person-to-person interactions were all part of the integrated strategy of Unliver to achieve the objective. 6.

Utilize the power of social media

On a global scale none is more power than social media to reach a wide audience. For campaigns with picture, video and lesser text, FaceBook would be the appropriate medium while for sharing industry global marketing news, especially those involving B2B products Twitter marketing may be effective. Paid campaigns can create good reach, even YouTube videos can be shared effectively to reach a large audience. All major consumer products marketed globally have good social media presence including Coca-Cola, Samsung, Pepsi, Unilever, Glaxo among others. Pearse Trust having operations in UK, USA and Canada, a globally renowned for advising on corporates and trusts has used the FaceBook campaign that features announcement on webinars on various topics and the various services they undertake. 7.

Events and promotions

Sports and entertainment events are the best avenues for promoting brands and Samsung, Sony, Lenovo, Coco-Cola, Pepsi, and other trans national companies have used it to boost their brand value. Red Bull Energy drink has also successfully sponsored sports globally using it effectively for branding. Red Bull Indianapolis Grand Prix, UK’s Red Bull Air Race, Jordan’s Soap Box race are all examples to study and implement. 8.

Pricing & Packaging

Prices are very sensitive in emerging markets while it may not be so in developed markets. For example, shampoos and oils are normally sold in bottles of 250 or 500 ml, but in emerging markets like India, China, Philippines, Korea and Indonesia it may be better to have smaller sachet packs of 50 or 100 ml to cater to lower income segments or those living in rural areas.

Many MNC ‘s has already adopted such localization techniques effectively. Sample tooth paste sachet packs with 50 gm content are now being marketed in such regions. In US and European markets, KFC or MacDonald’s may not be considered expensive but not so in emerging markets. India, it may be possible to have tea and snacks for fifteen rupees but the simplest snack in KFC may cost fifty rupees or more. 9.

Utilize local strengths

In many countries, large malls or commercial centres are yet to emerge but there is a strong network of small shops or kiranas as they are called in India or Kombini in Japan, the convenience stores that are essential part of their life. No marketing strategy can ignore the strength of these sales networks. Amazon markets its products in online in Japan but are delivered through the local kombinis or convenience stores. In India, too the power of kiranas to drive sales has been proven again and again. The retailer has the power to put up point-ofpurchase (POP) leaflets and hangers and also act as advisors for regular customers to choose the best products available. 10. Global marketing is not for big players alone There is a myth that global scale marketing can only be undertaken by large companies. A translation services company in UK, Lingo24 went global by opening offices in four continents. It also localized its web content into language of the region and there boost its total revenue from global operations to 50%. Many of the company’s getting good business in software services are not big players but medium and small players who offer better rates and expertise in some niche verticals or seen to be operating from major techno parks in India. In developing ‘global strategy’, it is useful to distinguish between three forms of international expansion that arise from a company’s resources, capabilities and current international position. If the company is still mainly focused on its home markets, then its strategies outside its home markets can be seen as international. For example, a dairy company might sell some of its excess milk and cheese supplies outside its home country. But its main strategic focus is still directed to the home market.

In South Korea, international and global soft drinks strategy will involve mixing both the global brands like Coke and Sprite with the local brands like Pocara Sweat (and, no, I don’t know what the brand tastes like!)

However, the Apple iPod was essentially following the same strategy everywhere in the world: in this case, the advertising billboard was in North America but it could have been anywhere. One of the basic decisions in global strategy begins by considering just how much local variation, if any, there might be for a brand. Another more basic decision might be whether to undertake any branding at all. Branding is expensive. It might be better to manufacture products for other companies that then undertake the expensive branding. Apple iPods are made in China with the Chinese company manufacturing to the Apple specification. The Chinese company then avoids the expense of building a brand. But faces the strategic problem that Apple could fail to renew its contract with the Chinese company, which might then be in serious financial difficulty. As international activities have expanded at a company, it may have entered a number of different markets, each of which needs a strategy adapted to each market. Together, these strategies form a multinational strategy. For example, a car company might have one strategy for the USA – specialist cars, higher prices – with another for European markets – smaller cars, fuel efficient – and yet another for developing countries – simple, low priced cars. For some companies, their international activities have developed to such an extent that they essentially treat the world as one market with very limited variations for each country or world region. This is called a global strategy. For example, the luxury goods company Gucchi sells essentially the same products in every country. Importantly, global strategy on this website is a shorthand for all three strategies above. Implications of the three definitions within global strategy: 

International strategy: the organization’s objectives relate primarily to the home market. However, we have some objectives with regard to overseas activity and therefore need an international strategy. Importantly, the competitiv...