Chapter 1: Introduction to Global Marketing

Chapter 1: Introduction to Global Marketing

Leaning Objectives • Summarize the evolution of marketing • Identify the three basic principles of marketing • Discuss global marketing practices and strategies • Discuss the growth of global market opportunities • Compare and contrast management orientations • Describe the driving forces behind the increased pace of global integration • Identify three restraining forces that hinder global marketing efforts Chapter Overview Global marketing is the process of focusing the resources and objectives of a company on global marketing opportunities. Companies engage in global marketing for two reasons: to take advantage of opportunities for growth and expansion, and to survive. Companies in globalizing industries that fail to pursue global opportunities will eventually lose their domestic markets because they will be pushed aside by stronger and more competitive global competitors. Company management can be classified in terms of its orientation toward the world.Lecture Outline

I. Marketing: A Universal Discipline (p. 3)

• The Marketing Concept (p.3)
• The New Concept of Marketing and the Four P’s

ii. The Strategic Concept of Marketing II. The Three Principles of Marketing (p. 6) (Global Marketing Management 8e Warren Keegan) (Instructor Manual) 1 / 4

• Customer Value and the Value Equation
• Competitive or Differentia Advantage
• Focus

III. Global Marketing: What It Is and What It Is Not (p. 7)

• The Standardization Debate

IV. Globalization and Global Marketing (p. 12)

• Management Orientations (p. 15)
• Ethnocentric Orientation
• Polycentric Orientation
• Regiocentric and Geocentric Orientations

VI. Driving and Restraining Forces (p. 18)

• Driving Forces
• Technology

ii. Regional Economic and Political Agreements iii. Market Needs and Wants iv. Transportation and Communication Improvements

• Product Development Costs

vi. Quality vii. World Economic Trends viii. Leverage

• Experience Transfers
• Scale Economies
• Resource Utilization 2 / 4

• Global Strategy

ix. The Global/Transnational Corporation

• Restraining Forces (p. 26)
• Management Myopia and Organizational Culture

ii. National Controls and Barriers VII. Outline of This Book (p. 27) VIII. Summary (p. 27) Tables and Figures Figure 1-1 Marketing is Everything (p. 4) Figure 1-2 Value Chain Boundaryless Marketing (p. 6) Figure 1-3 Key Marketing Principles (p. 6) Table 1-1 Examples of Global Marketing Strategies (p. 10) Table 1-2 Total Motor Vehicle and Parts Sales Worldwide, 2009 (p. 13) Table 1-3 The World’s Largest Corporations by Market Value (p. 14)

Table 1-4 The Global 2000: The Largest Corporations by Revenue (p. 15)

Figure 1-4 Orientation of Management and Companies (p. 16) Figure 1-5 Global Integration (p. 18) Sidebar Sidebar 1-1 Nokia “Blinded by the Light” (p. 24) Suggested Answers to Discussion Questions

• What are the basic goals of marketing? Are these goals relevant to global

marketing? 3 / 4

Marketing activities represent an organization’s efforts to satisfy customer wants and needs by offering products and services that create value. These goals are relevant in virtually every part of the world. However, when an organization pursues market opportunities outside of its home country (domestic) market, managers may need an understanding of additional conceptual tools and guidelines.

• What is meant by global localization? Is Coca-Cola a global product? Explain.

The phrase “global localization” represents an attempt to capture the spirit of the rallying cry for organizations in the 1990s, namely “think globally, act locally, and manage regionally.” Most students will agree that Coca-Cola is a global product by virtue of the fact that it is available in more than 195 countries in red cans bearing the product’s distinctive signature style. It must be noted, however, that customer service efforts are adapted to the needs of particular markets, e.g. vending machines in Japan.Thus, Coca-Cola is both global and local.

• Describe the difference among ethnocentric, polycentric, regiocentric, and

geocentric management orientations.The premise of an ethnocentric orientation is that home country products and management processes are superior. An ethnocentric company that neither sources inputs from, nor seeks market opportunities in, the world outside the home country is a domestic company. A company that does business abroad while still presuming the superiority of the home country may be classified as an international company. Such a company relies on an extension strategy whereby it would export, without adaptation, products designed for the domestic market. The polycentric orientation that predominates at a multinational company leads to a view of the world in which

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