Chapter 6 (Global growth)

A Global Brand

When entering an overseas market businesses have the options of:

  • standardising their marketing mix or
  • adapting the marketing mix to the local preferences and market characteristics.

Global branding requires large budgets but the use of technology such as websites and social media can make global campaigns affordable for businesses all sizes.

Benefits of a global brand

  • Consistency
  • Low risk
  • Lower cost
  • Easier to manage
  • Better differentiation

When to go global

Feasibility: the potential of a market

  • the market size
  • competitors in the target market
  • capital requirements to launch and sustain the business
  • considering the experience and expertise of staff and partners

Other factors to consider:

  • Level of consumer demand
  • Consumption patterns
  • Competitor activity

Information can be:

  1. Primary data: research and observation, involve extensive time spent in the target country conducting market research and includes exploiting competitor websites, outlets, patents and pricing
  2. Secondary data: published form and includes government publications, trade shows, media reports, advertising, competitor annual reports and product brochures
  3. Anecdotal data: comes from discussions with suppliers, customers and past employees of competitors

Competitor activity that supports market entry includes:

  • few competitors
  • customers unsatisfied with products on offer
  • products that are easily copied or substituted
  • competitors not offering choice or value for money
  • competitors missing a market need or niche market

Competitor activity that makes it difficult for market entry includes:

  • size, market dominance and wealth of competitors
  • that they’re an established brand that is part of the country’s culture
  • established distribution channels with strong working relationships with suppliers and retailers

Adapting strategies for international markets

A business conducts international market research and is aware of the differences between international markets to devise better marketing strategies. The differences between markets has an impact on the design and implementation of strategies and form the basis of the identification of target markets.

Adapting market strategies increases the costs involved in strategy implementation. It is less expensive to standardise strategies across foreign markets, but treating markets as homogeneous may result in marketing failure.

Approaches to strategy adaption are:

  • Use domestic strategies internationally with no change.
  • Adapt strategies based on generalizations about a region
  • Adapt strategies to countries based on national market research
  • Adapt strategies to regions or target markets in countries based on market research

Elements of the marketing mix

  • Positioning
  • Product features
  • Process
  • People
  • Product name and slogans
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Chapter 1 (Global Business)

Globalisation refers to the integration of markets in the global economy, leading to the increased interconnectedness of national economies.  Markets where globalisation is particularly common include financial markets, such as capital markets, money and credit markets, and insurance markets, commodity markets, including markets for oil, coffee, tin, and gold, and product markets, such as markets for motor vehicles and consumer electronics. The globalisation of sport and entertainment is also a feature of the late 20th and early 21st centuries.

For globalisation:

  • creates employment and investment in developing countries and increased revenues for government
  • creates a platform and international relationships that can be used to  build global standards for fair trade, environmental protection and human rights
  • promotes competition which leads to better choices and prices for consumers and businesses
  • improves the quality and growth of education and training as well as
  • improves the standard of living.

Against globalisation:

  • free trade creates vulnerable countries that do not have protections for local businesses and workers
  • globalisation widens the gap between the rich and the poor where wealthy countries and corporations exploit low pay and conditions
  • international companies exploit the lack of environmental protection in some countries
  • globalisation promotes a single culture as the basis for marketing a way of life; encouraging values of materalism and individualism and having an impact on cultural diversity.

 

Factors that drive global business:
  1. Financial opportunities and deregulation
  2. Patterns of consumption
  3. Technology and globalisation
  4. World Trade Organisation (WTO)

Impact of globalisation:

  1. Employment levels
  2. Spread of skills and technology
  3. International cooperation
  4. Domestic market (Competition)
  5. Tax minimisation (Tax havens and transfer pricing)