PDF | This is the introductory chapter to the book giving an overview of today's marketing environment. In doing so, it seeks to highlight the. teaches international marketing, global sourcing strategy (R&D, manufacturing, previous editions of Global Marketing Management. What you should learn from Chapter LO1 How global marketing management differs from international marketing management. LO2 The need for planning.
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GLOBAL MARKETING. MANAGEMENT. SECOND EDITION. Masaaki Kotabe. Temple University. Kristiaan Helsen. Hong Kong University of Science and. 7th ed. Wiley, p. ISBN The 7th Edition of Global Marketing Management prepares students to become effective managers overseeing. Wiley, p. 5th ed. ISBN: , Global Marketing Management prepares students to become effective managers overseeing.
Global marketing and global branding are integrated. Branding involves a structured process of analyzing "soft" assets and "hard" assets of a firm's resources.
A global marketing and branding implementation system distributes marketing assets, affiliate programs and materials, internal communications, newsletters, investor materials, event promotions and trade shows to deliver an integrated, comprehensive and focused communication, access and value to the customers. Elements of global marketing[ edit ] Product[ edit ] The product must deliver a minimum level of performance. For example, Coca-Cola uses two formulas one with sugar, one with corn syrup for all markets.
The product packaging in every country incorporates the contour bottle design and the dynamic ribbon in some way, shape, or form. The bottle can also include the country's native language and is the same size as other beverage bottles or cans in that same country.
Luxury products, high-tech products, and new innovations are the most common products in the global marketplace  because they are easier to market due to a lack of traditional cultural values attached to their meanings.
Price[ edit ] The price of a product varies based on factors such as costs of production, target segment, and supply-demand dynamics. There can be several types of pricing strategies, each tied in with an overall business plan. Pricing can also be used as a demarcation, to differentiate and enhance the image of a product.
Place[ edit ] Refers to the point of sale. How the product is distributed is influenced by how the competition is being offered to the target market. Of course, many raw materials are at the mercy of world prices, and so many developing countries find themselves at the mercy of supply and demand fluctuations.
But this highlights one important global lesson - the need to study markets carefully. Tobacco producing countries of the world are finding this out.
With a growing trend away from tobacco products in the west, new markets or increasing volumes into consuming markets have to be prospected and developed. Many agricultural commodities take time to mature. An orange grove will mature after five years.
By that time another country may plant or have its trees mature. Unless these developments are picked up by global intelligence the plans for a big profit may be not realised as the extra volume supplied depresses prices. The unexpected release of Chinese tobacco depressed the tobacco price well below expectations, leaving farms with stock and large interest carrying production loans.
A number of suppliers of agricultural produce can take advantage of "off season" in other countries, or the fact that they produce speciality products. In fact the case of Kenya vegetables to Europe is a classic, covering many of the factors which have just been discussed-improved technology, emerging global segments, shrinking communications gaps and the drive to diversify product ranges.
Kenya took advantage of: a increased health consciousness, increased affluence and foreign travel of West European consumers; b improved technologies and distribution arrangements for fresh products in Western Europe; c the emergence of large immigrant populations in several European countries: d programmes of diversification by agricultural export countries and e increased uplift facilities and cold store technologies between Europe and Kenya.
Exports started in , via the Horticultural Cooperation Union, which pioneered the European "off season" trade by sending small consignments of green beans, sweet peppers, chillies and other commodities to a London based broker who sold them to up market hotels, restaurants and department stores. From these beginnings Kenya has continued to give high quality, high value commodities, servicing niche markets. Under the colonialists, production remained small, under the misguided reasoning that Kenya was too far from major markets.
So irrigation for production was limited and the markets served were tourists and the settlers in Kenya itseff. The s saw an increased trade as private investment in irrigation expanded, and air freight space increased, the introduction of wide bodied aircraft, and trading relationships grew with European distributors.
Kenya, emerged as a major supplier of high quality sweet peppers, courgettes and French beans and a major supplier of "Asian" vegetables okra, chillies etc.
Kenya was favoured because of its ability to supply all year round - a competitive edge over other suppliers. Whilst the UK dominated, Kenya began supplying to other European markets. Kenya's comparative advantage was based on its low labour costs, the country's location and its diverse agro-ecological conditions. These facilitated the development of a diversified product range, all year round supply and better qualities due to labour intensity at harvest time.
Kenya's airfreight costs were kept low due to government intervention, but lower costs of production were not its strength. This lay in its ability for continuance of supply, better quality and Kenyan knowledge of the European immigrant population.
Kenya's rapidly growing tourist trade also accelerated its canning industry and was able to take surplus production. In the 's Kenya had its ups and downs. Whilst losing out on temperature vegetables courgettes etc to lower cost Mediterranean countries, it increased its share in French beans and other speciality vegetables significantly getting direct entry into the supermarket chains and also Kenya broke into tropical fruits and cut flowers - a major success.
With the development and organisation or many small "outgrowers", channelled into the export market and thus widening the export base, the industry now provides an important source of income and employment. It also has a highly developed information system, coordinated though the Kenya Horticultural Crops Development Authority. Kenya is thus a classic case in its export vegetable industry of taking advantage of global market forces.
However, ft has to look to its laurels as Zimbabwe is rapidly beginning to develop as another source of flowers and vegetables, particularly the former. Whilst the forces, market and otherwise, have been overwhelming in their push to globalisation, there remain a number of negatives.
Many organisations have been put off or have not bothered going into global industry due to a variety of factors. Some have found the need to adapt the marketing mix, especially in many culture bound products, too daunting. Similarly brands with a strong local history may not easily transfer to other markets. National Breweries of Zimbabwe, for example, may not find their Chibuku brand of beer brewed especially for the locals an easy transboundary traveller.
More often than not sheer management myopia may set in and management may fail to seize the export opportunity although products may be likely candidates. Similarly organisations may refuse to devolve activities to local subsidiaries. Other negative forces may be created by Governments. Simply by creating barriers to entry, local enterprises may be protected from international competition as well as the local market.
This is typical of many developing countries, anxious to get their fledging industries off the ground. The international economic system Several factors have contributed to the growth of the international economy post World War II.
Until the world economy traded on a gold and foreign exchange base. This affected liquidity drastically. Now an international reserve facility is available. Recently, the World Bank has taken a very active role in the reconstruction and development of developing country economies, a point which will be expanded on later.
GATT had the intention of producing a set of rules and principles to liberalise trade. The most favoured nation concept MFN , whereby each country agrees to extend to all countries the most favourable terms that it negotiates with any country, helped reduce barriers.
The "round" of talks began with Kennedy in the 60s and Tokyo of the 70s. The latest round, Uruguay, was recently concluded in April and ratified by most countries in early Despite these trade agreements, non tariff barriers like exclusion deals, standards and administrative delays are more difficult to deal with. Under this deal, African and Caribbean countries enjoy favoured status with EU member countries. Relative global peace has engendered confidence in world trade.
Encouraged by this and the availability of finance, global corporations have been able to expand into many markets. The break up of the former Soviet Union has opened up vast opportunities to investors, aided by the World Bank and the European Development Bank. This atmosphere of peace has also allowed the steady upward trend of domestic growth and again opened up market opportunities domestically to foreign firms.
Peace in Mozambique, the "normalisation" of South Africa, and peace in Vietnam as examples have opened up the way for domestic growth and also, therefore, foreign investment. The liberation of economies under World Bank sponsored structural adjustment programmes have also given opportunities. Sometimes, market opportunities open up through "Acts of God". The great drought of in Southern Africa, necessitated a large influx of foreign produce, especially yellow maize from the USA and South America.
Not only did this give a market for maize only, but opened up opportunities for transport businesses and services to serve the drought stricken areas. Speedy communications like air transportation and electronic data transmission and technology have "shrunk" the world.
Costs and time have reduced enormously and with the advent of television, people can see what is happening elsewhere and this can cause desire levels to rise dramatically. Only recently has television been introduced into Tanzania, for example, and this has brought the world and its markets, closer to the average Tanzanian. No doubt a great impetus to global trade was brought about by the development of economic blocs, and, conversely, by the collapse of others. New countries are trying to join these blocs all the time, because of the economic, social and other advantages they bring.
Similarly, the collapse of the old communist blocs have given rise to opportunities for organisations as they strive to get into the new market based economies rising from the ruins. This is certainly the case with the former Soviet bloc. In the late s and early 90s, the United States, along with Japan, have been playing an increasingly influential role in world affairs, especially with the collapse of the former USSR.
Whilst on the one hand this is good, as the USA is committed to world welfare development, it can be at a price.
The Gulf War coalition of the 90s, primarily put together by the USA as the leading player, was an example of the price. Individuals or organisations may get involved in International Marketing in a rather unplanned way which gives the impetus to more formal and larger operations. This may happen in a number of ways: Foreign customers Unsolicited enquiries through word of mouth, visits, exhibitions, and experience through others may result in orders.
This is often typical of small scale organisations. Importers Importers may be looking for products unavailable in domestic markets, for example, mangoes in the UK, or products which can be imported on more favourable terms. An example of these is flowers from Kenya to Holland.
Intermediaries These may be of four types - domestic based export merchants, domestic based export agents, export management companies or cooperative organisations. These will be expanded on later in this text.
Sometimes an intermediary may provide export services in an attempt to reduce their own costs on the export of their own produce by acting as a representative for other organisations. This is called "piggybacking". Attitudes as precursors to global involvement Cavusgil3 developed a three stage model of export involvement, based on the fact that the opportunity to export may arise long before exporting behaviours became manifest.
See figure 1. An organisation's style may be defensive or prospective. The latter type of organisation may systematically, or in an ad hoc manner, search out international opportunities. Culture plays a vital part in the internationalisation process. Hakansson et al4. African culture is not littered with international marketers of note.
This may be due to colonialisation late into the twentieth century. Behaviour as a global marketing impetus We saw earlier in the internationalisation process that organisations may evolve from exporting surplus or serving ad hoc enquiries to a more committed global strategy.
This gradual change may involve moving from geographically adjacent markets to another, say, for example from the Southern African Development Conference SADC to Europe. However, not all globalisation takes place like this. In the case of fresh cut flowers, these may go to major, developed country consumer centres, for example from Harare to London or Amsterdam and Frankfurt.
Lusaka or Nairobi may never see Zimbabwe flowers. In analysing behaviour one has not to generalise. What is certain, is that in all stages, the balance of opportunity and risk is considered.
The context of internationalisation It is essential to see in what context individual organisations view internationalisation. The existing situation of the firm will affect its interest in and ability to internationalise.
Such may be the low domestic quality and organisation that a firm could never export. It may not have the resources or the will. Internationalisation infrastructure Johanson and Mattison5 have explored the notion of differences in tasks facing organisations which internationalise. In low and high infrastructure situations. They may also be pressurised by customers, supplies or competitors to get into joint venturing.
Joint venturing, with its added infrastructure, may lead to rapid progress.
If the organisation faces intense competition then it may be forced to up the pace and scale of foreign investment. Rising protectionism in recent years has given impetus to late starters to establish production facilities in target markets. Infrastructure for foreign operations may also change firms also reduce their investment as well as invest. When this happens the perceived risk changes also. This discussion on international infrastructure concludes the factors which have led to internationalisation.
It is a complex focus of internal and external factors and looking carefully at risk versus opportunities. Planning to meet the opportunities and challenges of global marketing In order to take advantage of global opportunities, as well as meet the challenges presented by so doing a number of concepts can be particularly useful.
Every organisation needs an understanding of what is involved in "strategy", or else the hapharzardness involved in chance exporting can be accepted as the norm with all inherent dangers involved. Also potential exporters need to know what is going on in the global "environment". Just as in domestic marketing "Government" "competition", "social" and other factors need to be accounted for, such is the case in international marketing.
By comparing the similarities and differences between domestic and international marketing needs and planning requirements, then the organisation is in a better position to isolate the key factors critical to success. This section examines all these concepts in brief. Strategy Whatever business we are in, haphazard organisation often leads to haphazard results. In planning for international marketing organisations need a clear picture of the steps involved.
Strategy is the response of the organisation to the realities of shareholders and the business environment. The phases in the strategy formulation process are given on figure 1. Taking account of cultural, economic and political differences is a must when dealing with different markets.
More will be said on these factors in later chapters. Environmental analysis allows the organisation to cluster markets according to similarities and differences, based on the environmental "uncontrollable" factors. The international "uncontrollables" are in addition to the organisation's domestic "uncontrollables" so need to be treated with extra care.
It must be noted that according to the "relationship" marketing school of thought, the so called "incontrollables" can be made more "controllable" by building relationships with the influences of these factors.
For example, if an exporter of horticultural produce wishes to be able to anticipate changes in the political environment, it may build a relationship with certain politicians who may have intimate knowledge of the political system.
This should not, of course, be misconstrued as "insider information".