Marketing in the Digital World-2
Sa1_Jyyy
2GLOBALMARKETPLACE.pptxMN7182SR GLOBAL MARKETPLACE
What is global marketing? How does it differ from “regular” marketing
Global marketing: an organization that engages in global marketing focuses its resources and competencies on global market opportunities and threats.
A fundamental difference between “regular” marketing and global marketing is the scope of activities.
A company that engages in global marketing conducts important business activities outside the home-country market
THE GLOBAL MARKETPLACE - ENVIRONMENT
THE GLOBAL MARKETPLACE - ENVIRONMENT
We live in a global marketplace. Apple iPhones, Burberry trench coats, Caterpillar earthmoving equipment, Facebook, LEGO toys, McDonald’s restaurants, Samsung HDTVs, and Swatch watches are found practically everywhere on the planet.
Global companies are fierce rivals in key markets. E.g. American auto industry giants General Motors and Ford are locked in a competitive struggle with Toyota, Hyundai, and other global Asian rivals as well as European companies such as Volkswagen. U.S.-based Intel, the world’s largest chip maker, competes with South Korea’s Samsung.
In the global smartphone market, Apple (United States), Motorola (China), and Samsung are dominant players. The globalization of the appliance industry means that Bosch, Electrolux, Haier Group, LG, and Whirlpool all compete for precious retail floor space and consumer awareness and preference.
We live in a world in which markets are local. In China, for example, Yum! Brands’ KFC fast-food chain competes with local restaurants such as Haidi Lao.
Four decades ago, the phrase global marketing did not exist. Today, businesspeople use global marketing to realize their companies’ full commercial potential.
No matter whether you live in Asia, Europe, North America, or South America, you will be familiar with global brands such as KFC, McDonalds
THE GLOBAL MARKETPLACE - ENVIRONMENT
GLOBALISATION OF PRO SPORTS
Major league sports like the NBA, NFL, and MLS are finding new fans abroad.
Soccer is a global
sport.
The National Football League is focusing on Canada, UK, China, Germany, Japan, and Mexico.
The NFL promoted games in London
COMPETITIVE ADVANTAGE, GLOBALISATION & GLOBAL INDUSTRIES
Focus
Concentration and attention on core business and competence
“Nestle is focused: We are food and beverages. We are not running bicycle shops. Even in food we are not in all fields. There are certain areas we do not touch…We have no soft drinks because I have said we will either buy Coca-Cola or we leave it alone. This is focus”
Helmut Maucher, former CEO and Chairman of Nestlé SA
credited for transforming Nestlé into the world’s largest food company
GLOBAL MARKETING: What It Is & What It Isn’t
Single Country Marketing Strategy
Target Market Strategy
Marketing Mix
Product
Price
Promotion
Place
Global Marketing Strategy
Global Market Participation
Marketing Mix Development
Adapt or Standardise?
Concentration of Marketing Activities
Coordination of Marketing
Activities
Integration of Competitive Moves
STANDARDISATION VS. ADAPTATION
Globalisation (Standardisation)
Developing standardised products marketed worldwide with a standardised marketing mix
Essence of mass marketing
GloCalisation (Adaptation)
Mixing standardisation and customisation in a way
that minimises costs while maximising satisfaction
Essence of segmentation
Think globally, act locally
The GlocaLisation framework
WHY IS GLOBAL MARKETING DIFFERENT?
Consumer Culture : Diverse / Unique
Markets : Fragmented, different
Data : Difficult to get
Politics : Stability
Governments : Attitudes / politics
Competitors : Local / International /
Established
Economies : Varying levels and systems
Finance : Different systems
Currencies : Fluctuating
Businesses : The local way…
Control : Remote & Difficult
Economic forces
Competitive structure
Competitive Forces
Level of Technology
Promotion
Channels of distribution
Geography and Infrastructure
Foreign environment (uncontrollable)
Political/legal forces
Structure of distribution
Economic climate
Cultural forces
Political/ legal forces
Domestic environment (uncontrollable)
Marketing
(controllable)
Price Product
Environmental uncontrollables country market A
Environmental uncontrollables country market B
Environmental uncontrollables country market C
THE INTERNATIONAL MARKETING TASK
THE IMPORTANCE OF GOING GLOBAL
Only 5% of Nestle’s income is generated in its home country
For U.S. companies, 75% of total world market for goods and services is outside the country
Coca-Cola earns 75% of operating income and 2/3 of profit
outside of North America
For Japanese companies, 90% of world market is outside the
country
94% of market potential is outside of Germany for its companies even though it is the largest EU market
Forces Affecting Global Integration & Global Marketing
Multilateral trade agreements
Converging market needs and wants and the information revolution
Transportation and communication improvements
Product development costs
Driving Forces Affecting Global Integration and Global Marketing
Leverage
–Experience transfers
–Scale economies
–Resource utilisation
–Global strategy
Restraining Forces Affecting Global Integration and Global Marketing
Management myopia
Organisational culture
National controls
Opposition to globalisation
londonmet.ac.uk
londonmet.ac.uk
Most popular social networks : January 2023
by number of monthly active users
In millions
londonmet.ac.uk
Instagram accounts with the most followers : Jan 2021
1bn monthly active users /
popular all over the world.
With the rise of influencers, people
can even make a living there
INFORMATION SYSTEMS AND MARKETING RESEARCH
Information technology (IT): an organization’s processes for creating, storing, exchanging, using, and managing information.
A management information system (MIS) provides managers and other decision makers with a continuous flow of information about company operations. MIS is a broad term that can be used to refer to a system of hardware and software that a company uses to manage information. An MIS should provide a means for gathering, analyzing, classifying, storing, retrieving, and reporting relevant data.
big data: extremely large data sets that can be subjected to computational analysis to reveal patterns and trends
An electronic data interchange (EDI) system allows a company’s business units to submit orders, issue invoices, and conduct business electronically with other company units as well as with outside companies.
One of the key features of EDI is that its transaction formats are universal, which enables computer systems at different companies to “speak the same language.”
Customer relationship management (CRM) is an important business tool that helps companies leverage the data they collect through systems.
INFORMATION SYSTEMS AND MARKETING RESEARCH
SOURCES OF MARKET INFO
Research has shown that executives HQ f global companies obtain as much as two-thirds of the information they need from personal sources.
A great deal of external information comes from executives based abroad in company subsidiaries, affiliates, and branches.
Headquarters-based executives generally acknowledge that company executives overseas are the people who know best what is going on in their areas.
Similarly, a company with limited geographical operations may be at risk because internal sources abroad tend to scan only the information about their own countries or regions.
NEW PRODUCTS AND SERVICES
The digital revolution has spurred innovations in many different industries. Companies in all parts of the world are developing a new generation of products, services, and technologies.
These include broadband networks, mobile commerce, wireless connectivity, and smartphones.
A broadband communication system is one that has sufficient capacity to carry multiple voice, data, or video channels simultaneously.
Broadband offers multiple marketing opportunities to companies in a variety of industries. It also allows Internet users to access streaming media such as streaming audio and streaming video.
Streaming media are also having a profound impact on the television industry, with Amazon.com, iTunes, Netflix, YouTube and other services offering movie and TV show downloads
CLOUD COMPUTING
Cloud computing means that instead of installing software such as iTunes or Microsoft Office on a computer hard drive, such applications are delivered through a Web browser.
Cloud computing means that archives—including music and movie files, photos, and documents—are stored on massive remote servers and data centers rather than on individual users’ computers.
Computer files can be accessed remotely, via the Internet, from any location and from any computer
SMARTPHONES
Cell phones have been one of the biggest new-product success stories of the digital revolution.
Worldwide, 1.5 billion smartphones were shipped in 2017.
Smartphones have much greater functionality than feature phones, incorporating many of the capabilities of computers
DEVELOPING VALUE THROUGH DISTRIBUTION CHANNELS
In business-to-consumer marketing (also known as b-to-c or B2C marketing), consumer channels are designed to put products in the hands of people for their own use.
Business-to-business marketing (also known as b-to-b or B2B marketing) involves industrial channels that deliver products to manufacturers or other organizations that then use them as inputs in the production process or in day-to-day operations.
ADVERTISING
Advertising is a sponsored, paid message that is communicated through non-personal channels.
Global advertising relies on the same advertising appeals, messages, artwork, and copy in campaigns around the world.
Global advertising may be defined as messages whose art, copy, headlines, photographs, taglines, and other elements have been developed expressly for their worldwide suitability
The effort required to create a global campaign forces a company to determine whether a global market exists for its product or brand.
GLOBAL ADVERTISING CONTENT
Communication experts generally agree that the overall requirements of effective communication and persuasion are fixed and do not vary from country to country.
The same is true of the components of the communication process
PUBLIC RELATIONS
Public Relations (PR) is a “strategic communication process that builds mutually beneficial relationships between organizations and their publics.
Public relations personnel are responsible for fostering goodwill, understanding, and acceptance among a company’s various constituents and stakeholders.
Along with advertising,PR is one of four variables in the promotion mix.
One of the key tasks of the PR practitioner is to generate favorable publicity.
Publicity is communication about a company or product for which the company does not pay.
Publicity is sometimes referred to as earned media, and advertising and promotions are known as unearned media.)
SALES PROMOTION
Sales promotion refers to any paid consumer or trade communication program of limited duration that adds tangible value to a product or brand.
In a price promotion, tangible value may take the form of a price reduction, coupon, or mail-in refund.
Non-price promotions may take the form of free samples, premiums, “buy one, get one free” offers, sweepstakes, and contests.
Consumer sales promotions may be designed to make consumers aware of a new product, to stimulate nonusers to sample an existing product, or to increase overall consumer demand.
Trade sales promotions are designed to increase product availability within distribution channnels.
At many companies, expenditures for sales promotion activities have surpassed expendiitures for media advertising.
Sales promotion is just one of several marketing communication tools available to enterprises. In turn, sales promotion plans and programs should be integrated and coordinated with those for advertising, public relations (pr), and personal selling.
Sampling is a sales promotion technique that provides potential customers with the opportunity to try a product or service at no cost.
Cost of goods is one of the major disadvantages associated with sampling; another problem is that it is sometimes difficult for marketing managers to assess the contribution that a sampling program makes to return on investment.
SALES PROMOTION
A coupon is a printed certificate that entitles the bearer to a price reduction or some other special consideration for purchasing a particular product or service.
Coupons can also be handed out in stores, offered on a self-service basis from on-shelf dispensers, delivered to homes by mail, or distributed electronically at the checkout counter. In addition, the number of coupons distributed via the Internet is growing.
Social couponing is one of hottest online sales promotion trends today. Industry leader Groupon offers its followers deal-of-the-day coupons that are sponsored by local businesses. Followers then share their experiences via social networks. The local business gets customers, and Groupon takes a share of the coupon proceeds.
COUPONING
PERSON TO PERSON SELLING
Personal selling is person-to-person communication between a company representative and a prospective buyer.
The seller’s communication effort is focused on informing and persuading the prospect, with the short-term goal of making a sale and the longer-term goal of building a relationship with that buyer.
The salesperson’s job is to correctly understand the buyer’s needs, match those needs to the company’s product(s), and then persuade the customer to buy. Because selling provides a two-way communication channel, it is especially important in marketing industrial products that may be expensive and technologically complex.
Sales personnel can often provide headquarters with important customer feedback that can be used in design and engineering decisions.
Effective personal selling in a salesperson’s home country requires building a relationship with the customer;
Social media marketing is a technique that leverages on social networks and applications to spread brand awareness and promote particular products. Usually centres around establishing major presence on social media platform.
Types of social media:
Social networking: Facebook / linkedin
News
Microblogging: 小红书 / 微博
Forums eg cars and other special interest
SOCIAL NETWORKS
SOCIAL NETWORKS
PRICING OBJECTIVES AND STRATEGIES
Whether dealing with a single home-country market or multiple country markets, marketing managers must develop pricing objectives as well as strategies for achieving those objectives.
Price is always an independent variable; as a marketing tactic, managers can raise, lower, or maintain prices as part of the overall marketing strategy.
Nevertheless, a number of pricing issues are unique to global marketing
The pricing strategy for a particular product may vary from country to country; a product may be positioned as a low-priced, mass-market product in some countries and as a premium-priced, niche product in others
The market skimming pricing strategy is often part of a deliberate attempt to reach a market segment that is willing to pay a premium price for a particular brand or for a specialized or unique product
Companies that seek competitive advantage by pursuing differentiation strategies or positioning their products in the premium segment frequently use market skimming. For example, LVMH and other luxury goods marketers that target the global elite market segment use skimming strategies
PRICING OBJECTIVES AND STRATEGIES
A market penetration pricing strategy calls for setting price levels that are low enough to quickly build market share.
Scale-efficient plants and low-cost labor allowed these companies to flood the market.
A first-time exporter is unlikely to use penetration pricing, for a simple reason: Penetration pricing often means that the product may be sold at a loss for a certain length of time.
PRICING OBJECTIVES AND STRATEGIES
Target costing ensures that development teams will bring profitable products to market not only with the right level of quality and functionality but also with appropriate prices for the target customer segments.
It is a discipline that harmonizes the labor of disparate participants in the development effort, from designers and manufacturing engineers to market researchers and suppliers. . .
PRICING OBJECTIVES AND STRATEGIES
In target costing, the marketing team must do the following:
Determine the segment(s) to be targeted, as well as the prices that customers in the segment
Customers be willing to pay.
Using market research techniques such as focus groups and conjoint analysis, the team seeks to better understand how customers will perceive product features and functionalities.
Compute overall target costs with the aim of ensuring the company’s future profitability.
Allocate target costs to the product’s various functions.
Calculate the gap between the target cost and the estimated actual production cost.
Obey the cardinal rule: If the design team can’t meet the targets, the product should not be
launched
PRICING OBJECTIVES AND STRATEGIES
ENVIRONMENTAL INFLUENCES THAT IMPACT PRICES.
CURRENCY FLUCTUTATIONS
INFLATION
GOVERNMENT CONTROLS, SUBSIDIES AND REGULATIONS
COMPETITIVE BEHAVIOUR
GREY MARKETS (PARALLEL IMPORTS)
DUMPING
PRICE FIXING
TRANSFER PRICING E.G. SUBSIDIARIES BUY FROM EACH OTHER
BARTER TRADE
COUNTRADE (BUY BACK)
ENVIRONMENT
In a global marketing environment, a business is competing with many brands from around the world.
Why is it important to understand the global business environment?
It helps businesses easily adapt to the business environment in host countries
It helps enhance the ability to expand market share in new countries
It helps optimize profits by country, market share
It helps diversify markets, less dependent on a single market
It helps limit risks due to differences in culture and awareness in each country
It shows how to optimize resources and supply capacity
MARKET RESEARCH
Market research is the project-specific, systematic gathering of data.
American Marketing Association defines marketing research as “the activity that links the consumer, customer, and public to the marketer through information.”
In global market research, this activity is carried out on a global scale. The challenge of global market research is to recognize and respond to the important national differences that influence the way information can be obtained. These include cultural, linguistic, economic, political, religious, historical, and market differences.
What is big data?
Every day, we create 2.5 quintillion bytes of data — so much that 90% of the data in the world today has been created in the last two years alone. This data comes from everywhere: sensors used to gather climate information, posts to social media sites, digital pictures and videos, purchase transaction records, and cell phone GPS signals to name a few.
This data is “big data.
Huge amount of data
There are huge volumes of data in the world:
From the beginning of recorded time until 2003, we created 5 billion gigabytes of data.
In 2011, the same amount was created every two days
In 2013, the same amount of data is created every 10 minutes.
Why is data important
Segmentation of audience
Tailoring products/services to individuals
Understanding buyer behaviour
Customer Engagement
