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Global marketing of asem

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Asem Khan
Asem Khan

Global marketing management involves planning strategies for entering foreign markets. There are four main market entry strategies: exporting, contractual agreements like licensing and franchising, strategic alliances, and direct foreign investment. The optimal strategy depends on factors like market size, competition, regulations, and a company's objectives and resources. Planning is required to systematically analyze countries, adapt marketing mix tactics to local conditions, and implement and control the marketing plan. Organizational structures must also be considered to effectively manage global competition.

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Global Marketing Management: Planning and Organization Presented by ASEM KHAN
Chapter Learning Objectives 1. How global marketing management differs from international marketing management 1. How global marketing management differs from international marketing management 2. The increasing importance of international strategic alliances 2. The increasing importance of international strategic alliances 3. The need for planning to achieve company goals 3. The need for planning to achieve company goals 4. The important factors for each alternative market-entry strategy4. The important factors for each alternative market-entry strategy
Introduction • Increasingly firms are entering foreign markets • Acquiring a global perspective requires execution requires planning, organization, and a willingness to try new approaches—such as engaging in collaborative relationships • This chapter discusses global marketing management, competition in the global marketplace, strategic planning, and alternative market-entry strategies
Global Marketing Management • Global Marketing Management thought has undergone substantial revision • In the 1970s the argument was framed as “standardization vs. adaptation” • In the 1980s it was “globalization vs. localization” or “Think local, act local” • In the 1990s it was “global integration vs. local responsiveness” • The basic issue is whether the global homogenization of consumer tastes allowed global standardization of the marketing mix Global Marketing Management: An Old Debate and a New ViewGlobal Marketing Management: An Old Debate and a New View
Global marketing of asem
Global marketing of asem
Global marketing of asem
Global marketing of asem
The Nestle Way • The “Nestlé way” is to dominate its markets can be summarized in four points: (1) think and plan long term (2) decentralize (3) stick to what you know, and (4) adapt to local tastes • Nestlé sells more than 8,500 products produced in 489 factories in 193 countries • Nestlé sells more than 8,500 products produced in 489 factories in 193 countries • Nestlé is the world’s biggest marketer of infant formula, powdered milk, instant coffee, chocolate, soups, and mineral water • Nestlé is the world’s biggest marketer of infant formula, powdered milk, instant coffee, chocolate, soups, and mineral water
Benefits of Global Marketing • Economies of scale in production and marketing can be important competitive advantages for global companies • Unifying product development, purchasing, and supply activities across several countries it can save costs • Transfer of experience and know-how across countries through improved coordination and integration of marketing activities • Diversity of markets by spreading the portfolio of markets served brings an important stability of revenues and operations to many global firms The merits of global marketing include:The merits of global marketing include:
Planning for Global Markets • Structurally, planning may be viewed as (1) corporate, (2) strategic, or (3) tactical • Structurally, planning may be viewed as (1) corporate, (2) strategic, or (3) tactical Planning is a systematized way of relating to the futurePlanning is a systematized way of relating to the future • It is an attempt to manage the effects of external, uncontrollable factors on the firm’s strengths, weaknesses, objectives, and goals to attain a desired end • It is an attempt to manage the effects of external, uncontrollable factors on the firm’s strengths, weaknesses, objectives, and goals to attain a desired end • International corporate planning is essentially long term, incorporating generalized goals for the enterprise as a whole • International corporate planning is essentially long term, incorporating generalized goals for the enterprise as a whole • Strategic planning is conducted at the highest levels of management and deals with products, capital, and research, and long- and short-term goals of the company • Strategic planning is conducted at the highest levels of management and deals with products, capital, and research, and long- and short-term goals of the company • Tactical planning, or market planning, pertains to specific actions and to the allocation of resources used to implement strategic planning goals in specific markets • Tactical planning, or market planning, pertains to specific actions and to the allocation of resources used to implement strategic planning goals in specific markets
The Planning Process Phase 1: Preliminary Analysis and Screening – Matching Company and Country Needs Phase 1: Preliminary Analysis and Screening – Matching Company and Country Needs • Planning, which offers a systematic guide to planning for the multinational firm operating in several countries, includes the following 4 phases: • Planning, which offers a systematic guide to planning for the multinational firm operating in several countries, includes the following 4 phases: Phase 2: Adapting the Marketing Mix to Target Markets Phase 2: Adapting the Marketing Mix to Target Markets Phase 3: Developing the Marketing Plan Phase 3: Developing the Marketing Plan Phase 4: Implementation and Control Phase 4: Implementation and Control • The answers to three major questions are sought in Phase 2: (a) Are there identifiable market segments that allow for common marketing mix tactics across countries? (b) Which cultural/environmental adaptations are necessary for successful acceptance of the marketing mix? (c) Will adaptation costs allow profitable market entry?
Foreign Market-Entry Strategies – Market Size and Growth – Risk – Government Regulations – Competitive Environment – Local Infrastructure – Company Objectives – Need for Control – Internal Resources, Assets and Capabilities – Flexibility When a company makes the commitment to go international, it must choose an entry strategy When a company makes the commitment to go international, it must choose an entry strategy The choice of entry strategy depends on:The choice of entry strategy depends on:
Alternative Market-Entry Strategies • exporting • contractual agreements • strategic alliances, and • direct foreign investment • Import regulations may be imposed to protect health, conserve foreign exchange, serve as economic reprisals, protect home industry, or provide revenue in the form of tariffs • Import regulations may be imposed to protect health, conserve foreign exchange, serve as economic reprisals, protect home industry, or provide revenue in the form of tariffs • A company has four different modes of foreign market entry from which to select: • A company has four different modes of foreign market entry from which to select:
Exporting • Exporting can be either direct or indirect • In direct exporting the company sells to a customer in another country • In contrast, indirect exporting usually means that the company sells to a buyer (importer or distributor) in the home country who in turn exports the product • The Internet is becoming increasingly important as a foreign market entry method
Exporting as an Entry Strategy • Indirect Exporting – Domestic Intermediary • Direct Exporting – Independent Distributor Vs. Sales Subsidiary – The Company Owned Sales Office (Foreign Sales Subsidiary)
Foreign Production as an Entry Strategy • Licensing • Reasons for Licensing • Disadvantages of Licensing
Franchising • Franchisor and the franchisee • Master franchising • Benefits: – Overseas expansion with a minimum investment – Franchisees’ profits tied to their efforts – Availability of local franchisees’ knowledge
Contractual Agreements • Contractual agreements generally involve the transfer of technology, processes, trademarks, or human skills • Contractual forms of market entry include: (1) Licensing: A means of establishing a foothold in foreign markets without large capital outlays is licensing of patent rights, trademark rights, and the rights to use technological (2) Franchising: In licensing the franchisor provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management Contractual agreements are long-term, non-equity associations between a company and another in a foreign market Contractual agreements are long-term, non-equity associations between a company and another in a foreign market
Organizing for Global Competition (1) global product divisions responsible for product sales throughout the world; (2) geographical divisions responsible for all products and functions within a given geographical area; or (3) a matrix organization consisting of either of these arrangements with centralized sales and marketing run by a centralized functional staff, or a combination of area operations and global product management • An international marketing plan should optimize the resources committed to company objectives by using one of the following three alternative organizational structures: • An international marketing plan should optimize the resources committed to company objectives by using one of the following three alternative organizational structures:
Figure 9.1: Market Entry Strategies Exporting • Indirect • Direct Foreign Production • Licensing • Franchising • Contract Manufacturing • Assembly • Fully Integrated Production Ownership Strategies • Joint Ventures • Alliances • Acquisitions Ownership Strategies • Joint Ventures • Alliances • Acquisitions Entry Analysis • Sales • Costs • Assets • Profitability • Risk Factors Entry Analysis • Sales • Costs • Assets • Profitability • Risk Factors Exit StrategyExit Strategy Reentry StrategyReentry Strategy EntryStrategyAlternatives Entry Strategy Decision Entry Strategy Decision

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Global marketing of asem

  • 1. Global Marketing Management: Planning and Organization Presented by ASEM KHAN
  • 2. Chapter Learning Objectives 1. How global marketing management differs from international marketing management 1. How global marketing management differs from international marketing management 2. The increasing importance of international strategic alliances 2. The increasing importance of international strategic alliances 3. The need for planning to achieve company goals 3. The need for planning to achieve company goals 4. The important factors for each alternative market-entry strategy4. The important factors for each alternative market-entry strategy
  • 3. Introduction • Increasingly firms are entering foreign markets • Acquiring a global perspective requires execution requires planning, organization, and a willingness to try new approaches—such as engaging in collaborative relationships • This chapter discusses global marketing management, competition in the global marketplace, strategic planning, and alternative market-entry strategies
  • 4. Global Marketing Management • Global Marketing Management thought has undergone substantial revision • In the 1970s the argument was framed as “standardization vs. adaptation” • In the 1980s it was “globalization vs. localization” or “Think local, act local” • In the 1990s it was “global integration vs. local responsiveness” • The basic issue is whether the global homogenization of consumer tastes allowed global standardization of the marketing mix Global Marketing Management: An Old Debate and a New ViewGlobal Marketing Management: An Old Debate and a New View
  • 9. The Nestle Way • The “Nestlé way” is to dominate its markets can be summarized in four points: (1) think and plan long term (2) decentralize (3) stick to what you know, and (4) adapt to local tastes • Nestlé sells more than 8,500 products produced in 489 factories in 193 countries • Nestlé sells more than 8,500 products produced in 489 factories in 193 countries • Nestlé is the world’s biggest marketer of infant formula, powdered milk, instant coffee, chocolate, soups, and mineral water • Nestlé is the world’s biggest marketer of infant formula, powdered milk, instant coffee, chocolate, soups, and mineral water
  • 10. Benefits of Global Marketing • Economies of scale in production and marketing can be important competitive advantages for global companies • Unifying product development, purchasing, and supply activities across several countries it can save costs • Transfer of experience and know-how across countries through improved coordination and integration of marketing activities • Diversity of markets by spreading the portfolio of markets served brings an important stability of revenues and operations to many global firms The merits of global marketing include:The merits of global marketing include:
  • 11. Planning for Global Markets • Structurally, planning may be viewed as (1) corporate, (2) strategic, or (3) tactical • Structurally, planning may be viewed as (1) corporate, (2) strategic, or (3) tactical Planning is a systematized way of relating to the futurePlanning is a systematized way of relating to the future • It is an attempt to manage the effects of external, uncontrollable factors on the firm’s strengths, weaknesses, objectives, and goals to attain a desired end • It is an attempt to manage the effects of external, uncontrollable factors on the firm’s strengths, weaknesses, objectives, and goals to attain a desired end • International corporate planning is essentially long term, incorporating generalized goals for the enterprise as a whole • International corporate planning is essentially long term, incorporating generalized goals for the enterprise as a whole • Strategic planning is conducted at the highest levels of management and deals with products, capital, and research, and long- and short-term goals of the company • Strategic planning is conducted at the highest levels of management and deals with products, capital, and research, and long- and short-term goals of the company • Tactical planning, or market planning, pertains to specific actions and to the allocation of resources used to implement strategic planning goals in specific markets • Tactical planning, or market planning, pertains to specific actions and to the allocation of resources used to implement strategic planning goals in specific markets
  • 12. The Planning Process Phase 1: Preliminary Analysis and Screening – Matching Company and Country Needs Phase 1: Preliminary Analysis and Screening – Matching Company and Country Needs • Planning, which offers a systematic guide to planning for the multinational firm operating in several countries, includes the following 4 phases: • Planning, which offers a systematic guide to planning for the multinational firm operating in several countries, includes the following 4 phases: Phase 2: Adapting the Marketing Mix to Target Markets Phase 2: Adapting the Marketing Mix to Target Markets Phase 3: Developing the Marketing Plan Phase 3: Developing the Marketing Plan Phase 4: Implementation and Control Phase 4: Implementation and Control • The answers to three major questions are sought in Phase 2: (a) Are there identifiable market segments that allow for common marketing mix tactics across countries? (b) Which cultural/environmental adaptations are necessary for successful acceptance of the marketing mix? (c) Will adaptation costs allow profitable market entry?
  • 13. Foreign Market-Entry Strategies – Market Size and Growth – Risk – Government Regulations – Competitive Environment – Local Infrastructure – Company Objectives – Need for Control – Internal Resources, Assets and Capabilities – Flexibility When a company makes the commitment to go international, it must choose an entry strategy When a company makes the commitment to go international, it must choose an entry strategy The choice of entry strategy depends on:The choice of entry strategy depends on:
  • 14. Alternative Market-Entry Strategies • exporting • contractual agreements • strategic alliances, and • direct foreign investment • Import regulations may be imposed to protect health, conserve foreign exchange, serve as economic reprisals, protect home industry, or provide revenue in the form of tariffs • Import regulations may be imposed to protect health, conserve foreign exchange, serve as economic reprisals, protect home industry, or provide revenue in the form of tariffs • A company has four different modes of foreign market entry from which to select: • A company has four different modes of foreign market entry from which to select:
  • 15. Exporting • Exporting can be either direct or indirect • In direct exporting the company sells to a customer in another country • In contrast, indirect exporting usually means that the company sells to a buyer (importer or distributor) in the home country who in turn exports the product • The Internet is becoming increasingly important as a foreign market entry method
  • 16. Exporting as an Entry Strategy • Indirect Exporting – Domestic Intermediary • Direct Exporting – Independent Distributor Vs. Sales Subsidiary – The Company Owned Sales Office (Foreign Sales Subsidiary)
  • 17. Foreign Production as an Entry Strategy • Licensing • Reasons for Licensing • Disadvantages of Licensing
  • 18. Franchising • Franchisor and the franchisee • Master franchising • Benefits: – Overseas expansion with a minimum investment – Franchisees’ profits tied to their efforts – Availability of local franchisees’ knowledge
  • 19. Contractual Agreements • Contractual agreements generally involve the transfer of technology, processes, trademarks, or human skills • Contractual forms of market entry include: (1) Licensing: A means of establishing a foothold in foreign markets without large capital outlays is licensing of patent rights, trademark rights, and the rights to use technological (2) Franchising: In licensing the franchisor provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management Contractual agreements are long-term, non-equity associations between a company and another in a foreign market Contractual agreements are long-term, non-equity associations between a company and another in a foreign market
  • 20. Organizing for Global Competition (1) global product divisions responsible for product sales throughout the world; (2) geographical divisions responsible for all products and functions within a given geographical area; or (3) a matrix organization consisting of either of these arrangements with centralized sales and marketing run by a centralized functional staff, or a combination of area operations and global product management • An international marketing plan should optimize the resources committed to company objectives by using one of the following three alternative organizational structures: • An international marketing plan should optimize the resources committed to company objectives by using one of the following three alternative organizational structures:
  • 21. Figure 9.1: Market Entry Strategies Exporting • Indirect • Direct Foreign Production • Licensing • Franchising • Contract Manufacturing • Assembly • Fully Integrated Production Ownership Strategies • Joint Ventures • Alliances • Acquisitions Ownership Strategies • Joint Ventures • Alliances • Acquisitions Entry Analysis • Sales • Costs • Assets • Profitability • Risk Factors Entry Analysis • Sales • Costs • Assets • Profitability • Risk Factors Exit StrategyExit Strategy Reentry StrategyReentry Strategy EntryStrategyAlternatives Entry Strategy Decision Entry Strategy Decision