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Global MarketingManagementA European Perspective

Warren J. Keegan

Bodo B. Schlegelmilch

Introduction to Global Marketing

Keegan/SchlegelmilchGlobal Marketing Management: A European Perspective

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Overview

The Marketing ConceptThe Three Key Elements of MarketingScope and Boundaries of Global Marketing Importance of Global MarketingManagement Orientation and Global MarketingFactors Supporting or Inhibiting Global IntegrationSummary


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Learning Objectives

Understanding how the world economy developed over the past decades

Knowing the impact of globalization on the marketing discipline

Learning about the interdependencies between management orientation and marketing performance

Understanding the factors supporting or inhibiting international marketing activities


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Marketing: A Universal Discipline

Marketing (1): the process of focusing resources and objectives of an organization on environmental opportunities and needs

Marketing (2): a set of concepts, tools, theories, practices, procedures, and experiences

Although a universal discipline, marketing practice varies from country to country


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The Marketing Concept (1)

Concept has chanced dramatically1950’s:

Focus on products

1960’s: Focus on customer orientation Development of marketing mix: product, price, promotion,

place (4P’s)


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1990’s: Focus on customer in the context of the broader external

environment E.g. competition, government policy and regulation

Focus on stakeholder value E.g. employees, customers, shareholders, society


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Today: Two key tasks of marketing

Focus on customer and his/her environmentCreate value for consumers and stakeholder

Shift towards Focus on managing strategic partnerships Positioning of firm in value chain to optimize value

creation Profit as a measure of success, not an end in itself


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The Three Key Elements of Marketing

VALUE

DIFFERENTIATION FOCUS


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The Three Key Elements of Marketing - Value

Goal: create value that is greater than the value created by competitors

Strategy: Expand or improve product and/ or service benefits Reduce the price Combine these two elements


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The Three Key Elements of Marketing - Value

V = Value

B = Perceived Benefits – Perceived Costs

P = Price

V = B / P


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The Three Key Elements of Marketing - Differentiation

Goal: create competitive advantage through differentiation

Advantage can exist in any element of a company’s offer: e.g. product, price, advertising

Competitive advantage should be sustainable over extended period of time

BMW: Combination of superior production skills and marketing competencies


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The Three Key Elements of Marketing - Focus

Goal: a concentration of attention and resources Requirement to create customer value at a

competitive advantage A viable way for small and medium sized companies

to achieve dominant position in world market FREQUENTIS: 90% export share with air traffic

control systems


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Scope and Boundaries of Global Marketing

Marketing discipline is universal but markets and customers are quite different

Three domains of knowledge relevant to international managers Cross-Cultural Knowledge Country/ Regional Knowledge Cross-Border Transactions Knowledge

Need for “Global Localization”: Adjustment of global marketing strategies to local requirements


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Importance of Global Marketing

Activities in the international arena are of eminent importance to companies in achieving maximum growth potential

E.g.: 94% of world market potential for German companies is outside of Germany

Trend: A large number of industries will be dominated by a handful of global companies


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Management Orientation and Global Marketing (1)

Different Management Orientations in the Global Arena – EPRG Framework

Regiocentric

Ethnocentric

Geocentric

Polycentric


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Ethnocentric Orientation: Characteristic for domestic and international companies Marketing opportunities outside the home market are

pursued by extending various elements of the marketing mix

Polycentric Orientation Characteristic for multinational companies Marketing mix is adapted by autonomous country

managers


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Regiocentric or Geocentric Orientation: Characteristic for global and transnational companies Marketing opportunities are pursued by both, extension

and adaptation strategies in global markets


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Factors Supporting or Inhibiting Global Integration (1)

Driving Forces Technology Regional Economic Agreements Market Needs and Wants Transportation and Communication Improvements Product Development Costs Quality World Economic Trends Leverage


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Factors Supporting or Inhibiting Global Integration (2)

Restraining Forces Management Myopia Ethnocentric Organization Culture National Controls


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Summary

Global marketing is the process of focusing resources on global marketing opportunities

Goal, to create customer value and competitive advantage by maintaining focus

Three classifications of management orientation: ethnocentric, polycentric, regiocentric, geocentric

Global marketing importance is shaped by a variety of driving and restraining forces

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