understanding the global marketing environment class 5
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Understanding the Global Marketing Environment
Class 5
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The Marketing Task
Marketing Strategy
(Controllable)
Implementation
•Segmentation•Targeting•Positioning
• Product• Price• Promotion• Distribution
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How is a product “positioned?”
ProductPricePromotionsPlace
Implementation of Marketing Strategy
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4 Ps - Product Product decisions are all decision which relate to the physical product
and/or service offering, including its name, packaging, warranty, and availability. Product dimensions include: Size of the product Color(s) of product Scent of the product Materials/ composition of the product Design of the product Packaging materials Package colors and package design Brand name Warranty Availability of options Customizing services After-sale service offerings Inventory levels
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4 Ps - Price Price decision are all decisions which relate to the price of the
product, price negotiation, and payment terms. Pricing dimensions include: Price to end user Price to distribution intermediaries Fixed vs. negotiated pricing Negotiation policies Credit policies Credit charges Payment terms (the amount of time allowed for payment and any
discount given for payment on time) Volume discounts Introductory allowances Trade-in policies
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4 Ps - Place
Place (distribution) decisions are all decisions which relate to the places at which the product or service is made available to buyers and the methods by which the product or service reaches those places. Place dimensions include: Selection of geographic markets Types of outlets from which end-users buy Level of competition among end-use outlets Number of end-use outlets Required qualifications for end-use outlets Specific identities for end-use outlets Types of intermediaries which service end-use outlets Level of competition among intermediaries Number of intermediaries which service end-use outlets Required qualifications for intermediaries which service end-use outlets Specific identities for for intermediaries which service end-use outlets Push v. pull policy
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4 Ps - Promotion Promotion decisions are all decisions which relate to communication with buyers about the
product or service, solicitation of purchases, and short-term purchase incentives. Promotion dimensions include:
Size of advertising budget, if any Selection of all ad media (television, radio, magazines, etc.) Selection of ad vehicles (Time, Sports Illustrated, etc.) Ad Scheduling Ad appeals Ad executions Ad allowance (co-op advertising) programs Size of sales force Levels of sales force compensation Method of sales force compensation Sales quotas at which commissions or bonuses activate or change Sales territory definitions Sales force selection and training Size of budget for consumer promotions Types of consumer promotions to be used. Size of budget for “trade promotions” Types of trade promotions used.
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Creating Marketing Strategies for International Markets
Standardization/Globalization
Adaptation/Localization
VS.
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Global Marketing
A global marketing strategy involves the creation of a single strategy for a product, service, or company for the entire global market
A basic strategyA basic strategy
Flexibility to adapt to local market Flexibility to adapt to local market conditions where necessaryconditions where necessary
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Coca-ColaGlobal Marketing Strategy
Think GlobalAct Local
GLOCAL
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International Marketing Concepts
Ethnocentric Domestic Market Extension/ Standardized
International Marketing Strategy
Managers’ International Orientation
Global Market Segmentation
Polycentric Multidomestic Extension/ Localized
Regiocentric Pan Regional
Geocentric Globalized
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Country Selection
Which particular country markets should a firm enter?
Two Common Errors1) Ignore countries with good potential
2) Spend too much time and effort investigating countries with poor potential
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The Search Begins…
Macrovariables Describe total market in terms of
economic, social, geographic, political information
Macrovariables are especially useful for determining which countries get rejected early on!
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Geographic Indicators
Size of country, in terms of geographic area
Climatic conditions
Topographical characteristics
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Demographic Characteristics
Total population Population growth rate Age distribution of the
population Degree of population
density
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Economic Characteristics
Total gross national product
Per-capita income (also income growth rate)
Personal or household disposable income
Income distribution
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World (Total) $25,097 $30,783 100 100 $4,678 $5,863
Triad (Total) 19,119 16,992 76 55 24,203 21,511
North America* 7,253 7,246 29 24 24,903 24,877
Japan 4,247 2,849 17 9 33,748 22,636
EU 7,619 6,898 30 22 20,435 18,502
Other High Income 844 631 3 2 34,415 35,904
Upper Middle Income 2,239 3,504 9 11 4,397 7,604
Lower Middle Income 2,403 7,480 10 24 1,001 3,126
Low Income 491 2,176 2 7 300 1,370
GLOBAL INCOME AND POPULATION: 1995GLOBAL INCOME AND POPULATION: 1995
GNP GNPwith PPP
GNPPer
Capita
GNPPer Capitawith PPPMarket
*Not including Mexico
Purchasing Power Parity Compared
(billion)
% ofworldGNP
% ofworldGNP
with PPP
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Standard of Living
China 70 5 724 37.5 76.9
384,000,000
Hong Kong 77 7 933 4.0 1.6 95,000
Japan 79 11 609 1.6 1.9 130,000
U.S. 76 12 404 1.2 1.3 28,000
Russia 60 275
150,000,000
LifeExpectancy
Schooling(av. years)
Number of people per:
Doctor TV Phone McDonald’s
Sources: WEFA, AsiaWeek, McDonald’s, The New York Times
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Average Monthly Expenditures for Chinese Households National and Urban Areas - 1994
Food (includes eating out) $22.10 $38.00
Savings 11.40 17.00
Clothing 5.60 9.00
Child's Education 4.70 7.00
Home (includes Rent & Utilities) 4.30 8.20
Daily Goods other than Food 3.50 4.80
Medical Expenses & Drugs 2.30 4.00
Entertainment 1.30 3.20
National Urban Areas
SOURCE: Gallup China.
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Developing a Marketing Strategy
Situation Analysis Segmentation and Targeting Positioning Marketing Objectives Implementation - Marketing Mix Budget
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Roper Starch Worldwide Global Study
Shopping Styles Deal Makers (29%) - love the buying process Price Seekers (27%) - place primary value on the
price of the product that they are buying Brand Loyalists (23%) - purchase name brands
and remain true to them Luxury Innovators (21%) - seek new, prestigious
brands
40,000 consumers in 40 countries
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How the World Shops
Source: “How the World Shops,” Advertising Age, June 5, 1995, p.3.
Price Brand Luxury Deal Seekers Loyalists Innovators Makers
India 7.4 34.6 35.8 22.2Saudi Arabia 8.9 14.8 34.4 40.3Mexico 23.4 19.1 19.9 35.0China 23.4 27.9 19.1 35.0Czech Republic 26.9 23.9 25.7 22.6U.K. 27.2 28.7 17.5 25.5Spain 34.4 27.0 18.1 19.6U.S. 36.0 11.3 17.0 37.0Japan 41.0 23.5 7.9 27.1Germany 43.7 16.9 15.7 21.9France 45.5 19.5 8.5 26.6
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Type Of Segmentation
Grouping CountriesSegments Within and Across Foreign
Markets
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Global Scan Segmentation Study
0%
20%
40%
60%
80%
100%
Japan USA UK
Strivers
Achievers
Pressured
Traditionals
Adapters
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Life Style
Exhibit : Typology of European Car Market
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International Positioning Strategies
Global Positioning and Segmentation StrategiesUniversal Segment / Uniform Positioning
ThemeUniversal Segment / Different Positioning
ThemesDifferent Segment / Different Positioning
Themes
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Global Positioning & Segmentation Strategies