Chapter 1 Summary: Warren J. Keegan: Global Marketing Management, 7th Edition

Chapter 1

Introduction to Global Marketing

§ What is Global Marketing?

Global Marketing is the process of focusing the resources and objectives of a company on global marketing opportunities. It means widening the business horizons to encompass the world when scanning for opportunity and threat. This decision to entering new markets depends strongly on the company's resources, managerial mindset and the nature of opportunity and threat, which not every company is able to.

In the 1990s, the concept of the 4p's was outdated and there was a shift of the focus from the customer to the customer in the external environment. Then, the means of strategic Management for the integration of Marketing with other Management functions came up ad shifted the focus towards the strategic partnerships and the new positioning between vendors & customers with the purpose of creating value for the customer.

§ The 3 Principles of Marketing

The essence of Marketing can be summarized in 3 Principles.

1. Marketing for creating higher customer value than the competitors by expanding or improving the product, by reducing the price or by a combination of these.

2. Offering competitive advantage in case of product, price, promotion, distribution, etc.

3. For succeeding on the first two principles, the focus is needed for concentrating the attention.

§ Why Global Marketing?

Because, although the Marketing tools are universal, the marketing practice varies form country to country, as well as the consumers, competitors, distribution channels, etc are different. Therefore it can be necessary to change the marketing plan. The successful marketers need therefore to "think globally and act locally".

As seen in the example of Coca Cola, this ability can be a source of competitive advantage by adapting sales promotion, distribution and customer service efforts to local needs. Other examples are Philip Morris, Harley Davidson, Benetton, all with different Global Marketing Strategies.

§ The Importance of Global Marketing

Many companies have recognized the importance of conducting business activities outside their home countries. Now, a few global corporations dominate the world market, as it is for example in the market for automobiles. Mergers are common and will be the future pressure in this industry. Due to changing economic conditions, mergers & acquisitions and innovation, major changes can occur. From the many hundreds of small car manufactures in the USA are now 2 left.

§ Management Orientations

The form of a company's response to global market opportunities depend greatly on management's assumptions or beliefs about the nature of the world. Therefore, the worldview of a company can be different.

1. Ethnocentric Orientation

This person thinks that his/her home country is superior compared to the rest of the world. These people see only similarities in the foreign markets and assume that their product, as it is superior, will be successful everywhere. These companies have therefore a centralized Marketing Management.

2. Polycentric Orientation

This is the opposite of ethnocentrism. Here, the Management has often unconscious belief or assumption that each country is unique. Each subsidiary develops its own unique business and marketing strategies. These companies have therefore a decentralized Marketing Management.

3. Regiocentric Orientation

Here, the management sees regions as unique and seeks to develop an integrated regional strategy. A focus on the EU would be part of this view. These companies have therefore a integrated Marketing Management on regional scale.

4. Geocentric Orientation

This orientation represents a synthesis of ethno- and polycentrism; it is a worldview that sees similarities and differences in markets and countries and seeks to create a global strategy that is fully responsive to local needs and wants. A company with a geocentric orientation sees the entire world as a potential market. These companies have therefore a integrated Marketing Management on global scale.

§ Driving and restraining forces affecting global integration and global marketing

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