International Marketing - Chapter 12: Global Marketing Management: Planning and Organization

Chapter 12Global Marketing Management:Planning and OrganizationInternational Marketing15th edition Philip R. Cateora, Mary C. Gilly, and John L. GrahamGlobal Marketing Management The trend back toward localization Caused by the new efficiencies of customization Made possible by the Internet Increasingly flexible manufacturing processesFrom the marketing perspective customization is always bestGlobal markets continue to homogenize and diversify simultaneouslyBest companies will avoid trap of focusing on country as the primary segmentation variable2Roy Philip Benefits of Global MarketingWhen large market segments can be identifiedEconomies of scale in production and marketingImportant competitive advantages for global companiesTransfer of experience and know-how Across countries through improved coordination and integration of marketing activitiesMarketing globally Ensures that marketers have access to the toughest customersMarket diversity carries with it additional financial benefitsFirms are able to take advantage of changing financial circumstances3Roy Philip International Planning ProcessRoy Philip 4Exhibit 12.1Alternative Market-Entry Strategies (1 of 2)An entry strategy into international market should reflect on analysis Market characteristicsPotential salesStrategic importanceStrengths of local resourcesCultural differencesCountry restrictionsCompany capabilities and characteristicsDegree of near-market knowledgeMarketing involvementManagement commitment5Roy Philip Alternative Market-Entry StrategiesRoy Philip 6Exhibit 12.2Companies most often begin with modest export involvement A company has four different modes of foreign market entryExportingContractual agreementsStrategic international alliancesDirect foreign investmentsAlternative Market-Entry Strategies (2 of 2)7Roy Philip Contractual Agreement (1 of 2)Contractual agreements Long-term, Nonequity association between a company and another in a foreign marketLicensingA means of establishing a foothold in foreign markets without large capital outlaysA favorite strategy for small and medium-sized companiesLegitimate means of capitalizing on intellectual property in a foreign market8Roy Philip Contractual Agreement (2 of 2)FranchisingFranchiser provides a standard package of products, systems, and management servicesFranchise provides market knowledge, capital, and personal involvement in managementExpected to be the fastest-growing market-entry strategyTwo types of franchise agreementsMaster franchise Gives the franchisee the rights to a specific area with the authority to sell or establish subfranchisesLicensing9Roy Philip Strategic International Alliances Four characteristics define joint ventures: JVs are established, separate, legal entitiesThe acknowledged intent by the partners to share in the management of the JVThere are partnerships between legally incorporated entities such as companies, chartered organizations, or governments, and not between individualsEquity positions are held by each of the partners10Roy Philip Strategic International Alliances ConsortiaSimilar to joint ventures and could be classified as such except for two unique characteristicsTypically involve a large number of participantsFrequently operate in a country or market in which none of the participants is currently activeConsortia are developed to pool financial and managerial resources and to lessen risks11Roy Philip Direct Foreign InvestmentFactors that influence the structure and performance of direct investmentsTimingThe growing complexity and contingencies of contractsTransaction cost structuresTechnology transferDegree of product differentiationThe previous experiences and cultural diversity of acquired firmsAdvertising and reputation barriers12Roy Philip