"Companies must learn to operate

as if the world were one large

market – ignoring superficial
regional and national differences"
Theodore Levitt

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 Globalization -a  Example
process of interaction • 18-year-old Hanna logs on
to a Canadian web site,
and integration among
orders the latest CD
people, companies, and recorded by Madonna, and
governments of many pays for it in Kroner, using
nations, is driven by a Danish credit card issued
by her local bank.
international trade and
investment and has
resulted in what some
call a global economy.

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 Increasingly mobile workforce, more
informative customers, and rapidly changing
technologies and business models.
 Marketing strategy is the key to attaining
competitive advantage in the global
marketplace.
 How can a successful global marketing
strategy be developed and sustained?

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 Requires the firm to focus its efforts world-
wide, rather than developing marketing
strategies on a country by country basis
 The objective: Coordination and integration
of production, marketing and other
functional activities across countries

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 Global markets:
• The idea that regional and/or world markets are
converging, allowing for a more standardized
marketing strategy.

 Implementing a global strategy depends on

the distance (or closeness) between regions
and countries

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 Measured by 4 dimensions
• Cultural
 Language, ethnicities/traditions, religion, values, norms
• Administrative
 Laws, political risk, government structure
• Geographic
 Country size, infrastructure, climate, remoteness from
neighboring countries.
• Economic
 Differences in national income, costs of doing business,
prices, availability of human and natural resources
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 Global markets are characterized by:
1. Greater uncertainty in markets and environments.
2. Greater diversity and dynamism/interest than
domestic, internal markets.
3. Greater separation of geographical and
psychological distances.

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 Spatial(depth/position) distances between
domestic and global marketing have been
reduced by the substitution of IT media for
face-to-face contact between buyers and
sellers
 However, in some instances face-to-face
communication is preferable
 One of the most dramatic developments of
the start of the new millennium was a shift
of advertising expenditures from traditional
media to the Internet 1-8
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 Culturaldistance may be defined as some
measure of the extent to which cultures are
similar or different.
• Measured on a country level and cannot be
controlled by management
 Psychic distance exists in the mind of the
individual
• The perceptual distance between the home country
culture and the host country culture
 Measured on the individual, rather than the country, level
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 4 approaches/orientations by which a firm
is managed in foreign markets

1. Ethnocentric- a focus on the home market

2. Polycentric – approach global markets with

discrete/distinct strategies
3. Regiocentric – strategies target entire regions

4. Geocentric – the world is one market

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 Standardization vs. localization-adaptation

 Configuration/Coordination

 Integration of the Firm's Value Chain

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 Standardization vs. localization-adaptation
• Standardization benefits include
 Economies of scale (more production leads to decrease cost)
 Lowered costs
 Uniform products
 Shorter learning curve
• Localization is preferred:
 Different customer preferences
 Different performance requirements and standards
across countries
 Different cultural perceptions

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A value chain is the sequence of activities
required to make a product or provide a
service.
 Primary activities
• Inbound logistics
• Operations
• Marketing and sales
• Service

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 Configuration refers to where and how
activities will be located
• Concentrated in one country or
• Dispersed throughout many countries
 Coordination refers to the governance of the
activities, how they are linked together
throughout a chain which is dispersed
geographically among many countries

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4 dimensions:

• Market measures
• Consumer measure
• Measures of innovation
• Financial results

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 Strategic vision
• Where a company wants to go, how it will get there,
and why it should be successful in doing so.

 Global vision
• The ability to look into the future or the capacity to
visualize the image that the company is seeking to
create on a world-wide basis.

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