7018SMM

GLOBAL MARKETING
Lecture 1 Introduction to Global Marketing
Dr Annesha Makhal
ad5902@coventry.ac.uk
Learning Objectives

By the end of this lecture, you will be knowing:

• What is Global Marketing and why is it important?
• Why do companies go international?
• What are the different management orientations to
global marketing?
• What are the potential barriers to global marketing

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Why are global markets important?

1. International trade has grown faster than domestic economies

2. Several service industries also engage with global marketing. This includes
banks, accounting firms, consultancy companies, hotel chains, airlines, and sometimes
even law firms

○ Banking: HSBC, Citi Bank

○ Accountancy firms: PwC, Deloitte, KPMG, Deloitte

○ Hotel chains: Hilton hotels and resorts, Novotel

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Conceptualising ‘global marketing’

 The term global marketing has been in use since the 1980's. Before that, the term

used was 'international marketing' which is marketing activities outside one's

domestic market.

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From Domestic Marketing To Global
Marketing
DOMESTIC MARKETING

o Marketing is aimed at a single market - the

firm's domestic market

o The firm faces only one set of competitive,

economic, and market issues

o Caters to national customers - they could

serve several segments within this market

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From Domestic Marketing To Global
Marketing
EXPORT MARKETING
o The company exports or sells its products outside

of its domestic base of operation

o The firm only sells its products overseas, but does

not operate or function outside of its domestic base

o Hence, third-party retailers or having a pricing and

supply channel management system is key for

export marketing.

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From Domestic Marketing To Global
Marketing
INTERNATIONAL MARKETING
○ International marketing goes beyond exporting. The firm becomes more directly
involved with the local marketing environment within a given country.
○ Function through subsidiaries abroad that develop marketing strategies for foreign
markets.
○ Need to adopt a new marketing strategy, incorporate cultural, political, and economic
components of their operations.
○ Example: Starbucks have the most successful and largest markets in Japan. They have
had to respond to local changes such as slashing prices due to increasing price competition
and cut costs by procuring ingredients locally, and even change their menu to local tastes.
○ IM is more about understanding many national markets and helping customers navigate
through some of those differences.
o International marketing grew with the expansion of MNCs. In most cases MNCs

followed a multi-domestic strategy. This came with many failures 7

From Domestic Marketing
To Global Marketing

PAN-REGIONAL MARKETING
o Focussed on geographic regions: North

America, Pan-Europe, South Asia

o Companies seek synergies in their regional

marketing strategy for increasing efficiency

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From Domestic Marketing To Global
Marketing

GLOBAL MARKETING
o Global marketing strategy involves the creation of a single strategy for a product,

service or company for the entire global market. A basic strategy is agreed upon and
applied throughout the world, while also maintaining a certain degree of flexibility to
adapt to local market needs wherever necessary.
o Global marketing offers more advantages than IM. Firms can offer better products

and services at a lower cost even when adapting for local market conditions. Hence,
customers are offered products at lower prices
o Global marketing are more agile. New products can swiftly move to multiple markets

globally.
o Managers that follow a global perspective have to integrate actions taken in one

national market with actions in another national market

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Why should you study
Global Marketing?

 Every year MNCs hire large numbers

of marketing professionals, and as
they get more globalised, competence
in global marketing is becoming
increasingly important. This is true for
companies in the service sector.
Hence, learning about global
marketing will benefit all types of
business students.

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Management orientation

Ethnocentric orientation

Polycentric orientation

Regiocentric orientation

Geocentric orientation
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Ethnocentric orientation
Assumes that their own home
country is superior to the rest
of the world. Foreign markets
are considered
secondary/subordinate to
domestic markets
Hence, indifferent to
marketing opportunities
outside of home country.
Largely a standardised or
extension approach.
Ethnocentrism is considered a
major internal weakness that
must be overcome to be
regarded as an effective
global competitor
E.g., Japanese tech and
automobile companies (e.g.,
Nissan and Toshiba)
Polycentric orientation
Opposite of ethnocentrism.
Every country in which a
company does business is
unique, each subsidiary is
developed into its unique
business/marketing strategies
Hence, the approach is
localisation or adaptation
approach
P&G and Unilever: both
companies have used
different packaging and
promotional strategies in
different strategies
Regiocentric orientation
Here, a region becomes the
relevant geographical unit
North American Free Trade
Agreement (NAFTA)
Europe
E.g., General Motors –
different marketing executives
in different regions of the
world who operate
independently, in response to
the different regional
requirement. Asia-Pacific and
Europe.
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Geocentric orientation
Views the entire world as a
potential market and strives to
develop integrated global
strategies. Hence called a global
or transnational company
Approach can be to serve world
markets from a single country or
source globally and use the
most efficient processes to
deliver to the world.
E.g., Tods (Italy), Harley
Davidson (USA) – single
country .
Uniqlo and Benetton
Avail global supply chains, thus
blurring national identity. They
use a combination of
standardised (extension) and
localised (adaptation) elements
 “A key factor that distinguishes global and transnational companies from their

international or multinational counterparts is mind-set: At global and transnational

companies, decisions regarding extension and adaptation are not based on
assumptions, but rather made on the basis of ongoing research into market needs
and wants” (p. 41; Chapter 1)

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The decision to globalise

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Motives for internationalisation

Market-seeking
• Companies go abroad to find new customers

Efficiency-seeking
• To lower the cost of operations

Resource-seeking
• To access resources not available at home, or are costly to obtain

Strategic-asset seeking
• To obtain assets critical to their strategic survival and growth

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Why do firms go international?

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Barriers to internationalisation

Tariff Non-tariff

Quantitative
specific
restrictions

Bureaucracy
Ad valorem • Custom delays
• Government
intervention

Discriminatory Financial controls

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Key References

 Gillespie, K., & Hennessey, Hubert D. (2016). Global marketing (Fourth ed.).

 Green, M., & Keegan, Warren J., author. (2020). Global marketing (Tenth edition..;

Global ed.).

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Thank you!