International Business

Third Edition

Shad Morris and James Oldroyd

Chapter 17

Global Marketing

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Introduction

“Globalization and its rapid spread are facilitated, in part, by the

successful marketing strategies of companies around the world.
As global competition increases, success depends on firms’
ability to effectively adjust their marketing efforts in order to
reach and persuade target consumers in different markets
across the world”.
Learning Objectives

1. Explain how to customize a marketing mix to different

countries and cultures.
2. Describe the advantages and disadvantages of
standardizing and differentiating a product.
3. Outline ways to globally brand a product while
maintaining a local feel.
4. Describe ways to effectively set international pricing and
distribution strategies.
What Is the Goal of Marketing?

“Getting the right product in the right place at the right price and at
the right time. In other words, to market effectively, companies must
create a product that meets a need felt by a particular group of people,
then make the product available for sale at a location that they can
access at a price they can afford”.
Global Market Segmentation
Key terms:
• Global marketing strategy- the way in which a firm decides which market
segments to operate in, how it will position its offerings, and to what extent
products and services will be standardized or differentiated in each market
• Marketing mix- the collection of decisions regarding product, place, price,
and promotion that companies make during the process of bringing a
product or service to market
• Market segmentation- the process by which companies cluster customers
into homogeneous groups
• Global market segmentation- the process of grouping of customer across
national markets based on criteria such as level of economic development,
cultural characteristics, language, buying patterns, and regulatory
environment
Harley in Vietnam
Buying a Harley in Vietnam
is like buying a jet airplane
in the U.S.” It is expensive.
But despite the relative
high cost, a growing group
of Harley riders, or HOGs, is
emerging in Vietnam.
Figure 17.1 Harley Davidson is building a
consumer base in Vietnam
As one of the few countries that rely
primarily upon motorcycles instead of cars
for transportation, the Harley Davidson is
truly the Mercedes Benz of the road in
Vietnam.
Porsche Segmentation

Figure 17.2 Porsche The introduction of the Porsche Cayenne brought the carmaker
into a much larger global segment, with Maria Sharapova as spokesperson.
Company Marketing Strategies

• Standardization of the Marketing Mix

• Differentiation of the Marketing Mix
• Glocalization
Standardization Versus Differentiation
in International Marketing
Key terms:
• Global branding- a marketing approach where
promotion, product, and price are standardized globally
• Glocalization- an approach whereby firms achieve
global integration while still meeting the demands of
local markets
Advantage of Global Marketing
Standardization and Differentiation

Figure 17.3 Advantages of global marketing standardization and

differentiation Unfortunately, companies cannot do both really well and
must choose one over the other.
Rolex Promotion Across Markets
Figure 17.4 Tennis Great, Roger
Federer, Markets the Rolex Watch The
most expensive Rolex you can buy is the
GMT-Master Ice, which goes for about
half a million U.S. dollars.
Differentiation by Coca-Cola
Figure 17.5 Vending Machines in Japan
These vending machines are common in Japan and offer both hot and cold
beverages, allowing Coca-Cola to differentiate its Japanese drink products.
Glocalization

Figure 17.6 Glocalization This concept combines the benefits of

standardization and differentiation.
Glocalization Strategy

“Adopting a glocalization strategy means making

adjustments according to regional consumer needs. By
selling products and creating experiences that appeal to
local tastes, producers are able to build a level of brand
loyalty across borders that would be impossible with a
standard, homogenous product”.
 Brand Terminology
• Brand- the name, term, design, symbol, or any other feature that identifies one
seller’s goods or service as distinct from those of other seller.
• Guerilla marketing- marketing through unconventional, innovative, low-cost
means to generate social buzz and maximum exposure.
• Viral marketing- focused on producing a marketing message that people share
with their friends by email, reposting, or retweeting.
• Push marketing- marketing efforts designed to actively push a product through
the channel of distribution, starting with the producer, moving through the
distribution partners, and finally reaching the consumer.
• Pull marketing- marketing efforts designed to cultivate customer desires and
expectations so the customer will demand more product, effectively pulling the
product through the production and distribution process.
• Brand image- the set of associations in a customer’s mind regarding a brand.
• Brand loyalty- commitment to a brand in the face of competition.
The World’s Top 15 Global Brands
Table 17.1 The
World’s top 15
global brands,
2021
Guerilla Marketing
The Copenhagen Zoo wrapped several city busses with a picture of a
giant snake squeezing the bus. The advertising created a stir and
worked so well that some commuters refused to get on the bus.

Figure 17.7 Guerilla marketing

A giant snake squeezes a Copenhagen city bus in the Copenhagen Zoo’s
guerilla marketing campaign.
Brand Image
Figure 17.8 Ferrari
The prancing black horse
on a yellow background
is a powerful brand
image recognized
around the world, even
by consumers who will
never buy the
company’s iconic car.
General Pricing Strategies
• Cost-Plus Pricing Strategy
• Penetration Pricing Strategy
• Skimming Strategy
Global Pricing and Distribution
Key terms:
• Cost-plus strategy pricing- a product or service at a fixed margin over
costs.
• Penetration pricing strategy- a strategy where a company sets the price
of a product very low to get customers to try it.
• Dumping- selling a product for a price less than the cost of production to
capture market share and force competitors out of the market.
• Skimming- a pricing strategy where a company sets a high price for a
product and sells to the segment that is willing to pay a premium.
• Gray market activity- a specific type of arbitration whereby companies
or individuals buy a product in a cheaper market and sell it in a more
expensive market.
• Distribution- the process of taking goods from production to
consumption.
Other Factors Affecting Global Pricing
1. Government Intervention
2. Market Positioning
3. Fluctuations in Currency Value
4. Gray Market Activity
5. Transfer Pricing
Price and Perception of Quality Example #1
In Japan, farmers sell a limited quantity of specialized
watermelons—including heart-shaped and square ones grown in
special molds, as shown in Figure 17.9—as luxury items for over
20 times the normal price.

Figure 17.9 Shaped watermelons are popular in Japan Though expensive

in Japan, these watermelons can be sold for much more if exported.
Price and Perception of Quality Example #2

Figure 17.10 Bang and Olufsen’s BeoVision Harmony Television

The product offers a premium viewing experience at a premium price.
 Distribution Channels
• The U.S.-based company SignalQuest, a maker of microsensors,
uses international distributors to gain access to global markets.
• Its distributors in local markets help the company quickly enter
these markets.

Figure 17.11 Distribution Chain SignalQuest, a company headquartered in New

Hampshire, uses distributors to access global markets.
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