Global Marketing Management: Global Marketing Management: Planning and Organization Planning and Organization Chapter 11 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved. PowerPoint presentation prepared by: Alfred Lowey-Ball Associate Professor of Marketing UBI-United Business Institutes Brussels, Belgium Chapter Outline • Global Gateways • Global Marketing Management:old vs new views • The Nestlé way • Benefits of global marketing • A balanced approach to global marketing strategy: 3M • Planning for Global Markets • Company objectives and resources • International commitment • The planning process • Alternative Market Entry Strategies • Exporting • Contractual agreements • Strategic International Alliances • Direct foreign investment • Organizing for Global competition • Global Gateways • Global Marketing Management:old vs new views • The Nestlé way • Benefits of global marketing • A balanced approach to global marketing strategy: 3M • Planning for Global Markets • Company objectives and resources • International commitment • The planning process • Alternative Market Entry Strategies • Exporting • Contractual agreements • Strategic International Alliances • Direct foreign investment • Organizing for Global competition Chapter Learning Objectives 1. How global marketing management differs from international marketing management 1. How global marketing management differs from international marketing management 2. The increasing importance of international strategic alliances 2. The increasing importance of international strategic alliances 3. The need for planning to achieve company goals 3. The need for planning to achieve company goals 4. The important factors for each alternative market-entry strategy 4. The important factors for each alternative market-entry strategy McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved. Global Gateways • Internet Portal sector in US overcrowded: Google, Yahoo, Lycos, America On-Line, etc going int’l • How to go international? US companies face tough competition against local players with better understanding of local culture and needs • Local content indispensable • Biggest competitors: T-on-line (D) op. by DT, Wanadoo op. by FT • JV’s: Lycos with Bertelsmann for Germany, AOL has a dozen local JV’s, Excite about 9 Partnerships with local outfits only solution Partnerships with local outfits only solution Introduction • Mnc’s are becoming global, changing their market strategies and organizations to confront global competition for expanding markets often on unfamiliar ground. • Acquiring a global perspective is not hard, successful execution requires planning, organization, the right human resources and a commitment to try new approaches—such as engaging in collaborative relationships • This chapter discusses global marketing management, competition in the global marketplace, strategic planning, and alternative market-entry strategies Global Marketing Management • In the 1970s “standardization vs. adaptation” • In the 1980s “globalization vs. localization” or “Think global, act local” • In the 1990s “global integration vs. local responsiveness” • Does global homogenization of consumer tastes allow global standardization of the marketing mix? NO! • Solution: adaptation to local needs combined with std. of mfg. and financial controls insofar as possible: eg Coke and Disney [...]... ready-to-drink coffee adapted to local tastes ready-to-drink coffee adapted to local tastes around the world around the world International Planning Process Foreign Market -Entry Strategies The choice of entry strategy depends on: The choice of entry strategy depends on: • • • market characteristics (such as potential sales, strategic importance, cultural differences, and country restrictions) company capabilities... including the degree of near-market knowledge, marketing involvement, and commitment that management is prepared to make Alternative Market -Entry Strategies •• A company has four different modes of foreign market entry A company has four different modes of foreign market entry from which to select: from which to select: • • • • Exporting contractual agreements strategic alliances, and direct foreign investment... of foreign market development and entry is A fourth means of foreign market development and entry is direct foreign investment direct foreign investment • • Companies may manufacture locally to capitalize on low-cost labor, to avoid high import taxes, to reduce the high costs of transportation to market, to gain access to raw materials, or as a means of gaining market entry Firms may either invest in... tariffs Market Entry Strategies Exporting • • • • Exporting can be either direct or indirect In direct exporting the company sells to a customer in another country In contrast, indirect exporting usually means that the company sells to a buyer (importer or distributor) in the home country who in turn exports the product The Internet is becoming increasingly important as a foreign market entry method... one company and another in a foreign market between one company and another in a foreign market • • Involve the transfer of technology, processes, trademarks, or human skills Contractual forms of market entry include: (1) Licensing: of patent & trademark rights and technological knowhow It is a means of establishing a foothold in foreign markets without large capital outlays and risk eg Petrochemicals,... a standard package of products, operational systems, and management services, and the franchisee provides market knowledge, capital, and personal involvement in management Most rapidly growing market entry mode eg McDonalds, Pizza Hut Strategic International Alliances •• A strategic international alliance (SIA) is a business A strategic international alliance (SIA) is a business relationship established... for common marketing mix tactics across countries? Which cultural/environmental adaptations are necessary for successful acceptance of the marketing mix? Will adaptation costs allow profitable market entry? Phase 2: The Nestlé example •• Marketing of instant coffee ready to drink Marketing of instant coffee ready to drink • Preparation of country fact books – – – – – • How important is coffee in the . • commitment that management is prepared to make The choice of entry strategy depends on: The choice of entry strategy depends on: Alternative Market -Entry Strategies • Exporting • contractual agreements. company goals 4. The important factors for each alternative market -entry strategy 4. The important factors for each alternative market -entry strategy McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies,. • A company has four different modes of foreign market entry from which to select: • A company has four different modes of foreign market entry from which to select: • Import regulations may