Global Marketing 315 Midterm – Flashcards
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Managing profitable customer relationships
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Marketing is..
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Needs, wants, demands -> Products & services -> Value, satisfaction & quality -> Exchange transactions & relationships -> Markets ->
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Marketing Core Concepts
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1. State of self deprivation 2. Needs shaped by culture & individual personalisty 3. Wants backed up by buying power
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1. Needs... 2. Wants... 3. Demands...
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"Make your own meal"; Small companies usually center their product development efforts on meeting the customer's needs. Customization.
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Customer Driven Marketing Strategy
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is the art & science of choosing target markets & building profitable relationships with them
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Marketing Management
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What market will we serve? -> Target Market How can we serve these customers best? -> Value Proposition
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TWO QUESTIONS FOR MARKETERS
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Scottish economist who advocated private enterprise and free trade. The needs of producers should be considered only with regard to meeting the needs of customers
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Adam Smith
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The idea that consumers will favor products that are available and highly affordable; therefore, the organization should focus on improving production and distribution efficiency.
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Production Concept
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The idea that consumers will favor products that offer the most quality, performance, and features; therefore, the organization should devote its energy to making continuous product improvements.
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Product Concept
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The idea that consumers will not purchase enough of a product with a large-scale promotional & selling effort.
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Selling Concept
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Before Drucker; inside looking out After Drucker; outside looking in Peter Drucker; HAPPY CUSTOMERS, SOLE BUSIENSS PURPOSE 1. identify and satisfy the needs of consumers 2. while also seeking to achieve organizational goals 3. In return they are entitled to a "reasonable" rate of return
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Marketing Concept
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MARKETING CONCEPT PLUS --> in a manner which respects the well-being of consumers and society in general. FOR EXAMPLE: Ben & Jerry's - Masters at creating innovative flavors - 7,5% pre-tax profit donated to a variety of social and environmental causes
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Societal Concept
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activity by which a company with an image, product, or service to market builds a relationship or partnership with a cause or a number of causes for mutual benefit. Yoplait --> Save lids to save lives campaign Product Red -> Brand & cause! licensed to many companies to help with AIDS & malaria in Africa
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CAUSE RELATED MARKETING
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a concept based on the development, design, and implementation of marketing programs, processes, and activities that recognizes their breadth and interdependencies. Internal, Integrated, Performance & Relationship Marketing Holisitic Marketing: Coordination Efficiency Societal Marketing Concept: Well Being Marketing Concept: identify strategy & needs
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Holistic Marketing Concept
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Stage 1: Mission statement, Organization/business strategies & objectives. Analyze current situation Internal & External Stage 2: Research & analyze markets & customers Stage 3: Determine STP Stage 4: Set marketing plan objectives & direction Stage 5: Plan marketing strategies, support & programs Stage 6: Plan to measure progress and performance Stage 7: Implement control & evaluate plan
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Marketing Planning Process (7 stages)
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Macroenvironment; Economic, political/legal, social/culture, technological, ecological/physical Microenvironment; Supplies, Distributors, Customers, Competitors Company = center of circle
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The marketing environment
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Internal Audit; Offerings, Misison Statement, Key Issue, Strategic Business plans, previous performance External Audit: PESTE; identify trends, Porter's 5 forces, SWOT; threats & opportunities
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Analyze the situation, Step 1
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Market entry, buyer/supplier power, substitues/rivalry
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Industry Forces
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Competitor intelligence, competitor analysis, competitive benchmarking
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Competitor Benchmarking
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Cost advantage, differentiation advantage, marketing advantage When a company succeeds in creating more value for customers than its competitors, that company is said to enjoy this.
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Competitive Advantage
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Create value for customers; improve value or improve the cost, create better communication channels
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Value = Benefits/Price
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People & organizations that are both willing and able to buy
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Market
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Existing markets, existing products
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Market Penetration Strategy
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Existing markets, new products
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Product development strategy
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New markets, existing products
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Market Development Strategy
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New markets, new products
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Diversification Strategy
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Affordable & Sustainable! - Market penetration: CRM = Family loyalty card - Augmented reality catalogs (August 2013) - Market development: new countries, new targets - Product development: new products in 2013- 2014 catalog - Diversification: Moxy hotels co-brandedwith Mariott targeted to millenials Try before you buy, reduces risk
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Ikea's Value Propostion
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- Indicators of Globalization: Business in one country is dependent upon business in another - Proportion of industry revenue generated by all companies that compete in key world regions - Ratio of cross-border trade to worldwide production
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Globalization and Global Industries
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Target Marketing Strategy Marketing Mix; Product, Price, Promotion, Place
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Single Country Marketing Strategy
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Global Market Penetration Marketing Mix Development 4 P's; Adapt or Standardize Concentration of Marketing Activities Coordination of Marketing Activities Integration of Competitive Moves
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Global Market Strategy
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Focused on Canada & US BEFORE going to Europe; Market penetration in Canada & US. Markets are now saturated with the original crocs, they moved to shirts & bags using the plastic resin from their original shoes.
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Crocs
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Coke has 75% of its operating income & 2/3 of profit from overseas Japanese: 90% of world market is outside its borders Germany: 94% of market potential is outside its borders.
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Importance of Going Global for companies
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Angela Ahrendts; "One company, one brand" Mix Strategy Product: Increase sales of less cyclical lines (accessories, handbags, belts) Price: Value proposition = affordable luxury (more expensive than coach, less than prada) Place: Increase independent stores, regain control of global distribution, increase presence in emerging markets. Flagship store gets an update! (3 flagship stores in london) Promotion: New logo, social media, target millennials; You can watch the show as a preview Beauty Box: Virtual reality, reduces risk. Like IKEA
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Burberry
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Globalization = Standardization: Developing standardized products marketed worldwide with a standardized marketing mix. Essence of mass marketing. Global Localization = Adapatation: Mixing standardization and customization that minimizes costs while maximizing satisfaction. Essence of segmentation --> Think globally, act locally. <--
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Standardization v Adaptation
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Global low cost selling & production Global roll out of concepts; high speed Low complexity
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Globalization
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Culturally close to customer Flexible response to local customer needs Regional & local market penetration
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Localization
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Ethnocentric Home Country, Polycentric Host Country Regiocentric (Regional orientation), Geocentric (World orientation)
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Management Orientations: ERPG Framework
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Pros: Economies of scale Cons: Missed opportunities Home country is superior to others Sees ONLY SIMILARITIES to other countries Assumes products & practices that are successful at home will be successful everywhere; Leads to standardized or extension approach Domestic Companies: Opportunities outside home country are ignored. International Companies: Ethnocentric companies that do business outside the home country. - Business operations outside home country are secondary - Ignore customer differences.
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Ethnocentric Orientation
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Pros: Understand culture Cons: Costly Each country is unique Each subsidiary must develop their own strategy Often referred to as a multinational enterprise. (MNE) - Leads to a localized or adaptation approach that assumes products must be adapted to the local market conditions. - Companies limit their recruitment to local people to work for the company
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Polycentric Orientation
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Pros: Economies of production & marketing Cons: Slow "diffusion" A region is the relevant geographic unit. (European Union for example) Some companies serve markets throughout the world but on a regional basis. Regiocentric approach is adaptable to the company & strategies. When regional expertise is needed, people form the region are hired.
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Regiocentric Orientation
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Pros: Cons: relies on market research Entire world is potential market. Strives for integrated global strategeis Also known as a global or transnational company Retains an association with the headquarters. Leads both EXTENSION and ADAPTATION. Parent company uses local people to work for different countries subsidiaries.
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Geocentric Orientaiton
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Ethnocentric: Leads to standardization and NO adaptation appraoch. Regiocentric: A region is the relevant geographic unit Polycentric: Each country must be adapted to & localized strategies/products. Geocentric: Leads to combo of extension & adaptions
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Business approach by orientation
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- Management Myopia - Organization Culture - National controls - Opposition to globalization
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LIMITING Forces in Global Integration
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Leverage -Experience transfers -Scale economies -Resource utlization -Global strategy
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DIRVING Forces in Global integration
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Segmentation, Targeting, Positioning
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The Heart of Marketing Strategy
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1. Identify market needs Benefits in terms of: - product features -expense -quality -savings in time & convenience 2. Process of segmenting & targeting markets 3. Execute marketing program Marketing mix -Product, Price, Place, Promotion Segmentation: Process by which a market is divided into segments WITH SIMILAR NEEDS AND CHARACTERISTICS that leads them to respond in similar ways to particular product offerings. Why segment markets: to better respond to customers needs & wants to increase sales & profits. How to Segment: 1. Who customers are 2. Where they are 3. How they behave Segmentation Variables 1. Geographic variables 2. Demographic variables 3. Psychographic Segmentation 4. Behavioral Segmentation Requirements for successful segmentation: Measurable, accessible, substantial, differentiable, actionable.
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Market Segmentation
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1. Geographic; Nations, regions, states, countries, cities, neighborhoods, populations density 2. Demographic; India, population <14 is + than entire USA population 3. Psychographic; 4. Behavioral;
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Segmentation Variables
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Conventional Wisdom: - Assumes heterogenity b/w countries - Assumes homogenity w/i a country - Focuses on macro level differences - Relies on clustering of national markets - Less emphasis on w/i country segments Unconventional Wisdom: - Assumes emergence of segments that transcend national boundaries - Recognizes existence of w/i country boundaries - Emphasizes micro-level differences -Segments micro markets w/i & between countries
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Contrasting views of Global Segmentation; Conventional v Unconventional
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Millenials, Empty Nesters, Full Nest, Bachelor
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Age Segmentation
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Activities, Interest, Opinions, Demographics* VAL's: Value, Attitudes, Lifestyle; helps identify current & future opportunities for Innovators: Leading edge of change, have the highest income & can indulge. Thinkers: high resource group, motivated by ideals Believers: low resource group, motivated by ideals. favor american products. Achievers: high resource group, motivated by achievement Strivers: similar to achievers, but have low resources & less economic power Experiencers: motivated by self expression. Makers: value self-sufficiency, low resource Survivors: oldest, brand loyal customers with low resources.
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Psychographic Segmentation
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Lifestyles of Health & Sustainability Coke's bottle; able to be twisted into a small piece that can be recycled, reduces CO2 emission 40 %.
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LOHAS
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Money constrained - Walmart Time Constrained - Ikea is good value, but not for those who are time constrained. Convenience Involvement - Time savers, but allow customers to feel like they are putting in effort. - Occasions -Benefits Sought - User status - Usage Rates - Loyalty status
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Behavioral Segmentation
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Evaluating each market segment's attractiveness and selecting one or more segments to serve. Evaluating the relative attractiveness of various segments in terms of - Market growth potential -Growth rate - Competitive intensity -Firm mission and capabilities to deliver what each segment wants - In order to choose which segments to serve.
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Targeting
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Consists of a set of buyers who share common needs or characteristics that the company decides to serve.
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Target Market
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Undifferentiated/Mass Marketing: Firm chooses to ignore market differences and pursure the entire market with one offer Differentiated/Segmented Marketing: Firm decides to target several market segments and designs seperate offers for each Concentrated/Niche Marketing: Firm pusues a large share of one or a few segments Micromarketing: Tailoring programs to needs of specific individuals and local customer segments
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Market Targeting Strategies
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Standardized Global Marketing; - Mass marketing on global scale. - Undifferentiated target marketing - Standardized marketing mix - Minimal product adaptation - Intensive distribution -Lower production/ communication costs Differentiated Global Marketing; - Multi-segment targeting - Two or more distinct markets - Wider market coverage Concentrated Global Marketing; - Niche Marketing - Single segment of global market - Look for global depth rather than national breadth
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Global Targeting Strategies (3)
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- Tailoring Brands & Marketing to the needs and wants of local customer segments - Cities, neighborhoods & even specific stores
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Local Marketing
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Social Local Mobile
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SoLoMo
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Individual marketing involves tailoring products & marketing programs to the needs and preferences of individual customers One-on-one marketing Mass customization
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Individualized Marketing
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Product position is the way the product is defined by customers on important attributes, the place the product occupies in consumers minds relative to competing products -Perceptions, Impressions, Feelings, Attribute or Benefits, Quality & Price, Use or User, Competition
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Product Position
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Products -features, performance, conformance, durability, reliability, repairability, style, design Services - Delivery, installation, customer, training, consulting, service, repair Personnel -Competence, courtesy, credibility, reliability, responsiveness, communication Image -symbol, media, atmosphere, events Channels -Rapidity, efficiency
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Differentiation Variables
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Product differentiation: Mercedes Benz, well appointed luxury Product via VALUE differentation; Ryanair: low-cost, no frills Service differentiation: Apple genius bar
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Product Differentiation
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Competitive advantage is an advantage over competitiors gained by offering customers greater value either through lower prices or by providing more benefits that justify higher prices.
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Differentiation to achieve competitive advantage
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Singapore airlines; extraordinary customer care Ryanair: No frills
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Service differentiation
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To gain competitive advantage: MontBlanc $73,000 limited edition pen 70% of upmarket pens Based on desirable differentiation Global Consumer Cultural Positioning (GCCP): Identifies the brand as a symbol of a particular global culture or segment High touch and high tech products Proven effective for communication with global teens, cosmo elites & globe trotting laptop warriors. Foreign Consumer Cultural Positioning: Associates the brands users, use occasions, or product origins with a foreign country or culture. Haagen-Dazs Fosters Bewing Group's US advertising; "Fosters, Australian for beer" American-ness of Levi, Marlboro
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Repositioning
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Local Consumer Culture Positioning Identifies Positioning Statement: Identifies the target market states unique benefits of the product Value Proposition: - similar to positioning statement - includes information about pricing relative to competitors Both approaches reflect the unique selling proposition of the product.
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Global Positioning Strategies
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Hevily regulated: Harvest, Timing, & Production. Types of Grapes: Chardonnay, Pinot Noir, Pinot Meunier, Champagne & Royalty; Luxury item. Tradition of bringing monarchs to the region. Only wines that were fit for a king & used extensively in feasts. Burgundy v. Champagne; Champagne is better! Competition. Champagne process: 1. Blending 2. Clarifying 3. Corking (replaces hemp wrapped wood stoppers) How to control bubbles... 40% loss! Adding sugar after = 80% loss. Riddling, Veuve Cliquot, using gas in bottle to expel sediment CV-CNF co-op, 2,200+ hectares of land Unique Tours = Sustainablility awards Champagne only comes from Champagne, France Issues: Misuse of reputation, Champagne cigarettes, direct & indirect competition.
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Champagne
