Business Studies Unit 4 Topic 5

Topic 5: Global Marketing - a process of selling a product internationally and include 4 Ps

of marketing:

• Product - firms should consider whether to sell same product in all market or adjust
products depending on each country
• Place - firms should consider using same distribution channels or adjusting them
to different countries
• Price - firms should consider whether to charge same prices for all markets or
adjust them depending on the country
• Promotion - firm should not use same promotion for different markets as some of
it might be misunderstood or might seem offensive

International Marketing Strategies:

• Global Strategy - using common strategy with all markets that firm operates in
assuming all the markets are identical
• Global localisation (Globalisation) - where firm adapts a different strategy for each
country operates in and this strategy is more realistic as different markets have
different tastes; firms should be adapting to local conditions (thinking globally but
acting locally)

Marketing Approach of International market - depends on which marketing strategy is used;

various approaches include:

1.) Domestic approach (ethnocentric)

2.) International approach (polycentric)

3.) Mixed approach (geocentric)

1.) Domestic (ethnocentric) approach - includes all 4 Ps to be similar for both international
and local markets; only successful when markets are identical; also applied with
standardisation - where all products are common: computers, phones etc.

Advantages:

• Reduced investment in research and development - no need for research and

development as products are developed and marketed in the same way for every
country
 • Reduced marketing costs - same materials and messages are used when
promoting product across the globe; saves costs of materials in each country

Disadvantages:

• Risk of lost sales - same products might not appeal to different tastes because of
culture, religion etc.
• Lack of diversification - if a product marketed in the same way for each country,
failure in one country may mean failure in all of them
• Inefficiency - lack of knowledge about local markets may lead to inefficiency as
coordination of all the branches may be a problem

2.) International (polycentric) approach - marketing approaches are varied to meet the
needs of each country; each country will have to have their won marketing mix ( 4 Ps will
be different depending the country)

Advantages - disadvantages of domestic approach

Disadvantages - advantages of domestic approach

3.) Mixed (geocentric) approach - combines both domestic and international approaches;
4 Ps are varied to reflect both approaches; same product may be sold in all countries but
distributed differently

Global Niche Market - market that comprises of people that share common needs or interest
across the world; luxury cars, organic products etc.

Global Mass Market - focuses on general needs of consumers around the globe

Benefits of serving a global niche market:

• Niche markets have little or no competition - businesses charge premium prices

• Target their messages to specific audiences - saving money on promotion using
specialised media rather than mass media
• Global niche markets attract customer loyalty - since they offer exactly what
customers want

Limitations of serving a global niche market:

• Can attract new entrants - when successfully exploited and huge profits are made
• May suffer fluctuations - as it is a tiny market
• Unable to identify a common culture - even if the globe shares common
characteristics