Developing Marketing Management in The Global Market

Berlin
London
Developing Marketing Management in

the Global Marketplace Paris
Session 1 – Mapping key decision areas
Torino
Madrid
Copyright Owner: European Department of Marketing, ESCP Europe

Session 1 - Agenda
1 Foundations
1.1 Basic concepts of marketing
1.2 Marketing in the global marketplace
2 READINGS
CFVG - MMSS Session 1 © ESCP Europe

Session 1 - Agenda
1 Foundations

The term ‘marketing’ does not have one single
definition…
When we talk about ‘marketing’, we need to distinguish between three perspectives:
1 marketing as a function (the marketing department)
2 marketing as a process (marketing management)
3 marketing as a philosophy (the marketing concept)
Marketing is an organizational function and a set of processes for creating,

capturing, communicating, and delivering value to customers and for
managing customer relationships in ways that benefit the organization and its
stakeholders.
American Marketing Association
CFVG - MMSS Session 1 © ESCP Europe 4

Definition of the modern marketing concept
Marketing is a customer focus that permeates

organisational functions and processes and is
geared towards marketing promises through
value proposition, enabling the fulfilment of
individual expectations created by such promises
and fulfilling such expectations through support to
customers’ value-generating processes thereby
supporting value creation in the firm, customers
and stakeholders.”
Marketing is more than just selling and advertising
https://www.youtube.com/watch?v=heSudg-tfIk&feature=related
Source: P Kotler, K Keller, M Brady, M Goodman, and T Hansen (2016), Marketing Management,

The scope of marketing:
The three levels that managers need to distinguish
We can consider marketing at 3 levels:
• Strategic marketing – driven and overlapped with the overall company or

business strategies.
• Marketing strategy – Selecting the most profitably mix and make the
marketing plan, e.g., 4Ps
• Marketing operations – Implementation aspects of marketing, focusing on

maximizing the effective use of marketing resources and skills.

Different kinds of buyers and marketing exchanges
Organizational buyers – organizations that purchase

goods and services in order to produce something else to
sell.
Consumers – People who buy goods and services for

themselves, their households, or to give to others.
Producer
BtoB
Producer
BtoR BtoC
CtoC
RtoC
Retailer Consumer Consumer

Basic concepts of marketing
Marketers need to be skilled at stimulating and managing the level, timing and
composition of demand to meet business objectives.
Needs
• the basic human requirements such as food, water,

clothing and shelter.
Wants
• Desires for specific satisfiers to address the needs
Demands
• Wants that are backed by the ability and willingness to

pay

Basic concepts of marketing
Customer Value: the consumer’s assessment of the

product’s overall capacity to satisfy his or her needs
Marketing Offer: some combination of products,

services, information or experience offered to a market
to satisfy a need or want
Satisfaction: the extent to which a product’s perceived

performance matches customer’s expectations
Exchange: the transaction for obtaining a

desired offer from someone by offering
something in return (monetary value, …)
Market: the set of all actual and potential buyers

of a product (« markets are people »)

Customer Value
© Churchill & Peter (1998).

The Expected Consequences of Superior Customer
Value
Superior Customer Customer Long Term

Customer Satisfaction Loyalty Profitable
Value and Delight Relationships
Always true??
© Churchill & Peter (1998).

Approaches to the « Market »
(« markets are products »)
The market for the product (main market) : the set o products which are
technically identical and in direct competition (eg: bottled waters direct
competition)
The market for substitute products : the set of products of a different nature but
satisfaying the same need as the product (eg: other non alcoholic beverages,
hot or cold, indirect competition)
The generic market: set of product satisfying the same need as the product of the
main market, within the same context of consumption = ∑ main market +
substitutes market (eg : the market for drinks) generic competition
The market of complementary products: the set of product which are required to
the usage of the product (eg: roads for cars, films for cameras, softwares for
computers… dependent market

EXAMPLE: Competition on the photography market :
cameras
Direct competition :
▪ of brand : Kodak, Canon, Sony, Olympus

▪ of product : compact versus reflex, analogic versus digital
Indirect competition : cellphones, webcam,
Out of Competition : prefer the service of a photographer

The Market concept : Types of competition
Market type Competition
Principal market Direct competition/

(e.g. mp3 players) Brand competition
(e.g. Apple vs. Phillips)
Substitution market Indirect competition/

(e.g. music-playing devices: mobile Substitute competition
phones and portable CD players) (e.g. Apple vs. Nokia)
Generic market Budget competition/

(e.g. groups of products that satisfy Purchasing power competition
the same basic need: (e.g. mp3 player vs. concert visit)
listening to music)

Measuring the size of a « Market »
The market in volume: total of quantities bought (nb of units)
The market in value: total of spendings (quantity of money)
The market in terms of number of buyers (nb of people /

organizations)

Structure of the market
Current competitors’ Current Company Relative Absolute

market Market non buyers non buyers
Potential market
Current market of the sector
Potential market of the sector
Current company market = Market share of the company

(=penetration rate of the
Current market of the sector
product/brand)
How to expand the market share ?
Quantities bought (QB): Stimulating buyers to buy more
Number of buyers (NB): targeting new buyers through

capturing current competitors’ buyers and / or
transforming relative non-buyers into effective buyers
Nathalie Prime - CFVG.

Marketing paradigm
▪ Marketing is a state of mind :

« Consumer Orientation » Versus
« Product Orientation »
▪ Marketing is a set of techniques :

Marketing research, forecasting, tests…
▪ Marketing is a 4 steps management process:

1. Marketing Intelligence
2. Marketing Strategy (« STP » decisions)
3. Marketing Mix
4. Market Monitoring
Step 3. Overall Marketing mix

Step 4. Marketing Monitoring
Build indicators to evaluate operational performance
Compare outcome with goals
Analyse market sales deviations
Analyse costs and profitability
Learn and revise

Strategic Planning Responsibilities
Top Strategic Long

Management Planning Term
Definition: Activities that lead to the development of a clear organizational mission,

organizational objectives and the strategies that enable the organization to achieve its
objectives.

Top Strategic
Management Planning
Middle Tactical Medium

Definition: Involves the creation of objectives and strategies aimed at attaining goals
for specific divisions or departments over a medium time frame.

Top Strategic
Management Planning
Middle Tactical
Management Planning
Lower Operational Short

Definition: Involves the creation of objectives and strategies for individual operating
units over a short time span.

The new marketing landscape
Companies need to adapt to changes in the marketplace - major trends and forces
challenging firms’ marketing practices
Technology Rapid Ethics and Social Not-for-Profit

Development Globalisation Responsibility Marketing
Internet: Connecting globally Long-term Universities,

with customers & interests of hospitals,
E-commerce customers and
marketing partners museums,
Social media community churches,…
24
Age of “post demographic consumerism”
25
Age of transparency
26
Age of access
• Education
• Job
• Professional interests
• Login behaviour
• Demographics
• Search terms • Interests
• Websites visited • Life events
• On-site behaviours • Location
• Real-time location
• Purchases
• Non-purchases
• Activity over time
• Search terms
27
Age of criticism
28
Age of collaborative and participation marketing

Consumer trends in 2017
1. Virtual experience economy: the maturing of

technologies heralds a shift from an information-based to
an experience-based virtual environment.
2. Worlds apart: purposeful brands will find opportunities in

helping people understand their changing relationship to
home – be that their nation, city or neighborhood.
3. Incognito individuals: brands recognizes non-

traditional yet more authentic demographic segment;
continuously develop “segment of one” of a mass-scale
4. Capacity capture: Continuously develop sustainability

to find new sources of value and eliminate any wasted
resource.
5. Big brother brands: the relentless desire for

personalized service will meet new intelligent
technologies and lead to a new generation of big brother
Source: TrendWatching, 2017 brands
A dramatically changed marketplace
New capabilities enable New capabilities enable companies to:

consumers to:
1. use the internet as a powerful
1. use the internet as a powerful information and sales channel,
information and purchasing including for individually
aid; differentiated goods;
2. search, communicate and 2. collect fuller and richer information
purchase on the move; about markets, customers,
3. tap into social media to share prospects and competitors;
opinions and express loyalty; 3. reach customers quickly and
4. actively interact with efficiently via social media and
companies; mobile marketing sending targeted
5. reject marketing they find advertisements, coupons and
information;
inappropriate.
4. improve purchasing, recruiting,
training, and internal and external
communications;
5. improve cost efficiency.

Changing channels
Channels of distribution, particularly in retail, have been transformed in five ways:

1. The growth of own brands.
2. Retail internationalisation.
3. The fragmentation of the retail market (in Europe.)
4. Internet retailing and the blurring of digital and real stores.
5. Proliferation of stores.
•Heightened competition: Globalisation has created intense competition among domestic

and foreign brands.
•Marketing balance: Companies need to strike the right balance between innovating to
secure new advantages and relying on past strengths.
•Marketing accountability: Marketing professionals will be increasingly held accountable
and expected to justify their investment in financial and profitability terms
•Marketing in the organisation: Companies will need to acknowledge that marketing is an
organisation-wide activity.

Stakeholders in Marketing Activities
at
Organizational
Activities
Agencies
Govt.
Marketing
Activities
© Churchill & Peters (1998)

Five elements that catalyse great marketing*
* « The dawn of marketing’s new golden age», Mc Kinsey Quarterly, 2015.





Key Learning Points
11. Marketing is about value creation, delivery, and capture. It is a process

that requires clear objectives and careful planning from the beginning.
22. In the holistic view of marketing, marketers are not only thinking about the
profits but also their impact on the society.
33. Market is dynamic; while the principles of marketing remain the same,
marketers need to be agile with their strategies and plan ahead.
44. Marketing management is a series of decision-making where managers

aim to use the available resources to achieve organizational goals.

Session 1 - Agenda
1 Foundations

Defining the International Marketing tasks
International marketing consists of finding

and satisfying foreign customer needs, from
a local-regional-global perspective, better
than the competition, both domestic and
international, and of coordinating marketing
activities within the constraints of the global
environment and of the resources of the
company.”
Source: N. Prime & J.C. Usunier, Marketing international, Marchés, Cultures, et Organisations, Pearson Village Mondial, 2015.

International Marketing Decisions (IMD):
4 core strategic decisions to be made
Adaptation & standardization issues when presenting the

marketing offering to international targets
What to offer?
Where to grow
and whom to How to enter?
serve?
International Entry strategies: cross-
macrosegmentation (country border marketing
choice), microsegmentation
When?
(targeting) and positioning
Choice of timing: sequential vs.

simultaneous

KEY STEPS for developing foreign markets IN TIME
GLOBAL EXPANSION IMKG

LOCAL EXPANSION IMKG (implemented by
(implemented by Chief Marketing Officer)
Opportunity to market across borders
Country managers) GLOBAL ORIENTATION
GO NATIVE ORIENTATION (multinational firm)
(multilocal firm)
INITIAL To develop the
PENETRATION IMKG potential: To rationalize on a global
(implemented by Existing offer scale:
Geographic diversity
pioneers) New offer

MKG coordination between
FIRST LANDING
ORIENTATION countries and between
PRE- Country 1 Country 2 regions
INTERNATIO- (international firm)
NALISATION
Multifunctional integration
(MKG and SC, HR,
production…)
Country 3 Country 4
What?
Allocation of resources
NATIONAL within global portfolio growth
ORIENTATION Economies of
(domestic firm) Where? scales: Leveraging operations,
How?
When? • promotion structures, and cultures
• distribution
Scope of globalization of the IMKG strategy

Source: Prime & Usunier (2015)


(multilocal firm)
pioneers) New offer

FIRST LANDING
NALISATION
(MKG and SC, HR,
production…)
Country 3 Country 4
What?
How?
• distribution



(multilocal firm)
pioneers) New offer

FIRST LANDING
NALISATION
(MKG and SC, HR,
production…)
Country 3 Country 4
What?
How?
• distribution



(multilocal firm)
pioneers) New offer

FIRST LANDING
NALISATION
(MKG and SC, HR,
production…)
Country 3 Country 4
What?
How?
• distribution


IMD Challenge 1:
Managing environmental complexity
Foreign environment Uncontrollable

(uncontrollable) environment
Political/legal Economic (country market A)
forces forces
Uncontrollable
Political/ Competitive environment
legal Controllable structure (country market B)
Cultural forces
forces Com-
Price Product
petitive
forces
7 Channels of
Promotion
distribution
Level of
Economic climate
technology
Structure of Uncontrollable
Domestic environment distribution environment
(uncontrollable) (country market C)

IMD Challenge 2:
Managing with LOCAL sensitivity at a GLOBAL scale
Extensive cultural sensitivity

Managing the risk of Ethnocentrism
To be locally aware is to be able:

to acknowledge “multiple perspectives” on consumption cultures and
relevant / efficient local marketing practices (e.g. conceptual and functional
equivalences of products)
to be knowledgeable of the diversity of environmental conditions,
especially
historical and competitive ones
permanent and fast pace dynamics of change taking place in the
international environment

IMD Challenge 3:
Managing with GLOBAL perspective at a LOCAL scale
Extensive synergy sensitivity

Managing international cooperation with foreign partners
1. To have a global view to benefit from advantages of synergies across countries within
the multinational company:
“A critical issue is the extent to which the firm can leverage skills, capabilities or
experience developed in relation to one market into others … to take
advantage of efficiencies and synergies associated with operating across
markets, while at the same time allowing for responsiveness to local market
characteristics, competitive conditions and resource availability.”*
2. Collaboration with other firms, from other countries, to acquire competencies that are
not available inside the enterprise
* Source: In Douglas S.P. et Craig C.S. (1999), "Competing in the Next Millennium: Challenges Facing International Marketers”

IMD challenge 4:
A series of core decisions IN TIME
Strategic Where to How to What to offer? Degree of

decision grow? grow? coordination
First landing Country No control Initial penetration

choice entry marketing
strategies (Standardization >
Adaptation)
Increase
Go native Country Increasing Local expansion
choice + control entry marketing
portfolio mgt strategies (Adaptation >
Standardization)
Regionalization Country Portfolio of Regional / global
/ Globalization Portfolio mgt entry marketing
strategies (Adaptation <->
Standardization)
+ Organizational support to the International marketing strategies:

international structures and corporate cultures
WHAT to OFFER: Managing differences in country
markets, but how?
In a world of differences (legal-political, cultural,

economical, geographical), the central challenge is
adaptation:
1. What is the appropriate degree of

adaptation?
2. What is the best way to achieve it?

Differences across country markets:
Adaptation or standardization?
Standardization Differentiation
Effects of standardization: Effects of localization:
Realization of economies of scale Differentiation of marketing mix by
(reaching a critical mass by adjustment to national or local
extensive standardization of characteristics
marketing mix) or learning curve
effects
Objectives:
Objectives: Increasing the effectiveness of
▪ Harmonizing the marketing mix communication
▪ Facilitating cross-country Generating a competitive
planning advantage versus (country-
specific) competition
▪ Exploiting synergies
Market penetration through more
▪ Optimizing the costs (Efficiency) precise targeting
Optimizing the revenues
(Effectiveness)
Efficiency goals Effectiveness goals

3 basic orientations of the International Marketing
(sometimes global!) strategy
Global Glocal
Advantages of standardization
orientation orientation
X Multinational
orientation
Advantages of localization
Source: adapted from Zentes/Swoboda/Schramm-Klein, 2006, p. 53.

The Global orientation
▪ Conscious focus on the world market similarities to develop

more homogeneous than differentiated marketing programs
(geocentric or global strategy)
▪ For example, aircraft manufacturers such as Airbus or Boeing
never develop aircraft frames for a single country market
Global Glocal
Multi-
X national
orientation

The Global orientation:
The case of homeland orientation
▪ The marketing programs used in the domestic market are

transferred mostly or completely to foreign markets
(“ethnocentric marketing”)
▪ Example: Country of origin effects (“made in effects”)
„Die
“TheUnternehmen
companies ofder
thenachfolgend genannten
following branches Branchen
have genie
an excellent ßen international
international einen ”hervorragenden Ruf.“
reputation.
Global Glocal
Aussage stimmt
Statement is not nicht
true Aussage stimmt
Statement is truevöllig
orientation orientation CH UK F I USA J D
Automotive
Automobilindustrie
industry
1 2 3 4
Mechanical engeneering industry F UK CH USA J D
Maschinenindustrie
1 2 I 3 4
Pharmaceutical Industrie
industry I J F DCH
Pharmazeutische
Multi- 1 2 UK 3 USA 4
I J FCH USAD
national Chemical Industrie
Chemische industry
1 2 UK 3 4
orientation Banking/finance
Banken / Finanzgesellschaften
I F J D USA CH
1 2 UK 4
UK USA D F J CH
Uhren /Watches/jewellery
Schmuckindustrie
1 2 I 3 4
Textiles/fashion CH D USA FI
Textil / Mode
1 J2 UK 3 4
Base:Basis:
3,419 3.419
respondents
Befragte Key:
Legende:
D Deutschland
Germany F Frankreich
France J Japan
CH Schweiz
Switzerland UK United Kingdom USA
Großbritannien USA
I Italien
Italy
Source: Zentes/Swoboda/Schramm-Klein, 2006, p. 54f.

The Multinational orientation
Conscious adjustment to each country’s specific

characteristics to develop more differentiated than
homogeneous marketing programs (national strategies of
marketing – “polycentric orientation”)
Example: InBev (formerly Interbrew; biggest brewery group
worldwide, since 2008 Anheuser-Busch InBev): “The World’s
Global Glocal local Brewer”: Strategy is based on strong local platforms in
orientation orientation the core beer markets
Multi-national
orientation

The glocal orientation
Joint exploitation of efficiency advantages resulting from

efficiency and effectiveness advantages resulting from
adjusting to market-specific customer preferences
▪ Example: Metro Group (wholesale): Standardization of the
business model, but country-specific assortment and package
Global Glocal sizes
Multi-
national
orientation

Summary: 3 basic orientations of
international marketing strategy
Advantages of standardization
Global
orientation
Glocal
Homeland orientation
orientation
Multinational
orientation
Advantages of localization
Source: adapted from Zentes/Swoboda/Schramm-Klein, 2006, p. 53.

Major arguments
in favor of a more standardized strategy
A full set of decision criteria:
▪ for “culture-free” products

▪ for international standards
▪ for exotic or ethnic products
▪ for “mobile” customers
▪ for transnational product-market segments
▪ operational efficiency due to economies of scales (inferior
production, marketing and legal costs) and experience effects
▪ limits the markets’ fragmentation
▪ simplifies decision-making and implementation
▪ better quality control
▪ when favorable image of imported products, company, nationality or
brand
If these criteria match the company’s situation, then a more

standardized strategy is recommended

Major arguments
in favor of a more localized strategy
A full set of decision criteria:
▪ for “culture-bound” products

▪ for local standards, hygiene or safety regulations
▪ for products that depend on climate conditions
▪ to allow for local innovations
▪ production improvements allows for short production lines at low
costs
▪ flexibility of production across markets and pricing across markets
▪ better local identity of the product, more meaningful communication
▪ when images of imported products, company, nationality or brand
are unfavorable
▪ when symbolic attributes such as color, shape, etc., convey
inadequate meaning
If these criteria match the company’s situation, then a more

localized strategy is recommended

Session 1 - Agenda
1 Foundations
2 READINGS

2. Read More
The dawn of marketing golden age (McKinsey, 2015)

Marketers are boosting their precision, broadening their scope, moving more
quickly, and telling better stories (the 5 S model)
A refresher on marketing myopia (HBR, 2016)

Marketing myopia remains an important reminder of the risks your company runs if
you don’t pay close attention to your consumers’ needs.
Building a marketing organization that drives growth today

(McKinsey, 2017)
With the renewed marketing landscape, managers need to be agile with their
marketing organizations and strategies

Developing Marketing Management in The Global Market

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Berlin

Developing Marketing Management in

Session 1 – Mapping key decision areas

Copyright Owner: European Department of Marketing, ESCP Europe

1.1 Basic concepts of marketing

1.2 Marketing in the global marketplace

CFVG - MMSS Session 1 © ESCP Europe

1.1 Basic concepts of marketing

CFVG - MMSS Session 1 © ESCP Europe

When we talk about ‘marketing’, we need to distinguish between three perspectives:

1 marketing as a function (the marketing department)

2 marketing as a process (marketing management)

3 marketing as a philosophy (the marketing concept)

Marketing is an organizational function and a set of processes for creating,

American Marketing Association

CFVG - MMSS Session 1 © ESCP Europe 4

Marketing is a customer focus that permeates

Marketing is more than just selling and advertising

CFVG - MMSS Session 1 © ESCP Europe

We can consider marketing at 3 levels:

• Strategic marketing – driven and overlapped with the overall company or

• Marketing operations – Implementation aspects of marketing, focusing on

CFVG - MMSS Session 1 © ESCP Europe

Organizational buyers – organizations that purchase

Consumers – People who buy goods and services for

CFVG - MMSS Session 1 © ESCP Europe

• the basic human requirements such as food, water,

• Desires for specific satisfiers to address the needs

• Wants that are backed by the ability and willingness to

CFVG - MMSS Session 1 © ESCP Europe

Customer Value: the consumer’s assessment of the

Marketing Offer: some combination of products,

Satisfaction: the extent to which a product’s perceived

Exchange: the transaction for obtaining a

Market: the set of all actual and potential buyers

CFVG - MMSS Session 1 © ESCP Europe

© Churchill & Peter (1998).

CFVG - MMSS Session 1 © ESCP Europe

Superior Customer Customer Long Term

© Churchill & Peter (1998).

CFVG - MMSS Session 1 © ESCP Europe

CFVG - MMSS Session 1 © ESCP Europe

▪ of brand : Kodak, Canon, Sony, Olympus

Out of Competition : prefer the service of a photographer

CFVG - MMSS Session 1 © ESCP Europe

Market type Competition

Principal market Direct competition/

Substitution market Indirect competition/

Generic market Budget competition/

CFVG - MMSS Session 1 © ESCP Europe 14

The market in volume: total of quantities bought (nb of units)

The market in value: total of spendings (quantity of money)

The market in terms of number of buyers (nb of people /

CFVG - MMSS Session 1 © ESCP Europe

Current competitors’ Current Company Relative Absolute

Current market of the sector

Potential market of the sector

Current company market = Market share of the company

Quantities bought (QB): Stimulating buyers to buy more

Number of buyers (NB): targeting new buyers through

Nathalie Prime - CFVG.

CFVG - MMSS Session 1 © ESCP Europe

▪ Marketing is a state of mind :