CHAPTER 1: INTRODUCTION TO GLOBAL

MARKETING

INTRODUCTION
Principles of marketing
Competitive advantage, globalization and

global industries
Global marketing
Management orientations
Factors affecting global integration

PRINCIPLES OF
MARKETING
Marketing can be thought of as a set of

activities and process that, along with product

design, manufacturing, and transportation
logistics, comprise a firms value chain
The value equation:
Value = Benefits/Price (money, time, effort,
etc.)

The numerator for the buyer and the denominator

for the seller

COMPETITIVE ADVANTAGE,
GLOBALIZATION AND GLOBAL
INDUSTRIES
Competitive advantage: any activity that a company

performs better than its rivals and through which is

able to add more value to both products and profits.
Such an advantage can not easily be replicated.
Globalization presents companies with both
opportunities and challenges
Global industry is one in which competitive
advantage can be achieved by integrating and
leveraging operations on a worldwide scale
Focus is simply the concentration of attention on a
core business or competence

COMPETITIVE ADVANTAGE, GLOBALIZATION

AND GLOBAL INDUSTRIES
The importance of focus for a global company

is evident in the following comment by Helmut

Maucher, former chairman of Nestl SA:
Nestl is focused: We are food and beverages.

We are not running bicycle shops. Even in food

we are not in all fields. There are certain areas
we do not touch. For the time being we have no
biscuits [cookies] in Europe and the United States
for competitive reasons, and no margarine. We
have no soft drinks because I have said we either
buy Coca-Cola or we leave it alone. This is focus.

GLOBAL MARKETING
Global market participation: the extent to which a

company has operations in major world markets

Standardization versus adaptation: the extent to
which each marketing mix element is standardized
(i.e., executed the same way) or adapted (i.e.,
executed in different ways) in various country markets
Marketing mix strategy: product, price, place and
promotion
Glocalization: process through which a company
becomes both global and local at the same time
Reverse flow of innovation

MANAGEMENT
ORIENTATIONS
Ethnocentric orientation: belief in superiority of

home country
Polycentric orientation: belief that each country in
which a company does business is unique
Regiocentric orientation: the region becomes the
relevant geographical unit with managements
goal being the development of an integrated
regional strategy
Geocentric orientation: management views the
entire world as potential market and develops
integrated global strategies

FORCES AFFECTING GLOBAL

INTEGRATION
Driving forces
Multilateral trade agreements
Converging market needs and wants and the information revolution
Transportation and communication improvements
Product development costs
Quality
World economic trends
Leverage
Restraining forces
Management myopia and organizational culture
National controls
Opposition to globalization