With respect to global marketing management, the catchphrase of the 1990s was “global integration v. local responsiveness.” From the marketing perspective, customization is always best. Nestlé is used as an example in the text to demonstrate how major corporations are moving in a truly international (global) direction. All of the following would be considered to be part of Nestlé’s international strategy EXCEPT customize all products and abandon any mass production strategy. A matrix organization is an organizational form characterized as being one where a centralized sales and marketing staff is run by a centralized functional staff? This form is popular with companies that reorganize for global competition. This form often overcomes the difficulties of the other formats. The benefits of global marketing include the transfer of experience and know-how across countries, global diversity of marketing talent, gaining access to the toughest customers, and financial benefits by spreading the corporate portfolio.
Adopting a European strategy cuts production costs. The transfer of experience and know-how across countries through improved coordination and integration of marketing activities create the ability to adapt. This ensures that marketers have access to the toughest customers- high-quality products. The diversity of markets has additional financial benefits like the stability of revenues and operations to many global companies (Stable Cash Flow). Source of Growth. Brand Awareness. Economies of Scales. US domestic market is one of the markets that don’t have to operate internationally.
Strategic planning is conducted at highest levels of management and deals with products, capital, research, and the long and short-term goals of the company. The Cybex Corporation is attempting to develop long-term generalized goals for the enterprise as a whole. Cybex is using corporate planning. Strategic planning is conducted at the highest levels of management and deals with products, capital, and research, and long- and short-term goals of the company. Tactical planning, or market planning, pertains to specific actions and to the allocation of resources used to implement strategic planning goals in specific markets, made at local level and address marketing and advertising questions. Global Toys Company is making marketing and advertising plans for specific local markets within its international portfolio. This planning form is tactical planning.
Planning Process and 4 phases of the planning process:
- Preliminary analysis and screening – matching company and country needs In which of the following phases of the international planning process would you expect to explore home-country constraints such as the political environment? Phase 1-preliminary analysis and screening where company/country needs are matched.
- Adapting the marketing mix to target markets. The Caliber Corporation is at the stage of international planning where specific budgets need to be devised for its various markets and plans. In which stage of the international planning process would you expect to see these activities: Phase 3-developing the marketing plan.
- Developing the marketing plan
- Implementation and control. The production manager for Aziz Nuts is measuring a recent production run against company standards for quality and consistency before the shipment is released to several international customers. In which stage of the international planning process would you expect these activities to occur? Phase 4-implementation and control.
4 Market entry strategies:
- Exporting accounts for 10% of global activity. Direct exporting is when the company sells to a customer in another country. Indirect exporting is when the company sells to a buyer in the home country, who in turn exports the product. The Internet and direct sales are important in the foreign market entry. The Blue Flame Company (a company that sells small gas heaters) has just sold 5,000 heaters to a buyer in Northern Africa. Which of the following market entry modes has Blue Flame engaged in? Direct exporting.
- Contractual agreements are long-term, non-equity associations between a company and another in a foreign market, means of transfer of knowledge rather than equity 1) Licensing-a means of establishing a foothold in foreign markets without large capital outlays a favorite strategy for small and medium-sized companies; legitimate means of capitalizing on intellectual property in a foreign market. For example, television programming and pharmaceuticals.
- Franchising is when the franchiser provides a standard package of products, systems, and management services, and the franchise provides market knowledge, capital, and personal involvement in management.
- The master franchise gives the franchise the rights to a specific area with the authority to sell or establish sub-franchises. Provides effective blend of skill centralization and operational decentralization
Strategic international alliances: business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective, grown in importance recently as a competitive strategy in global marketing management. International joint ventures-partnership of 2 or more participating companies that have joined forces to create a separate legal identity, IJVs can be hard to manage. Consortia-similar to joint ventures except that they typically involve a large number of participants and they frequently operate in a country or market in which none of the participants are currently active, developed to pool financial and managerial resources and to lessen risks. Direct foreign investment: investment within a foreign country.
Difference between joint ventures and licensing:
Licensing means of establishing a foothold in foreign markets without large capital outlays. Caliente Computers (a Mexican computer manufacturer) has just given an American company the right to build and sell computers carrying the Caliente name as long as the American company meets and upholds Caliente’s standards. Which of the following market entry modes has Caliente Computers engaged in? Licensing. Joint ventures are partnerships of 2 or more participating companies that have joined forces to create a separate legal entity, get around paying tariffs, decrease risk, give up control/profits. Joint venturing is a market entry modes is primarily a partnership between two (or more) international companies where the result is a new legal entity. The product life cycle is shorter these days because of a faster planning process; customers expect good quality at good price.