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BUSINESS THEME 4 - TOPIC 4.3 - Global Marketing - Coggle Diagram
BUSINESS THEME 4 - TOPIC 4.3 - Global Marketing
4.3.1 Marketing
Global marketing strategy and global localisation (glocalisation)
Global Marketing
refers to the marketing strategies used when in global markets
A global approach is where the same products + strategies are used in all markets. This standardised approach can cut costs and saves time. However, sales can be lost if not all market segments are not catered for
Global localisation
means although the business operates on a global scale, it may adapt or change its products or marketing in order to suit individual countries or market segments
Sales are likely to increase as its tailored to consumers but the business can't fully exploit EoS and it's time consuming as well as expensive
Three different approaches
The Domestic Approach (Ethnocentric model)
- No adaption of products or marketing, uniform approach worldwide
The Mixed Approach (Geocentric model)
- Some adaptation to suit local preferences
The International Approach (Polycentric model)
- All products + marketing are adapted
The Marketing Mix
Price
may need to be altered coordinated with the levels of disposable income in the country. However, even in LIC's there are groups of high income consumers and in some cases prices need to be set high to generate sales (the belief that high price means high quality)
The
Product
may need to be adapted for local cultures and conditions e.g food products altered for dietary requirements such as halal foods or car AC in hot countries
Promotion
will be altered in order to cater to cultural differences and language barriers
The
Place
will be differed due to the difference in distribution channels as a consequence of the countries infrastructure
Ansoff's Matrix and global markets
Market penetration
- this represents businesses that have an existing product in an existing market. These businesses have yet to enter an international market
Product development
- Developing different products in their new markets
Market development
- Least risky option for international expansion when targeting a new market with existing products
Diversification
- this applies when introducing a new product to a new market and is the riskiest option
4.3.2 Niche markets
Global market niches are smaller, more specialised parts of a global market, products are likely to be differentiated from that of mass market
Subcultures are groups of people who have interests and values in common
Characteristics of successful global niche business
Clear understanding of the needs of their customers and market
offer high levels of customer service
expertise in their field
Prioritise profit over market share
Innovation is key to satisfying customers
Focus on cost efficiency but not at expense of quality
More emphasis on product over price
Pros of operating in global niche market
Can provide specialised services + products which are often more valuable
Price inelastic market
Less Direct competition
Know customers better
Cons
EoS can't be fully exploited so average costs may be higher
Market size limited
Success can attract competition or takeovers
Consumer interests can change suddenly
Niche markets can expand and become mass markets
Application + Adaption of 4P's to suit global niches
Price
can be increased as less competition and high prices can signify exclusiveability
Product
will be distinguished and set apart from the mass market. May be highly specialised + technical or very unique
Promotion
is through cheaper, but more specialist methods such as magazines or websites
Place
- due to internet, firms are not confined to one geographical region
4.3.3 Cultural and Social factors
Social and cultural differences come from the fact that individual societies and groups within them may have a distinct way of life. This affects patterns of consumption and the products they favour
Cultural Differences
Some cultures believe in directness rather than diplomacy e.g USA
Others put diplomacy before directness e.g Japan
Some cultures are more emotional
Failure to appreciate such differences can lead to poor relationships
Different tastes
Never assume if one country likes it, another will
Market research is essential
Language
Requires accurate communication and no misunderstandings
Unintended meanings + inappropriate translations
Inappropriate branding + promotion