🪁Multinational Corporate Strategies Unit 9 – Global Marketing Strategies

Key Concepts and Definitions

• Global marketing involves planning, producing, placing, and promoting a company's products or services in the global market
• Globalization refers to the growing interdependence of countries worldwide through the increasing volume and variety of cross-border transactions in goods and services
• Standardization strategy involves a uniform approach to marketing mix elements in all countries
• Adaptation strategy involves adjusting the marketing mix elements to meet the specific needs of each market
• Glocalization combines the words "globalization" and "localization" to describe a product or service that is developed and distributed globally but also adjusted to accommodate the user or consumer in a local market
• EPRG framework classifies a company's attitude toward international business into four categories: ethnocentric, polycentric, regiocentric, and geocentric
• Global branding aims to establish a consistent brand identity across multiple countries and cultures

Global Market Analysis

• PESTEL analysis examines the political, economic, social, technological, environmental, and legal factors influencing a market
• Market segmentation divides a market into distinct groups of consumers with similar needs or characteristics
• Hofstede's cultural dimensions theory describes the effects of a society's culture on the values of its members and how these values relate to behavior
• CAGE distance framework assesses the cultural, administrative, geographic, and economic distances between countries
• Porter's Five Forces model analyzes the competitive forces that shape an industry: threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitute products or services, and rivalry among existing competitors
• Country risk assessment evaluates the potential risks associated with investing or conducting business in a specific country
• Market potential estimation determines the likely demand for a product or service in a given market

Market Entry Strategies

• Exporting involves selling goods or services produced in one country to customers in another country
• Licensing allows a company to grant the rights to manufacture and sell its products to a foreign company in exchange for royalties
• Franchising involves granting the right to use a company's business model and brand to a franchisee in exchange for a fee and royalties
• Joint ventures are strategic alliances between two or more companies to share resources, risks, and profits in a specific project or business activity
• Wholly-owned subsidiaries are foreign operations that are entirely owned and controlled by the parent company
• Greenfield investments involve establishing a new production facility or business operation from the ground up in a foreign country
• Brownfield investments involve acquiring an existing production facility or business operation in a foreign country

Cultural Considerations in Marketing

• High-context vs. low-context cultures differ in their communication styles, with high-context cultures relying more on implicit messages and low-context cultures relying more on explicit messages
• Individualism vs. collectivism describes the extent to which people prioritize individual goals over group goals
• Power distance refers to the extent to which less powerful members of a society accept and expect power to be distributed unequally
• Uncertainty avoidance describes a society's tolerance for ambiguity and uncertainty
• Masculine vs. feminine values refer to the extent to which a society emphasizes achievement, assertiveness, and material rewards for success (masculine) or cooperation, modesty, and quality of life (feminine)
• Long-term vs. short-term orientation describes a society's time horizon and its emphasis on the future (long-term) or the present and past (short-term)
• Indulgence vs. restraint refers to the extent to which a society allows relatively free gratification of basic and natural human drives related to enjoying life and having fun (indulgence) or suppresses gratification of needs and regulates it by means of strict social norms (restraint)

Adapting Marketing Mix Globally

• Product adaptation involves modifying a product's features, packaging, or branding to suit the preferences and needs of a specific market
  • Example: McDonald's offers the McAloo Tikki burger in India, which is a potato and pea patty flavored with Indian spices
• Pricing strategies must consider factors such as currency fluctuations, tariffs, and local market conditions
  • Penetration pricing involves setting a low initial price to quickly gain market share
  • Skimming pricing involves setting a high initial price to maximize profits from early adopters before gradually lowering the price
• Distribution channels may need to be adapted to account for differences in infrastructure, regulations, and consumer shopping habits
  • Example: In Japan, 7-Eleven stores serve as a popular distribution channel for many products due to their convenience and ubiquity
• Promotional strategies should be tailored to the cultural values, media consumption habits, and language preferences of the target market
  • Example: In China, social media platforms like WeChat and Weibo are crucial for reaching consumers, while in the United States, platforms like Facebook and Instagram are more popular

Digital Marketing in a Global Context

• Search engine optimization (SEO) strategies must consider the unique search habits and preferences of users in different countries
  • Example: In China, Baidu is the dominant search engine, while in Russia, Yandex is more popular than Google
• Social media marketing should leverage the platforms that are most popular and influential in each market
  • Example: In Japan, Line is a widely used messaging app that also serves as a platform for brand marketing and e-commerce
• E-commerce platforms and payment methods vary widely across countries, requiring businesses to adapt their online sales strategies accordingly
  • Example: In China, Alibaba's Tmall and Taobao are the leading e-commerce platforms, while in Latin America, MercadoLibre is a major player
• Mobile marketing is particularly important in emerging markets where smartphone penetration is high but desktop computer ownership is low
  • Example: In Africa, mobile money services like M-Pesa have transformed the way people make payments and access financial services
• Influencer marketing can be an effective way to reach global audiences, but businesses must carefully select influencers who resonate with their target market and align with their brand values
  • Example: In the United Arab Emirates, fashion and beauty influencers like Huda Kattan have massive followings and can drive significant sales for the brands they promote

Challenges and Risks in Global Marketing

• Language barriers can lead to miscommunication and misunderstandings, requiring businesses to invest in translation and localization services
• Cultural differences can impact consumer preferences, purchasing behaviors, and brand perceptions, necessitating extensive market research and adaptation
• Regulatory compliance can be complex and varied across different countries, requiring businesses to navigate a patchwork of laws and regulations related to product safety, labeling, advertising, and data privacy
• Intellectual property protection can be challenging in countries with weak enforcement of patents, trademarks, and copyrights, exposing businesses to the risk of counterfeiting and piracy
• Political instability and economic volatility can disrupt supply chains, alter consumer spending patterns, and create uncertainty for businesses operating in affected markets
• Currency fluctuations can impact the profitability of global operations, requiring businesses to implement hedging strategies and adjust pricing as needed
• Ethical considerations may arise when operating in countries with different labor standards, environmental regulations, and human rights practices, requiring businesses to navigate complex moral and reputational risks

Case Studies and Real-World Applications

• Coca-Cola's "Share a Coke" campaign demonstrated successful global adaptation by featuring popular local names and phrases on Coke bottles in each market
• IKEA's global expansion strategy involves careful market research, product adaptation, and localized marketing to appeal to consumers in diverse cultural contexts
  • Example: In China, IKEA stores feature larger dining areas and more expansive showrooms to accommodate extended family gatherings and longer store visits
• Airbnb's global growth has been fueled by its ability to tap into the unique travel preferences and accommodation needs of users in different countries
  • Example: In Japan, Airbnb has partnered with local governments to promote rural tourism and revitalize declining communities
• Unilever's "Dirt is Good" campaign for its Omo detergent brand has been successfully adapted across multiple markets by tapping into universal themes of childhood exploration and messiness
  • Example: In Brazil, the campaign was localized as "Não é sujeira, é bom" (It's not dirt, it's good) to resonate with Brazilian cultural values around outdoor play and adventure
• Nike's global marketing strategy centers around inspirational storytelling and athlete endorsements that transcend cultural boundaries
  • Example: Nike's "Dream Crazy" campaign featuring Colin Kaepernick sparked global conversations about social justice and the role of brands in addressing controversial issues
• Netflix's international expansion has been driven by its investment in local content production and partnerships with regional studios and creators
  • Example: In India, Netflix has commissioned a range of original series and films that explore diverse themes and genres relevant to Indian audiences
• Red Bull's global marketing strategy revolves around extreme sports sponsorships, event marketing, and branded content that appeals to adventure-seeking consumers worldwide
  • Example: The Red Bull Stratos project, in which Felix Baumgartner skydived from the edge of space, generated massive global media attention and reinforced Red Bull's brand association with boundary-pushing feats