Global Marketing Management

GLOBAL MARKETING MANAGEMENT

ANHUI UNIVERSITY OF FINANCE AND ECONOMICS

Business College

全球营销管理

GLOBAL MARKETING MANAGEMENT

Instructor: Prof. Xu Song

Phone: 0552-3128117

I. OBJECTIVES

Global marketing is the process of focusing the resources (people, money, and physical assets) and objectives of an organization on global market opportunities and threats.

The post-World War II decades have been a period of unparalleled expansion of national enterprises into global markets. Two decades ago, the term global marketing did not even exist. Today, global marketing is essential not only for realization of the full success potential of a business, but even more critically, for the survival of a business. A company that fails to go global is in danger of losing its domestic business to competitors with lower costs, greater experience, better products, and, in a nutshell, more value for the customer.

The importance of going global to ensure company survival is a more powerful motive for many companies than the attraction of opportunity abroad. Industries that were entirely national in scope only few years ago are dominated today by a handful of global companies. The rise of global corporation closely parallels the rise of the national corporation.

In most industries it is clear that companies that will survive and prosper in the next century will be global enterprises. Companies that do not face the challenges and opportunities of going global will be absorbed by more dynamic enterprises if they are luck, the others will simply disappear in the wake of the more dynamic competitors.

This course concentrates on the major dimensions of global marketing: the environment of global marketing, global market segmentation and global target marketing, formulating global marketing strategy and plans, the global marketing mix, and managing and leading the global marketing effort.

II. TEXT BOOK

Warren J. Keenan: Global Marketing Management, Prentice-Hall International, Inc., 1997.

III. REFERENCE BOOKS

Chisnall, Peter (1992): Marketing Research, 4th Ed, New York: McGraw-Hill.

Drucker, Peter F. (1973): Management: Tasks, Responsibilities, Practices, New York: McGgraw-Hill.

Kotler, Philip (1991): Marketing Management: Analysis, Planning and Control, 7th Ed, Hemel Hempstead: Prentice Hall.

Stanton, William and Etzel, Michael (1991): Fundamentals of Marketing, 9th Ed, New York: McGraw-Hill.

Robert J. Carbaugh (1998): International Economics, 6th ed., South-Western College Publishing.

David B. Yoffie (1994): International Economic and Competition: Cases and Notes in Strategy and Management, 2nd ed., MaGraw-Hall, Inc.

IV. DISTRIBUTION OF CLASSHOURS

V. TEACHING PROGRAMMS

PART ONE: A CONCEPTUAL OVERVIEW

CHAPTER ONE

Introduction to Global Marketing

OBJECTIVE OF THIS CHAPTER: This chapter presents the theory and practice of applying the universal discipline of marketing to the global opportunities of world markets. We should let students understand globalization in the single most significant development in marketing in this century. The reality of global markets and global competition is pervasive.

KEY POINTS: The marketing concept; three principles of marketing; the theory of comparative advantage.

CLASS HOURS: 2 Hours

Ⅰ. Introduction

The definition and objectives of Global Marketing Management.

Ⅱ. Marketing: A Universal Concept

1. Marketing Concept

（1）The New Concept of Marketing and the Four Ps

（2）The strategic Concept of Marketing

Value Chain Boundary less Marketing

1. Three Principles of Marketing

（1）Customer Value and the Value Equation

The Value Equation: V=B/P (V=Value; B=Perceived Benefit; P=Price)

Conclusion: Value is enhanced by increasing the numerator or reducing the denominator.

（2）Competitive or Differential Advantage

（3）Focus

Ⅲ. From Domestic to Global/Transnational Marketing

1. Domestic Marketing
2. Export Marketing
3. International Marketing
4. Multinational Marketing
5. Global/Transnational Marketing

Ⅳ. Theory of Comparative Advantage

The Theory of Comparative Advantage

Limitation of the Theory of Comparative Advantage

Ⅴ. Driving and Restraining Forces

1. Driving Force

（1）Market Needs

（2）Technology

（3）Cost

（4）Quality

（5）Communications and Transportation

（6）Leverage (Experience Transfers, Systems Transfers, Scale Economies, Resource Utilization, Global Strategy)

1. Restraining Forces

（1）Market Differences

（2）History

（3）Management Myopia

（4）Organizational Culture

（5）National Controls/Barriers to Entry

Ⅵ. Underlying Forces of International Business

1. Orientations of Management
2. The International Monetary Framework

SDRs（Special Drawing Rights）

1. The World Trading System

GATT（the General Agreement on Tariffs and Trade）

MFN（the most favored nation）

NTBs（non-tariff barriers）

（1）Regional Trade Agreement

RFTA（regional free-trade agreement）

VERs（voluntary export restraints）

EC（the European Community）

1. Global Peace
2. Domestic Economic Growth
3. Communications and Transportation Technology
4. The Global/Transnational Corporation

Ⅶ. Discussion Questions

CHAPTER TWO

Global Marketing Planning

OBJECTIVE OF THIS CHAPTER: This chapter outlines an overview of the global marketing planning process and provides an understanding of the distinctive character of global marketing.

KEY POINTS: Strategy concept; product Cycle/Market Life Cycle; The Product Trade-Cycle Model; The Stages of Development of the Transnational Corporation: A Dynamic Typology; Requirements for a Successful Global Marketing Plan

CLASS HOURS: 3 Hours

Ⅰ.Introduction

Ⅱ. Key Concepts

1. Strategy

（1）Three strategic dimensions

a) The external environment of the firm;

b) The organization or the internal environment of the firm;

c) The values and aspirations of the stakeholders of the firm.

（2）Six stages of the strategy formulation process

a) The assessment of the opportunities, threats, and trends in the environment; the strengths and weaknesses of the organization; and the desires of the stakeholders, leading to a formulation of what is possible or of the alternatives open to the organization.

b) The determination of objectives and goals based on the organization’s alternatives of what is possible and the relative importance of stakeholder values.

c) The identification of the driving force of the business, a critical stage of the process.

d) The preparation of integrated plans and programs in each of the functional areas of the business.

e) Plan implementation.

f) Framework—control—overlaps with strategy implementation.

1. The company in the world
2. Clustering, Segmentation and Target Marketing
3. Environment Sensitivity
4. Unifying and Differentiating Influences
5. Product Life Cycle/Market Life Cycle

（1）Product Life Cycle

Introduction; Growth; Maturity; Decline

（2）Extending the Product Life Cycle

Introduction; Growth; Maturity; Extension #1; Extension #2

1. Product Trade-Cycle Model

（1）Divided all countries into three types

a) High-income countries of invention;

b) Other high and middle-income countries;

c) Low-income countries.

(2) International Product Life Cycle-Trickle Down or Waterfall Approach International Product Life Cycle-Shower Approach

Ⅲ. The Stages of Development of the Transnational Corporation: A Dynamic Typology

1. Five stages in the evolution of the transnational corporation

（1）Domestic

（2）International

（3）Multinational

（4）Global

（5）Transnational

2. The stages compared

3. An Emerging Transnational Company: the New Corporation

Ⅳ. Requirements for a Successful Global Marketing Plan

1. Knowledge of the market and the marketing especially of customers, competitors, and the government.

2. Knowledge of the product—the formal product, its technology, and its core benefit.

3. Knowledge of the marketing function and discipline.

Ⅴ. A Successful Global Marketing Plan

Standardized; Decentralized; Interactive

Ⅵ. Planning Practices

Ⅶ. Discussion Questions

CHAPTER THREE

Economic Environment

OBJECTIVE OF THIS CHAPTER: This chapter identifies the most salient characteristics of the economic environment to provide the framework for future consideration of the elements of a global marketing program.

KEY POINTS: Economic Systems; Stages of Market Development; Balance of Payments; Trade Patterns

CLASS HOURS: 3 Hours

Ⅰ.Introduction

Ⅱ. The World Economy—An Overview

1. Five major changes of the world economy

（1）Capital movements rather than trade have become the driving force of the world economy;

（2）Production has become “uncoupled” from employment;

（3）Primary products have become “uncoupled” from the industrial economy;

（4）The world economy is in control. The macroeconomics of the nation-state no longer control economic outcomes;

( 5 ) The 75-year “contest” between capitalism and socialism is over. The clear success of the capitalist system over the communist centrally controlled model has led to the collapse of communism as a model for the organization of economic activity and as an ideology.

Ⅲ. Economic Systems

1. Market Allocation

2. Commend Allocations

3. Mixed System

OECD (Organization for Economic Cooperation and Development)

USPS (the U. S. Postal Service)

4. Productivity Around the Global

GNP

Ⅳ.Market Development

1.Stages of Market Development

（1）Low-Income Countries

Characteristics shared by countries at this income level

a) Limited industrialization and a high percentage of the population engaged in agriculture and subsistence farming.

b) High birth rates.

c) Low literacy rates.

d) Heavy reliance on foreign aid.

e) Political instability and unrest.

f) Concentrated in Africa south of the Sahara.

（2）Lower-Middle-Income Countries

LDCs (less development countries)

（3）Upper-Middle-Income Countries

（4）High-Income Countries

（5）Basket Cases

2. The Location of Income

ICP (The United Nations’ International Comparison Project)

GDP (gross domestic product)

GNP (gross national product)

1. The Location of Population
2. Marketing and Economic Development

Ⅴ. Consumption Patterns

1. Engel’s Law

2. Product Saturation Levels

Ⅵ. Balance of Payments

Ⅶ. Trade Patterns

1. Merchandise Trade

2. Services Trade

Ⅷ. National Controls of International Transfers

Why Identify Control Motives?

Ⅸ. The Global Environment

Ⅹ. Discussion Questions

CHAPTER FOUR

Social and Cultural Environments

OBJECTIVE OF THIS CHAPTER: Culture has both pervasive and changing influence on each national market environment. International marketers must recognize the influence of culture and must be prepared to either respond to it or change it. This chapter focuses on the social and cultural forces that shape and affect individual behavior in the world market environment.

KEY POINTS: Basic Aspects of Culture; Analytical Approaches to Cultural Factors; Cross-Culture Challenge.

CLASS HOURS: 3 Hours

Ⅰ. Introduction

Ⅱ. Basic Aspects of Culture

Anthropologists agree on three characteristics of culture

(1) It is not innate, but learned.

(2) The various facets of culture are interrelated—touch a culture in one place and everything else is affected.

(3) It is shared by the members of a group and defines the boundaries between different groups.

1. The Search for Culture Universals

2. The Anthropologist’s Standpoint

3. Communication

Ⅲ.Analytical Approaches to Culture

1. Several facts that will accelerate ability to learn about other cultures

(1) To accept that we will never fully understand ourselves or others — people are far too complex to be “understood.”

(2) Our perceptual systems are extremely limited. We “see” almost nothing. Our nervous systems are organized on the principle of negative feedback (i.e., our nervous system operates so smoothly that the only time our control system is brought into play is when input signals deviate from what we expect).

(3) We spend most of our energy managing perceptual inputs.

(4) When we experience or perceive bizarre behavior, there is something behind this behavior (i.e., a culture system of beliefs and values that we do not understand).

(5) If we want to be effective in a foreign culture, we must attempt to understand beliefs, motives, and values. This requires an open attitude, one that transcends our own culture.

2. The Need Hierarchy

3. The Self-Reference Criterion

SRC (self-reference criterion)

James Lee’s systematic four-step framework for eliminating this form of myopia

（1） Define the problem or goal in terms of home-country culture traits, habits, and norms,

（2） Define the problems or goal in terms of the foreign culture traits, habits, and norms.

（3） Isolate the SRC influence in the problem and examine it carefully to see how it complicates the problem.

（4） Redefine the problem without the SRC influence and solve for the foreign market situation.

4. Diffusion Theory

（1） The Adoption Process

An individual passes through five stages in proceeding from first knowledge of a product to the final adoption or purchase of that product.

a) Awareness

b) Interest

c) Evaluation

d) Trial

e) Adoption

（2）Characteristics of Innovation

a) Relative advantage

b) Compatibility

c) Complexity

d) Divisibility

e) Communicability

（3）Adopter Categories

1. High-and Low-Context Culture
2. Perception

Ⅳ. Negotiations: Cross-Cultural Challenges

There are ten uniquely American tactics or approaches to negotiations.

(1)“I can go it alone.”

(2)“Just call me, John.”

(3) “Pardon my French.”

(4)“Get to the point.”

(5)“Lay your cards on the table.”

(6)“Don’t just sit there, speak up.”

(7)“Don’t take no for an answer.”

(8)“One thing at a time.”

(9)“A deal is a deal.”

(10)“I am what I am.”

Ⅴ. Industrial Products

Ⅵ. Consumer Products

Ⅶ. Nationalism

Ⅷ. Cross-Cultural Complications and Suggested Solutions

Ⅸ. Discussion Questions

CHAPTER FIVE

Legal and Regulatory Environment

OBJECTIVE OF THIS CHAPTER: Each country has its own unique system of law, regulation. There are rules for exporting and importing goods. This chapter will make students more clear about what above-mentioned.

KEY POINTS: Conflict Resolution, Dispute Settlement, and Litigation; Nation-States and Sovereignty.

CLASS HOURS: 3 Hours

Ⅰ. Introduction

Ⅱ. International Law

Ⅲ. Nation-States and Sovereignty

1. Conflict of Laws

2. Extraterritorial Reach

3. Freedom of Contract Should Not Be Taken for Granted

Ⅳ. Regional Organizations: The EU Example

A List of International Economic Organizations

Ⅴ. Conflict Resolution, Dispute Settlement, and Litigation

1. Alternatives to Litigation for Dispute Settlement

ICC（the International Chamber of Commerce）

AAA（the American Arbitration Association）

IACAC（the Inter-American Commercial Arbitration Commission）

ICSID（International Center for Settlement of Investment Disputes）

ICCA（International Council for Commercial Arbitration）

UNCITRAL（the United Nations Conference on International Trade Law）

2. Critical Elements of Arbitration

Ⅵ. Relevant Business Issues

1. Establishment

2. Patents and Trademarks

PCT（a patent cooperation treaty）

3. Recourse

Jurisdiction is generally established on the basis of

（1）a jurisdictional clause

（2）where a contract was entered into, and

（3）where the provisions of a contract are to be performed.

4. Taxes

1. Dilution of Equity—Control
2. Expropriation

Creeping Expropriation

1. Communist Countries

Ⅶ. Licensing

Examples

Ⅷ. Antitrust

Ⅸ. Bribery and Corruption

SEC（Securities and Exchange Commission）

1. The Foreign Corrupt Practices Act（FCPA）

Ⅹ. Regulatory Agencies

1. The GATT Legal System

GATT（General Agreement of Tariffs and Trade）

Three principles in the GATT:

（1）nondiscrimination, whereby each member country must treat the trade of all other member countries equally;

（2）open markets which are encouraged by the GATT through a prohibition of all forms of protection except customs tariffs;

（3）fair trade, which prohibits export subsidies on manufactured products and limits the use of export subsidies on primary products.

Ⅺ. Discussion Questions

CHAPTER SIX

Global Marketing Information Systems and Research

OBJECTIVE OF THIS CHAPTER: The global marketer must scan the world for information about opportunities and threats. This chapter just introduces the global marketing information systems and research.

KEY POINTS: Sources of Information; Analytical Techniques for Researching International Markets.

CLASS HOURS: 3 Hours

Ⅰ. Introduction

Ⅱ. Elements of A Global Information System

1. Information Subject Agenda

2. Scanning Modes: Surveillance and Search

The significance of determining scanning mode is the measure it offers:

（1）of the extent that a scanner actively seeks out information, as contrasted to the more passive acquisition of information,

（2）of the scanner’s attention state at the time of acquiring information.

Ⅲ. Sources of Information

1. Human Sources

2. Documentary Sources

3. Perception Sources

4. Information Perception and Media

Ⅳ. Marketing Research

1.Two modes of search:

（1）Investigation—a relatively limited and informal seeking out of specific information.

（2）Research—a formally organized effort to acquire specific information for a specific purpose.

2. Comparability of International Data

3. Assessing Market Opportunity

Three basic categories of demand:

（1）Existing demand

（2）Latent demand

（3）Incipient demand

4. Special Problems in International Marketing Research

5. Five Rules for International Research

6. Survey Research

A good questionnaire has three characteristics:

（1）It is simple.

（2）It is easy for respondents to answer and for the interviewer to record.

（3）It keeps the interview to the point and obtains desired information.

To achieve this, the following principles should observed:

（1）Single-element questions

（2）Expected replies

（3）Ambiguity in questions

（4）Leading questions

（5）Personal and embarrassing questions

（6）Pretest

7. Sampling

Three key characteristics of a probability sample determine the sample size

The formula for sample size

N=sample size

T=confidence limit expressed in standard errors (three standard errors=99 percent confidence)

S=standard deviation

E=error limit

Ⅴ. Analytical Techniques for Researching International markets

1. Demand Pattern Analysis

2. Income Elasticity Measurements

3. Estimation by Analogy

4. Comparative Analysis

5. Cluster Analysis

6. Multiple-Factor Indexes

1. Regression analysis

Ⅵ. Headquarters Control of Global Marketing Research

1. The Management of the marketing Information System

2. The Marketing Information System as a Strategic Asset

3. An Integrated Approach to Information Collection

Ⅶ. Discussion Questions

CHAPTER SEVEN

Global Segmentation, Targeting, and Positioning

OBJECTIVE OF THIS CHAPTER: Through global market segmentation, the similarities and differences of potential buying customers can be identified and grouped. The aim of this chapter is to make students grasp the technique of segmentation, targeting, and positioning.

KEY POINTS: Global Marketing Segmentation; Global Targeting; Global Product Positioning.

CLASS HOURS: 3 Hours

Ⅰ. Introduction

Ⅱ. Global Market Segmentation