Chapter 12 Global Marketing Management Planning And Organiza

Chapter 12global Marketing Managementplanning And Organizationinterna

Chapter 12 global Marketing Management: Planning and Organization International Marketing 15th edition Philip R. Cateora, Mary C. Gilly, and John L. Graham 1 Global Marketing Management The trend back toward localization Caused by the new efficiencies of customization Made possible by the Internet Increasingly flexible manufacturing processes From the marketing perspective customization is always best Global markets continue to homogenize and diversify simultaneously Best companies will avoid trap of focusing on country as the primary segmentation variable 2 Roy Philip 2 Benefits of Global Marketing When large market segments can be identified Economies of scale in production and marketing Important competitive advantages for global companies Transfer of experience and know-how Across countries through improved coordination and integration of marketing activities Marketing globally Ensures that marketers have access to the toughest customers Market diversity carries with it additional financial benefits Firms are able to take advantage of changing financial circumstances 3 Roy Philip 3 International Planning Process Roy Philip 4 Exhibit 12.

Alternative Market-Entry Strategies (1 of 2) An entry strategy into international market should reflect on analysis Market characteristics Potential sales Strategic importance Strengths of local resources Cultural differences Country restrictions Company capabilities and characteristics Degree of near-market knowledge Marketing involvement Management commitment 5 Roy Philip 5 Alternative Market-Entry Strategies Roy Philip 6 Exhibit 12. Companies most often begin with modest export involvement A company has four different modes of foreign market entry Exporting Contractual agreements Strategic international alliances Direct foreign investments Alternative Market-Entry Strategies (2 of 2) 7 Roy Philip 7 Contractual Agreement (1 of 2) Contractual agreements Long-term, Nonequity association between a company and another in a foreign market 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 8 Roy Philip 8 Contractual Agreement (2 of 2) Franchising Franchiser provides a standard package of products, systems, and management services Franchise provides market knowledge, capital, and personal involvement in management Expected to be the fastest-growing market-entry strategy Two types of franchise agreements Master franchise Gives the franchisee the rights to a specific area with the authority to sell or establish subfranchises Licensing 9 Roy Philip 9 Strategic International Alliances Four characteristics define joint ventures: JVs are established, separate, legal entities The acknowledged intent by the partners to share in the management of the JV There are partnerships between legally incorporated entities such as companies, chartered organizations, or governments, and not between individuals Equity positions are held by each of the partners 10 Roy Philip 10 Strategic International Alliances Consortia Similar to joint ventures and could be classified as such except for two unique characteristics Typically involve a large number of participants Frequently operate in a country or market in which none of the participants is currently active Consortia are developed to pool financial and managerial resources and to lessen risks 11 Roy Philip 11 Direct Foreign Investment Factors that influence the structure and performance of direct investments Timing The growing complexity and contingencies of contracts Transaction cost structures Technology transfer Degree of product differentiation The previous experiences and cultural diversity of acquired firms Advertising and reputation barriers 12 Roy Philip 12

Paper For Above instruction

Global marketing management has undergone significant transformation in recent decades, driven primarily by technological advancements, increased globalization, and the drive towards localization. As outlined in Chapter 12 of the 15th edition of Philip R. Cateora's "International Marketing," firms are now compelled to adapt their strategies to navigate an increasingly complex international environment characterized by simultaneous homogenization and diversification of markets. This necessitates a nuanced understanding of international planning processes and market-entry strategies to achieve effective global positioning.

Introduction

The landscape of global marketing has evolved from traditional approaches where companies focused primarily on standardization across markets to a more sophisticated paradigm emphasizing localization and customization. This shift is largely facilitated by technological changes, especially the internet, which has simplified market segmentation and product customization. Consequently, companies must carefully analyze market characteristics—including strategic importance, local resources, cultural differences, and regulatory restrictions—to design effective entry strategies. The core objective remains to balance global efficiencies with local responsiveness, enabling firms to capitalize on broad market opportunities while respecting regional nuances.

Benefits of Global Marketing

Global marketing offers several advantageous opportunities for firms willing to expand beyond domestic borders. One significant benefit is the ability to identify large market segments, which allows companies to achieve economies of scale in production and marketing. This enhances cost-efficiency and competitive advantage. Moreover, firms engaged in global marketing benefit from the transfer of experience and best practices across markets, fostering innovation and continuous improvement. International operations also provide access to diverse customer bases, which can mitigate risks associated with economic or political volatility in any single country. As companies expand globally, they gain access to a broader consumer base, including some of the most discerning customers, which further incentivizes international strategies.

International Planning Process

The process of planning for international market entry involves a strategic assessment of multiple factors. As outlined by Roy Philip, this includes evaluating market characteristics such as potential sales, strategic importance, and the presence of local resources. Understanding cultural differences and country restrictions is essential to tailor marketing strategies effectively. Companies must also assess their internal capabilities, including management commitment and product strengths, to determine the most suitable entry mode. The planning process considers the degree of near-market knowledge and the company's existing international experience. Effective planning ensures that organizations are capable of making informed decisions regarding entry modes like exporting, contractual agreements, strategic alliances, or direct investments.

Market Entry Strategies

Choosing an appropriate market entry strategy is crucial for success in international markets. Companies often start with modest export involvement and gradually intensify their engagement, depending on market response and internal capabilities. The four primary modes of market entry include exporting, contractual agreements such as licensing and franchising, strategic international alliances like joint ventures, and direct foreign investments. Exporting involves minimal risk and resource commitment but also offers limited control, making it suitable for initial forays into international markets.

Contractual agreements like licensing and franchising allow firms to expand rapidly with reduced capital investment. Licensing offers a legal means to capitalize on intellectual property, thereby establishing a foothold in foreign markets without significant upfront costs. Franchising enhances this approach by providing a comprehensive package of products, systems, and operational know-how, which can accelerate market penetration. Franchise arrangements, especially, are growing quickly and include models such as master franchising, which grants franchisees rights to specific territories and the authority to subfranchise.

Strategic international alliances and joint ventures involve shared management and resource pooling, often establishing legally distinct entities with joint control. These arrangements are particularly effective in markets with high entry barriers or where local knowledge is essential. Consortia represent an extension of joint ventures, involving numerous participants pooling resources to reduce risks further. As such, they are instrumental when deploying multilateral operations in unfamiliar markets.

Factors Influencing Direct Foreign Investment

Direct foreign investment (DFI) is a more committed mode of international engagement with significant strategic implications. Several factors influence the decision to undertake DFI and the subsequent organizational structure. Timing plays a crucial role; firms must evaluate market readiness and economic conditions to optimize entry. The complexity of contracts and transaction costs are also pivotal, impacting the choice of investment type and scope. Technological capability and the potential for technology transfer influence investment decisions, especially in sectors like manufacturing and high-tech industries.

Furthermore, product differentiation levels, past experience, and cultural compatibility of target markets shape DFI strategies. Barriers such as advertising restrictions and reputation issues must also be considered, as they can impact long-term sustainability. A comprehensive assessment ensures that firms align their investment strategies with both internal resources and external market dynamics, maximizing the likelihood of success and scalability in international markets.

Conclusion

In conclusion, global marketing management demands a sophisticated understanding of international market opportunities, challenges, and strategic options. Companies must adopt a flexible, well-informed approach—balancing standardization and localization—to effectively serve diverse markets. By understanding the benefits, constraints, and intricacies of various entry modes, firms can formulate strategies that not only optimize resource utilization but also foster long-term competitiveness in the global arena. As globalization continues to evolve, a strategic, well-planned approach is crucial for sustaining growth and capitalizing on emerging opportunities across international markets.

References

  • Cateora, P. R., Gilly, M. C., & Graham, J. L. (2019). International Marketing (15th ed.). McGraw-Hill Education.
  • Ellis, B. (2018). International Business and Multinational Enterprises. Routledge.
  • Hollensen, S. (2015). Global Marketing. Pearson Education.
  • Root, F. R. (1994). Entry Strategies for International Markets. Jossey-Bass.
  • Yip, G. S. (2003). Total Global Strategy. Pearson Education.
  • Doole, I., & Lowe, R. (2012). International Marketing Strategy: Analysis, Development and Implementation. Cengage Learning.
  • Luiz, J., & Azevedo, A. (2015). International Market Entry Strategies. Journal of Business Research, 68(9), 1734-1740.
  • Hollensen, S., & Opresnik, M. O. (2020). Global Marketing. Pearson.
  • Rugman, A. M., & Verbeke, A. (2004). A Perspective on Regional and Global Strategies of Multinational Enterprises. Journal of International Business Studies, 35(1), 3-18.
  • Ghemawat, P. (2007). Redefining Global Strategy: Crossing Borders in a Changing World. Harvard Business Review Press.

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