cost-effective manufacturing

cost-effective manufacturing

Concept, Multidomestic Market Concept, or Global Market Concept, the main focus of this chapter and the text is on the Global Market Concept. I believe that regardless of the size of a company or in how many countries it operates, it should have a global orientation. The teaching objectives of this chapter are to:

1) Present the operating concepts an international company may have and explore the idea of global marketing management.

2) Discuss the benefits of global orientation.

3) Stress the importance of quality and cost containment in global marketing competition.

4) Examine the different types of collaborative relationships and show how these alliances are being embraced by international companies.

5) Focus on relationship marketing and strategic international alliances as two important types of collaborative relationships for the global marketer.

6) Stress the need for strategic planning to achieve company goals.

Comments and Suggestions

  1. The subject of collaborative relationships and the subsequent discussion of relationship marketing and strategic international alliances are important ideas to focus on in this chapter. Changes in technology, the shortening product life cycle, competition, the rapid growth of emerging markets and the need for cost containment as major trends in global marketing means that many firms must engage in collaborative relationships to remain competitive. There are several good examples in the text that illustrate how these relationships have been used. Also, Michael Schrage, “Notes on Collaboration,” The Wall Street Journal, June 19, 1995, p. A-10, had three good examples of important collaborations by IBM, Microsoft, and Boeing. As Schrage states, “. . . ‘winning’ in tomorrow’s global markets isn’t going to be a matter of scoring points but of creating value with customers, clients, suppliers and colleagues in innovative ways.” These relationships span the complete range of contacts a company has from customers through suppliers to other companies.
  2. Not to be overlooked in this chapter are the various alternative market entry strategies. It is important to stress that there are a variety of ways to enter international markets and a company may use only one or a combination depending on the goals of the company and target market characteristics.

Lecture Outline
I. Global Marketing Management

A. Global Marketing Management

B. Benefits of a Global Orientation

II. Planning for Global Markets

A. Company Objectives and Resources

B. International Commitment

C. The Planning Process

III. Alternative Market-Entry Strategies

A. Exporting

B. Contractual Agreements

  1. Licensing
  2. Franchising
  3. Joint Ventures
  4. Consortia

C. Strategic International Alliances (SIA)

D. Direct Foreign Investment

IV. Organizing for Global Competition

A. Locus of Decision

B. Centralized versus Decentralized Organizations

Discussion Questions



Corporate planning


Direct exporting

Joint Venture

Strategic planning

Indirect exporting


Tactical planning

  1. Define strategic planning. How is strategic planning different for international marketing than domestic marketing?

Strategic planning is a systemized way of relating to the future. It is an attempt to manage the effects of external uncontrollable factors on the firm’s strengths, weaknesses, objectives, and goals to attain a desired end. Further, it is a commitment of resources to a country market to achieve specific goals.

The principles of planning are not in themselves different between international and domestic marketing, but the intricacies of the operating environments of the MNC (host country, home, and corporate environments), its organizational structure, and the task of controlling a multicountry operation create differences in the complexity and processes of international planning. Strategic planning on an international level allows for rapid growth of the international function, changing markets, increasing competition, and the ever-varying challenges of different national markets. The plan blends the changing parameters of external country environments with corporate objectives and capabilities to develop a sound, workable marketing program.

  1. Discuss the benefits to an MNC of accepting the global market concept. Explain three points that define a global approach to international marketing.

Potential economies of scale; transfers of experience and product and marketing ideas across markets; having access to the toughest, most demanding customers; and stability of revenues should all be on the students’ lists of answers.

(1) Identification of market segments that cut across countries, (2) potential economies of scale in manufacturing and marketing, and (3) firm goals, strategies, structures, and personnel that support a global approach.

  1. Discuss the effect of shorter product life cycles on a company’s planning process.

Global competition is placing new emphasis on some basic tenets of business. It is reducing time frames and focusing on the importance of quality, competitive prices, and innovative products. Time is becoming a precious commodity for business, and expanding technology is shortening product life cycles and creating greater opportunities for innovative products. A company no longer can introduce a new product with the expectation of dominating the market for years while the idea spreads slowly through world markets. In any given year, for example, two thirds of Hewlett-Packard’s revenue comes from product introduced in the prior three years. Shorter product life cycles mean that a company must maximize sales rapidly to recover development costs and generate a profit by offering its products globally. Along with technological advances have come enhanced market expectation for innovative products at competitive prices. Today, strategic planning must include emphasis on quality, technology, and cost containment. To achieve the flexibility and speed required under such conditions, many

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