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
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
B. Contractual Agreements
C. Strategic International Alliances (SIA)
D. Direct Foreign Investment
IV. Organizing for Global Competition
A. Locus of Decision
B. Centralized versus Decentralized Organizations
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.
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.
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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