Globalisation: reflects the trend of firms buying, developing, producing and selling products and services in most countries and region of the world.
Internationalisation: Doing business in many countries of the world, but often limite3d to a certain region (e.g. Europe).
According to Solberg (1997), with limited international experience and a weak position in thehome market there is a little reason for affirm to engage in international markets. Instead the firm should try to improve its performance in its home market.
1.3 development of the global marketing concept
Global marketing consists of finding and satisfying global customer needs better than the competition, and of coordinating marketing activities within the constraints of the globalenvironment.
This worldview of a firm’s business activities can be described as the EPRG framework, its four orientations are:
* 1 Ethnocentric: the home country is superior and the needs of the home country are most relevant. Essentially headquarters extends ways of doing business to its foreign affiliates. Controls are highly centralized and the organisation and technology implemented in foreignlocations will essentially be the same as in the home country.
* 2 Polycentric (multidomestic): Each country is unique and therefore should be targeted in a different way. The polycentric enterprise recognizes that there are different conditions of production and marketing in different locations and tries to adapt to those different conditions in order to maximize profits in each location. Theco0ntrol with affiliates is highly decentralized and communication between headquarters and affiliates is limited.
* 3 Regiocentric: the world consists of regions (e.g. Europe, Asia, and the Middle East). The firm tries to integrate and coordinate its marketing programme within regions, but not across them.
* 4 Geocentric (Global): the world is getting smaller and smaller. The firm may offerglobal product concepts but with local adaptation (think global, Act local= glocalisation).
Global Marketing: the firm’s commitment to coordinate its marketing activities across national boundaries in order to find and satisfy global customer needs better than the competition. This implies that the firm is able to:
* Develop a global marketing strategy, based on similarities and differentbetween markets
* Exploit the knowledge of the headquarters (home organisation) through worldwide diffusion (learning) and adaptation
* Transfer knowledge and ‘best practices’ from any of its markets and use them in other international markets.
The company should:
* Coordinate its marketing activities that mean coordinating and integrating marketing strategies and implementing themacross global markets. (Centralisation, delegation, standardisation and local responsiveness).
* Find global customer needs: this involves carrying out international marketing research and analysing market segments.
* Satisfy global customers: adapting products, services and elements of the marketing mix to satisfy different customer needs across countries and regions.
* Being better thanthe competition: offering better value, low prices, high quality, superior distribution, great advertising strategies or superior brand image.
Global village: it refers to the phenomenon in which the world’s population shares commonly recognised cultural symbols.
Good sentence to remember: markets are people, not products. There may be global products, but there are not global people.
1.5 Thevalue chain as a framework for identifying international competitive advantage
The concept of the value chain
It provides a systematic means of displaying and categorizing activities. The activities performed by a firm in any industry can be grouped into the eight generic categories shown.
At each stage of the value chain there exists an opportunity to contribute positively to the firm’s...
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