Zusammenfassung der Ressource
Theme 4
- Global
Marketing
- The marketing strategies used by businesses when operating in global markets.
- The Ethnocentric Model
- No adaption of products
and marketing tactics to
suit local preferences and
tastes. Uniform approach
worldwide.
- e.g. Apple, Pizza Express, Rolls Royce
- The Geocentric Model
- Some adaption of products
and marketing tactics to
suit local preferences and
tastes.
- e.g. Mcdonalds
- The Polycentric Model
- All products and
marketing tactics are
adapted to suit local
preferences and tastes.
- A Global Marketing Strategy that applies to all
global operations.
- ~ Producing on a large scale can be cheaper (designs can
be standardised so there may be economies of scale
- ~ Same marketing campaigns can be used everywhere
- ~ Less time can be spent researching individual markets
- ~ Less time developing products for individual markets
- Glocalisation
- ~ Sales are likely to increase as each market is specifically
targeted
- ~ Turnover and profits maximised
- ~ Marketing tactics are ideally suited to the local situation so less likely
to cause negative reactions
- A combination of the words localisation and globalisation. It involves the
development and sale of products to customers around the world which
reflect specific local customs, tastes and traditions.
- Global market Niches
- Smaller more specialised parts of a global market. Customer
needs are not met by the global mass market.
- Advantages of operating in a global niche market
- By focusing on a smaller segment of the market, a
business is able to offer more specialised services and
products which are often more valuable and in
greater demand.
- Consumer demand in a niche market is usually more price
inelastic which means premium prices can be charged.
- Direct competition may be reduced.
- Smaller markets make it easier to get to know your
customers better meaning marketing and sales
strategies can be more effective.
- Disadvantages of operating in a global niche market
- Producing on a smaller scale means that economies of scale may not be
fully exploited and so average costs will be higher
- Market size is ultimately limited
- A successful niche will attract a lot of attention for competition or takeover bids
- Niche markets tend to be based on a narrow consumer interest that
could change suddenly
- Over time niche markets may expand into mass markets and so the business
may lose the benefits of being a niche producer
- Assessment of a country as a production location
- Infrastructure
- Weak or unreliable infrastructure slows down transport system and raises costs.
- Makes communications more uncertain or difficult
- Location in a trade bloc
- Common for businesses to locate production facilities
inside a trade bloc to minimise trade barriers.
- Government Incentives
- Some countries reduce their business tax rates to encourage FDI
- Ease of Doing Business
- Forming a joint venture can get around problems
associated with understanding local rules and regs
- Political Stability
- Costs of Production
- There is a trade off between the need for cheap labour and
labour with the right technical skills
- Natural Resources
- e.g. Mining companies go to where the resources are and
export them to where the demand for them is
- Likely return on investment
- Protectionism
- Involves any policy that restricts
international trade in order to minimise
competition from foreign producers
that are trying to export.
- TARIFFS
- Tax imposed on imports.
- IMPORT
QUOTAS
- A physical limit of number of imports
allowed into the country.
- SUBSIDIES
- Financial support given to domestic producers
to help compete with international firms
- EMBARGOS
- A complete ban of imports into a country. (normally for political reasons.
- GOVERNMENT
LEGISLATION
- Imposing regulations to exclude some imports
- Advantages of Protectionism
- Can protect infant industries
- Can prevent dumping: where foreign producers sell goods below cost in the domestic market
- Can protect jobs
- Can raise government revenue
- Disadvantages (problems) of Protectionism
- Where trade barriers are imposed on a country, retaliation usually follows
- Doesn't work for goods that are very price inelastic e.g. land rovers in china
- Protection reduces competition, can lead to ineffieciency and higher prices
- Trading Blocs
- A group of countries where barriers to trade are reduced or eliminated
between the member countries
- Free Trade Areas
- NAFTA (north american free trade area) consists of Canada, North America and Mexico
- Groups of countries that trade completely freely, with few or no
trade boundaries BUT each country retains its own
independent trade policies in relation to the rest of the world.
- Single Markets/Common Markets
- Complete free trade within and a single unified
trade policy (CET). Also there is free movement
of people within.
- Benefits and constraints of trade blocs
- No tariffs mean members benefit from lower prices
- No trade restrictions mean export levels increase within the bloc
- Greater possibility of economies of scale
- A trade bloc creates a larger market which attracts FDI
- A common external tariff can increase costs of goods from outside the bloc
(APPLIES TO COMMON MARKETS ONLY)
- No protection for domestic industries from competitors within the bloc
- Unified regulations may not suit all businesses, especially those without ethical commitments
- Global Competitiveness
- Businesses that import will want
an appreciating or stronger £ - as
their costs will fall
- Businesses that export will want a
depreciating or weaker £ - it will
make them more competitive
- Globalisation
- Indicators of Growth
- GDP - Gross Domestic Product
- Measures the value of all the goods and services produced in an economy over one year.
- However, measuring growth with GDP can have drawbacks:
- Inequality: A country with some very wealthy people will
distort the results if most people in that country our
living in poverty.
- Exchange rates make comparisons
difficult because the values of
currencies fluctuate.
- The black economy: Sometimes paid work is not recorded
- Does not take into account cost of living varies from country to country.
- Literacy
- There is a strong link between literacy rate and economic efficiency and
growth.
- HDI - Human Development Index
- A measure of development based on access to health care, education and national income.
- Growing Economies
- Primary Sector
- Secondary Sector
- Tertiary Sector
- Involves services and other knowledge based industries
- 80% of UK GDP
- Involves the production and manufacture of tangible goods
- Tangible good: Physical products defined by the ability to be touched
- Involves the production of raw materials. e.g. Farmers, Fishers, Mining
- Developed Economies e.g. Europe, North America, Japan, South Korea, Singapore
- Economic growth is relatively slow
- Tertiary sector is the largest sector
- Emerging Economies e.g. China, Vietnam, India, Nigeria, Indonesia
- Rapid Economic Growth
- Primary sector declining, secondary and tertiary sector growing rapidly
- Skill levels and educational standards rising all the time
- Developing Countries e.g. African and Latin American Economies
- Usually slow economic growth
- Primary sector largest sector
- Economic activities will be labour intensive
- Most people poorly educated