19.1 - Global Marketing Strategy
What global marketing strategies are
A global marketing strategy outlines how a business promotes and sells its products across different countries. It forms part of the overall marketing mix, which includes product, price, promotion, and place. Businesses develop specific strategies for each country they operate in, which can be identical, slightly adapted, or completely different depending on local factors.
Variations in global marketing strategies
- Strategies can remain consistent across all countries or vary by region, such as using one approach for Western Europe and another for East Asia.
- An overall global strategy can include small adjustments for individual countries without needing full changes.
- For high-end products, strategies often stay similar worldwide, while mass-market items like food or beauty products may differ to match local preferences.
The concept of glocalisation
Glocalisation involves adapting a business's global marketing strategy to suit local markets while maintaining an overall international presence. It follows the idea of thinking on a global scale but acting locally to meet specific regional needs.
Key features of glocalisation
Products or services are modified to align with local cultures, tastes, or preferences, making them more appealing to consumers. For example, a worldwide music streaming service might use a standard platform globally but feature local languages, artists, and content in each country.
Advantages of glocalisation
- Increases consumer appeal by tailoring offerings to local needs, which can boost sales.
- May encourage local manufacturing, reducing transport costs and overall expenses.
The three main approaches to global marketing
Businesses can adopt one of three primary approaches when marketing internationally: ethnocentric, polycentric, or geocentric. Each approach balances global consistency with local adaptation differently, influencing costs, risks, and sales potential.
| Approach | Description | Advantages | Disadvantages |
|---|---|---|---|
| Ethnocentric | Treats all markets similarly, using the same strategy as in the home country with minimal changes. For example, an electronics firm sells identical high-end devices worldwide at premium prices. | - Achieves economies of scale by producing uniform products. - Lowers costs with consistent marketing tools. - Reduces spending on research and brand variations. - Builds a strong global brand that appeals to international customers. | - Products may not suit local tastes, leading to poor sales. - Issues in one market can harm the entire brand. |
| Polycentric | Develops unique products and strategies for each country based on local research. For instance, a snack company develops unique flavours for two distinct regions, such as North America and East Asia. | - Targets specific local needs, improving sales chances. | - High costs for market research and custom products. - Limits economies of scale. |
| Geocentric | Combines global branding with local adaptations (a form of glocalisation). An example is a restaurant chain keeping a uniform image but varying menus by country. | - Boosts sales through local relevance while maintaining brand recognition. - Saves on advertising by using similar materials across markets. | - Adaptation costs are present but lower than in a polycentric approach. |
Applying the marketing mix to global markets
The marketing mix (product, price, promotion, and place) must be considered when expanding internationally, as each element may require adjustments to fit different countries' conditions.
Adaptations needed for each element of the marketing mix
- Product - Items may need changes to match local regulations, preferences, or cultural norms.
- Promotion - Advertising methods should account for cultural differences to ensure messages resonate effectively.
- Price - Influenced by factors like local production costs, taxes, consumer income levels, and competition in each market.
- Place - Distribution strategies depend on how and where customers prefer to purchase goods in a specific country.
Ansoff's Matrix in global marketing
Ansoff's Matrix helps businesses assess growth strategies, including international expansion. Entering overseas markets increases risk due to unfamiliarity with local conditions, and the chosen global marketing approach affects the level of uncertainty.
Risk levels in global strategies using Ansoff's Matrix
- An ethnocentric approach is generally less risky as it uses existing products and strategies in new markets.
- A polycentric approach carries higher risk because it involves creating new products for unfamiliar markets.
- Overall, developing entirely new products for international markets creates more uncertainty than introducing established products abroad.