4-3-1-marketing

Glocalisation

• Global marketing strategy is the process of planning, producing, placing and promoting a business’s product or service in the global market 

• Glocalisation is a strategy where businesses aim to reach customers globally and also take into consideration the needs of the local market 

  • The saying “think global, act local” is used to describe the strategy of glocalisation 

Different marketing approaches

• There are several marketing approaches that a business can take when it comes to expanding its operations to other countries or regions

• The three main approaches are:

  • Domestic/ethnocentric

  • Mixed/geocentric

  • International/polycentric

The domestic/ethnocentric approach

• Businesses see the domestic market and foreign markets as very similar

• This approach is based on the belief that the company’s home country culture and marketing practices are superior to those of other countries

• There will be no changes to the products for overseas customers, and marketing of the product will be the same

  • E.g. Apple sells standardised products across global markets, e.g. iPhones and iPads, which helps the company reduce costs, as it can benefit from economies of scale

Advantages and disadvantages of the ethnocentric approach

Polycentric/international approach

• Businesses adapt their marketing strategy by tailoring their products to the local market 

• A business treats each country as a unique market and develops a customised marketing mix for each market

  • E.g. KitKat (Nestle) has developed different adaptations of the chocolate to reach different consumers in the international market 

    • The packaging of KitKats in Japan was changed to include cherry blossoms, a symbol of good luck

    • Additional flavours, such as purple sweet potato and matcha powder, were included to appeal to the tastes of the local market

Advantages and disadvantages of the polycentric approach

The geocentric/mixed approach 

• This strategy is a mix of the polycentric and ethnocentric approaches

• This approach utilises the benefits of standardised products but also tailors products to meet the needs of local markets overseas while maintaining a consistent brand image across markets

  • E.g. McDonald’s has a geocentric approach by adapting its menu to meet the tastes and cultures of different overseas markets

  • McDonald’s does not offer beef or pork in India due to religious reasons. However, in the majority of Western countries, McDonald’s has standardised products such as the Big Mac

Advantages and disadvantages of the geocentric approach

Adapting and applying the marketing mix to global markets

• The marketing mix is the set of controllable marketing tools that a company uses to promote its brand or product in a market

  • It consists of the four Ps — product, price, place and promotion

• Businesses have to adapt their marketing mix to overseas markets to ensure the success of their product/service

• By adapting the marketing mix to meet local needs, companies can effectively penetrate global markets and build a strong global brand

Adapting the marketing mix to global markets 

Adapting and applying Ansoff’s matrix to global markets

• Ansoff’s matrix is a strategic planning tool that helps businesses identify potential growth opportunities by analysing their product and market strategies

  • The matrix consists of four growth strategies — market penetration, market development, product development and diversification

• Expanding outside domestic markets generates risks for a business, so it needs to ensure that it adopts the right strategy

  • By doing so, businesses can effectively penetrate global markets and achieve long-term success

Ansoff’s matrix

Market penetration

• This strategy focuses on selling existing products in existing markets 

  • Carries the least risk — if a business already operates in a market and launches another product, customers are already familiar with the business

Market development 

• This strategy focuses on selling existing products in new markets

  • Businesses may have to adapt their product to meet the needs and different preferences of customers in global markets

  • This strategy carries more risk, as customers may not understand a business’s product

    • E.g. Tesco opened stores in China and later had to withdraw from the market, as the company lacked understanding of Chinese consumer habits

Diversification 

• This strategy involves businesses developing new products for new markets 

• This is a high-risk strategy, as the business may have limited knowledge about the new market

• This strategy requires a deep understanding of local market conditions and consumer behaviour to ensure that the new product and market are a good fit for the business

Product development 

• A growth strategy where a business aims to introduce new products to existing markets

• This requires market research to identify the target market’s needs and preferences, developing products that meet those needs and adapting the business’s marketing mix to ensure that the products resonate with local consumers