Global Marketing
Unit 4: Global Business
Global Marketing
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A global marketing strategy plans one marketing approach for the world market; glocalisation keeps that global core and adapts what local buyers need changed.
A global marketing strategy treats every country a firm sells in as one market. The brand, the core product and the message are planned once and used everywhere, as far as buyers allow.
The gain is scale. Serana, a Singaporean skincare brand sold in 6 countries, can make one advertising campaign for $1.2m and run it in all of them: $200,000 a country. Separate campaigns would cost $450,000 each, $2.7m in total. Standardising saves $1.5m, and buyers see the same brand wherever they travel.
The risk is that buyers are not the same everywhere. A message, a pack or a product that works at home can fail where beliefs, tastes or languages differ, and then the saving is paid for in lost sales.
Global localisation, or glocalisation, is the answer most global brands reach: "think global, act local". The firm keeps what gives it scale and recognition, such as the name, the logo and the core formula, and changes only the parts a country's buyers would otherwise reject.
Real Example: An instant-noodle brand keeps its name, logo and cup design in every country, but sells a chicken version with no pork where many buyers avoid pork, and a hotter one where buyers prefer strong chilli.
Exam Matters: When a case gives the cost of one campaign against several, work out the saving from standardising, then say what could be lost if buyers in one country reject the standard message.
An ethnocentric approach markets abroad the way it markets at home; a polycentric approach builds a separate marketing mix for each country.
A firm selling abroad can take one of three marketing approaches, and each answers the same question: whose view of the customer shapes the marketing?
A domestic or ethnocentric approach starts from home. The firm sells abroad the product, pack, price structure and adverts it designed for home buyers, assuming that what sells at home will sell elsewhere. It is cheap and quick, because nothing is redesigned, and head office keeps control. It works when the product meets the same need everywhere; it fails when buyers abroad differ from buyers at home.
An international or polycentric approach starts from each country. Every market is treated as different, usually with a local team deciding the mix there, so the product, the price, the channels and the message can all differ. It gives the closest fit to local buyers, but it costs more, gives up the saving from one campaign, and can leave the brand looking different in every country.
The two sit at opposite ends: one mix for everyone, designed at home, against a new mix for each country, designed there.
Real Example: A juice maker in Kenya first sold its home packs and adverts unchanged in two neighbouring countries. When it entered a market with a different language and diet, it handed pack design and flavours to a team based there.
Exam Matters: Use the paired names the first time — "domestic/ethnocentric", "international/polycentric" — then explain the approach in terms of who decides the mix and how much of it changes.
A geocentric approach sees the world as one market, keeps common what buyers share, and changes the rest; it is the approach behind glocalisation.
A mixed or geocentric approach takes neither home nor each separate country as its starting point. It looks at the world market as a whole, asks what buyers everywhere have in common, and standardises that; then it changes the elements where countries genuinely differ.
Serana works this way. One brand, one core formula and one global campaign serve all 6 countries, while each country team can choose pack sizes, a fragrance or the model in an advert. Decisions are shared between head office and the country teams rather than taken wholly by either.
Its strength is balance: most of the saving from standardising, with enough local fit to sell. Its weakness is that the line between shared and local has to be drawn and redrawn, which takes management time and causes disputes between head office and the countries.
Choosing between the three approaches turns on how alike the firm's buyers are, how costly a local mistake would be, and how much the firm can spend. A product that meets the same need everywhere leans towards one mix; one that touches food, faith or language leans towards local adaptation.
Real Example: A phone-case brand designs one range and one online campaign for all its markets, but lets each country choose which colours to stock and translate the product pages.
Exam Matters: A judgement between the approaches should name the condition that decides it, such as how alike buyers are or what a local mistake would cost, rather than choose the mixed approach as a safe middle.
A product can travel unchanged or be adapted in its formula, size or label; the more it touches climate, law, belief or taste, the more it tends to change.
The marketing mix (4Ps) — product, price, place and promotion — has to be applied to every market a firm enters, and each P can be standardised or adapted. Product comes first, because the other three are built around it.
Some products travel unchanged: a phone charger meets the same need everywhere. Others need adaptation to the conditions of the market: its climate, its religious or legal rules on ingredients and labelling, its language, and how much and how often people buy.
Serana's core moisturiser is the same in every country. In Zarand, where the climate is hot and dry, it sells a lighter, alcohol-free gel, labelled in Zarand's own language. The brand, the logo and the core formula stay the same.
Every adaptation costs something: a separate production run, new packaging, more stock to hold. So a firm adapts only where the standard version would lose more sales than the change costs.
Real Example: Chocolate makers selling into hot countries use recipes that soften at a higher temperature, so bars survive the journey from warehouse to shop.
Exam Matters: Name the local condition that forces the change, such as climate, law, belief, income or taste, and the P it changes. An adaptation with no reason attached is description, not application.
Price is adapted to what buyers can pay, what local rivals charge and what it costs to reach the market; changing the pack size is how many firms reach a price.
Price is the P most often changed, because incomes, local rivals and the cost of reaching a country all differ. One price in dollars can be a bargain in one market and a luxury in the next.
Where incomes are low, the obstacle is often the price of one purchase, not the price per ml. Serana's 200 ml bottle sells at $18, which is $0.09 a ml. A 25 ml sachet at $3 is $0.12 a ml, a third more, yet the buyer needs only a sixth of the money at the till.
That move changes two Ps, and good answers separate them. Making the smaller pack is a product decision, because the size of what is sold changes. Charging a price for it is a price decision, because it sets what one purchase costs.
Price is also set against local rivals — lower where cheap local brands are strong, higher where a foreign brand carries status — and it must cover the tariffs and freight that buyers at home never pay for.
Real Example: Shampoo, coffee and detergent are widely sold in single-use packs in lower-income markets, so a household can buy a few days' supply with the cash it has that day.
Exam Matters: If a case gives pack sizes and prices, work out the price per unit of each: it shows whether the adaptation made the product cheaper or only easier to afford at once.
Place follows how and where buyers in each country shop; promotion follows what they watch, read and believe, and what the law allows.
Place is adapted to how a country shops. In one market supermarkets dominate; in another most goods are bought from small family shops, open markets, or online and delivered. A firm that uses only the channels it knows at home can leave most buyers unreached.
Serana sells mainly through pharmacies at home. In Zarand most skincare is bought in small shops and online, so it appoints a local distributor for the small shops and sells direct through its own website.
Promotion is the P where culture matters most. The media people use differ, and so do what an advert may show, which public figures people trust, what humour works and what the law allows; some countries restrict adverts aimed at children or adverts that name a rival.
A global campaign can keep one message and one visual style while changing the language, the people and the setting in each country: the promotional form of glocalisation.
Real Example: A sports-drink brand runs one global advert idea, an athlete pushing past exhaustion, but films each country's version with a well-known local athlete, in the local language.
Exam Matters: Say which channel or medium the buyers in the case actually use, and why the home approach would not reach them. That turns a list of Ps into application.
Applied abroad, Ansoff's matrix sorts a firm's global options by whether the product and the market are new to it, and shows how risk rises as more is new.
Ansoff's matrix (a Unit 3 theory of corporate strategy, 3.3.1) asks two questions of any growth option: is the product one the firm already sells, and is the market one it already sells in? In global marketing the market is usually a country, or a group of buyers in one.
Serana's four options, one in each cell:
Risk rises as more becomes new. Market development abroad adds the unknowns of a new country (culture, law, channels) to a product the firm knows works; diversification abroad adds both unknowns at once, which is why firms usually enter a country with a proven product first.
The test for the two middle cells is which element changed. Adapting an existing product so it sells in a new country, with a new label or pack size, is still market development, because the country is what is new. Product development is a genuinely new product for buyers the firm already has.
Real Example: A frozen-food maker entering a new region usually starts with its best-selling existing meals, which is market development, and develops new dishes for buyers there only once it knows them.
Exam Matters: Place the option in one cell, say which element is new, and use the cell to judge risk; then say what in the case makes that risk larger or smaller than the matrix suggests.
Porter's matrix asks how a firm will win abroad, on lower cost or on difference, and whether it targets the whole global market or one part of it.
Porter's Strategic Matrix (also 3.3.1) asks two things: does the firm's advantage come from lower cost or from offering something different, and does it aim at a broad market or a narrow one? Applied to global marketing, the answers shape the mix in every country.
Cost leadership across the world means one standard product made at great scale and sold on price; it fits a global marketing strategy, because every local version adds cost. Differentiation across the world means a product buyers value for something rivals lack, such as quality, design or a trusted brand, with one consistent image and a price that covers it.
Cost focus and differentiation focus aim at one part of the market. Globally, that part is often a group of buyers spread across many countries. Serana's halal-certified, alcohol-free serum is differentiation focus: something distinctive, built for one group, sold wherever that group lives.
The position limits the mix. A cost leader cannot afford many local versions; a differentiator can adapt more, but must keep what makes it distinctive the same everywhere.
Real Example: A low-cost stationery maker sells the same pens in the same packs in dozens of countries and competes on price; a rival sells hand-bound notebooks at many times the price to collectors in the same countries.
Exam Matters: Place the firm in one cell with evidence from the case, then say what that position means for the 4Ps abroad, especially how much local adaptation it can afford.
Ansoff's matrix says where a firm grows and how risky that is; Porter's says how it will compete once there. A global marketing decision needs both answers.
The two matrices answer different questions, so a global marketing decision usually needs both. Ansoff asks where: which products, in which countries, at what risk. Porter asks how: on what basis the firm will beat rivals once it is there.
Serana entering Zarand with its existing moisturiser is market development. How it competes there is a separate choice. Against cheap local creams it cannot win on cost when it ships from Singapore, so it competes on difference, with halal certification, a gel texture and a trusted brand, and prices above local rivals.
The two answers together then shape the mix: a standard brand and core formula, an adapted pack and label, selected shops rather than every market stall, and promotion that stresses what makes the product different.
Neither matrix makes the decision. Ansoff says nothing about how large a market is or how well the firm understands it, and Porter's cells blur when a firm is low-cost in one country and premium in another. They organise the argument; the evidence in the case decides it.
Real Example: A Nigerian fashion label taking its existing designs to buyers of Nigerian origin in several other countries is developing new markets, and it competes on its designs and fabrics rather than on price.
Exam Matters: In a longer answer, use Ansoff to judge the risk of the move and Porter to judge whether the firm can win once there; the conclusion weighs the two.
Cultural diversity means groups of people across the globe have different interests and values, and a group that shares them can be a market wherever it lives.
Cultural diversity is the recognition that groups of people across the globe have different interests and values. A country is not one market of identical buyers: within it are groups with their own beliefs, customs and ways of spending their time.
Two kinds of difference matter for marketing. Values are beliefs about what is right or important: a faith's rules, a commitment to protecting animals, a view of how people should dress. Interests are what people enjoy or spend time on: a sport, a kind of music, a hobby.
Shared values and interests are what create global niches. A group that shares a value or an interest is often spread across many countries. It may be a small share of any one country and still, added together, a large number of people with the same need.
So cultural diversity works in two directions. It is a reason to adapt the mix country by country, and it is also a reason to look for groups that cross borders and serve them in the same way everywhere.
Real Example: Fans of Korean pop music are a small part of the population in most countries, yet together they support merchandise, streaming and concert businesses worldwide.
Exam Matters: Name the value or interest the group in the case shares, and whether it crosses borders: that tells you whether to adapt by country or to serve one group in many countries.
A global niche is a small, specialised group of buyers with a shared need, spread across countries: small in each, worth serving in total, and often willing to pay more.
A niche market is a small, clearly defined part of a larger market, with needs the mass market serves badly. A global niche is that kind of group spread across many countries.
Its features:
The weaknesses come from the same features. Sales are capped by the size of the group, one new rival can take a large share of it, and a firm that depends on one niche has no other market to fall back on.
Real Example: A maker of left-handed guitars sells only a few hundred instruments in any one country, but by selling online it serves left-handed players everywhere with a single range.
Exam Matters: Use the case's figures to show the niche is small in each country but viable in total, then weigh the higher price against the risk of depending on one group.
For a global niche the product usually stays the same everywhere, while price, place and promotion are set by the niche rather than by the country.
The marketing mix (4Ps) for a global niche is built around the group, not the country, so its adaptation follows the group. The usual question, what changes in each country, turns into another: what does this group need wherever it lives?
Product. The specialised feature is why the niche buys, so it stays the same everywhere: Serana's serum is halal-certified and alcohol-free in all five countries. Changes are limited to what law requires, such as the label.
Price. Buyers with few alternatives accept a higher price: $30 against $20, 50% more. It must still fit what the group can pay, so a firm may hold one price in richer markets and a lower one where incomes are lower.
Place. A niche is too thin to fill every supermarket shelf, so it is reached through shops that serve that need, outlets run by the community itself, and online orders shipped across borders.
Promotion. Rather than mass advertising, the firm goes where the group already gathers: its magazines and websites, community events, and recommendations from trusted members.
Real Example: A small brand of vegan hiking boots sells from one website to walkers in dozens of countries, advertises in outdoor and vegan communities, and is never stocked by a mainstream shoe shop.
Exam Matters: For each P, say how serving the niche changes it compared with a mass-market mix, and use the case's figures for the price where they are given.
Cultural differences decide what is acceptable to sell and show; different tastes and preferences decide what buyers like. Either can force a change to the mix.
Before selling in a new country, a business has four cultural and social factors to consider: cultural differences, different tastes and preferences, language and unintended meanings, and inappropriate branding and promotion. This step takes the first two.
Cultural differences are differences in beliefs, customs, religion and social rules: what may be eaten or worn, which days are holidays or fasts, who in a family makes buying decisions, what is polite or offensive to show. They decide whether a product, an ingredient or an image is acceptable at all.
Different tastes and preferences are differences in what buyers like: flavours, textures, sizes, colours and styles. They decide whether an acceptable product is wanted. Buyers in Zarand prefer light skincare in the heat; buyers in cooler countries may prefer rich creams.
A cultural difference can make a product unsaleable, so it is usually a condition to meet. A difference in taste usually lowers sales rather than stopping them, so it is a choice to weigh against the cost of adapting.
Real Example: Snack makers selling across Asia commonly keep one brand but sell different flavours in each market, such as seaweed in one and chilli in another, while checking that no flavour uses an ingredient local faiths forbid.
Exam Matters: Separate the two: a cultural difference that forbids something is a condition to meet; a taste is a trade-off between the cost of adapting and the sales it wins.
A name, slogan or instruction can carry a meaning nobody intended once it is translated, or even when it is left untranslated and heard in a new language.
Language is the most visible way a global brand can go wrong, and unintended meanings arise in three places:
Serana found that its name, spoken in Zarand's main language, sounds close to the word for "slippery". Before launching it asked people who grew up speaking that language what they heard, found most read the name as intended when it appeared beside the logo, and chose a local tagline that made the meaning clear.
The checks cost little next to a failed launch: ask local speakers what a name or slogan suggests to them, carry the idea across rather than the literal words, and have a second translator turn the text back into the original to see whether it still says what was meant.
Real Example: A furniture brand preparing an export catalogue found that three of its product names, chosen in its home language, were slang words in the new market, and renamed them before printing.
Exam Matters: Explain the consequence, not only the error: ridicule that spreads, lost trust, the cost of renaming and reprinting, or a safety risk from a mistranslated instruction.
Branding and promotion become inappropriate when a colour, symbol, image or message offends local beliefs, breaks local rules, or means something unintended there.
Branding is the name, logo, colours, symbols and pack design that identify a product. Promotion is how it is communicated: adverts, sponsorship, social media posts and offers. Either can be inappropriate in a new market, even after succeeding at home.
Branding goes wrong through meaning. Colours carry different associations in different cultures, so a colour linked with celebration in one place can be linked with mourning in another; animals, hand gestures, numbers and religious symbols can also carry meanings the firm never intended.
Promotion goes wrong through content and timing. An advert showing behaviour that is normal at home, such as how people dress or what they drink, can offend; humour can insult; a campaign timed carelessly around a religious or national occasion looks disrespectful. Some countries also ban certain kinds of advert.
Serana has every pack and advert checked by its team in the country before it runs.
Real Example: A gift-wrap exporter found that one of its best-selling colours was associated with funerals in one of its markets, and withdrew that colour from the range for that country only.
Exam Matters: Say what made the branding or promotion inappropriate in that market, the likely effect on sales and reputation, and the check the firm could have made before launch.
A global marketing strategy plans one marketing approach for the world market; glocalisation keeps that global core and adapts what local buyers need changed.
An ethnocentric approach markets abroad the way it markets at home; a polycentric approach builds a separate marketing mix for each country.