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GMS 522 Chapter Notes -Theodore Levitt, Pricing Strategies, Kenichi Ohmae


Department
Global Management Studies
Course Code
GMS 522
Professor
Helene Moore

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GMS522 Reading Notes 1/24/2013 9:52:00 AM
January 17th, 2013
Chapter 1: The Global Marketing Imperative
Global marketing combines art/science with:
o Economics
o Anthropology
o Cultural studies
o Geography
o History
o Languages
o Jurisprudence
o Stats
o Demographics
Global marketing refers to the planning, coordination, and
integration of marketing activities across multiple country markets
The “liability of foreigness” adds an additional layer of complexity
and risk to the firm’s marketing decisions
Research has shown that large firms generate most of their sales in
their home region
Coordination/integration may be in terms of the sale of a
standardized product with the same brand name in every country
o Or, the company may choose to introduce this standardized
product with a uniform advertising campaign that uses similar
advertising appeal in all country markets
o Pricing strategies across national markets may be harmonized
o Timing of product introductions may be coordinated
Coordination and integration of marketing strategy with an
emphasis on standardization are central tenets of global marketing
Global marketing retains basic mkt principle of satisfaction and
exchange
To achieve in art of global marketing, it is necessary to be firmly
grounded with its scientific aspects
Evolution of the Concept
Term global marketing popularized by Theodore Levitt in 1980s

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Economies of scale when firms expand its output, cost per unit
will decline, allowing firm to be more price competitive in the
markets that it serves
Growing recognition that markets are different from home markets
led to companies adopting a country-by-country or multi-domestic
strategy
“Think global, act local”
importance of culture and local market conditions gave rise to the
concept of “glocal marketing”, which reflects the need for balance
between global marketing, with its focus on standardization, and
local marketing, with its focus on adaptation to county differences
Global marketing and international marketing differ
o International older term, focuses on issues surrounding
foreign market entry and local marketing
Globalization
Refers to the increased integration of the world’s economies
First recognized during the worldwide oil crisis of 1970
For example:
o A drought in Brazil and its effects on coffee production and
prices are felt in Canada and indeed around the world
o Sudden decline of Mexican pesos reverberated throughout
Poland, hungary, and the Czech Republic
o The “Asian Meltdown” of 1990s spawned uncertainty and
affected businesses in every continent
Intergration has also become more apparent on an individual level
o Communications has built new international bridges, be it
through music or TV (CNN)
Globalization has also resulted in a re-orientation of corporate
processes
o Now easy to gather, manipulate, analyze, and disseminate
information
Ongong global technological innovation in marketing has direct
effects on the efficiency and effectiveness of all business activities
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o Products can be produced more quickly, obtained less
expensively from sources around the world, distributed at
lower costs, and customized to meet diverse customer needs
Advances in Internet technology also allow firms to separate their
activities by content and context
o Firms can operate in a “marketplace”, where buyers and
sellers transact online, rather than a traditional marketplace
o Research suggests that Canada and US exporters have not
fully embraced Internet technology for transactions across
national borders
Globalization has spawned significant increase in investment
o Investment at an unprecedented high, and these shifts in
financial flows have had major effects
o These flows have resulted in buildup of international debt by
governments, affected the international value of currency,
provided foreign capital for firms, and triggered major foreign
direct investment activities
o These developments makes us more and more dependent on
eachother
Globalization is based on the belief that the world is becoming more
homogenous, that distinctions between national markets are not
only fading, but will eventually disappear
Forms of Globalization
Two forms of globalizations
o The globalization of MARKETS
o The globalization of PRODUCTION
Globalization of markets refers to the convergence of consumer
tastes around the world as recognized by Levitt
o For example: in Tokyo, Lusaka and Toronto, teens
demonstrate similar tastes in running shoes and MP3 players
Nike and Apple are able to capitalize on this
phenomenon with standardized products and marketing
campaigns
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