Bulletpoint Summary Global Marketing: A Decision-Oriented Approach
The book is structured according to five parts (figure 1.1). The global marketing plan (figure 1.2) helps to create competitive advantages in the global marketplace that are sustainable.
LSEs (Large Scale Enterprises): These are firms with over 250 employees, and comprise 1% of all firms
SMEs (Small and Medium-sized enterprises): Small firms are firms that have less than 50 employees; Medium firms have less than 250 employees. These firms comprise 99% of all firms.
LSEs and SMEs differ in the following aspects:
Formation strategy/decision-making processes
Economies of scale and economies of scope
Use of information sources
Globalization: mirrors the trend of companies buying, developing, producing and selling products and services in most countries and regions of the world.
Internationalization: is involved with doing businesses in many countries of the world, but is very often limited to a certain region.
Solberg (1997) came up with a framework that decides on whether or not a company should ‘stay at home’ or ‘go abroad’. It is based on the dimensions industry globalism (global, local or potentially global) and preparedness for internationalisation (mature, adolescent, immature).
Global marketing: coordinating market activities abroad, and at the same time finding and satisfying customers better than the competition does. The way in which management looks upon doing business around the world influences the nature of the firm’s response to international market opportunities.
The EPRG framework describes this way of looking at a firm’s business activities, and consists of four orientations:
The following terms are linked to global marketing:
Coordinating marketing activities
Finding global customer needs
Satisfying global customers
Performing better than the competition
Glocalization: the idea of thinking globally whilst acting locally. This can be achieved by interacting dynamically between headquarters and subsidiaries. Both globalization and localization can be found in the ‘glocalization’ framework (figure 1.8).
Figure 1.9 illustrates the changing of the strategies of LSEs and SMEs. It consists of two dimensions, namely localization and globalization.
Global integration: recognizing the similarities between international markets and integrating them into the overall global strategy.
Market responsiveness: responding to each market’s needs and wants.
There are several forces that cause the shift towards integrated global marketing:
Removal of trade barriers (deregulation)
Relationship management/network organization
Standardized worldwide technology
Global cost drivers
There are several forces for ‘market responsiveness’ as well:
Deglobalization: moving away from the globalization trends and regarding each market as special, with its own economy, culture and religion.
Value chain: a categorization of the firm’s activities providing value for the customers and profit for the company. It can be used in order to identify competitive advantages.
Value: the amount that buyers are willing to pay for what a firm provides them (perceived value). One should realize that the value chain of a firm is embedded in a much larger stream of network activities in all of the supply chain.
Margin: the difference between the total value (price) and the collective cost of performing the value activities.
A firm can create a competitive advantage through: providing comparable buyer value more efficiently than competitors, and differentiating: providing move value than competitors at comparable cost.
There are two types of value activities, as can be seen in Figure 1.10:
Primary activities: These are activities involved with the actual creation of a product, the selling and transferring to the buyer, including after-sale assistance. There are 5 categories:
Inbound logistics: receiving, storing and distributing the inputs to the product.
Operations: transformation of inputs into the product.
Outbound logistics: collection, storage and distribution of the product to customers.
Marketing and sales: means used to make customers aware of products and services and being able to purchase it.
Service: Activities concerned with enhancing/maintaining the value of a product.
Support activities: These activities support the primary activities. There are four types:
Procurement: The process of acquiring resource inputs to primary activities.
Technology development: May be concerned with the product, processes or a particular resource.
Human resource management: Transcends all primary activities.
Infrastructure: Planning, finance, quality control etc. Also structure and routines.
The difference between up- and downstream activities is elaborated upon in Figure 1.10.
Linkages: relationships between the way in which one value activity is dependent on the performance of another. There are two types:
Internal linkages: These are between activities within the same value chain, they can however be on different planning levels within the firm. There are three levels:
There are two key dimensions related to how a firm competes globally:
Configuration: This is the location where each activity in the value chain is performed.
Coordination: How similar activities performed in different countries are coordinated with each other.
Stabell and Fjeldstad identified two models of value creation:
Value shops: A model for solving customer problems in a service environment. Value is created by mobilizing resources and deploying them to solve a specific customer problem.
Value networks: The formation of several firm’s value chains into a network, where each company contributes a small part to the total value chain.
Whereas hard services are those where production and consumption can be decoupled, soft services are services where production and consumption take place at the same time, making decoupling impossible.
Figure 1.14 illustrates 4 things:
The combination of the product and service value chain.
The cyclic nature of the service interaction, also being referred to as ‘the moment of truth’.
An illustration of a negotiation process between seller and buyer.
The ‘learning’ nature of the overall decision cycle, which would lead to:
A better service value chain
A better product value chain
A better combination of the service and product value chain.
Customer experience: The use of products in combination with services to engage the individual customer in a way that creates a memorable event. This can be characterized into one of four groups: entertainment, educational, aesthetic or escapist.
Pine and Gilmore propose thinking of experiences across two bi-polar constructs:
Involvement/participation: The level of interaction between the supplier and customer.
Intensity/connection: Strength of feeling towards the interaction.
Currently the world has entered the so-called ‘information age’ which is a lot different from the industrial age. Examples of drivers for this shift are: computation, the ability to collapse time and space by telecommunications and information.
Virtual value chain= An extension of the conventional value chain, where the information processing itself can create value for customers (Figure 116). There are four ways of using information to create business value:
Offering products and services
Inventing new products
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