,Part I: The decision whether to internationalize (1-4)
Part II: Deciding which markets to enter (5-8)
Part III: Market entry strategies (9-13)
Part IV: Designing the global marketing programme (14-17)
Part V: Implementing and coordinating the global marketing programme (18-19)
Chapter 1 --> Global marketing in the firm
➢ 1.3 Comparison of the global marketing and management style of SMEs and LSEs
LSE → large scale enterprises (more than 250 employees)
SME → small and medium sized enterprises (fewer than 50 and 250 employees)
LSES SMES
RESOURCES Many resources Limited resources
Internalization of resources Externalization of resources
Coordination of personnel/financing/market (outsourcing of resources)
knowledge, etc.
FORMATION OF Deliberate (‘planned’) strategy formation. Emergent (‘not planned’) strategy
STRATEGY/DECISION- Adaptive decision-making mode in small formation.
MAKING PROCESSES incremental steps. The entrepreneurial decision-making
model.
The owner is personally involved
ORGANIZATION Formal/hierarchical Informal
Independent of one person The owner usually has the power to
control a total organization
RISK-TAKING Mainly risk-averse Sometimes a risk-taking
Focus on long-term opportunities Focus on short-term opportunities
FLEXIBILITY Low High
TAKE ADVANTAGE OF Yes Only limited
ECONOMIES OF SCALE
/SCOPE
USE OF INFORMATION advanced techniques: databases, external informal inexpensive :
SOURCES consultancy, internet Internal sources/ - Face-to-face
communication
▪ Formation of strategy/decision-making process (LSEs)
As is seen in the figure, the realized strategy (the observable output of an organization’s activity) is a result
of the mix between the intended (planned) strategy and the emergent (not planned) strategy.
On the other hand, the SME is characterized by the
entrepreneurial decision-making model. Here more
drastic changes in strategy are possible because
decision-making is intuitive, loose and unstructured.
, ▪ Economies of scale and economies of scope
Economies of scale → accumulated volume in production, resulting in lower cost price per unit.
The benefits of economies of scale appear in different ways:
• Reducing operating costs per unit and spreading fixed costs over a larger volume due to experience
curve effects;
• Pooling global purchasing gives the opportunity to concentrate global purchasing power over
supplies;
• A larger scale gives the global player the opportunity to build centers of excellence for the
development of specific technologies or products.
Economies of scope → reusing a resource from one business/country in additional businesses/countries.
The challenge in capturing the economies of scope at a global level lies in being responsive to the tension
between two conflicting needs: the need of central coordination of most marketing mix elements, and the
need for local autonomy in the actual delivery of products and services.
➢ 1.4 Should the company internationalize at all? (Nine strategic windows)
Globalization: Reflects the trend of firms buying, developing, producing and selling products and services in
most countries and regions of the world. It increases the companies’ competitiveness and facilitates
innovation.
Internationalization: Doing business in many countries of the world, but often limited to a certain region. It is
unlikely to be successful unless the company prepares in advance.
Industry globalism: firm cannot influence this, it is determined by the international marketing environment.
▪ Preparedness for internationalization
This dimension is mainly determined by the firm.
The degree of preparedness is dependent on the
firm’s ability to carry out strategies in the
international marketplace, the actual skills in
international business operations.
For example: the well-prepared company (mature)
has a good basis for dominating the international
markets and consequently it would gain a higher
market share.
1.5 Development of the ‘global marketing’ concept
Basically ‘global marketing’ consist of finding and satisfied global customer needs better than the
competition, and coordinating marketing activities within the constraints of the global environment.
This world view of a firm’s business activities can be described according the EPRG framework, the four
orientations of which are summarized as follows:
1. Ethnocentric: the home country is superior and the needs of the home country are most relevant;
2. Polycentric (multidomestic): each country is unique and should therefore be targeted in a
different way;
3. Regiocentric: the world consists of regions (Europe, Asia etc);
4. Geocentric (global): the world is getting smaller and smaller. The firm may offer global concepts.
Global marketing → defined as the firm’s commitment to coordinate its marketing activities across national
boundaries in order to find and satisfy global customer needs better than the competition.
, Glocalization → the development and selling of products
or services intended for the global market, but adapted
to suit local culture and behavior
(think globally, act locally).
This global marketing strategy strives to achieve the
slogan ‘think globally, act locally’ (glocalization) through
dynamic interdependence between headquarters and
subsidiaries.
1.6 Forces for global integration and market responsiveness
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.
In the figure is assumed that SMEs and LSEs are learning for each other.
The consequence of both movements may be an action-oriented
approach, where firms use the strengths of both orientations.
▪ Forces for ‘global coordination/integration’
In the shift towards integrated global marketing, greater importance will
be attached to transnational similarities for target marks across national
borders and less on cross-national differences.
The major drives for this shift are as follows (global integration)
• Removal of trade barriers (deregulation) → has an impact on
globalization as it reduces the time, cost and complexity involved in trading across boundaries.
• Global accountants/customers → as customers become global and rationalize their
procurement activities, they demand that suppliers provide them with global services to meet
their unique global needs.
• Relationship management/network organization → business alliances and network
relationships help to reduce market uncertainties, particularly in the context of rapidly
converging technologies and the need for higher amounts of resources to cover global
markets.
• Standardized worldwide technology → the desire for gaining scale and scope in production
is so high that worldwide availability of products and services should escalate we may
witness more homogeneity in the demand and usage of consumer electronics across nations.
• Worldwide markets → worldwide markets are likely to develop because they can rely on world
demographics.
• 'Global village' → refers to the phenomenon in which the world’s population shares
commonly recognized cultural symbols ; products and services can therefore be sold to
similar groups of customers in almost any country in the world.
• Worldwide communication → internet ;customers within national markets are able to buy similar
product and services across parts of the world.
• Global cost drivers → economies of scale and scope
Part II: Deciding which markets to enter (5-8)
Part III: Market entry strategies (9-13)
Part IV: Designing the global marketing programme (14-17)
Part V: Implementing and coordinating the global marketing programme (18-19)
Chapter 1 --> Global marketing in the firm
➢ 1.3 Comparison of the global marketing and management style of SMEs and LSEs
LSE → large scale enterprises (more than 250 employees)
SME → small and medium sized enterprises (fewer than 50 and 250 employees)
LSES SMES
RESOURCES Many resources Limited resources
Internalization of resources Externalization of resources
Coordination of personnel/financing/market (outsourcing of resources)
knowledge, etc.
FORMATION OF Deliberate (‘planned’) strategy formation. Emergent (‘not planned’) strategy
STRATEGY/DECISION- Adaptive decision-making mode in small formation.
MAKING PROCESSES incremental steps. The entrepreneurial decision-making
model.
The owner is personally involved
ORGANIZATION Formal/hierarchical Informal
Independent of one person The owner usually has the power to
control a total organization
RISK-TAKING Mainly risk-averse Sometimes a risk-taking
Focus on long-term opportunities Focus on short-term opportunities
FLEXIBILITY Low High
TAKE ADVANTAGE OF Yes Only limited
ECONOMIES OF SCALE
/SCOPE
USE OF INFORMATION advanced techniques: databases, external informal inexpensive :
SOURCES consultancy, internet Internal sources/ - Face-to-face
communication
▪ Formation of strategy/decision-making process (LSEs)
As is seen in the figure, the realized strategy (the observable output of an organization’s activity) is a result
of the mix between the intended (planned) strategy and the emergent (not planned) strategy.
On the other hand, the SME is characterized by the
entrepreneurial decision-making model. Here more
drastic changes in strategy are possible because
decision-making is intuitive, loose and unstructured.
, ▪ Economies of scale and economies of scope
Economies of scale → accumulated volume in production, resulting in lower cost price per unit.
The benefits of economies of scale appear in different ways:
• Reducing operating costs per unit and spreading fixed costs over a larger volume due to experience
curve effects;
• Pooling global purchasing gives the opportunity to concentrate global purchasing power over
supplies;
• A larger scale gives the global player the opportunity to build centers of excellence for the
development of specific technologies or products.
Economies of scope → reusing a resource from one business/country in additional businesses/countries.
The challenge in capturing the economies of scope at a global level lies in being responsive to the tension
between two conflicting needs: the need of central coordination of most marketing mix elements, and the
need for local autonomy in the actual delivery of products and services.
➢ 1.4 Should the company internationalize at all? (Nine strategic windows)
Globalization: Reflects the trend of firms buying, developing, producing and selling products and services in
most countries and regions of the world. It increases the companies’ competitiveness and facilitates
innovation.
Internationalization: Doing business in many countries of the world, but often limited to a certain region. It is
unlikely to be successful unless the company prepares in advance.
Industry globalism: firm cannot influence this, it is determined by the international marketing environment.
▪ Preparedness for internationalization
This dimension is mainly determined by the firm.
The degree of preparedness is dependent on the
firm’s ability to carry out strategies in the
international marketplace, the actual skills in
international business operations.
For example: the well-prepared company (mature)
has a good basis for dominating the international
markets and consequently it would gain a higher
market share.
1.5 Development of the ‘global marketing’ concept
Basically ‘global marketing’ consist of finding and satisfied global customer needs better than the
competition, and coordinating marketing activities within the constraints of the global environment.
This world view of a firm’s business activities can be described according the EPRG framework, the four
orientations of which are summarized as follows:
1. Ethnocentric: the home country is superior and the needs of the home country are most relevant;
2. Polycentric (multidomestic): each country is unique and should therefore be targeted in a
different way;
3. Regiocentric: the world consists of regions (Europe, Asia etc);
4. Geocentric (global): the world is getting smaller and smaller. The firm may offer global concepts.
Global marketing → defined as the firm’s commitment to coordinate its marketing activities across national
boundaries in order to find and satisfy global customer needs better than the competition.
, Glocalization → the development and selling of products
or services intended for the global market, but adapted
to suit local culture and behavior
(think globally, act locally).
This global marketing strategy strives to achieve the
slogan ‘think globally, act locally’ (glocalization) through
dynamic interdependence between headquarters and
subsidiaries.
1.6 Forces for global integration and market responsiveness
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.
In the figure is assumed that SMEs and LSEs are learning for each other.
The consequence of both movements may be an action-oriented
approach, where firms use the strengths of both orientations.
▪ Forces for ‘global coordination/integration’
In the shift towards integrated global marketing, greater importance will
be attached to transnational similarities for target marks across national
borders and less on cross-national differences.
The major drives for this shift are as follows (global integration)
• Removal of trade barriers (deregulation) → has an impact on
globalization as it reduces the time, cost and complexity involved in trading across boundaries.
• Global accountants/customers → as customers become global and rationalize their
procurement activities, they demand that suppliers provide them with global services to meet
their unique global needs.
• Relationship management/network organization → business alliances and network
relationships help to reduce market uncertainties, particularly in the context of rapidly
converging technologies and the need for higher amounts of resources to cover global
markets.
• Standardized worldwide technology → the desire for gaining scale and scope in production
is so high that worldwide availability of products and services should escalate we may
witness more homogeneity in the demand and usage of consumer electronics across nations.
• Worldwide markets → worldwide markets are likely to develop because they can rely on world
demographics.
• 'Global village' → refers to the phenomenon in which the world’s population shares
commonly recognized cultural symbols ; products and services can therefore be sold to
similar groups of customers in almost any country in the world.
• Worldwide communication → internet ;customers within national markets are able to buy similar
product and services across parts of the world.
• Global cost drivers → economies of scale and scope
