Business - Theme 4

• Marketing strategy


  A medium to long term plan that a business creates in order to achieve specific marketing objectives
• Global marketing strategy


  the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ
• Localisation strategy


  Increasing profitability by customizing the firm's goods and services so that they provide a good match to tastes and preferences in different national markets
• Global localisation (glocalisation)


  Adapting the marketing mix, including differentiated products, to meet national and regional tastes and cultures
• Marketing mix adaptions - businesses need to consider...

  - cultural differences

  - different tastes

  - language

  - unintended meanings

  - inappropriate/inaccurate translation

  - inappropriate branding and promotion

  Often a trade off between the advantage of a true global strategy and gains from localisation
• Ethnocentric (domestic) approach


  Where a business approaches the world primarily from the perspective of its own culture. Products and marketing are not adapted

  - standardised products

  - highly centralised structure/decision making
• Ethnocentric Advantages


  - Lower costs of production development

  - Economies of scale

  - Tight control
• Ethnocentric Disadvantages


  - Doesn't take account of national/cultural differences

  - Decision making can be slow

  - Diseconomies of scale
• Polycentric (international) approach


  The business changes its product and brand name to meet the demand of its customers (WALMART - ASDA)

  - decision making decentralised

  - local businesses often treated as separated entities
• Polycentric Advantages


  - Targeted marketing mix could maximises sales

  - Empowered local managers can respond quickly to market changes

  - Separated the different parts of the business can minimise diseconomies of scale
• Polycentric Disadvantages


  - Higher development costs

  - Fails to exploit global brand

  - Difficult to compete with established local brands

  - Price differences creates risks of reselling
• Geocentric (mixed) approach


  A combination of both Ethnocentric and Polycentric marketing. Maintain and promote the global brand name, but tailor its products to local markets
• Geocentric Advantages


  - Sales may be increased by adapting somewhat to local marketing conditions whilst exploiting the power of the global brand

  - Some scale economies can be achieved

  - Some control is retained by the corporate centre

  - Local manager have the power to adapt/respond to changing local markets conditions
• Geocentric Disadvantages


  - Costs associated with acting local

  - Can the MNC act competitively with polycentric and domestic businesses?

  - Will there be tensions between the centre and the regions when making key decisions