Managing Marketing in the Global Economy
I.  Chapter Overview/Objectives/Outline
A. Overview
Organizations have engaged in international marketing for years. However, as working across global boundaries has become easier, the competition precipitated by global markets has intensified. A small Midwestern manufacturing business, for instance, may find itself suddenly thrust into a global competitive market. Parts of a larger product may be manufactured in a number of countries, brought together into a third country for assembly, then sent to another country for final preparation and sale. The world has come to the doorstep of every business. Participating in some aspect of global business is not a question of “if,” it is more a question of “how.”

An organization must address the following areas before entering into a global market:
It must decide whether to go abroad in the first place. While going abroad may present new profit opportunities, it does include risks. Risks include: failure to understand the customer’s needs and behavior, not knowing or understanding the dynamics of the respective business culture in the country targeted, lack of government regulation and restriction knowledge, not being able to staff with experienced personnel, failure to assign probability of occurrence for exogenous variables such as sudden changes in the political landscape or currency fluctuations, availability of optimal human, and nonhuman resources.
If it decides to enter a market it must have a high-level mode of entry plan such as exporting directly or indirectly, using licensing, entering joint ventures, and knowing how much direct investment to undertake.
Once it has determined its high-level mode of entry, it then must define a more tactical strategy for its marketing mix. Some questions to be addressed with regard to the marketing mix include:
• Will the organization deliver its current products as is, modify them, or create totally new products?
• Will current marketing communication approaches work in the new environment, is adaption required, or must totally new modes of communication be developed?
• Most probably, price strategies will be different due to the demand curve, price elasticity, and value chain dynamics. Additionally, there is a threat of the gray market.
• Distribution channels will most definitely be different and best practices need to be identified and leveraged. 
 
The importance of internal marketing cannot be stressed enough. As the dynamics of a global marketplace create opportunities and threats at unprecedented levels, an organization’s marketing strategy must be disseminated internally as well as throughout its value chain. Marketing assesses demand and supply, and without demand, there is no revenue and thus no need for any other business function. The margins of competitive advantage have grown thin due to in large part the increase in global competition. To maintain or increase a competitive advantage, the marketing strategy, to be effective, must be implemented in all respective areas of an organization’s business. Organization structural design can be an enabler or an inhibitor with respect to implementing a marketing strategy. For example, a functional design, i.e., silos, reduces flexibility in responding to a marketing threat or opportunity. Sales force structure may provide a competitive advantage if the sales people are deployed in line with the marketing strategy. For example, if the business sells complex solutions to other businesses, a team of knowledge-based personnel in proximity of the prospects and customers that can be easily tapped by the salesperson provides flexibility in responding to sales opportunities. There are many organization design strategies, and the key is to align the right design with the right marketing strategy so both are complementary and not in conflict.

Once a marketing strategy is implemented, it must be closely monitored and open to a continuous improvement mode of operation. So the initial strategy must contain the flexibility to change the marketing mix quickly and efficiently in an effort to respond to new opportunities and threats and the overall competitive environment.
B. Learning Objectives
• Identify factors that should be reviewed by the company before deciding marketing internationally
• Define the major ways of entering foreign markets.
• Understand key success factors to internal marketing.
• Gain insight to companies can be responsible social marketers.
• Identify how tools can facilitate marketing activity monitoring and enhancement.
C. Chapter Outline
Introduction
I. Competing on a Global Basis – A global form operates in more than one country and captures R&D. production, logistical, marketing and financial advantages not available to purely domestic competitors. (Refer to Figure 18.1 for a list of Major Decisions in International Marketing)
A. Deciding Whether to Go Abroad
1. Higher profit opportunities than domestic
2. Need larger customer base to establish economies of scale
3. Counterattack competition abroad
4. Risks include failure to understand the customer, the consumer, and business culture, failure to understand regulations and laws. and inability to staff experienced personnel
B. Deciding Which Markets to Enter
1. Determine proportion of foreign to domestic sales
2. Typical entry strategies:
a) Waterfall approach – gradually enter countries in a sequence
b) Sprinkler approach – enter many countries simultaneously
c) Some firms are born global – market to the entire world at the onset
3. Types of countries to consider influenced by product, geography, income and population, political climate 
C. Deciding How to Enter the Market - modes of entry
1. Indirect and direct exporting (usually start with indirect to minimize investment and risk)
2. Licensing
a) Licensor gains entry at little risk
b) Licensee gains production expertise or a well-know product or brand name.
c) Licensor has little control over licensee and when contract ends may find it has created a competitor
3. Joint ventures
a) Share ownership and control for economic and political reasons
b) Partners may disagree
c) Joint ownership may prevent a multinational company from carrying out specific manufacturing and marketing policies on a worldwide basis.
4. Direct investment - buy all or part of foreign- based entity or build own
D. Deciding on the Marketing Program –
1. Standardized marketing program worldwide promises lower costs (refer to Table 18.1 Globally Standardized Marketing Pros and Cons)
2.  Adapted marketing program –consistent with the marketing concept believes consumer needs vary and tailors marketing to each target group. (Refer to Figure 18.3 for an illustration of Five International Product and Communication Strategies) 
3. Product
a) Straight extension - no change to product
b) Product adaptation - to meet local conditions and preferences
c) Product invention - two forms
(1) Backward invention - reintroduce earlier product form
(2) Forward invention - create new product
4. Communications
a) Communication adaptation - use same communication program as old market or adapt old program to new market
b) Dual adaptation - adapt both the communication and the
         product
5. Price
a) Added costs tied to cost of transportation, tariffs, importer margins, wholesaler margins, retailer margins
b) “Gray market” - branded products diverted from normal or authorized distribution channels in the country of product origin or across international borders
6. Distribution
a) Vary widely across countries
b) Small retail operations in most countries drive costs higher
E. Country of Origin Effects
1. Companies increasingly concerned about the respective country’s perceptions attitudes and beliefs of their brands and country of origin effect
2. Companies need to strengthen image in respective target country to help sell their products
3. Consumers may view brands as symbolically important to their own cultural heritage and identity
II. Internal Marketing - requires that everyone in the organization buy into the concepts and goals of marketing and engage in choosing, providing, and communicating customer value.
A. Organizing the marketing department
1. Functional Organization - most common form, easy to administer but less effective from a marketing perspective due to “silo-based” mentality
2. Geographic organization - supports optimal use of sales representatives and enhanced when area market specialists also used
3. Product- or Brand-Management Organization – Alternatives
a) Product manager concentrates on developing a cost-effective marketing program and reacts more quickly to new products in the marketplace.
b) Some firms assign each major brand to a brand-asset management team (BAMT) with representatives from functions affecting the brand’s performance
c) Eliminate product manager position for minor products and assign two or more products to each remaining manager
d) Introduce category management, focusing on product categories to manage the firm’s brands
4. Market Management Organization
a) Usually adopted when products are sold to diverse markets
b) Market managers supervise several market-development
            Managers, market specialists or industry specialists and
            draw on functional services as needed
c)          Market-centered organizations – organize along market
             lines.
d)          Customer-management organization organize to deal with
              individual customers
5. Matrix Management Organization - can create competitive advantage but costly and difficult to manage
B. Relations with Other Departments
1. Chief marketing officer (CMO) has two tasks
a) Coordinate organization’s internal marketing activities
b) Coordinate marketing with other operational functional areas 
2. Determine optimal mix of marketing and non-marketing activity
III. Socially Responsible Marketing – Forces are driving forms to practice a higher level of corporate social responsibility, such as rising customer expectations.
A. Legal and Ethical Behavior
1. Firms must ensure employees know and observe relevant laws
2. Firms must adopt and disseminate:
a) Written code of ethics
b) Build a company tradition of ethical behavior
c) Hold employees responsible for observing ethical and legal guidelines
B. Social Responsibility Behavior
1. Company should exercise their social conscience in specific dealings with customers
2. Company should check their record on social and environmental responsibility to help them decide which companies to buy from, invest in, and work for.
3. Attempts at doing a “good thing” may have negative consequences if the company is seen as exploitive or if it fails to live up to a “good guys” image.
C. Sustainability
1. Ability to meet humanity’s needs without harming future generations
2. Triple Bottom line – people, planet, profit- and in that order
3. Possible unintended consequence – greenwashing – products give the appearance of being environmentally friendly without living up to their promise.
4. Consumer interest in sustainability is creating opportunities – refer to “Marketing Insight: The Rise of the Organic Product”
D. Cause-Related Marketing
1. Links the firm’s contributions to a designated cause to customers’ engaging directly or indirectly in revenue-producing transactions with the firm
2. Part of corporate societal marketing (CSM) which Minette Drumwright and Patrick Murphy define as marketing efforts” that have at least one non-economic objective related to social welfare and use the resources of the company and/or of its partners
3. Cause related marketing can:
a) Build brand awareness
b) Enhance brand image
c) Establish brand credibility
d) Evoke brand feelings
e) Create a sense of brand community
f) Elicit brand management
4. May backfire if consumers question the link between the product and the cause or see the firm as self-serving and exploitive. (Refer to “Marketing Skills: Cause-Related Marketing”
IV. Marketing Implementation and Control
A. Marketing implementation turns marketing plans into action or the who, where when and how versus strategy which addresses the what and why. Many firms use Marketing Resource Management (MRM) software to automate, integrate, and manage marketing activities and budgets, manage brands, and manage brand relationships.
B. Marketing Control and Metrics (Table 18.2 lists different Types of Marketing Control, Table 18.3 provides a list of Marketing Metrics) There are four types of Marketing Control:
1. Annual-Plan Control – shows whether the company achieved the sales, profits and other goals established in its annual plan
2. Profitability Control
3. Efficiency Control
4. Strategic Control
C. The Marketing Audit – a comprehensive, systematic, independent, and periodic examination of a company’s (or business unit’s) marketing environment. Objectives, strategies, and activities to identify problems and opportunities and to recommend improvements, The audit examines six major marketing components:
1. Macroenvironment and task environment
2. Marketing strategy
3. Marketing organization
4. Marketing systems
5. Marketing productivity
6. Marketing function
V. The Future of Marketing – Many forces contributing to the drive for corporate social responsibility. The ensuing benefit of being seen as a socially responsible company is the ability to attract employees who want to work for companies that they feel good about.
A. To succeed in the future, marketing must:
1. Be more holistic and less departmental
2. Achieve larger influence in the company
3. Continuously create new ideas and strive for customer insight by treating customers differently but appropriately
4. Build brands more through performance than promotion
B. To achieve above marketers need:
New sets of skills and competencies in CRM, PRM, Database marketing and Data Mining, contact center management and telemarketing, PR marketing, brand-building and brand-asset management, experiential marketing, integrated marketing communications and profitability analysis
C. Emerging markets offer enormous new sources of demand
D. Marketers face ethical dilemmas.
E. Marketers will have to use creative win-win solutions to balance conflicting demands and develop fully integrated marketing programs for meaningful relationships with a range of constituents
VI. Executive Summary
II.  Lectures
A.  “Managing Global Marketing”
The focus in this discussion is on the important role of understanding the options available to organizations as they embrace this invasive global market force. The word invasive is used as organizations must gain an understanding of the global forces that have impacted their business without their election to formally enter a global market.
Teaching Objectives 
• To provide students with a framework to address options in global market entry
• To explain the concepts related to understanding how global forces are impacting their business
 
Discussion
INTRODUCTION
Global firms plan, operate, and coordinate their activities on a worldwide basis. Small and midsize firms can practice global nichemanship.  For an organization to go global, it must make key decisions at the onset.

DECIDING WHETHER TO GO ABROAD
Reasons for contemplating going abroad may include: higher profit opportunities than the domestic market, larger customer base to achieve greater economies of scale, leverage international resources, and diversify its market. There are risks that must be assessed as well. A company may fail to understand customer preferences or behavior. For example, Japanese customers buy in less volume but more frequently as their storage space is smaller than that of consumers in the United States. Thus, they may pay more money for less. There are certain ethical and behavior modes that must be understood. Someone in the organization should own the process of monitoring government regulation, which includes a firm understanding of past trends, which  may be indicative of future trends. Organizations must also ensure that they have personnel with experience in the respective geographic target area. This may include local talent. A country’s economic and political volatility must also be assessed in terms of probability and contingency plans, because a response to any negative economic or political impact should be defined and understood by all personnel who have an impact or can be impacted by these forces.

DECIDING HOW TO ENTER THE MARKET

Modes of entry may include:
1. Indirect or direct exporting. Companies usually start with indirect to reduce risk and learn. Eventually they may decide to manage their own exports and invest in more global presence via trade shows and exhibitions.
2. Licensing a manufacturing process, trademark, patent, or trade secret for a fee or royalty is a way to minimize risk while gaining entry. Traditional risks of licensing, such as policing, quality, and reliability are present. Choice: marketers need to reassess the diversity and breadth of their offerings into a manageable good-better-best selection.
3. Joint ventures allow for risk and gain sharing. Organizations entering into this type of relationship should consider their respective approaches to decision making (e.g. quick or “multi-level decision approval”), long-term objectives, positions in their industry (e.g. new entrant versus established). How organizations behave and motivate themselves can enhance or derail the venture. There is an old, 1980s’ Harvard business case, Laura Ashley and FedEx, which may provide a good background to the instructor on the issues of joint ventures.
4. Direct investment, where the organization invests capital and other resources into entities present in the target geography.
DECIDING ON THE MARKETING PROGRAM
Several extreme approaches to choosing a marketing program approach can be discussed. Standardized marketing mix approach keeps costs low, allows for brand image consistency, and enables flexibility. However, this extreme may be the worst approach if market conditions dictate conditions that require a vastly different approach to brand positioning, pricing, distribution, types of products, and other mix variables. At the other extreme, an adapted or custom approach may be used. This ensures a more optimal alignment with market needs; however it may be extremely costly and perhaps unattainable. In conclusion, each organization must decide on the approach that provides acceptable risk and gains. The instructor may then wish to focus on one or more of the marketing mix variables.

Student exercises
Have students conduct an inventory of products in their home with respect to country of origin. They should tabulate the number of products by country. They may also wish to select one of the manufacturers and explore their partners via a Web site search.

Instruct students to select a major firm based in the United States. Have them research the ultimate corporate owner. They may be surprised to find out how many organizations that are considered traditional American companies are actually now foreign owned.
B.  “Internal Marketing”
Focus: Gain a competitive advantage or maintain a competitive position by leveraging internal marketing initiatives.

Teaching Objectives
• Gain an understanding of how organization design can impact marketing.
• Understand the importance of communicating the marketing strategy to everyone who can be impacted or who has an impact on the marketing strategy (this entails basically every employee). 
• To understand the key role value chains play in the organization’s marketing strategy.

Discussion
ORGANIZATION DESIGN
The text elaborates on different organization structures, functional, geographic, product, or brand management based, matrix, marketing management corporate-divisional, global. The key points to make are that there is no one correct organization design. Factors influencing the optimal design include: organization size, position in the marketplace, competitive activity, best practices, macro environmental forces, consumer buying patterns and changes to those patterns, complexity of the product or service, and degree of outsourcing (i.e., how many employees are under direct control of the organization as well as business functions).
VALUE CHAIN PARTENERS
As organizations outsource non-core competency functions in order to reduce cost and increase efficiencies, they become more reliant on their value chain partners. This is a good thing relative to cost and efficiency; however, it may be a liability relative to a marketing strategy.  Here are several scenarios that may lead to interesting discussions:

Scenario 1. A consumer purchases an Internet service from a major communication company, the same company perhaps that has provided them good satisfaction for their home telephone service. Now this communication company has partnered with a firm that manufactures and supports the modem device used as part of the service. When service is interrupted, problem resolution may be an issue as the two organizations must be managed by the consumer. There is not a one-stop place for the consumer to go to for service. There is no sole owner of the customer.

Scenario 2. A consumer purchases an appliance form a major retailer. The retailer subcontracts the installation and maintenance service. The consumer takes off from work and the installer does not show or call. The bad experience is directed toward the retailer. Product - what are you selling? (It might be a product or a service.)
Scenario 3. A firm outsources its inbound telemarketing for customer service. They provide the telemarketing firm with hard standards to ensure compliance with procedures and consistency with consumer communication. However, the outsourcing employee has no buy-in to the organization’s marketing strategy of servicing the customer at all cost, i.e., “The customer is the king.”
Scenario 4. A software company that was about to release a new software product to its business customers arranged training for all of its employees. The training included an in-depth discussion of product features. A test was created and employees were required to take the test online via an intranet. Test scores of all employees, including all levels of management from executive on down, were posted on the intranet. This approach ensured complete employee participation as no one wanted to score low. The end result was that every employee had complete knowledge of the product and all human touch-points with the organization were well versed when talking with the customer. The customer could call anyone within the organization and received the same qualified answers to his or her product questions.
III. Background Article
Issue:  Internal Marketing
Source: “Selling the Brand Inside,” Harvard Business Review January, 2002. Author - Colin Mitchell.
Discussion
Good article that demonstrates the value of internal marketing.

IV.   Case 
A.
The Leo Burnett Company LTD.: Virtual Team Management
 IVEY Case: 903M52-211        TN: 803-M52
Teaching Perspectives
Leo Burnett Co. Ltd. is a global advertising agency. The company is working with one of its largest clients to launch a new line of hair care products into the Canadian and Taiwanese test markets in preparation for a global rollout. Normally, after a brand launching, the global brand center turns over the responsibility for the brand and future campaigns to the local market offices. In this case, however, the brand launch was not successful. Team communications and team dynamics broke down in recent months and the relationships are strained. Further complicating matters are a number of client and agency staffing changes that could jeopardize the stability of the team and the agency-client relationship. The global account director must decide whether to proceed with the expected decision to modify the global team structure to give one of the teams more autonomy or whether to maintain greater centralized control over the team. She must also recommend how to move forward with the brand and determine what changes in team structure or management are necessary.

This case covers topics including advertising, brand management, cross-cultural relations, globalization, international relations, and marketing strategy.

B.
P&G Japan: The SK-II Globalization Project
 HBS Case: 9-303-003        TN: 5-304-023
Teaching Perspectives
The case focuses on whether to build a market for a $120-a-bottle product in Japan, expand the regional market into the promising Chinese market opportunity, or to launch the product in Europe. In addition to detailing the strategic opportunities and risk of each option, the case also describes some of the organizational constraints, including the CEO’s bias against prestige brands and the organization’s distraction of a simultaneous major global reorganization.  

This case presents the following objectives:
• Explore the process of formulating and implementing a global strategy and particularly the issues related to the globalization of local brands
• Examine how product innovation is developed and diffused on a global basis
• Develop an understanding of the tensions in multinational organization and particularly the need to balance the competing demands between local responsiveness, global integration, and worldwide diffusion of innovation
• Analyze the sources of success and failure in transformational change in a multinational corporation

给自信 更公益

中国经济管理大学《公益教育宣言》

中国经济管理大学——每个人都有受教育的权利和义务，不分民族、性别、宗教、语言、社会出身、财产或其它身份等任何区别。　

中国经济管理大学——MBA/EMBA培训不应该仅仅属于富人的专属特权，更不应该让天价学费阻碍为那些有管理潜力普通大众的求学之路。

中国经济管理大学——中国经济管理大学EMBA公益研究生院（免费学堂）勇当教育公益事业先行者，2013继续让公益培训遍结硕果。每月2-4次免费专题培训。

中国经济管理大学——为有潜力的管理人才、培训合格人才免费颁发合格证书，筹建高端管理人才库，让每一位学员享有金牌猎头服务。

中国经济管理大学

中国经济管理大学|中国经济管理大学培训|MBA实