4.3 Global Marketing

Question 1

what is global localisation?

Answer 1

when a business adapts to local expectations in order for a business to succeed in the international market, it can also be known as glocalisation

Question 2

what is an ethnocentric approach?

Answer 2

they make little to no attempt to adapt to global markets, eg Apple

Question 3

2 advantages of ethnocentric approach

Answer 3

• economies of scale, the same product is made in larger quantities, savings can be made from raw materials
• no development costs to identify and develop new products, therefore leading to lower costs and increased competitiveness

Question 4

disadvantage of ethnocentric approach

Answer 4

• product may not sell well in a local market, as it is new and has different cultural norms

Question 5

polycentric approach

Answer 5

when businesses adapt their product to local markets where they plan to sell the product

Question 6

advantage of polycentric approach

Answer 6

• product should sell well as it has been precisely targeted to that local market

Question 7

2 disadvantages of polycentric approach

Answer 7

• high cost as the market research is expensive
• hard to compete with local markets

Question 8

geocentric approach

Answer 8

a combination of ethnocentric and polycentric marketing

Question 8

geocentric approach

Answer 8

a combination of ethnocentric and polycentric marketing so keeping the brand name but developing some products to meet the needs of the market, for example, mcdonald’s and their different burgers around the world

Question 9

advantage of geocentric approach

Answer 9

• tailor product to local market tastes and needs

Question 10

disadvantage of geocentric approach

Answer 10

• high cost of product development
• there is a risk that the market still won’t like the product

Question 11

applying Price to local markets (4 P’s)

Answer 11

need to consider local prices, incomes, taxes, rent etc meaning they won’t charge the same price everywhere

Question 12

applying Product to local markets (4 P’s)

Answer 12

how much does the business have to adapt their product to the market? need to choose which approach (ethno, geo, poly)

Question 13

applying Promotion to local markets (4 P’s)

Answer 13

business needs to be conscious of different languages and cultures when promoting their products

Question 14

applying Place to local markets (4 P’s)

Answer 14

businesses need to take into account of how local consumers buy their products

Question 15

market penetration in global markets

Answer 15

when the business adapts products for markets it already operates in e.g mcdonalds already operates in japan, launched the teriyaki burger

Question 16

market development in global markets

Answer 16

marketing existing products in new markets in new markets, not always straightforward as customers from different countries have different tastes

Question 17

diversification in global markets

Answer 17

when new products are developed for new markets

Question 18

what are global niche markets?

Answer 18

customers who live in a different country and who’s needs are not met by global mass markets

Question 19

features of global niche markets

Answer 19

• clear understanding of needs and wants of the market segment
• emphasis on quality
• good customer service
• innovation

Question 20

why are customers prepared to pay higher prices for these global brands rather than local equivalents?

Answer 20

• the internet and e-commerce: internet is a good way to spread information and e-commerce helps businesses expand into foreign markets
• social media: the rise of platforms like tik tok and instagram and the impact of influencers has helped raise awareness for brands
• ease of travel: low cost airlines has made it more appealing for consumers to travel and purchase these products

Question 21

in what ways is cultural diversity a barrier?

Answer 21

a product suitable in one country may have a different meaning in another, for example, in the East, white is associated with mourning rather than black

Question 22

adaption of product in global niche markets (marketing mix)

Answer 22

there is a huge emphasis on quality and often luxury, for example, luxury cars/watches

Question 23

adaption of price in global niche markets (marketing mix)

Answer 23

they charge higher prices as they provide a product not intended for the mass market, charge premium prices

Question 24

adaption of promotion in global niche markets (marketing mix)

Answer 24

often based around the name and the exclusivity of the brand, more targeted than the mass market promotion

Question 25

adaption of place in global niche markets (marketing mix)

Answer 25

niches are more careful when choosing distribution channels, they usually use networks of exclusive dealers

Question 26

2 advantages of niche global marketing

Answer 26

• prices are higher, demand is price inelastic
• distributed through specialist retailers or directly to the consumer, this has advantages in terms of image

Question 27

2 disadvantages of niche global marketing

Answer 27

• products sell in low volumes, so profits need to be high to make it worthwhile
• the niche market must be large enough to support the business, the small size prevents economies of scale

Question 28

things to consider: cultural differences

Answer 28

different cultures greet in different ways, e.g in Vietnam, they shake hands and exchange business cards, but in the UK, it is less formal

Question 29

things to consider: language

Answer 29

over-reliance on one language is risky, as it can lead to miscommunication and there’s different forms of communication, like high context and low context

Question 30

what is the difference between low context and high context cultures

Answer 30

low context are cultures like America and Europe, who say what they mean and relies on direct language

whereas high context cultures like the Middle East and Asia, that are collectivist, focus on developing trust and interpersonal relationships

Question 31

things to consider: unintended meanings

Answer 31

simple things like gestures are different in different cultures, like how a thumbs up is offensive in Australia and Greece

Question 32

give 3 examples of differing tastes in different countries

Answer 32

• halal meat is common in the middle east but not in more western countries
• many foods from the US are banned in European countries
• Mcdonald’s change their types of burgers depending on where they are located to fit different countries’ tastes

Question 33

things to consider: inappropriate branding and promotion

Answer 33

• the beer maker Coors translated its slogan ‘turn it loose’ into Spanish, which meant ‘drink Coors and get diarrhoea’

businesses need to ensure that they are translating everything before they publicise/ sell