Global Marketing Strategy

This introductory chapter makes the point that managers cannot afford to think in functional silos and that marketing and strategy always go together. It maps out the field by explaining the key terms: marketing, strategy, and global. Next, we look at theories that explain the rationale for globalization, focusing particular on firm-level explanations. We explain the Uppsala Model of Internationalization, the Born Global Model, and Dunning’s Eclectic Paradigm (OLI model) in detail. Finally, we also mention other motives to globalize, such as knowledge seeking, learning in industry clusters, market seeking, and challenging competitors.

This chapter introduces different analytical frameworks to analyze foreign market characteristics. We discuss two approaches in depth: the CAGE framework, which looks at cultural, administrative, geographic, and economic differences between countries, and the PESTEL framework, which focuses on political, economic, social, technological, environmental, and legal aspects. Subsequently, we use the PESTEL framework to illustrate the relevance of some pertinent market characteristics in developing global marketing strategies.

This chapter focuses on two important decisions: how to select the most promising geographic market(s) and which market entry method is the most appropriate. Thus, the first part of the chapter describes how to systematically assess and select geographic markets. The second part describes alternative market entry methods. A distinction is made between non-equity modes, such as different means of exporting and contractual agreements, and equity modes, such as joint ventures and wholly owned subsidiaries.

This chapter focuses on the tension between global synergies and local responsiveness, which dominates many global marketing and strategy decisions. We start with a review of forces that encourage global integration and then look at forces pushing companies toward local responsiveness. Subsequently, we introduce two frameworks that help managers maneuver through the global versus local tension, namely, the integration-responsiveness framework and the AAA Triangle. Next, we briefly discuss the potential of regional strategies as middle ground between a global and local focus. Having laid the foundations, the remaining discussion focuses on how managers can best achieve a balance between local responsiveness and global synergies. The chapter concludes with a list of instruments facilitating global marketing integration and arguments in support of local marketing autonomy.

This chapter focuses on the process of designing global marketing strategies. Specifically, we take an in-depth view at three key choices every company has to make when developing a global marketing strategy, namely, “where to compete,” “how to compete,” and “what we need to compete.” We also briefly discuss the “organizational purpose” as a central boundary condition that drives these three questions and comment on the “management system” that supports and monitors strategic choices. The “where to compete” section deals with product, customer, distribution, and value chain choices within a selected geographic market. In terms of “how to compete,” we discuss the merits of alternative competitive strategies, such as low cost, differentiation, or a combination of both. Next, the “what we need to compete” section focuses on the resources and capabilities that are required to deliver the strategic choices of a company and discusses one of the most influential approaches to corporate strategy, namely, the Resource Based View of the firm. We finish with some remarks on the role of corporate management systems, which support and monitor strategic choices. In this context, we also point out that the availability of real-time metrics has made measuring the impact of marketing strategies easier in the era of digital marketing.

Segmentation, targeting, and positioning are core disciplines in marketing strategy, both in a domestic and global environment. Mistakes in these areas are likely to be costly and may result in failure; getting it right is a critical prerequisite for corporate success. In the age of “Big Data,” companies now have the possibility to micro-segment, target, and position in seconds. This represents a tremendous advance compared to the traditional approaches based on coarse-grained geographic, demographic, psychographic, and behavioral categorizations. Still, in many parts of the world, Internet penetration and smart phone usage are still low, and consumer segmentation via Big Data remains limited. Moreover, we are increasingly facing a technologically divided world, where search engines and applications are not universally accessible and governments and consumer rights advocates are concerned about passing data across country boundaries. This chapter starts with a short review of traditional segmentation methods and an explanation of how Big Data has advanced segmentation, targeting, and positioning. Next, we look at potential challenges to segmentation, targeting, and positioning faced by companies that work internationally.

The chapter starts with a distinction between different types of products and services. This provides the basis for the standardization-adaptation debate. Subsequently, the discussion shifts to global innovation and product development and demonstrates how different types of innovations may have rather different implications for the innovating company and the market as a whole. Next, we look at the international product life cycle, which is used to explain foreign investment patterns as well as to describe revenue and profit patterns of products. The chapter closes with a look at the counterfeits, an increasing and potentially dangerous aspect of global marketing.

There is no greater leverage for revenues and profits than pricing. Unfortunately, setting prices is also one of the most difficult decisions in global marketing. This chapter considers some of the key influences on setting prices in an international arena and looks at global pricing strategies and practices. The discussed topics range from different approaches to pricing in international markets to new approaches to pricing in today’s digital environment, different forms of countertrade, and the role of Incoterms. The chapter also scrutinizes the vexing issue of standardization and differentiation in the context of global pricing and the closely related question of where price decisions should be made: centrally or locally. Other topics discussed in this chapter include transfer prices within multinational companies, dumping, gray markets, and parallel imports.

Supply chains that stretch over different countries on different continents are one of the defining characteristics of globalization. At its core, global supply chain management comprises logistics, purchasing (sourcing), operations, and marketing channels. This chapter starts by clarifying the conceptual differences between global supply chains and global value chains and reviews the transformation from linear chains to digital ecosystems brought about by digital platform providers like Amazon and Alibaba. This is followed by a look at the key benefits and challenges of global supply chains, where we emphasize that logistics involves much more than the transfer of goods and that the smooth exchange of electronic data is gaining rapid importance. Next, we take a detailed look at inbound, outbound, and reverse logistics. Subsequently, we focus on the customer-facing elements of the supply chain, where we discuss the key functions of channel members and different organizational formats. Perspectives on selecting channels for different country markets, alternatives to cover markets with different degrees of intensity, the composition of indirect distribution structures and the management, training and competition with intermediaries follow. The chapter closes by considering some important trends shaping global supply chains and distribution channels.

Branding is the lynchpin of any corporate communication. But what makes brands valuable, what is a global brand, and why are there still so many local brands? This chapter addresses these and other questions. It first looks at some basic aspects of branding, such as the brand value, brand architecture, brand identity, brand image, and brand resonance. Next, it discusses various aspects central to global brands and highlights some of the challenges faced by companies aiming to globalize their brands. Finally, it examines the key digital and traditional communication tools available to companies and discusses the challenges of using them globally.

This chapter looks at digitalization from a consumer perspective and from a corporate perspective. We start by pointing out how uneven the Internet penetration and the adaption of smartphones still are across the globe. Next, we take a closer look at the substantial differences in e-commerce and proximity mobile payment systems between countries. We argue that these differences are only partially a reflection of the variances in digital infrastructure, but are also a manifestation of profound differences in digital consumer behavior. Turning to corporations, we illustrate the staggering size of some of the key digital players. Subsequently, we discuss the digital divide between China and the rest of the world and take a closer look at important digital players in China. This includes a comparison between Baidu, Alibaba, and Tencent and their US counterparts. The chapter closes with a brief look at the digital landscape in India.

Senior management needs to align global marketing strategy with an appropriate organizational design. This chapter introduces some pertinent aspects of organizational design encountered by companies with a global footprint. We structure the discussion into three parts. First, we look at the “anatomy” of an organization, which captures the roles, the responsibilities, and the distribution of assets. In this context, the “integration-responsiveness dilemma” is a particularly important concept. We introduce different organizational responses that try to bridge the local versus global tension, such as matrix structures, transnational networks, and regional headquarters. Next, we focus on organizational “physiology,” which concerns the flow of information through the organization, as well as the processes and relationships. We introduce different approaches to coordination and discuss the allocation of responsibilities across hierarchies and value chain activities. Different facets of the relationship between global and regional headquarters, between regional headquarters and national subsidiaries, and among national subsidiaries are also discussed. Finally, we take a brief look at organizational psychology, which relates to norms, values, and culture. As the tacit social order of an organization, corporate culture is often a key lever for improving corporate performance.

This chapter discusses business responsibility in a global marketing context. It looks at corporate social responsibility (CSR), sustainability, and business ethics from a corporate perspective and briefly explores the role of consumers and regulators. When attempting to clarify what business responsibility entails, we note persistent disagreements on rather fundamental positions. Examples include the remit of CSR and its voluntary nature; the potential “trade-offs” between the economic, social, and environmental aspects of sustainability; and how to judge whether particular decisions are ethical or unethical. An understanding of the main issues underlying these debates helps executives to navigate through the thorny field of business responsibility in global marketing strategy and shows that responsible business conduct and economic success are two sides of the same coin.

Let me be clear—the heading of this chapter is a complete oversell. It is impossible to predict the future with any degree of certainty! The Covid-19 pandemic vividly illustrates how unpredictable our environment is. The widely used VUCA acronym further reminds us that the future is volatile, uncertain, complex, and ambiguous. But does this rising uncertainty hail the end of strategic planning? We argue that the opposite is true. In a future increasingly characterized by VUCA, strategic planning is more important than ever. However, it is not planning for one future; it is planning for multiple possible futures that is called for. Companies need to develop the agility to adapt quickly to different possible scenarios to prosper under different conditions. This requires companies to spot trends that may influence their business as early as possible. Not all of the trends will materialize, and new unforeseen events may occur. Nevertheless, the more decision-makers think about how trends may impact their business, the more likely will they be able to capitalize on the opportunities these trends may offer and minimize the threats they represent. This chapter aims to identify some of these trends and discusses the likely implications for global marketing strategy.