(Management for Professionals) Bodo B. Schlegelmilch (auth.) - Global Marketing Strategy_ An Executi

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Unformatted text preview: Management for Professionals Bodo B. Schlegelmilch Global Marketing Strategy An Executive Digest Management for Professionals More information about this series at Bodo B. Schlegelmilch Global Marketing Strategy An Executive Digest Bodo B. Schlegelmilch Vienna University of Economics and Business WU Vienna Vienna, Austria ISSN 2192-8096 ISSN 2192-810X (electronic) Management for Professionals ISBN 978-3-319-26277-2 ISBN 978-3-319-26279-6 (eBook) DOI 10.1007/978-3-319-26279-6 Library of Congress Control Number: 2016933769 # Springer International Publishing Switzerland 2016 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. Cover designer: eStudio Calamar, Berlin/Figueres Printed on acid-free paper This Springer imprint is published by Springer Nature The registered company is Springer International Publishing AG Switzerland To Irene and Roger ThiS is a FM Blank Page Preface The Benefits This book provides an opportunity to look at international marketing challenges from a strategic perspective. If you share the belief that managers cannot afford to think in functional silos and agree that the best companies combine marketing and strategy, this book will appeal to you. If you are also too busy for reading textbooks the size of “War and Peace” to get the latest thinking on international marketing strategy, you will like the conciseness of the book. And finally, if you would like to have a book that points you to further readings on topics you may want to pursue in more depth, you should definitely hit the “order now” button without any further ado. The Ideal Reader The ideal reader is like an ideal partner: he or she does not exist in reality. However, here is my wish list. You are an experienced manager or a student in a postgraduate program, such as an MBA or a specialized Master’s program. You have an international orientation and are interested in cross-cultural differences and their impact on marketing and strategy. You prefer a big picture approach to nerdy details. The People Who Did the Real Work Whole societies are built on the division of labor. I make no secret of the fact that this book uses the same principle. First, there are a number of bright students, who helped me in getting the literature up to date and doing some background work. These include, but in case I forgot someone, are not restricted to, Helmut Artinger, Hanin Al-Zahid, Carina Brenner, Doina Bors, Damir Haramina, Antonia Karamat Calice, Tassilo Benjamin Karunarathna, Martin Kirks, Richard Kola´rik, Janina vii viii Preface Kuhagen, Tanja Lang, Julia Lanske, Irina Mihai, Marcos Munoz, Ekaterina Nikitina, Bogdan Liviu Pralea, Tobias Rauscher, Stefanie Reif, Marie-Theres Riegler, Gerald Sonnleitner, Lilla Sarolta Balogh, Leonidas Tsotras, Peter Ummenhofer, and Alexandra Ioana Velescu. Second, there is Ms. Gina Villanueva-Weinzierl, who helped me organize the students. Third, there is Ms. Miya Komori-Glatz, who proofread the entire book. And last but not least, ¨ zdemir, who formatted the text and supplied me with copious there is Ms. Hanife O amounts of coffee while I was writing. The One Who Gets the Credit I am a professor of international management and marketing at Vienna University of Business and Economics, WU Vienna for short. Here, I established and chair the Institute for International Marketing Management and founded the WU Executive Academy, now one of the leading business schools for professionals in Central and Eastern Europe. Leaving the school after serving more than 10 years as Dean in 2015, the business school is a profitable venture that now serves some 2000 students p.a., has an administrative staff of 50 plus people, and employs some 500 instructors each year. It is EQUIS, AMBA, and AACSB accredited and has alumni from more than 80 countries. I was brought up and educated in Germany and obtained two doctorates (Ph.D. and D.Litt.) from Manchester Business School (UK) and an honorary Ph.D. from Thammasat University (Thailand). Starting at Deutsche Bank and Procter and Gamble in Germany, I continued my career at the University of Edinburgh and the University of California, Berkeley. Appointments as British Rail Chair of Marketing at the University of Wales (UK) and Professor of International Business at Thunderbird School of Global Management (USA) followed. Currently, I am serving on the Board of Governors of the Academy of Marketing Science, in the USA, the Board of Trustees of the Association of MBAs in the UK, and the Executive Board of the American Chamber of Commerce in Austria. I am also on the Advisory Board of a number of international Business Schools and have been a visiting professor at a number of international business schools, for example, at the Universities of Minnesota (USA), Keio (Japan), Leeds (UK), Sun Yat-Sen (China), and Cologne (Germany). Other claims to fame include various teaching and research awards as well as Fellowships of the Academy of Marketing Science and the Chartered Institute of Marketing. My research has been published in a wide variety of books and journals, such as the Strategic Management Journal, Journal of International Business Studies, Journal of the Academy of Marketing Science, and Journal of World Business. I was also the first European Editor-in-Chief of the Journal of International Marketing, published by the American Marketing Association. Appraisals The Opinion of Significant Others My wife Irene likes the book! Of course, I admit that she is biased. Other people stated the following: The charm of this book lies in its interdisciplinary perspective. Bringing together insights from marketing and strategy, it offers a structured approach to the topic for graduate students and a crisp digest for seasoned international managers alike. Howard Thomas LKCSB Chair in Strategic Management Former Dean: Lee Kong Chian School of Business Singapore Management University Singapore Bodo Schlegelmilch has produced a definitive book on global marketing that does an outstanding job clarifying how to bring the best of both local and global marketing efforts into one unifying marketing strategy. The book is a “must read” for any manager interested in understanding how to better market his or her brands in an increasingly global economy. Russ Winer William H. Joyce Professor of Marketing Stern School of Business, New York University New York USA ix x Appraisals This book is a must read! A successful strategy builds on serving one’s customers in good ways—and this is what this book is all about. The global focus is particularly relevant, given the fact that the competition today for leading customers is global—as said, a must read!! Peter Lorange Professor and Chairman of the Lorange Institute of Business former President of IMD Zurich Switzerland This is a perfect book for executive managers and MBA students who would like to grasp the essence of global marketing strategy quickly. Professor Schlegelmilch did a wonderful job bringing his deep knowledge of global marketing strategy into an easy-to-read textbook. Kazuhiro Asakawa Mitsubishi Chaired Professor of Global Innovation and International Management Graduate School of Business Administration Keio University Japan Ambitious Marketeers need to see a broader perspective. This book will give them a crisp and easy-to-read guide for their leap into Global Marketing. Highly recommended for its concise character! Gu¨nter Thumser CEO Henkel Central and Eastern Europe Vienna Austria An instructive and insightful guide for busy managers to understand how to compete in the global market today. The book is an excellent reading for both MBA and Executive MBA students. Xu Xinzhong Professor and Dean: Lingnan (University) College Sun Yat-sen University Guangzhou China A thought-provoking and easy to follow book, which can enable time-pressed readers to comprehend or formulate global marketing strategy. Andrew Main Wilson Chief Executive AMBA—The Association of MBAs London UK Appraisals xi An impressive combination of advanced academic wisdom and very practical advice for achieving success in global marketing strategy. Valery Katkalo Professor and Dean: Sberbank Corporate University Moscow Russia This book presents complex issues in an easily understandable, concise manner. A must read for busy managers who need to understand the essential global marketing strategy concepts but do not have the time to read lengthy textbooks. Joseph F. Hair, Jr. Director Emeritus, Louisiana State University Entrepreneurship Institute and Alvin C. Copeland Endowed Chair of Entrepreneurship Baton Rouge USA With so much written about the infinitely complicated world of global marketing, this book does the hard sorting of what’s important for you and delivers the essence of what’s needed in a clear, digestible, and insightful way. Vince Mitchell Sir John E Cohen Professor of Consumer Marketing Faculty of Management, Cass Business School City University London UK This book is clear and concise and focuses on the most relevant concepts. I highly recommend this text for managers, who need to understand how marketing strategy can be applied in a global context. Pannapachr Itthiopassagul Director of the Master of Marketing Program (MIM) Thammasat Business School Bangkok Thailand Whether you are new to the global marketing scene or a seasoned global manager, Professor Schlegelmilch presents a useful, readable framework for organizing and understanding the key issues and concepts in global marketing strategy planning and execution. Michael J. Houston Ecolab-Pearson M. Grieve Chair in International Marketing Carlson School of Management University of Minnesota, Minneapolis USA xii Appraisals This is a very nicely structured and written analysis of core issues relating to the development and implementation of global marketing strategy. Executives at all levels and from all functional areas will greatly benefit from this book which succinctly and powerfully addresses the most crucial decisions impinging upon global marketing success. A “must” read. Adamantios Diamantopoulos Chair of International Marketing University of Vienna Vienna Austria The book is great for executives who want an easy, yet comprehensive, book on global marketing strategy and for students in a global marketing strategy course to use as a guiding framework for doing business in the twenty-first century. Victoria L. Crittenden Professor and Chair, Marketing Division Babson College Babson Park USA Global Marketing Strategy: A Managerial Perspective is a highly insightful, comprehensive, and up-to-date book on a topic critical for all companies involved in international business. It is easily accessible to practicing managers as well as to business students. I highly recommend it. George S. Yip Professor of Strategy and Co-Director, Centre on China Innovation China Europe International Business School Shanghai China Global Marketing Strategy fills a gap in the international marketing literature by offering a concise textbook without sacrificing a broad coverage of issues relevant to managerial decision making in foreign markets from a world-renowned specialist in the area. The book aims at an executive audience that can strongly benefit from its direct, hands-on approach. Angela da Rocha Professor and Director of NUPIN - Nu´cleo de Pesquisas em Nego´cios Internacionais (Center for International Business Research) Pontifical Catholic University of Rio de Janeiro Brazil Appraisals xiii The book covers key dimensions of global business in a crisp and vibrant manner. It manifests the experience and academic versatility of the author and makes the book highly recommended reading for every business manager and student. Mubbsher Munawar Khan Principal: Hailey College of Banking and Finance University of the Punjab Lahore Pakistan Bodo Schlegelmilch takes the reader on an insightful and compelling journey through the world of global marketing strategy. This powerful book should be an obligatory read for any brand or product manager aiming at succeeding on a global scale. Bjo¨rn Ambos Professor and Managing Director: Institute of Management Senior Editor, Journal of World Business University of St. Gallen Switzerland ThiS is a FM Blank Page Contents 1 2 Marketing: A Global Discipline . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Mapping Out the Field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Defining the Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2.1 What Is Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2.2 What Is Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2.3 What Is Global . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 The Path to Globalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3.1 How Companies Become Global . . . . . . . . . . . . . . . . 1.3.2 Resource Seeking or Market Seeking . . . . . . . . . . . . . 1.3.3 Knowledge Seeking or Efficiency Seeking . . . . . . . . . 1.3.4 Learning in Industry Clusters . . . . . . . . . . . . . . . . . . . 1.3.5 Challenging Competitors . . . . . . . . . . . . . . . . . . . . . . 1.4 Contravening Forces Facing Global Companies . . . . . . . . . . . . 1.4.1 Forces for Global Integration and Coordination . . . . . . 1.4.2 Forces for Local Responsiveness . . . . . . . . . . . . . . . . 1.5 Implications for Global Corporate Structure and Control . . . . . . 1.5.1 The Integration-Responsiveness (IR) Framework . . . . . 1.5.2 The Adaptation–Aggregation–Arbitrage Model . . . . . . 1.5.3 The Role of Regions in Corporate Global Strategies . . . 1.6 Global Marketing Strategy as a Balancing Act . . . . . . . . . . . . . 1.6.1 Determining the Degree of Global Marketing Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6.2 Instruments Used to Facilitate Global Marketing Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6.3 Arguments for Empowering Local Marketing . . . . . . . 1.7 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1 1 2 3 3 3 4 4 5 6 6 6 7 9 9 10 12 13 Assessing Global Marketing Opportunities . . . . . . . . . . . . . . . . . . 2.1 The Market Assessment Task . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Assessments Based on Secondary Data . . . . . . . . . . . . . . . . . 2.2.1 Global Information Needs . . . . . . . . . . . . . . . . . . . . 2.2.2 The Global Market Assessment Process . . . . . . . . . . 21 21 23 23 24 . . . . . 14 15 16 16 17 xv xvi Contents 2.2.3 Use of Scoring Models . . . . . . . . . . . . . . . . . . . . . . . . 2.2.4 Detailed Assessment of Potential Country Markets . . . 2.3 Assessments Based on Primary Data . . . . . . . . . . . . . . . . . . . . 2.3.1 The Complexity of Global Marketing Research . . . . . . 2.3.2 From Research Objectives to Recommendations . . . . . 2.3.3 Data Equivalence in Global Marketing Research . . . . . 2.3.4 Emic or Etic Approach . . . . . . . . . . . . . . . . . . . . . . . . 2.4 Global Marketing Information Systems . . . . . . . . . . . . . . . . . . 2.4.1 Challenges in Designing Global Marketing Information Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4.2 New Tools for Global Data Collection . . . . . . . . . . . . 2.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 28 29 29 29 30 33 34 3 Entering Global Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 The Why the When and the How . . . . . . . . . . . . . . . . . . . . . . . 3.2 Ex Ante Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1 Motivation and Timing of Foreign Market Entry . . . . . 3.2.2 Balancing Risk and Control . . . . . . . . . . . . . . . . . . . . 3.3 Foreign Market Entry: Non-equity Modes . . . . . . . . . . . . . . . . 3.3.1 Exporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.2 Contractual Agreements . . . . . . . . . . . . . . . . . . . . . . . 3.4 Foreign Market Entry: Equity Modes . . . . . . . . . . . . . . . . . . . . 3.4.1 Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4.2 Strategic Alliances . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4.3 Wholly Owned Subsidiaries . . . . . . . . . . . . . . . . . . . . 3.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 43 43 43 44 45 45 50 54 54 57 58 59 60 4 Segmenting Targeting and Positioning in Global Markets . . . . . . 4.1 STP: The Holy Trinity of Marketing . . . . . . . . . . . . . . . . . . . 4.2 Global Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.1 Geographic Segmentation . . . . . . . . . . . . . . . . . . . . . 4.2.2 Demographic Segmentation . . . . . . . . . . . . . . . . . . . 4.2.3 Psychographic Segmentation . . . . . . . . . . . . . . . . . . 4.2.4 Behavioral Segmentation . . . . . . . . . . . . . . . . . . . . . 4.2.5 Benefit Segmentation . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Selecting Global Target Segments . . . . . . . . . . . . . . . . . . . . . 4.3.1 Targeting Approaches . . . . . . . . . . . . . . . . . . . . . . . 4.3.2 Assessing Target Segments . . . . . . . . . . . . . . . . . . . . 4.3.3 Selecting Target Segments . . . . . . . . . . . . . . . . . . . . 4.4 Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4.1 Establishing a Frame . . . . . . . . . . . . . . . . . . . . . . . . 4.4.2 Clarifying Areas of Parity . . . . . . . . . . . . . . . . . . . . . 4.4.3 Differentiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 63 64 64 65 66 68 69 70 70 71 72 74 74 75 75 . . . . . . . . . . . . . . . . 35 37 39 39 Contents 4.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii 79 80 5 Creating Global Product and Service Offerings . . . . . . . . . . . . . . . 83 5.1 Consumers Buy Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 5.2 Turning Products into Solutions . . . . . . . . . . . . . . . . . . . . . . . . 83 5.2.1 Product Dimensions . . . . . . . . . . . . . . . . . . . . . . . . . . 84 5.2.2 Product Types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 5.3 The Standardization–Adaptation Debate . . . . . . . . . . . . . . . . . . 86 5.3.1 Standardization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8...
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