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BUSI 617 Ch 1 - Chapter 1 Paradox of global marketplace...

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Chapter 1 Paradox of “global marketplace versus local markets” Introduction and Overview Marketing – an organizational function for creating, communicating, and delivering value to customers and managing customer relationships Marketing Mix – product, price, place, promotion – primary tools of marketing Product/Market Growth Matrix Product Orientation Existing Products New Products Market Orientation Existing Markets Market penetration strategy Product development strategy New Markets Market Development Strategy Diversification Strategy Principles of Marketing: A Review Value Equation – Benefits/Price Value, as customer perceives it, can be increased in 2 basic ways Offer customers an improved bundle of benefits or lower prices (or both) Find ways to cut costs/prices Nonmonetary costs are also a factor – time/effort to learn about/seek out product Definition of a market: people or organizations that are both able and willing to buy Competitive Advantage, Globalization, and Global Industries Competitive Advantage – success in creating more value for customers than competitors Globalization – transformation of formerly local/national industries into global ones Global Industry – competitive advantage can be achieved by integrating and leveraging operations on a worldwide scale An industry is global to the extent that a company’s position in one country is interdependent with its industry position in other countries Indicators of globalization include the ratio of cross-border trade to total worldwide production, the ratio of cross-border investment to total capital investment, and the proportion of industry revenue generated by companies that compete in all key world regions Degree of Industry Globalization Consumer Electronics – 118% Apparel – 77% Auto – 42% Steel – 33% IT/Business Process Outsourcing – 1% Focus – concentration of attention on a core business or competence Value, competitive advantage, and the focus required to achieve them are universal in their relevance and they should guide marketing efforts anywhere Global Marketing: What It Is and What It Isn’t A marketing approach that has proven successful in one country will not necessarily succeed in another country Global Marketing Strategy (GMS) – reflected in the way a company addresses the task of recognizing the extent of possible marketing expansion as well as the extent of marketing adaptation
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Strategy development addresses two fundamental issues: choosing a target market and developing a marketing mix Global market participation is the extent to which a company has operations in major world markets Standardization versus adaptation is the extent to which each marketing mix element is standardized or adapted in various country markets GMS has three additional dimensions that pertain to marketing management First, concentration of marketing activities is the extent to which activities related to the marketing mix are performed in one or a few country locations
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