Global Marketing

1. Global Marketing
Prof. K. Ravindran

2. In this session we will learn:
1. Global Marketing - Introduction
2. Selecting a potential market
3. Developing global marketing strategies
4. Marketing strategies of MNCs in India.
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3. Introduction

4. What is Marketing
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5. Globalisation
The International Dimension to the
development of Globalization:
1960 1970 1980 1990
• US • Japan • Third • Compani
world es going
countries global

6. What made them to go global?
Changes in environmental factors
Technology
Economy
New products
New markets

7. Why the need of companies going global?
Companies need to:
• Achieve their growth objective
• Reduce cost
• Increase the customer base
• Improve firm’s profitability
• Satisfy shareholders
Also for to:
• Reduce the product development time
• Recover investment (R&D) faster
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8. Diageo PLC – Expanding Globally
London-based Diageo PLC has spent an estimated $2 billion for a 53.4%
stake in India’s United Spirits Ltd. This is an attempt to expand their
business into a high growth, whiskey drinking country that has long eluded
them. They have made multiple attempts at entering the Indian market in
the past but failed. Diageo has made similar deals in other emerging
countries such as China and Brazil in recent years. The company plans to
derive half of its sales from these economies by 2015, it currently is at
40%.
Diageo is known for its flagship brands which include Johnnie Walker and
Smirnoff. Looking at India, Diageo sees a population of 1.2 billion and
growing. This investment with United Spirits will provide Diageo with an
extensive distribution network within India. It will also allow it to profit
from owning a majority stake in the world’s largest liquor company by
volume. Most importantly though, the deal gives Diageo a clear position in
the Indian market for affordable local spirits. This is extremely valuable
with India’s growing middle class. Local whiskey sales, which are
dominated by United Spirits, have made India the world’s largest whiskey
drinking market by volume. This market is dominated by local brands
mostly due to the high alcohol import taxes of India. Diageo’s successful
Johnnie Walker has struggled to gain a significant position in the market.
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9. Diageo PLC – Expanding Globally
The Indian market can be difficult with imitators and the stigma against
alcohol consumption. Also many of the places that sell alcohol are dingy
and not characteristic of Diageo’s traditional distribution channels.
However, slowly these issues are becoming smaller in India which in turn
makes it very attractive. It would have been extremely difficult for
Diageo to enter this market without acquiring a majority stake in an
established Indian company. At this point in time, this entry mode and
strategy makes the most sense for Diageo given its history of failures at
entering the market.
Diageo has gained the know how from United Spirits and at the same time
immediately gained a major share of the market through the investment in
the company. As we all understand, India is growing fast and if your
company can find a product to sell to their people, then you have a great
chance at being successful. This strategy has enabled Diageo to quickly
gain a strong position in a market that many are forecasting to be
extremely profitable and competitive into the future. I predict this
somewhat risky investment will prove more than worth it in the years to
come.
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10. 2 minutes
Activity1
Write your view about what do you
understand by Global Marketing?
Is global marketing is different from local
marketing?
Global Marketing essentially,
similar to local marketing
technically (i.e. non-human factors),
not in terms of social, which
involves a lot to do with human
feelings
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11. Nokia phones sells all over the world.
World
markets
have
integrated,
and are
Maruti has operations in over 70 countries. moving
towards
unified
Global
Market.
India provide software solutions for the global clients.
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12. What is common in
Hamburger
and
except that they belongs to
the category of edible
products? Scotch whisky
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13. Global Marketing – the plain truth
For example, in global business, it would not surprise anyone to observe a Canadian
businessman, Tony, meet with his Indonesian counterpart, Julia, in a French restaurant
located in London.
Further scrutiny would reveal that one is dressed in an Italian suit and wears Brazilian
shoes, while the other sports a Hon-Kong suit and Thai shoes, although both of their shirts
are made of Egyptian cotton.
Tony is staying in an Indian-run hotel, Julia in one owned by a Palestinian businessman. The
encounter could very well take place over a cup of coffee from the Ivory Coast accompanied
by Syrian pastries and end with a Cuban cigar
Tony might have flown to London on a European airplane owned by an American airline, while
Julia arrived on an American plane owned by a Singaporean company, both using fuel derived
from oil extracted in Saudi Arabia and Nigeria.
One would have travelled to the restaurant in a taxi can be made by a Swedish firm, the
other in a Spanish-made rental car. They would both have been there on time, on relying on
a Swiss watch, the other on a Japanese one.
Their meeting, necessitated by the eventual purchase of German machine tool for a plant in
South Africa owned by Tony’s Korean employer, resulted in a quickly drafted agreement on a
computer made in Korea of components of myriad origins.
After their meeting, they both agreed to watch a game of football between Brazil and Cost
Rica on a Chinese-made large screen television, on a channel owned by an Australian firm in a
bar owned by an Irishman
These are examples of globalization today, where the flow of trade has increased
significantly.
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14. Global Marketing – a reality check for an MNC working in India
If you consider India as a global market, you must have
to understand the fact that there are about:
3.2 million sqkm. area,
Over 750 million people in about 700,000 villages
Low disposable income
Various consumption pattern that is heavily depended on:
Monsoon
Harvest
Festivals
An then, there are:
Poor infrastructure like:
Power problems
Road connectivity
Distribution reach
In addition to all, one has to deal with the latest
theory of:
1% vs. 99%
(wherein the money remain at the top 1% and the maximum
demand exists at the bottom 99%)
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15. How will you market these products?
.

16. Can you market them?

17. Can you beat the competition without marketing?

18. Can you market the firm profitably?

19. Can you adjust to the changing business
environment?

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21. Group exercise
How will you go
about setting your
global marketing
function in a new
market?
Product:
Fashion Garments
Market:
African Content