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Find more at http://www.downloadslide.com ‘All good marketing is local. Global companies know this and are going “glocal”. Svend Hollensen has captured all the latest trends in this new edition of his Global Marketing.’ Philip Kotler, Northwestern University, USA Global Marketing arketing Sixth Edition Svend Hollensen Find more at http://www.downloadslide.com Global marketinG Find more at http://www.downloadslide.com Find more at http://www.downloadslide.com iii Global Marketing Sixth Edition Svend Hollensen Find more at http://www.downloadslide.com PEARSON EDUCATION LIMITED Edinburgh Gate Harlow CM20 2JE United Kingdom Tel: +44 (0)1279 623623 Web: www.pearson.com/uk First published 1998 by Prentice Hall (print) Second edition published 2001 by Pearson Education Limited (print) Third edition published 2004 (print) Fourth edition published 2007 (print) Fifth edition published 2011 (print) Sixth edition published 2014 (print and electronic) © Prentice Hall Europe 1998 (print) © Pearson Education Limited 2001, 2011 (print) © Pearson Education Limited 2014 (print and electronic) The right of Svend Hollensen to be identified as author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. The print publication is protected by copyright. Prior to any prohibited reproduction, storage in a retrieval system, distribution or transmission in any form or by any means, electronic, mechanical, recording or otherwise, permission should be obtained from the publisher or, where applicable, a licence permitting restricted copying in the United Kingdom should be obtained from the Copyright Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS. The ePublication is protected by copyright and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased, or as strictly permitted by applicable copyright law. Any unauthorised distribution or use of this text may be a direct infringement of the author’s and the publisher’s rights and those responsible may be liable in law accordingly. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. The screenshots in this book are reprinted by permission of Microsoft Corporation. Pearson Education is not responsible for the content of third-party internet sites. ISBN 978-0-273-77316-0 (print) 978-0-273-77319-1 (PDF) 978-0-273-79440-0 (eText) British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book is available from the Library of Congress 10 9 8 7 6 5 4 3 17 16 15 Print edition typeset in 10/12pt Minion by 35 Printed and bound by L.E.G.O S.p.A, Italy NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION Find more at http://www.downloadslide.com brief ContentS Preface Guided tour Acknowledgements Publisher’s acknowledgements Abbreviations About the author Part i THE DECISION WHETHER TO INTERNATIONALIzE 1 2 3 4 Part ii Global marketing in the firm Initiation of internationalization Internationalization theories Development of the firm’s international competitiveness Part I Case studies DECIDING WHICH MARKETS TO ENTER 5 6 7 8 Global marketing research The political and economic environment The sociocultural environment The international market selection process Part II Case studies Part iii MARKET ENTRY STRATEGIES 9 10 11 12 13 Some approaches to the choice of entry mode Export modes Intermediate entry modes Hierarchical modes International sourcing decisions and the role of the subsupplier Part III Case studies Part iV DESIGNING THE GLOBAL MARKETING PROGRAMME 14 15 16 17 Part V Product decisions Pricing decisions and terms of doing business Distribution decisions Communication decisions (promotion strategies) Part IV Case studies IMPLEMENTING AND COORDINATING THE GLOBAL MARKETING PROGRAMME xviii xxxii xxxiv xxxvi xli xlv 3 5 52 76 100 144 169 173 208 243 270 308 325 331 346 368 398 419 446 471 479 534 570 606 650 681 18 Cross-cultural sales negotiations 19 Organization and control of the global marketing programme Part V Case studies 683 Index 775 710 744 Find more at http://www.downloadslide.com This page is intentionally left blank. Find more at http://www.downloadslide.com ContentS Preface Guided tour Acknowledgements Publisher’s acknowledgements Abbreviations About the author Part I THE DECISION WHETHER TO INTERNATIONALIzE 1 2 xviii xxxii xxxiv xxxvi xli xlv 3 Part I Video case study: Cisco systems 4 Global marketing in the firm 5 Learning objectives 1.1 Introduction to globalization 1.2 The process of developing the global marketing plan 1.3 Comparison of the global marketing and management style of SMEs and LSEs Exhibit 1.1 LEGO’s strategic drift Exhibit 1.2 Economies of scale with Nintendo Game Boy Exhibit 1.3 Ford Focus global marketing plan 1.4 Should the company internationalize at all? 1.5 Development of the ‘global marketing’ concept Exhibit 1.4 Persil Black & Persil Abaya = glocalization (same product, but different packaging and market communication) 1.6 Forces for global integration and market responsiveness Exhibit 1.5 McDonald’s is moving towards a higher degree of market responsiveness 1.7 The value chain as a framework for identifying international competitive advantage 1.8 Value shop and the ‘service value chain’ 1.9 Global experiential marketing 1.10 Information business and the virtual value chain 1.11 Summary Case studies 1.1 Green Toys, Inc.: a manufacturer of eco-friendly toys is going international 1.2 Hunter Boot Ltd: the iconic British brand is moving into exclusive fashion 1.3 Video case study: Nivea Questions for discussion References 42 47 49 50 50 Initiation of internationalization 52 Learning objectives 2.1 Introduction 2.2 Internationalization motives Exhibit 2.1 Jägermeister: the famous herbal liqueur is going global as a result of ‘managerial urge’ in the family-owned company 52 5 6 6 7 14 16 18 19 20 23 24 26 27 33 37 39 41 53 53 54 Find more at http://www.downloadslide.com viii CONTENTS 3 4 Exhibit 2.2 Global marketing and economies of scale in Japanese firms Exhibit 2.3 Internationalization of Haier – proactive and reactive motives 2.3 Triggers of export initiation (change agents) 2.4 Internationalization barriers/risks Exhibit 2.4 De-internationalization at British Telecommunications (BT) 2.5 Summary Case studies 2.1 LifeStraw: Vestergaard-Frandsen transforms dirty water into clean drinking water 2.2 Elvis Presley Enterprises Inc. (EPE): internationalization of a cult icon 2.3 Video case study: TOMS Shoes Questions for discussion References 70 72 73 74 75 Internationalization theories 76 Learning objectives 3.1 Introduction 3.2 The Uppsala internationalization model 3.3 The transaction cost analysis (TCA) model 3.4 The network model 3.5 Born globals Exhibit 3.1 K-pop – a ‘born global’ phenomenon has worldwide success 3.6 Summary Case studies 3.1 zumba: a dance phenomenon is going global 3.2 DreamWorks Classics: internationalization of Postman Pat 3.3 Video case study: Reebok Questions for discussion References 76 77 57 60 61 65 67 69 79 83 86 88 88 92 93 96 97 97 97 Development of the firm’s international competitiveness 100 Learning objectives 4.1 Introduction 4.2 Analysis of national competitiveness (the Porter diamond) 4.3 Competition analysis in an industry 4.4 Value chain analysis 4.5 The sustainable global value chain 4.6 Corporate social responsibility (CSR) Exhibit 4.1 Chiquita – integrating CSR in the resource base 4.7 The value net Exhibit 4.2 Value net – cooperation/competition between competitors within each airline alliance. The three alliances are competing against each other 4.8 Blue ocean strategy and value innovation Exhibit 4.3 Hotel Formule 1 – value innovation in action 4.9 Summary Case studies 4.1 Nintendo Wii: Nintendo’s Wii took first place on the world market – but it didn’t last 4.2 Microsoft ‘Surface’ tablet: the software producer is moving into the hardware tablet PC market and challenging Apple 4.3 Video case study: Nike Questions for discussion References 100 101 101 107 111 121 122 123 125 126 127 129 131 132 138 141 141 142 Find more at http://www.downloadslide.com CONTENTS ix Part i Case studies I.1 I.2 I.3 I.4 zara: the Spanish retailer goes to the top of world fashion Manchester United: still trying to establish a global brand Adidas: the No. 2 in the global sportswear market is challenging the No. 1, Nike Cereal Partners Worldwide (CPW): the No. 2 world player is challenging the No. 1, Kellogg 144 150 153 159 Part ii DECIDING WHICH MARKETS TO ENTER 169 Part ii Video case study: embraer business jets 171 Global marketing research 173 Learning objectives 5.1 Introduction 5.2 The changing role of the international researcher 5.3 Linking global marketing research to the decision-making process 5.4 Secondary research 5.5 Primary research Exhibit 5.1 Market research in India is challenging 5.6 Other types of marketing research 5.7 Setting up an international marketing information system (MIS) 5.8 Marketing research based on Web 2.0 5.9 Summary Case studies 5.1 Teepack Spezialmaschinen GmbH: organizing a global survey of customer satisfaction 5.2 LEGO Friends: the world’s third largest toy manufacturer is moving into the girls’ domain 5.3 Video case study: ziba Questions for discussion References 173 174 174 175 177 181 190 193 197 198 200 The political and economic environment 208 Learning objectives 6.1 Introduction 6.2 The political/legal environment Exhibit 6.1 Huawei Technologies Corporation: the role of home government in the internationalization process 6.3 The economic environment 6.4 The European economic and monetary union and the euro 6.5 BRIC – the new growth markets of the world Exhibit 6.2 ChotuKool – Indian Godrej is creating a disruptive innovation (a low-cost refrigerator) for the BOP market 6.6 ‘Bottom of pyramid’ (BOP) as a market opportunity Exhibit 6.3 Vodacom – reaching both BOP customers and BOP entrepreneurs in Africa Exhibit 6.4 Voltic Cool Pac – distribution of water in Ghana 6.7 Summary Case studies 6.1 G-20 and the economic and financial crises: what on earth is globalization about? Massive protests during a meeting in Mexico City, June 2012 208 209 209 5 6 200 201 206 206 207 211 219 226 228 231 233 234 235 236 238