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WEEK 4, Global Marketing Environment

by: JC11

WEEK 4, Global Marketing Environment IB7013-8

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WEEK 4 Global Marketing Environment
Global Marketing Environment
Class Notes
WEEK 4 Global Marketing Environment, NCU, NORTHCENTRAL UNIVERSITY
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This 8 page Class Notes was uploaded by JC11 on Saturday April 9, 2016. The Class Notes belongs to IB7013-8 at Northcentral University taught by in Spring 2016. Since its upload, it has received 7 views. For similar materials see Global Marketing Environment in General at Northcentral University.


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Date Created: 04/09/16
  NORTHCENTRAL UNIVERSITY ASSIGNMENT COVER SHEET Student:    THIS FORM MUST BE COMPLETELY FILLED IN Follow these procedures:  If requested by your instructor, please include an assignment cover  sheet. This will become the first page of your assignment. In addition, your assignment header  should include your last name, first initial, course code, dash, and assignment number. This  should be left justified, with the page number right justified. For example:   Save a copy of your assignments: You may need to re­submit an assignment at your  instructor’s request. Make sure you save your files in accessible location.  Academic integrity: All work submitted in each course must be your own original work. This  includes all assignments, exams, term papers, and other projects required by your instructor.  Knowingly submitting another person’s work as your own, without properly citing the source of  the work, is considered plagiarism. This will result in an unsatisfactory grade for the work  submitted or for the entire course. It may also result in academic dismissal from the University.  IB7013­8­4 Gisela Salas, PhD Global Marketing Environment Assignment 4 Faculty Use Only <Faculty comments here> <Faculty Name>   2 Introduction Consumer buying behavior can be influenced and preferences identified within the  international marketing environment.  By reviewing economic status, technology levels, culture,  social factors, consumer’s personal motives, and a number of other identifying factors, a  marketer can begin to target a given market.  By identifying what motivates a person to buy a  particular product, the marketer can pinpoint a successful strategy.  Within this weeks’  assignment the following will be discussed:  1) three levels of the global consumer, 2) global  buyer marketplace, 3) country­of­origin effects, 4) global industrial buyer influences, and 5)  global customer relationship management. Three Levels of the Global Consumer Global consumers by definition are individuals or organizational buyers that exhibit  similar needs and tastes worldwide. The two trends that are associated with globalization include two driving factors: 1) globalization, and 2) advancing information and technologies.  As  countries begin to interact and become interconnected globalization as well as consolidation  begin to take place, creating the concept of a world society.  In addition, advancing information  and technologies play a major role in consolidating countries by removing the barriers of  geographic distance.  Geographic distance is minimized by faster moving ships, aircraft,  communication and overall logistics.   As the overall concept of globalization is considered, the three levels of the global  consumer need to be discussed as well as the the traits and influences.  These levels include:       1) The outer circle consists of supranational factors, transcending national borders. As explained  below, the influence of globalization and information and communications technologies on the                                                                     3 emergence and nature of the global consumer has been pervasive. 2) The middle level consists of national­level factors. The national­level factors consist of political, infrastructural, economic,  legal and cultural conditions. The middle circle represents the nation in which the consumers live within, and 3) The inner circle consists of factors that exist at the individual and personal level.   They include personality traits and situational factors (Czinkota & Ronkainen, 2013). Global Buyer Marketplace The following factors are identified as influences or drivers on the global consumer: 1)  economic status, 2) technology level, 3) personal motives, 4) culture, 5) social factors, and 6)  situational factors (Czinkota et. al, 2013).  The drivers that are the most effective on the  contemporary global buyer marketplace are economic status and technology.  Without money,  consumers are not able to make purchases and technology allows the world to become a global  marketplace.  The least effective drivers are noted as social and situational factors.  While each  of the factors play an influence, social and situational factors affect people at an individual and  personal level.   Steenkamp and De Jong (n.d.) discussed how companies may introduce both global and a local brands resulting in successful business strategies.  The referenced example company is  Anheuser­Busch.  The company’s global brand involves Budweiser, Stella Artois, and Beck’s.   While the global brands provide a broad audience with a product that can be acquired worldwide, the company also provides regional beers that provide a strong association with the local  population’s pride and identify.  The example provided was that Anheuser Busch, Sibirskaya  Korona, a Russian beer that incorporated Russian heritage dating back to the Tsars.  By creating  a brand of beer the Russian people so strongly identified with, the company was able to target                                                                     4 not only the global market but the local market as well. Country­of­Origin Effects Country of Origin (COO) is defined as the location the product is manufactured.  After  consumers become aware of where the product is manufactured the reaction can be either  positive or negative (Czinkota et. al, 2013).  For instance, if a product was manufactured in Iran,  Iraq, or Afghanistan and the U.S. population was aware of this fact, the probability of purchase  decreases significantly.  Terrorism has become even more prevalent in the past few decades and  the American population associates the identified countries as participating countries.  Perception and stereotypes play a significant role in the success of a product or company.  A company that  is located in one of these areas would have to incorporate a strategy that involved manufacturing  a product in another country.  On the other hand, a company that is located in Japan that  manufacturers automobiles would have a leg up due to Japan’s positive affiliation with  manufacturing reliable transportation.  Consumer ethnocentrism is defined as a person’s unwillingness to purchase a product that is manufactured or produced outside of their own country.  An example of this can be seen in the product marketing of Buy American.  By buying the products developed and manufactured in the U.S., people believe they are supporting others from within their homeland by creating jobs.   World mindedness is the opposing view to consumer ethnocentrism.  The type of people that fall  into this category are open and willing to try new things produced worldwide.  This type of  consumer is interested in alterative ways of doing things and a variety of products.  An example  of this type of concept is U.S. residents that are used to western medicine opening their minds                                                                     5 and incorporating eastern medicine.  Western medicine is known for the use of medicines to fix a problem versus the eastern method of utilizing herbs and acupuncture and more natural healing  methods.  In addition to a consumers’ preference for purchasing locally or globally, purchases are also  affected by a number of other factors.  The first of which is noted as the imbalance of wealth and emotions but by wealth imbalances.  Prahalad (2007) discussed the influence of globalization on  the poor and how the scale of poverty and wealthy are imbalanced.  The imbalances show that if  there is an area of significant poverty, there will also be areas of significant wealth.  In the U.S.  this is apparent.  The Bill Gates, Microsoft, and Donald Trumps of the world hold a significant  amount of wealth while there are many people surviving at the poverty level.  This concept  applies worldwide.  As one country is rich there is another that is very poor.  Another factor that can significantly effect buyers is emotion.  Min­Young, Knight, and  Youn­Kyung (2008) discussed how Japanese consumers consider the domestic brand as  providing high emotional value.  The results of the study performed indicated how the Japanese  consumers believed and perceived U.S. global products as inferior when compared to local  brands.  For a company to succeed, the U.S. global product must differentiate the product in such a way that isn’t providing direct competition to the local brand.  This way, a consumer doesn’t  have to choose one or the other as both products do different things.    Yalin (2008) also discussed the concept of emotional buying.  The perspective referenced was in relation to emotional buying and impulsive buying.  If a company/marketer can develop a  way to pull at the heart strings of a person, the possibility of a sale is probable whether the  person needs it or not.  Consider shopping at the grocery store when hungry versus when full.                                                                      6 By cooking fragrant items in the store and providing samples, the probability of purchase is  considerably higher when an individual is hungry right there and then.  Junk food high in salt,  fat, and sugars also become an impulsive buy when previously not listed as an item for purchase. Global Industrial Buyer Influences Industrial buyers are buyers that purchase raw materials, parts, components, and supplies. The pieces and parts procured are utilized to produce a product or run a business. Purchases are  usually large in quantity and made by purchasing managers that implement competitive bidding  and negotiations. The strongest influence to an industrial buyer is globalization.  Czinkota et. al  (2013) referenced that industrial buying consists of two parts, derived demand and cost­ performance. Derived demand involves raw materials, parts, and demands for those goods.  The  example noted discussed an Airbus A320 jetliner antennae.  The antennas are purchased from a  specific vendor and are based on the procurement of additional jetliners. The industrial buyers  utilize cost performance as a driving factor.  The cost performance is how a product is relative to  the costs to buy and utilize the product. The fact that industrial products are contingent upon the  purchase of the primary product.  This can be both positive and negative.  In the Airbus scenario, the more aircraft purchased, the more antennae’s needed.  The opposite is the negative.  If Airbus does not purchase the aircraft or smaller portions the company selling the antennas are negatively affected.   Global Customer Relationship Management Global customer relationship management is focused upon building relationships and  keeping customers rather than a one­time purchase.  Marketers focus upon building a long­term                                                                     7 relationship and doing what is necessary to keep a customer happy and increase satisfaction  levels.  With this understanding in mind, the belief is that China’s consumer market will not  likely become the largest market in the world.  The reasoning behind this is the fact that Chinese  products are known for being cheaper and produced quickly, but relationship building is not an  overall part of the concept.  While industrial buyers may focus their large purchases on China for a reduction in price, the overall relationship is being built with the cost of a good rather than  customer satisfaction.  Conclusion Consumer buying behavior can be influenced and preferences identified within the  international marketing environment.  By reviewing economic status, technology levels, culture,  social factors, consumer’s personal motives, and a number of other identifying factors, a  marketer can begin to target a given market.  By identifying what motivates a person to buy a  particular product, the marketer can also pinpoint a successful strategy.  Within this weeks’  assignment the following will be discussed:  1) three levels of the global consumer, 2) global  buyer marketplace, 3) country­of­origin effects, 4) global industrial buyer influences, and 5)  global customer relationship management                                                                    8 References Czinkota, M. R., & Ronkainen, I. A. (2013).  International Marketing. Mason: South­Western   Min­Young, L., Knight, D., & Youn­Kyung, K. (2008). Brand analysis of a US global brand in  comparison with domestic brands in Mexico, Korea, and Japan. The Journal of Product  and Brand Management, 17(3), 163­174. doi:  10610420810875089  Prahalad, C. K. (2007, August 30). Globalization's effects on the global poor. Retrieved from  Steenkamp, J., & De Jong, M. (n.d). A global investigation into the constellation of consumer  attitudes toward global and local products. Journal of Marketing, 74(6), 18­40 Yalin, L.(2008). Impact of impulsive buying behavior on post impulsive buying satisfaction.  Social Behavior & personality: An International Journal, 43(2), 339­351                                                                   


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