WEEK 4, Global Marketing Environment
WEEK 4, Global Marketing Environment IB7013-8
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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:http://dx.doi.org/10.1108/ 10610420810875089 Prahalad, C. K. (2007, August 30). Globalization's effects on the global poor. Retrieved from http://www.youtube.com/watch?v=EVShrk7Qj_s 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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