Coke and Pepsi
CHAPTER 6
Entering Global Markets
“The multinational corporation knows a lot about a great many countries and congenially adapts to supposed differences..... By contrast, the global corporation knows everything about one great thing. It knows about the absolute need to be competitive on a worldwide basis as well as nationally and seeks constantly to drive down prices by standardising what it sells and how it operates. It treats the world as composed of a few standardised markets rather than many customised markets.”
Theodre Levitt[1]
Introduction
Companies may enter overseas markets for various reasons. These include saturated and intensely competitive domestic markets, diversification of risk on a geographical basis, opportunity to realise economies of scale and scope, entry of competitors into overseas markets, the need to follow customers going abroad and the desire to compete and learn in a market with sophisticated consumer tastes. This chapter focuses on how global companies enter different markets across the world. We will take up how companies operate in global markets in the next chapter and global branding in Chapter 8 as these topics deserve a separate treatment.
Key issues in global marketing:
Typically, marketing includes the following activities: -
▪ Market research. ▪ Concept & idea generation. ▪ Product design. ▪ Prototype development & test marketing ▪ Selection of packaging material, size and labelling ▪ Positioning ▪ Choice of brand name ▪ Choice of advertising agency ▪ Development of advertisement copy ▪ Execution of advertisements ▪ Recruitment and posting of sales force ▪ Pricing ▪ Sales Promotion ▪ Selection and management of distribution channels.
Some of these activities are amenable to a uniform global approach. Others involve a great degree of customisation. Again, within a broadly defined activity, some sub activities can be more easily
Entering Global Markets
“The multinational corporation knows a lot about a great many countries and congenially adapts to supposed differences..... By contrast, the global corporation knows everything about one great thing. It knows about the absolute need to be competitive on a worldwide basis as well as nationally and seeks constantly to drive down prices by standardising what it sells and how it operates. It treats the world as composed of a few standardised markets rather than many customised markets.”
Theodre Levitt[1]
Introduction
Companies may enter overseas markets for various reasons. These include saturated and intensely competitive domestic markets, diversification of risk on a geographical basis, opportunity to realise economies of scale and scope, entry of competitors into overseas markets, the need to follow customers going abroad and the desire to compete and learn in a market with sophisticated consumer tastes. This chapter focuses on how global companies enter different markets across the world. We will take up how companies operate in global markets in the next chapter and global branding in Chapter 8 as these topics deserve a separate treatment.
Key issues in global marketing:
Typically, marketing includes the following activities: -
▪ Market research. ▪ Concept & idea generation. ▪ Product design. ▪ Prototype development & test marketing ▪ Selection of packaging material, size and labelling ▪ Positioning ▪ Choice of brand name ▪ Choice of advertising agency ▪ Development of advertisement copy ▪ Execution of advertisements ▪ Recruitment and posting of sales force ▪ Pricing ▪ Sales Promotion ▪ Selection and management of distribution channels.
Some of these activities are amenable to a uniform global approach. Others involve a great degree of customisation. Again, within a broadly defined activity, some sub activities can be more easily