# data[].attributes.headline
FORCES AFFECTING GLOBAL INTEGRATION AND GLOBAL MARKETING

# data[].attributes.subject
FORCES AFFECTING GLOBAL INTEGRATION AND GLOBAL MARKETING

# data[].attributes.body
-The remarkable growth of the global economy over the past 60 years has been
shaped by the dynamic interplay of various driving and restraining forces. *During most of those decades, companies from different parts of the world in different industries achieved great success by pursuing international, multinational, or global strategies.
**Regional economic agreements, converging market needs and wants,
technology advances, pressure to cut costs, pressure to improve quality, improvements in communication and transportation technology, global economic growth,
and opportunities for leverage all represent important driving forces; any industry subject to these forces is a candidate for globalization.

1)Multilateral Trade Agreements:
-A number of multilateral trade agreements have accelerated the pace of global integration.

2)Converging Market Needs and Wants and the
Information Revolution:
-A person studying markets around the world will discover cultural universals as well as differences. The common elements in human nature provide an underlying basis for the opportunity to create and serve global markets. The word create is deliberate. Most global markets do not exist in nature; marketing efforts must create them.

-Multinational companies pursuing strategies of product adaptation run the
risk of falling victim to global competitors that have recognized opportunities to serve global customers.

3)Transportation and Communication Improvements:
-The time and cost barriers associated with distance have fallen tremendously over the past 100 years.
*A similar revolution has occurred in transportation technology. The costs
associated with physical distribution, both in terms of money and time, have been greatly reduced as well.

4)Product Development Costs:
-The pressure for globalization is intense when new products require major investments and long periods of development time.
*Global marketing strategies can generate greater revenue and greater operating margins which, in turn, support design and manufacturing quality.

5)World Economic Trends:
-Economic growth has been a driving force in the expansion of the international economy and the growth of global marketing for three reasons:
*First, economic growth in key developing countries has created market opportunities that provide
a major incentive for companies to expand globally. At the same time, slow growth in industrialized countries has compelle management to look abroad for opportunities in nations or regions with high rates of growth.
**Second, economic growth has reduced resistance that might otherwise have developed in response to the entry of foreign firms into domestic economies.
***The worldwide movement toward free markets, deregulation, and privatization is a third driving force. The trend toward privatization is opening up formerly closed markets; tremendous opportunities are being created as a result.

6)Leverage:
-A global company possesses the unique opportunity to develop leverage. In the context of global marketing, leverage means some type of advantage that a company
enjoys by virtue of the fact that it has experience in more than one country.
*Leverage allows a company to conserve resources when pursuing opportunities in new geographical markets. In other words, leverage enables a company to expend less time, less effort, or less money. Four important types of leverage are experience transfers, scale economies, resource utilization, and global strategy.

7)Restraining Forces:
-Despite the impact of the driving forces identified previously, several restraining forces may slow a company’s efforts to engage in global marketing.
*In addition to the market differences discussed earlier, important restraining forces include
management myopia, organizational culture, national controls, and opposition to globalization.
**As we have noted, however, in today’s world the driving forces predominate over the restraining forces. That is why the importance of global marketing is steadily growing.

# data[].attributes.body
-The form and substance of a company’s response to global market opportunities depend greatly on management’s assumptions or beliefs—both conscious and
unconscious—about the nature of the world.
*The world view of a company’s
personnel can be described as ethnocentric, polycentric, regiocentric, and geocentric.
**Management at a company with a prevailing ethnocentric orientation may consciously make a decision to move in the direction of geocentricism.

-The orientations are collectively known as the EPRG framework.

1)Ethnocentric Orientation:
-A person who assumes that his or her home country is superior to the rest of the world is said to have an ethnocentric orientation.
*Ethnocentrism is sometimes associated with attitudes of national arrogance or assumptions of national superiority.
**Company personnel with an ethnocentric orientation see only similarities in markets, and assume that products and practices that succeed in the home country will be successful anywhere.

-At some companies, the ethnocentric orientation means that opportunities outside the home country are largely ignored. Such companies are sometimes called domestic companies.

-Ethnocentric companies that conduct business outside the home country can be described as international companies; they adhere to the notion that the products that succeed in the home country are superior. This point of view leads to a standardized or extension approach to marketing based on the premise that products can be sold everywhere without adaptation.

-In the ethnocentric international company, foreign operations or markets are typically viewed as being secondary or subordinate to domestic ones.

-Today, ethnocentrism
is one of the major internal weaknesses that must be overcome if a company is to transform itself into an effective global competitor.

2)Polycentric Orientation:
-The polycentric orientation is the opposite of ethnocentrism.
*The term polycentric describes management’s belief or assumption that each country in which a
company does business is unique.
**This assumption lays the groundwork for each subsidiary to develop its own unique business and marketing strategies in order to succeed; the term multinational company is often used to describe such a structure.
***This point of view leads to a localized or adaptation approach that assumes products must be adapted in response to different market conditions.

3)Regiocentric Orientation:
-In a company with a regiocentric orientation, a region becomes the relevant geographic unit; management’s goal is to develop an integrated regional strategy.

4)Geocentric Orientation:
-A company with a geocentric orientation views the entire world as a potential
market and strives to develop integrated global strategies.
**A company whose
management has adopted a geocentric orientation is sometimes known as a global or transnational company.
***A global company can be further described as one that pursues either a
strategy of serving world markets from a single country, or one that sources globally for the purposes of focusing on select country markets. In addition, global companies tend to retain their association with a particular headquarters country.
****Transnational companies both serve global markets and utilize global supply chains; in addition, there is often a blurring of national identity. A true transnational would be characterized as “stateless.”

-A key factor that distinguishes global and transnational companies from international or
multinational companies is mind-set: at global and transnational companies, decisions regarding extension and adaptation are not based on assumptions. Rather,
such decisions are made on the basis of ongoing research into market needs and wants.

-One way to assess a company’s “degree of transnationality” is to compute an average of three figures: sales outside the home country to total sales; assets outside the home country to total assets; and employees outside the home country to total employees.

-The geocentric orientation represents a synthesis of ethnocentrism and polycentrism; it is a “world view” that sees similarities and differences in markets and countries and seeks to create a global strategy that is fully responsive to local needs and wants.

# data[].attributes.body
-The largest single market in the world in terms of national income is the United States representing roughly 25 percent of the total world market for all products and services. *U.S. companies that wish to achieve maximum growth potential must “go global” because 70 percent of world market potential is outside their
home country.

-Many companies have recognized the importance of conducting business
activities outside their home country. Industries that were essentially national in scope only a few years ago are dominated today by a handful of global companies.
*The rise of the global corporation closely parallels the rise of the national corporation, which emerged from the local and regional corporation in the 1880s and 1890s in the United States.

# data[].attributes.body
-The discipline of marketing is universal. It is natural, however, that marketing practices will vary from country to country, for the simple reason that the countries and peoples of the world are different.
*These differences mean that a marketing approach that has proven successful in one country will not necessarily succeed in another country.
**Customer preferences, competitors, channels of distribution, and communication media may differ. An important task in global marketing is learning to recognize the extent to which marketing plans and programs can extend worldwide, as well as the extent to which they must adapt.

-Global marketing strategy (GMS)
*Choosing a target market and developing a marketing mix
**Global market participation is the extent to which a company has operations in major world markets. Standardization versus adaptation is the extent to which each
marketing mix element can be standardized or
adapted in various country markets.

-GMS has three additional dimensions that pertain to marketing management. *First, concentration of marketing activities is the extent to which activities related to the marketing mix are performed in one or a few country locations. **Coordination of marketing activities refers to the extent to which marketing activities related to the marketing mix are planned and executed interdependently around the globe.
***Finally, integration of competitive moves is the extent to which a firm’s competitive marketing tactics in different parts of the world are interdependent. The GMS should enhance the firm’s
performance on a worldwide basis.

-What does the phrase global localization mean?
*It means that a successful global marketer must have the ability to “think globally and act locally.”

-The particular approach to global marketing that a company adopts will depend on industry conditions and its source or sources of competitive advantage.

# data[].attributes.body
-Marketing is one of the functional areas of a
business, distinct from finance and operations.
*Marketing can also be thought of as a set of activities and processes that, along with product design, manufacturing,
and transportation logistics, comprise a firm’s value chain. Decisions at every stage, from idea conception to support after the sale, should be assessed in terms of their ability to create value for customers.
**For any organization operating anywhere in the world, the essence of marketing is to surpass the competition at the task of creating perceived value for customers. The value equation is a guide to this task:
Value = Benefits/Price (money, time, effort, etc.)

-Definition of a market: people or organizations that are both able and
willing to buy.
*In order to achieve market success, a product or brand must measure
up to a threshold of acceptable quality and be consistent with buyer behavior, expectations, and preferences.

-Competitive Advantage, Globalization,and Global Industries:
*When a company succeeds in creating more value for customers than its competitors, that company is said to enjoy competitive advantage in an industry
**Globalization is the inexorable integration of markets, nation-states and technologies to
a degree never witnessed before—in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than
ever before, and in a way that is enabling the world to reach into individuals, corporations and nation-states farther, faster, deeper, and cheaper than ever before.
***A global industry is one in which competitive advantage can be achieved by integrating and leveraging operations
on a worldwide scale.

-Achieving competitive advantage in a global industry requires executives and managers to maintain a well-defined strategic focus. Focus is simply the concentration
of attention on a core business or competence.

-Value, competitive advantage, and the focus required to achieve them are universal in their relevance and they should guide marketing efforts in any part of the world.

# data[].attributes.body
-We live in a global marketplace.
*McDonald’s restaurants, LEGO toys, Swatch watches and Burberry trench coats are found practically everywhere on the planet.

-Global companies are
fierce rivals in key markets.
*American auto industry giants General Motors and Ford are locked in a competitive struggle with
Toyota, Hyundai, and other global Asian rivals as well as European companies such as Volkswagen.

-We live in a world in which markets are local.
*In China, for example, Yum Brands’ new East Dawning fast-food chain competes with local restaurants such as New Asia Snack.

-The global marketplace finds expression in many ways.
*More multilanguage labeling on the products and brands.
**Your local filling station may have changed its name from Getty to Lukoil, reflecting the Russian energy giant’s expanding global reach.

-The growing importance of global marketing is the one aspect of a sweeping transformation thathas profoundly affected the people and industries of many nations during the past 160 years.
*Three decades ago, the phrase global marketing did not even exist. Today, savvy businesspeople utilize global marketing for the realization of their companies’ full commercial potential.
**critical reason why companies need to take global marketing seriously: survival.

-What is global marketing? How does it differ from “regular” marketing?
*Marketing is an organizational function and a set of processes for creating, communicating,
and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
**An organization that engages in global marketing focuses its resources and competencies on global market opportunities and
threats. Afundamental difference between “regular” marketing and “global” marketing is the scope of activities. A company that engages in global marketing conducts
important business activities outside the home-country market.
***Companies that engage in global marketing frequently encounter unique or peculiar features in specific countries or regions of the world.