How Do I Develop a Global Business Strategy?

Global marketing strategy refers to the company from the perspective of the world to review all marketing activities of the company's production, distribution, etc., according to the principle of optimization, the organization of different enterprises in different countries to meet the market with the lowest cost and optimized marketing plan demand. Its purpose is to emphasize international comparison of marketing. The global marketing strategy breaks through the concept of national boundaries, and considers the development of the company's marketing strategy from the world market scope in order to obtain the comprehensive competitive advantage of the enterprise.

Global marketing strategy

The views on the discussion of the connotation of global marketing strategy can be summarized into the following three types: ^[1]

Global marketing strategy, as a product of the globalization and integration of the world economy, is significantly different from general international marketing. Its main features are as follows: ^[2]

If an enterprise wants to win the survival and development in the fierce competition of the fittest, it must take the global market as its guide and adopt a global marketing strategy. The company's global marketing strategy includes four main aspects: determining global marketing tasks, global market segmentation strategies, competitive positioning, and marketing mix strategies. ^[3]

In the process of implementing global marketing strategies, the main advantages of multinational companies are: ^[4]

Global marketing is different from international marketing. Organizations engaged in international marketing generally apply their publicity and advertising programs in their countries directly to foreign countries, while global marketing has made full use of the company's assets, experience and products, and also achieved the universal characteristics and countries in the marketing process. The combination of their respective characteristics does not duplicate their publicity and advertising programs in the country. ^[5]

1. Global marketing strategy portfolio ^[6]

The design and management process of global marketing strategy includes the following five decision-making processes. ^[7]

I. Decision on whether to enter a foreign market

The main factors driving an enterprise to enter the international field to engage in business activities are: the domestic market of the enterprise is attacked by high-quality or low-cost products of global enterprises. Enterprises may want to counterattack in the domestic market of foreign competitors; companies may find that foreign markets have higher profit opportunities than domestic markets; companies may need to expand their market scope to achieve economies of scale; companies may want to reduce their reliance on only one market Incoming risks; corporate customers are abroad and require international service.

Before making a decision to enter a foreign market, a company must weigh the following risks: the company may not understand the preferences of foreign customers and lose to competitors' attractive products; the company may not understand the foreign business culture and how to interact with Foreigners get along; companies may not understand foreign regulations and incur increased extra-budgetary costs; companies may realize that they lack managers with extensive international experience; foreign countries can modify their business laws to put entrants at a disadvantage, can implement currency depreciation or The implementation of foreign exchange control may lead to political unrest and confiscation of foreign assets.

Only after weighing the advantages and risks of an enterprise can an enterprise make a decision on whether to enter a foreign market.

Decisions on which markets to enter

When deciding to enter the international market, enterprises should try to determine their goals and policies for international marketing. First, determine how much foreign sales will account for the company's total sales. Companies have to decide between selling to a few countries or selling to many countries; they also have to make decisions about which market to enter.

(I) Selection of the number of countries entering

Ayr and Ziff believe that companies should enter a few countries if: the cost of entering and controlling the market is high; the cost of adjusting products and communication methods is high; Rapid development; major foreign companies can establish barriers to market entry.

(B) the choice of entering the country (market)

Generally speaking, when choosing which countries' markets to enter, the available countries should be ranked according to the three main criteria of market attractiveness, competitive advantage, and market risk level, and then make decisions.

Decisions on how to enter the market

Decisions on marketing plans

Companies operating in one or more foreign markets must study how much adjustments to their marketing mix must be made to adapt to local market conditions. In an extreme case, companies use their globally standardized marketing mix, with products, advertising, distribution channels, and other elements of the marketing mix standardized, so costs can be minimized because no major changes are required limit. Another extreme situation is to formulate an adaptive marketing mix and adjust the content of its marketing mix according to the characteristics of each target market.

(1) Product planning

(1) Direct extension. Direct extension is to push the product directly into foreign markets without any changes. Products suitable for this strategy are: cameras, home appliances, machine tools, etc.

(2) Product adaptation. Product adaptation refers to changing the design of a product to suit local conditions and preferences. There are three ways to change products: change by region, change by city, and change by retailer.

(3) Product innovation. Product innovation refers to the production of a new product. The invention of a new product can take two forms: backward innovation and forward innovation. Backward innovation refers to the refurbishment of old products. It is an appropriate change to a certain product form in the past, which is exactly suitable for the current needs of a certain country. Forward innovation refers to creating a brand new product to meet the needs of another country (region).

(II) Promotion planning

In international marketing, companies can either adopt the same promotion strategy as in the domestic market or change it according to the status of each market entry. This is called communication adaptation. If it adjusts both the product and the spread, it is a dual adaptation approach.

1. Four ways to change communication

(1) Change the language, name and color and use the same information worldwide. This needs to avoid ambiguity in language and name, and to avoid taboos in some countries in terms of color changes.

(2) Adapt the values of each market with the same theme. For example, there is a commercial in the Camry soap, where a beautiful woman is bathing in the picture; in Venezuela, a man is seen in the bath; Italy and France, only one man's hand can be seen; In Japan, he saw the man waiting outside the bathroom.

(3) Establish an international advertising database, which contains advertisements suitable for each country style. Coca-Cola and Goodyear use this approach.

(4) Invest in creating advertisements that are fully adapted to the local market.

2. Considerations for spreading adaptation

First, the available advertising media are different in different countries. For example, Norway and Switzerland do not allow television advertising; Bulgaria and France do not allow cigarette and spirits advertising on television, etc.

Second, the available promotional technologies are different in different countries. For example, Germany and Greece ban coupons, which are predominant forms of consumer goods promotions in the United States, and so on.

(Three) price planning

1. International marketing pricing methods

(1) Uniform pricing in each place. The Coca-Cola company, for example, sells around the world for the same price of 60 cents a bottle. Due to the different export costs of various countries, the Coca-Cola Company's profit margins in different countries are quite different. It is high in poor countries and low in rich countries.

(2) Pricing based on national markets. The Coca-Cola company uses this method to sell at a price that countries can afford. But this ignores differences in actual costs between countries. Moreover, middlemen will ship colas from low-priced to high-priced countries.

(3) Pricing based on the cost of each country. The Coca-Cola Company uses uniform standard cost markups around the world. But in those high-cost countries, Coca-Cola will lose market using this pricing method.

2. Method of determining internal transfer price

The internal transfer price refers to the fee charged to another unit within the same enterprise. Generally speaking, a parent company sells goods at a low price to a subsidiary in a country with a lower tax rate, and sells goods at a higher price to a subsidiary in a country with a higher tax rate, without paying too much tariffs and avoiding dumping allegations.

3 Gray market precautions

Grey market means that the same product is sold at different prices in different regions. Dealers in low-priced countries sell them to high-priced countries for more profit.

Multinational companies generally adopt measures such as controlling distributors, or increasing selling prices to lower-cost distributors, or changing product characteristics to serve different countries to prevent gray markets.

(IV) Distribution channels

1. The overall channel for international marketing

2. Issues to note when developing foreign distribution channels

(1) The distribution channel status in each country is very different. The number and types of intermediaries involved in operating imported goods in different countries' markets are significantly different. For example, if you sell goods to the Japanese market, you have to go through various layers of domestic wholesale to reach the end consumer. Its retail price is two to three times higher than the import price. Selling goods to African countries can reach consumers in a few steps.

(2) The scale and characteristics of foreign retailers are also different. For example, in the United States, large-scale chain retail stores predominate, but in other countries, most of them are a large number of independent small retail stores that operate the retail of goods.

V. Decisions on Marketing Organization

Depending on the company's degree of involvement in the international marketing field, the company's organization managing international marketing activities has at least three different ways: through the export department, international business department or global organization.

(1) Exit department. A company involved in international marketing usually adopts a simple way of shipping goods abroad. If international sales expand, the company will set up an export department consisting of a sales manager and several staff members. With the further development of sales, the export department will also expand. Only by including all kinds of marketing services can we meet the needs of actively expanding sales. If the company already has a joint venture abroad or has invested directly in setting up a factory, then an agency such as the Export Department will no longer be competent.

(2) International Business Department. Many companies have now entered several international markets and formed joint ventures. Sooner or later, the company will set up an international division to handle the company's international business activities. The International Business Department is headed by the general manager of the department, responsible for setting its goals and budget, and responsible for the company's business development in the international market.

(3) Global organizations. Some companies have become truly global organizations. The company's management and staff are engaged in the planning of worldwide production facilities, marketing strategies, financial revenues and logistics and logistics supply systems. Global operating units are accountable to the company's top executives and executive committees, and no longer accountable to the heads of the international division. Managers are trained in global operations. Managers can be hired from other countries. Parts and other supplies can be purchased from any place with the lowest price, and investments can be made where it is expected to yield the greatest returns.