Global Marketing Mix

The Relationship Between Product and Promotion

Product and promotion in global marketing can work together effectively with proper market research and communication techniques.

Learning Objectives

Illustrate the relationship between product and promotion from a global marketing perspective

Key Takeaways

Key Points

  • The “Four P’s” of marketing — product, price, placement, and promotion —are all affected as a company moves through the different phases to become and maintain dominance as a global company.
  • It is the job of global marketers to create and place product advertisements in settings where local consumers will be most receptive to receiving and acting on those messages.
  • Promotion is one crucial component of the global marketing mix that enables a global company to send the same message worldwide using relevant, engaging, and cost-effective techniques.

Key Terms

  • integrated marketing communications: an approach to brand communications where the different modes work together to create a seamless experience for the customer and are presented with a similar tone and style that reinforces the brand’s core message.

The Relationship Between Product and Promotion

With the rapidly emerging force of globalization, the distinction between marketing within an organization’s home country and marketing within external markets is disappearing very quickly. With this in mind, organizations are modifying their marketing strategies to meet the challenges of the global marketplace in addition to sustaining their competitiveness within home markets. These changes also have prompted brands to customize their global marketing mix for different markets, based on local languages, needs, wants, and values.

A package of feminine products that are manufactured and sold in China.

Product Marketing: An effective global marketing plan enables brands to tweak products for local markets while using the most effective promotional channels to reach consumers.

The Marketing Mix in Global Marketing

The “Four P’s” of marketing—product, price, placement, and promotion—are all affected as a company moves through the different phases to become and maintain dominance as a global company. Promotion becomes particularly important for positioning the company in such a way that a single product can be tweaked instead of revamped for different markets. Coca-Cola is one strong example of global marketing. The drink brand uses two formulas (one with sugar and one with corn syrup) for all markets. The product packaging in every country incorporates Coca-Cola’s contour bottle design and signature ribbon in some shape or form. However, the bottle can also include the country’s native language and appear in identical sizes as other beverage bottles or cans in that country’s market.

Promotion and Product

Before launching promotional programs, global companies must first define their target markets and determine the products that will resonate most with those consumers and businesses. In addition to pinpointing which price point and distribution channels would best serve those country markets, global marketers must decide how to introduce their products. Promotional tactics for global audiences can range from television commercials to social media marketing on Facebook or YouTube. It is the job of global marketers to create and place product advertisements in settings where local consumers will be most receptive to receiving and acting on those messages.

After product research, development, and creation, promotion is generally the largest line item in a global company’s marketing budget. Integrated marketing communications can significantly increase efficiency and reduce promotional costs. Moreover, promotion is one crucial component of the mix that enables a global company to send the same message worldwide using relevant, engaging, and cost-effective techniques.

While global promotion enables global brands to engage in uniform marketing practices and promote a consistent brand and image, marketers also face the challenge of responding to differences in consumer response to marketing mix elements. Promotional and product marketing challenges also come into play when dealing with differences in brand and product development and fending off local or global competition.

Changes in Promotion

Local languages, colors, and religious beliefs all impact how global marketers promote their products and services in different countries.

Learning Objectives

Analyze the rationale used to promote products within a global marketing mix

Key Takeaways

Key Points

  • To successfully implement global marketing strategies, brands must ensure their promotional campaigns take into account how consumer behavior is shaped by internal conditions and external influences.
  • Global companies must be nimble enough to adapt changing local market trends, tastes, and needs to their promotional mix.
  • When launching global advertising, public relations or sales campaigns, global companies test promotion ideas to provide results that are comparable across countries.
  • Using measures can be particularly helpful for marketers since they are based on visual, not verbal, elements of the promotion.

Key Terms

  • demographics: The observable characteristics of a population, such as physical traits, economic traits, occupational traits, and more.
  • measure: To ascertain the quantity of a unit of material via calculated comparison with respect to a standard.

Changes in Promotion

Before a company decides to become global, it must consider a multitude of factors unique to the international marketing environment. These factors are social, cultural, political, legal, competitive, economic, and even technological in nature. Ultimately, at the global marketing level, a company trying to speak with one voice is faced with many challenges when creating a worldwide marketing plan. Unless a company holds the same position against its competition in all markets (market leader, low cost, etc.), it is impossible to launch identical marketing plans worldwide. Thus, global companies must be nimble enough to adapt to changing local market trends, tastes, and needs.

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Global Promotion: Language is usually one element that is customized in a global promotional mix.

For global advertisers, there are four potentially competing business objectives that must be balanced when developing worldwide advertising: building a brand while speaking with one voice, developing economies of scale in the creative process, maximizing local effectiveness of advertisements, and increasing the company’s speed of implementation. Global marketers can use the following approaches when executing global promotional programs: exporting executions, producing local executions, and importing ideas that travel.

Factors in Global Promotion

To successfully implement these approaches, brands must ensure their promotional campaigns take into how consumer behavior is shaped by internal conditions (e.g., demographics, knowledge, attitude, beliefs ) and external influences (e.g., culture, ethnicity, family, lifestyle) in local markets.

  • Language – The importance of language differences is extremely crucial in global marketing, as there are almost 3,000 languages in the world. Language differences have caused many problems for marketers in designing advertising campaigns and product labels. Language becomes even more significant if a country’s population speaks several languages.
  • Colors – Colors also have different meanings in different cultures. For example, in Egypt, the country’s national color of green is considered unacceptable for packaging because religious leaders once wore it. In Japan, black and white are colors of mourning and should not be used on a product’s package. Similarly, purple is unacceptable in Hispanic nations because it is associated with death.
  • Values – An individual’s values arise from his or her moral or religious beliefs and are learned through experiences. For example, Americans place a very high value on material well-being and are much more likely to purchase status symbols than people in India. In India, the Hindu religion forbids the consumption of beef.
  • Business norms – The norms of conducting business also vary from one country to the next. In France, wholesalers do not like to promote products. They are mainly interested in supplying retailers with the products they need.
  • Religious beliefs – A person’s religious beliefs can affect shopping patterns and products purchased in addition to his or her values. In the United States and other Christian nations, Christmas time is a major sales period. But for other religions, religious holidays do not serve as popular times for purchasing products.

There are many other factors, including a country’s political or legal environment, monetary circumstances, and technological environment that can impact a brand’s promotional mix. Companies have to be ready to quickly respond and adapt to these challenges as they evolve and fluctuate in the market of each country.

Changing the Global Promotional Mix

When launching global advertising, public relations or sales campaigns, global companies test promotional ideas using marketing research systems that provide results comparable across countries. The ability to identify the elements or moments of an advertisement that contribute to the success of a product launch or expansion is how economies of scale are maximized in marketing communications. Market research measures such as flow of attention, flow of emotion, and branding moments provide insight into what is working in an advertisement in one or many countries. These measures can be particularly helpful for marketers since they are based on visual, not verbal, elements of the promotion.

Considering these measures along with conducting extensive market research is essential to determining the success of promotional tactics in any country or region. Once brands discover what works (and what does not) in their promotional mix, those ideas can be imported by any other market. Likewise, companies can use this intelligence to modify various elements in their promotional mix that are receiving minimal or unfavorable response from global audiences.

Changes in Placement

Successfully positioning products on a global scale requires marketers to determine the target market’s preferred combination of attributes.

Learning Objectives

Examine the rationale behind product placement from a global marketing perspective

Key Takeaways

Key Points

  • Placement in global marketing involves conducting extensive research to accurately define the market, as well as the attributes that define the product ‘s potential environment.
  • Regardless of its size or visibility, a global brand must adjust its country strategies to take into account placement and distribution in the marketing mix.
  • In addition to where products are placed, global marketers must consider how these products will be distributed across the different shopping venues and communication channels unique to that particular country or market.

Key Terms

  • marketing mix: A business tool used in marketing products; often crucial when determining a product or brand’s unique selling point. Often synonymous with the four Ps: price, product, promotion, and place.
  • positioning: The act of positioning; placement.
  • dollar store: A retail store selling inexpensive items, especially one in which all items have a price of one dollar.

Changes in Placement

The global marketing mix comprises four main elements: product, price, placement and promotion. Although product development, promotional tactics and pricing mechanisms are the most visible during the marketing process, placement is just as important in determining how the product is distributed. Placement determines the various channels used to distribute a product across different countries, taking in factors such as competition and how similar brands are being offered to the target market.

Cases of products on the lower shelf in a grocery store.

Product Placement: Global brands attempt to place products in locations where consumers will be most receptive to the messaging.

Global marketing presents more challenges compared to domestic or local marketing. Consequently, brands competing in the global marketplace often conduct extensive research to accurately define the market, as well as the attributes that define the product’s potential environment. Successfully positioning products on a global scale also requires marketers to determine each product’s current location in the product space, as well as the target market’s preferred combination of attributes. These attributes span the range of the marketing mix, including price, promotion, distribution, packaging and competition.

Regardless of its size or visibility, a global brand must adjust its country strategies to take into account placement and distribution in the marketing mix. For example, not all cultures use or have access to vending machines. In the United States, beverages are sold by the pallet via warehouse stores. However, in India, this is not an option.

Moreover, placement decisions must also consider the product’s positioning in the marketplace. A global luxury brand would not want to be distributed via a “dollar store” in the United States. Conversely, low-end shoemakers would likely be ignored by shoppers browsing in an Italian boutique store.

In addition to where products are placed, global marketers must consider how these products will be distributed across the different shopping venues unique to that particular country or market. Customizing these placement strategies for national and local markets while retaining a strong and consistent brand image can help companies gain significant competitive advantages in the global market.

Changes in Pricing

Price in global marketing strategies can be influenced by distribution channels, promotional tactics, and the quality of the product.

Learning Objectives

Summarize how proper pricing from a global marketing perspective impacts a company

Key Takeaways

Key Points

  • In the global marketing mix, pricing factors are manufacturing cost, market place, competition, market condition, and quality of product.
  • As one of the four “Ps” in the marketing mix, pricing is the only revenue generating element.
  • Price will always vary from market to market, and global brands must be prepared to deal with external influences such as trade tariffs, and political and economic shifts in the target country.

Key Terms

  • jurisdiction: the limits or territory within which authority may be exercised
  • tariff: A system of government-imposed duties levied on imported or exported goods; a list of such duties, or the duties themselves.
  • marketing mix: A business tool used in marketing products; often crucial when determining a product or brand’s unique selling point. Often synonymous with the four Ps: price, product, promotion, and place.

Changes in Pricing

Pricing is the process of determining what a company will receive in exchange for its products. In the global marketing mix, pricing factors are manufacturing cost, market place, competition, market condition, and quality of product. As one of the four “Ps” in the marketing mix, pricing is the only revenue generating element.

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Pricing: Walmart uses placement, product, and promotion work in addition to pricing in its global marketing mix.

The goal of pricing in global marketing strategies falls under three criteria:

  1. Achieving the financial goals of the company and generating profits
  2. Matching the realities of the marketplace and consumer buying trends
  3. Support a product’s positioning so that it is consistent with product, promotion and placement

General Factors Affecting Price

Like national marketing, pricing in global marketing is affected by the other variables of the marketing mix. Price in global marketing strategies can be influenced by distribution channels, promotional tactics, and the quality of the product. For instance, if distribution is exclusive, then prices are likely to be higher. High prices will also be needed to cover high costs of manufacturing, or extensive advertising and promotional campaigns. If manufacturing costs go up due to the rise in price of some raw material, then prices will need to rise as well.

The Role of Price in Global Marketing

Price will always vary from market to market. However, global marketers must be prepared to deal with not only cultural expectations of pricing, but also external variables including trade tariffs, political and economic fluctuations, and the administrative or legal criteria of specific jurisdictions. Pricing can also be affected by the cost of production (locally or internationally), natural resources (product ingredients or components), and the cost of delivery (e.g., the availability of fuel). For instance, if a country imposes a minimum wage law that forces the company to pay more to its workers, the price of the product is likely to raise to cover some of that cost. Natural resources, such as oil, may also fluctuate in price, changing the price of the final good.

A Chevron gas sign.

Oil : The price of oil is a factor that impacts the prices of many goods due to increased transportation costs.

Additionally, the product’s positioning in relation to the local competition influences the brand’s ultimate profit margin. Global marketers must carefully consider how to position their product in global markets, and whether their products are considered high-end, economical or something in-between according to cultural norms and customs.

Global Marketing and the Internet

The internet has allowed marketers to benefit from reduced geographic and time constraints, and reach consumers in various new ways.

Learning Objectives

Translate the use of the Internet to marketing on a global level

Key Takeaways

Key Points

  • One of the great benefits of global marketing via the Internet is the elimination of geographic and time constraints.
  • The Internet provides scope and immediacy for marketers looking to reach large swaths of consumers across different demographics.
  • Technological tools such as behavioral targeting, as well as online groups and communities, allow companies to effectively target consumers in different markets with different needs.

Key Terms

  • lead: Potential opportunity for a sale or transaction, a potential customer.
  • personalization: The act of changing an option of a multi-user software product to change the product’s behavior or style for one user.

Global Marketing In Light Of the Internet

The Oxford University Press defines global marketing as “marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives. ” The emergence of the Internet in the early 1990s and its gradual commercialization through the early 2000s would coincide with the globalization of media and cultural products. Brands around the world have since attempted to take advantage as well as keep abreast of the commercial, technological, and cultural trends around Internet marketing.

The Twitter logo.

Global Marketing: Some of the most popular forms of online social media are Facebook, Twitter, and Pinterest.

Time and Space Compression

The Internet’s most obvious benefit is the elimination of geographic and time constraints. Organizations have quickly realized that operating costs can be significantly reduced by moving services from physical locations into the digital world. Employees can work remotely from locations hundreds or even thousands of miles away from office headquarters, delivering the same services to clients and customers as employees working on-site. Virtual help desks can be outsourced, allowing technical staff to log into online systems to assist customers located in distant cities, states, and countries.

This same immediacy applies to global marketing, as it allows brands to reach consumers in various ways and offer a wide range of products and services simultaneously. The scope and reach of the Internet is especially beneficial for companies looking to deliver public relations, advertising, and sales messaging consistently across a broad and diverse audience.

The costs of traditional media (television, radio, print and billboard advertising) limit this kind of reach to multinational markets. For small businesses, eMarketing opens up access to potential customers around the world, all for much less the cost than traditional advertising.

The Internet’s accessibility and low barrier to entry enable anyone with an Internet connection to book a flight, test drive a service, or purchase a product with just a few clicks of a mouse. Moreover, the perpetual nature of the Internet makes business occur 24 hours per day, seven days per week, 52 weeks per year. By speeding the time between the delivery of marketing communications and the gathering of consumer responses, the length of the consumer buying cycle is reduced and the volume of lead generation is increased.

Demographics and Targeting

One of the biggest challenges of global marketing is not only communicating a consistent message and brand image, but developing a deep understanding of the cultural differences that separate consumer markets from one another.

Luckily for global companies, web monitoring and tracking tools have become increasingly sophisticated and offer insights into consumer behavior both online and offline. The nature of the Internet is such that users tend to organize themselves into far more focused groupings and in greater concentrations than in offline settings. For example, social networking websites and personalization features can offer valuable information for global marketers looking to access hard-to-reach and overseas markets.