Global Marketing. Global marketing and global advertising

Differences in international orientation and approach to international markets in which international business companies operate can be described by one of three concepts of international marketing management:

1. the concept of expanding the domestic market,

2. the concept of a multi-domestic market,

3. the concept of global marketing.

The ideas expressed in each concept reflect a philosophical orientation that can further define the next stages in the evolution of the company's international operations.

Among the approaches that describe a different perspective on how companies go through the various phases of the evolution of participation in international marketing - from occasional exports to global marketing - is the oft-discussed EPRG (EPRG) scheme. The authors of this scheme believe that firms can be classified based on their orientation:

1) ethnocentric;

2) polycentric;

3) regional-centric;

4) geocentric.

The key assumption underlying the EPRG framework is the level of internationalization at which marketing management is exercised or to which the firm wishes to move by applying international marketing strategies and decisions. The EPRG scheme is reflected in the three concepts below.

The concept of expanding the domestic market. The orientation of the company to international marketing is observed when the company enters foreign markets in order to expand sales of its products. Under the concept of domestic expansion, the firm treats its international operations as secondary, intended to expand domestic operations in the domestic domestic market. The primary motive for expanding the domestic market is the sale of surplus products.

Business in the domestic market is a priority, and sales abroad are seen as a profitable expansion of operations in the domestic (domestic) market. The firm may actively seek to strengthen its position in foreign markets, however, focusing mainly on the domestic market. The attitude towards international sales is expressed by the following setting: to sell to foreign consumers (customers) goods intended for the domestic market, and do this in the same manner (similar manner) as it is commercially carried out in the domestic market. In this regard, companies are looking for markets where the demand for products is similar to the demand in the domestic market and products intended for the domestic market will also be acceptable. This market expansion strategy can prove to be very lucrative and many companies enter international marketing through this strategy. Firms that follow this marketing approach are classified as ethnocentric under the EPRG scheme.

The concept of a multi-domestic market. In the event that a company attaches importance to the differences in foreign markets and considers it necessary to modify foreign business in an organizational sense, then in international business this company adheres to the strategy of a multi-domestic market. The company, guided by this concept, is of the opinion that the markets of various foreign countries have great differences, and that in order to achieve market success in each individual market, its own individual program. These firms are characterized by the fact that they form separate marketing strategies for each separate market of a foreign country.

The branches of the company operate independently of each other, each branch according to its own marketing goals and plans, and the domestic market and the market of each foreign country have separate marketing segments, perhaps with little interaction among them. Products (goods) are adapted for each individual market without coordination and connection with other markets of foreign countries. Wherein advertising campaigns are carried out individually for each individual market, and in the same way, pricing and distribution decisions are carried out individually for each market. A company adhering to such a concept does not look for similarities among the elements of marketing segments that could lead to standardization in its activities in the markets; on the contrary, it strives to adapt to each local market of a foreign country. Marketing management is naturally decentralized, and this fact reflects the belief that each market is unique and requires specific marketing management. Firms with this orientation should be classified as polycentric according to the EPRG scheme.

Global marketing concept. A company guided by this concept or philosophy is usually referred to as a global company, and its marketing activities are called global marketing, and the market of this company covers the whole world. A company that adopts a global marketing tactic strives for efficient scales of developing standardized products that are of reliable quality and that must be sold at an acceptable reasonable price in the global market. Thus, the global market is the same as the domestic market of a country, but established throughout the world. The main postulate of the global marketing concept involves the orientation of the world market to the people to the buyer to meet their needs and desires. Thus, buyers constitute significant market segments of buyers with similar demand for a particular product worldwide. With this orientation, the company is trying to standardize many of its methods (approaches), and give them a practical orientation around the world (on a global basis). Certain solutions become applied and applied in all countries, while other firms require research and consideration. local features markets of each foreign country. A global company views the world as a whole as a single market and develops a global marketing strategy.

The global marketing company corresponds to the region-centric or geocentric according to the EPRG scheme.

Based on the concept of global marketing, a whole set of markets of countries (regardless of whether it is a domestic (domestic) market and only one foreign market, or domestic and 100 foreign ones) is considered as a single market. At the same time, groups of prospective buyers with similar needs define global market segments and the global company develops a marketing plan aimed at standardizing products in broad sense. This may mean that the global marketing plan has a standardized product for the global market, but specific advertising depending on the country, or a product of a certain theme for all countries, attracting specific market distinctive characteristics product, brand name or product image to suit the needs of the country. In other words, marketing planning comes from the perspective of a global market for which a standardized product is in a certain sense found. At the same time, it is allowed to adapt the product for the markets of those countries, ethnic and social features that require this adaptation.

What is suggestive about the orientation of firms to global markets is the analogy with the success of US companies in the domestic American market. The fact is that the US (all 50 states), or if the company's goals exclude some of the 50 states, only those states in which the company intends to trade, can be considered as a single market. The concept of global marketing assumes a standardized product for the whole market, except for regions whose characteristics require product adaptation.

For example, thick (heavy) fabric for men's winter suits is intended more for northern and northeastern markets than for southern and western markets.

A reason should be given that compels all companies, large and small, trading in one country or in the whole world, to be guided by a global marketing concept. As the competitive environment in which US businesses operate becomes more international - and this factor will no doubt increase - the most effective orientation for all firms trading in foreign markets will be a global orientation. This means that all markets of foreign countries (including also the domestic market), which are in the field of activity of the company, are combined into a single market (approaching the global market), for which it is possible to standardize all marketing tools and approaches (product standardization), when it is effective and feasible, taking into account the social cultural characteristics countries.

We must recognize at least two sides in the question of global business: the first side concerns the orientation of firms, as discussed above, the other side asks whether there is a global market, as defined by Professor Theodore Levitt. (Theodore Levitt, "The Globalization of Markets. Harvard" Business Review, May-Jun 1983, pp. 92-102.)

In other words, are there segments formed from consumers from different countries with similar needs that can be satisfied with standardized products (goods).

Although the world has not become a homogeneous market, nevertheless, there is solid evidence of the existence of identified groups of international consumers (segments) with similar needs, desires, and behavior. These segments are formed from consumers from different countries and "permeate" in a certain sense the state borders.

The important thing is that regardless of the extent to which global markets exist, a company can benefit from the global orientation of its business and marketing.

Global marketing is one of the most popular multinational business terms. It is believed to have been first used by Theodore Levitt of Harvard University. As the name implies, a company can develop worldwide advertising and marketing strategies for its products. The concept is based on the assumption that the needs of consumers of all

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worlds are essentially the same. Therefore, buyers will respond to the same calls regardless of cultural differences. Like most other marketing concepts, global marketing must take into account the unique situation around and within each particular company. The main task international marketing is to build an organization that maintains a sense of corporate identity in the company and its brands, while allowing some autonomy in taking into account the characteristics of different countries.

The importance of branding and brand equity in global marketing cannot be overestimated. It is the individuality and reputation of the brand that determine the effectiveness of a multinational business. It is estimated that no less than 90% of the market value of some companies is directly determined by their brands. Without their famous brands and logos, Coca-Cola would be just cola-flavored soda, Kellogg's would be roasted cereals, Swatch would be just one of many wrist watch. In fact, these companies' brands have established themselves as high-quality, consistent leaders in their product categories. As organizations expand globally, organizations are increasingly aware of the intrinsic value and value of their brands.

To create a successful international marketing organization, a number of issues need to be addressed in the following areas.

Management

Regardless of geographic scope marketing strategy managers are coordinating top level companies. Some organizations have created a complex structure of control centers to achieve this goal. Nestle has long been considered one of the masters of multinational marketing. From its headquarters in Vevey (Switzerland), it manages 10 worldwide corporate brands (such as "Nestle", "Carnation", "Perrier", etc.) and about 7,000 regional brands ("KitKat", "Polo " etc.).

The typical approach to MNC management involves the consolidation of strategic management at corporate headquarters and the empowerment of field managers with sufficient authority to independently develop tactical programs within the overall strategy. As expected, the centralization of management leads to consolidation advertising agencies. Even the largest companies in the world usually work with no more than four agencies, and some even with one. (However, secondary advertising projects may be assigned to local advertising agencies.) This trend, in turn, has led to the emergence of giant multinational advertising agencies, holding companies and networks serving global clients. McCann-Ericson Worldwide, Young & Rubicam, BBDO Worldwide are just a few of the agencies providing full complex services to multinational organizations.

Whatever the structure of the company as a whole, effective management requires that local leaders have sufficient decision-making freedom. In fact, "despite the trend towards centralization, only a few organizations adhere to any one structure. Most choose a hybrid system that provides a single, central strategic direction and its local execution."

An example of an organization with a hybrid management model is Coca-Cola. Before the change took place in the company, even the smallest decisions had to be approved at the headquarters in America. This style of management was well suited to the post-war situation, when Coca-Cola was almost the only soft drink in the world. However, the more competitive the global arena became, the more difficult it was to account for regional differences in politics, economics, and culture from the North Avenue office in Atlanta. Welcoming the company's decision to liberalize the management style, one of the European representatives of Coca-Cola said: "The cultural differences between Norway, Belgium and Ireland are obvious, and we (Coke) tried to manage the business in these countries as a whole. Previously, we tried to fit many perfectly different cultures at our convenience organizational structure. Now we are creating a structure that will correspond to the natural cultural clustering of countries."

Centralized management cannot be seen as a purely top-down approach, with headquarters managers dictating their decisions to offices scattered around the world. Perhaps in the past, some companies have followed this management method. Today, if this method exists, it is rather in small international firms. The vast majority of companies treat regional managers as their "eyes and ears", the providers of information with which top management effectively manages global business.

It is possible to rank the elements of the marketing mix according to the degree of their globality, universality. On a scale from the point “most global” to “most local”, they are arranged as follows.

Variation of Marketing Mix Elements

Most Global/Standard

brand name

Price compared to the prices of the main competitors

Absolute price

Product promotion

Customer service

Most Local/Various

Personal Selling

In any company, the degree of standardization of marketing elements across national borders will vary, perhaps even from brand to brand. One thing is for sure, any form of global marketing requires leadership. When it comes to a single, worldwide brand, production and sales managers provide guidance. Companies operating with a large number of brands need to create separate structure, although the term “matrices” as applied to it may be somewhat outdated. Shell, which developed and actively promoted this concept in the early 1960s, officially buried it long ago. If a company is interested in consistent, vigorous, and consistent brand management and equity growth, then somewhere, someone must be responsible for each individual brand. Shell focuses on one brand, while companies such as Grand Metropolitan (distillers) must care for at least dozens of brands.

Any form of global marketing requires leadership.

There needs to be a clear division of responsibilities or spheres of influence between regional, international and local leadership. Corporations operating all over the world need an international marketing department and local sales companies. For companies operating in several countries, an international brand coordinator is sufficient. Step into the position of a country-specific marketing manager who is challenged not only by local executives but also by regional and international brand managers.

However, to an outside observer, most likely, any decision of the leadership will seem strange, since it is necessary to regulate what is not subject to regulation: the autonomy of the decision-making process at each level of the hierarchy. It is not the structure of the corporation that determines how much separation of powers is compatible with the motivation of each manager, but its culture. It is the corporate culture that determines whether any global marketing formula will work. If a culture encourages partnerships and exchanges, it will help overcome language and ethnic barriers. The goals set will be achieved if the company adopts an authoritarian leadership style, although it is not known to what extent this approach applies when it comes to the subtleties and volatility of the global market.

Conversely, there are many objective difficulties that global marketing faces. Why share information if it will weaken our position? Is it worth doing something that is not aimed at increasing the profits of your own division? The classic point of contention is domestic transfer prices; this also includes disputes about the investment component of the marketing budget, that is, about those funds that will pay off in a fairly distant future.

Signs of an organization that would solve the problem of corporate culture are developed international information systems and knowledge sharing. In order to achieve this, it may be necessary to set new goals for brand managers and regional managers, change performance evaluations and accounting systems in order to stimulate cooperation rather than competition. Not every Executive Director dare to radical change. Many top managers believe that the best results come from healthy competition between the company's head office and its divisions.

To some extent this is true, but a much more significant success factor is cooperation.

the main objective management signals - stimulation to action. Who cares how correct the data is if it gets the right response? Attention to detail and accuracy, which are extremely important for an accountant, are much less useful for international managers who need to work out consistent decisions. From the outside, it might seem that the company's top management is machine-gunning out computer printouts and submitting them for approval to some marketing trendsetter. More than one international manager was buried under a pile of papers flying out of laser printer. International companies need information (especially consumer information) that is instantly transferable and easy to process to enable more effective marketing efforts than ever before.

The main principles of global marketing are culture, information and knowledge sharing.

The focus of this section has been on consumer goods, but the prospects for globalization of some types of services, especially financial services and the production of capital goods, are much better. However, the basic principles of success remain the same: culture, information and knowledge sharing.

Three perspectives were used in the landscape metaphor: from a bird's eye view, at ground level, and from underground, when the market is explored by touch. The international marketer has the opportunity to see a real perspective that is not available to his other colleagues. When considering the positioning of the brand around the world, the main element of the brand, its essence, should be viewed. We are not discussing positioning, target audience, etc.; we are talking about the motivation for the existence of the brand, about the reasons why the appearance of the brand in one country means its distribution in other countries. However, the essence of the brand and its representation are completely different things. Throughout the world, Smirnoff defines its brand as "Simply a Sensation", but does not replicate this slogan around the world. Local marketers must transform the brand slogan in the context of their culture. The essence of the brand is something very simple, in order to describe it, five words should be enough.

When Cadbury's Wispa chocolate became a huge success in the UK, it was only natural that Cadbury wanted to repeat the success in the US. Wispa is Cadbury's leading confectionery brand featuring aerated chocolate - more flavor, fewer calories, less chocolate, lower production costs, more profit. Before the company's management realized that its expansion into the American market ended in failure, many millions of dollars were invested in production. What was the reason for the failure? The essence of Wispa chocolate was represented by the following motto: "Your favorite chocolate, but lighter and tastier" (okay, there are seven, not five words). And America's favorite chocolate is by no means Wispa. This place is already taken by Hershey. Maybe you should have taken Hershey and made it porous?

If you can convince corporate headquarters that:

Competition must be replaced by cooperation and partnership;

Leadership should encourage collaboration, one form of encouraging collaboration is double counting so that the brand team in the country and the international team see full profits;

Managers of an international brand in the country where it occupies a leading market position should guard the essence of the brand, especially its positioning, and local managers should be able to interpret the essence of the brand;

The system of bonuses and incentives should be based on the criteria of the overall profit of the company, and not on the profits earned by divisions;

Information databases should be accessible to everyone, then you can consider that global learning has begun in your company. Global marketing will soon follow.

P. Douglas C. Samuel Craig

1. Introduction

2. Parameters of the global strategy

3. Determining the direction of the global strategic offensive

4. Development of marketing mix elements

5. Building a global business portfolio

In most industries, both manufacturing and services, business is no longer limited to the national market. Thanks to improved communication systems and new technologies, a worldwide market has emerged. The consequences of this fact are significant and cover the areas of finance, production, personnel, logistics and marketing. Now there are global brands, global services, an international consumer profile and global company images and, of course, global marketing strategies. Firms must decide whether to enter the global market, how to do it, what elements of the firm's activities to standardize for the global market. Companies must also consider the consequences of these decisions for their growth and prosperity in the future.

The globalization of markets is one of the most important characteristics of today's business. This trend has serious and far-reaching implications for the development of a firm's strategy, as well as for setting its policies in all areas of business activity, including marketing, production, finance, and personnel. This trend is evident in the growing number of global products and brands, in the increasingly complex production logistics systems being developed in the automotive, electronics and computer industries, as well as in the growing number of partnerships and joint ventures created by firms in different countries (see also STRATEGIC ALLIANCES AND SUPPLIER COOPERATION).

The development of communications and the mutual exchange of personnel, ideas and experience between different countries contributes to the fact that companies can offer their products to global market segments. In various countries, consumer groups such as wealthy consumers, teenagers, environmentalists are identified, and around the world certain goods, services or brands are offered to these segments. For example, Rolex and Cartier watches, Hermes scarves and leather goods, and Waterman pens are offered to wealthy customers around the world, while Body Shop products are aimed at those who are concerned about the environment. McDonald's, Coca-Cola and Levi-Strauss have succeeded in creating successful global brands that represent the Western way of life in markets around the world (see also MARKET SEGMENTATION, POSITIONING).

Parallel to this trend, global sourcing and production logistics are evolving, fueled by increasing awareness of differences in labor, production, and raw material costs across countries, as well as the growing efficiency of international transport and communications networks (see LOGISTICS AND VALUE CREATION; MARKETING COMMUNICATIONS). Adidas and Nike manufacture many of their products, including athletic shoes, in Asia. Similarly, Ford launched the Year 2000 initiative to consolidate operations in Europe and North America in order to reduce costs and rationalize production. The Ford Mondeo for the European market and the Contour and Mystique for the US market share the same platform. This eliminates the need for additional engineering and significantly reduces the number of suppliers of spare parts.

Such trends lead to the fact that in many industries, competition takes place not on the national or even regional market, but on an international scale. As a result, in order to compete effectively, companies must develop global marketing strategies. In this article, we propose a scheme for creating such strategies. The first step is to identify the key parameters of the strategy: defining the business, identifying the company's driving force, defining its global strategic offensive.

In order to clearly formulate a global marketing strategy, several mandatory steps must be followed. First, you need to choose the territory in which the company will compete. Thus, we will determine not only the geographical scope of activities, but we will also be able to identify potential competitors. You can then begin to select the underlying strategy (such as price leadership, differentiation, or a combination of several strategies) that is seen as the most appropriate for the firm and industry.

The next step after defining the strategy is to create a marketing mix that would allow you to implement the strategy most effectively (see MARKETING MIX). One of the most important questions is whether the firm will standardize the entire marketing mix or only part of it in foreign markets. To do this, it is necessary to consider all the obstacles to standardization and weigh the benefits arising from the condition of adapting the elements of the marketing mix. Finally, as the global market evolves, becomes more complex, and more interconnected, the firm must decide how to allocate resources across geographic markets and businesses to determine the direction for future growth (see DEVELOPING AND IMPLEMENTING A MARKETING PLAN).

Susan P. Douglas K. Samuel Craig

Introduction

Parameters of the global strategy

Determination of the direction of the global strategic offensive

Development of marketing mix elements

Building a global business portfolio

In most industries, both manufacturing and services, business is no longer limited to the national market. Thanks to improved communication systems and new technologies, a worldwide market has emerged. The consequences of this fact are significant and cover the areas of finance, production, personnel, logistics and marketing. Now there are global brands, global services, an international consumer profile and global company images and, of course, global marketing strategies. Firms must decide whether to enter the global market, how to do it, what elements of the firm's activities to standardize for the global market. Companies must also consider the consequences of these decisions for their growth and prosperity in the future.

1. Introduction

The globalization of markets is one of the most important characteristics of today's business. This trend has serious and far-reaching implications for the development of a firm's strategy, as well as for setting its policies in all areas of business activity, including marketing, production, finance, and personnel. This trend is evident in the growing number of global products and brands, in the increasingly complex production logistics systems being developed in the automotive, electronics and computer industries, and in the growing number of partnerships and joint ventures created by firms around the world (see also STRATEGIC ALLIANCES AND SUPPLIER COOPERATION).

The development of communications and the mutual exchange of personnel, ideas and experience between different countries contributes to the fact that companies can offer their products to global market segments. In various countries, consumer groups such as wealthy consumers, teenagers, environmentalists are identified, and around the world certain goods, services or brands are offered to these segments. For example, Rolex and Cartier watches, Hermes scarves and leather goods, and Waterman pens are offered to wealthy customers around the world, while Body Shop products are aimed at those who are concerned about the environment. McDonald's, Coca-Cola and Levi-Strauss have managed to create successful global brands that represent the Western lifestyle in markets around the world (see also MARKET SEGMENTATION, POSITIONING).

Parallel to this trend, global sourcing and production logistics are evolving, fueled by increasing awareness of differences in labor, production, and raw material costs across countries, as well as the growing efficiency of international transport and communications networks (see LOGISTICS AND VALUE CREATION; MARKETING COMMUNICATIONS). Adidas and Nike manufacture many of their products, including athletic shoes, in Asia. Similarly, Ford launched the Year 2000 initiative to consolidate operations in Europe and North America to reduce costs and streamline production. The Ford Mondeo for the European market and the Contour and Mystique* for the US market share the same platform. This eliminates the need for additional engineering and significantly reduces the number of suppliers of spare parts.

Such trends lead to the fact that in many industries, competition takes place not on the national or even regional market, but on an international scale. As a result, in order to compete effectively, companies must develop global marketing strategies. In this article, we propose a scheme for creating such strategies. The first step is to identify the key parameters of the strategy: defining the business, identifying the company's driving force, defining its global strategic offensive.

In order to clearly formulate a global marketing strategy, several mandatory steps must be followed. First, you need to choose the territory in which the company will compete. Thus, we will determine not only the geographical scope of activities, but we will also be able to identify potential competitors. You can then begin to select the underlying strategy (such as price leadership, differentiation, or a combination of several strategies) that is seen as the most appropriate for the firm and industry.

The next step after defining the strategy is to create a marketing mix that would allow you to implement the strategy most effectively (see MARKETING MIX). One of the most important questions is whether the firm will standardize the entire marketing mix or only part of it in foreign markets. To do this, it is necessary to consider all the obstacles to standardization and weigh the benefits arising from the condition of adapting the elements of the marketing mix. Finally, as the global market evolves, becomes more complex, and more interconnected, the firm must decide how to allocate resources across geographic markets and businesses to determine the direction for future growth (see DEVELOPING AND IMPLEMENTING A MARKETING PLAN).

2. Parameters of the global strategy

The first step in developing a global marketing strategy is to define the business, or in other words, the market arena in which the company will compete. For the domestic market, it is sufficient to define the market for the goods or services produced by the company; for the international market, it is also necessary to determine the geographic coverage of the business (see Fig. 1 illustrating this process).

Rice. 1. Development of a global marketing strategy

Business Definition

Determining the market for a product or service

The first step is to identify the market or markets for a particular product in which the company will compete in order to identify the basis and scope of the company. It often involves multiple markets and businesses. For example, the General Electric Company (GE) continues its steady global expansion in a number of industries, from aircraft engines, generators and medical equipment to full-scale services.

There are four main aspects to consider when defining a business: the utility function of the product being offered, the technology, the customer segments, and the steps in the value chain. The utility function is the benefits provided. For example, a fast food business provides not only food, but also speed of delivery and consistent quality standards. The technologies used determine the way in which benefits are provided. For example, cars can be powered by internal combustion engines, electric motors, or a combination of both. The segment defines the specific customers to whom the product is offered. Ryobi and Ma-kita, for example, offer small, hand-operated tools for DIY shoppers as well as professionals such as home improvement companies, plumbers, and carpenters. The stages of the value chain show the degree of vertical integration within a business. For example, Vgaip sells expensive, stylish home appliances that are manufactured by other companies based on detailed descriptions of developed specifications.

When applying each of these parameters to the international market, it is important to keep in mind that they may differ from country to country. First, a product or service may be used for different purposes in different countries or geographies. For example, while in the US bicycles are primarily used for recreation, in China and the Netherlands they are the main means of transportation. It follows from this that different countries expect different benefits from the product. While style and design may be the main factors in the US, in China and the Netherlands economy and durability will be more important.

The range and availability of different product varieties can also vary considerably by country. A wide variety of household detergents can be found in the US, such as high or low foaming powders, fabric softeners with or without bluing effect, ordinary bleaches, or bleaches for colored fabrics. In other countries, detergents can be much simpler and consist of soap shavings or bars of soap, with laundry being washed on a washboard or on rocks in a river. And, therefore, the desired benefits are not in the degree of foaming or softness, but in the efficiency of removing dirt.

Differences in the relative cost of labor, energy and other resources lead to the fact that in different countries there are different technologies and this also affects the definition of the business. For example, in rural areas of developing countries where there is no electricity, manual or battery-powered appliances may be required.

It follows from all these differences that it may be better to first determine the geographic area in which the business will be carried out. Then you can identify similarities in different countries. This may be followed by a redefinition of the business, depending on the company's desire to offer a product to a single segment in different countries or to accommodate national differences.

Determination of the geographical coverage of the market

In addition to defining its business, a firm must also define the geographical scope of its activities. In this way, it will define the geographical boundaries of competition, as well as establish the main geographical parameters for resource allocation and strategy development. Depending on the degree of integration of markets across countries, four main categories of business can be distinguished: national business, international business, regional business and global business.

A national business is a business covering one country. Within a country, demand is homogeneous, and there are barriers between countries. Food establishments are often national enterprises, although there is a tendency to internationalize some segments such as fast food, soft drinks. Culinary preferences, with the exception of individual exceptional cases, usually do not go beyond one locality.

International business is carried out by enterprises that make minor changes to their products and sell them in other countries. Many household appliances such as toasters, irons, and mixers are cross-national products because they require only minor changes in voltage and plug configuration.

A regional business is one that covers geographic regions such as Europe, Latin America, and North America. The automotive market is usually regional in scope, as models are developed primarily for regional markets. In the past, Ford, for example, has developed models such as the Fiesta, Granada and Sierra specifically for the European market. Recently, due to the increased integration of markets, economic pressures are leading to an orientation towards global markets. The 2000 Initiative shows that Ford, like Honda, is moving towards a world car.

A global business is a business for which the market is the same all over the world. For example, markets for tires, telecommunications, computers, drugs. These markets are homogeneous throughout the world, and therefore the enterprises serving them operate on a global scale. Vigo pens are an example of a global consumer market.

Determining the driving force of the company

The next step is to determine the company's driving force. This is a key determinant in developing a strategy, both in determining the direction of resource allocation in various functional areas, and in determining the company's characteristic competitive advantage. There are six different areas in which a company's driving force can lie (Day, 1984): the nature of the product offering, marketing skills, technology, production capacity, methods of distribution and sales control over resources.

The nature of the product offering: if a company can offer a unique product or a product that is superior to all other products, or a product that has some advantages over other products, then it can try to use this internationally and expand its activities in new markets in other countries. Anita Roddick, the owner of the Body Shop, has developed a line of environmentally friendly cosmetics that are not tested on animals. Following the success in the UK, franchising ventures have been set up in many environmentally concerned countries around the world.

Marketing Skills: In this case, the company's driving force is its marketing experience and know-how. Procter & Gamble's success in international markets is largely due to the company's mastery of the art of consumer goods marketing, which is the combination of large-scale media advertising and heavy distribution.

Technology: In this case, superior technology allows the product to be developed and offered to target markets. Lucent and Siemens, for example, are at the forefront of new technological developments in telecommunications and digital switching systems.

Production capacity: Manufacturing-driven enterprises focus on production efficiency and production processes Japan's competition in the automotive market is largely based on superior production efficiency.

Methods of distribution and sales, in this case, the unique characteristics of the company are its methods of distribution and sales. For example, Avon has successfully employed a system of hiring housewives as its sales agents in many countries around the world.

Resource control: And the last category consists of companies that focus their efforts on resource control. This is usually the driving force oil companies such as BP, Exxon and Shell, as well as diamond miners such as DeBeers. When operating in a foreign market, the main concern of such companies is to maintain control over key resources and manage conflicts with the government of the host country.

In essence, determining the driving force of a company means identifying the key aspects of the strategy that will be focused on. However, this does not necessarily lead to neglect of other aspects. Focusing on technology or product offerings does not mean that we can ignore the ability to meet market needs or identify key target segments. Rather, it allows for the prioritization of management efforts and resources and the evaluation of new projects.

3. Determining the direction of the global strategic offensive

Once a company has identified its business and its driving force, the next step is to determine the direction of the strategic offensive and formulate a strategy for the global market. In this way, the company will determine, firstly, its competitive strategy and, therefore, create the basis for the company's distinctive advantage over competitors, and, secondly, the strategy for market coverage, its configuration or target segments.

Competitive strategy

To create a competitive strategy in international markets, it is necessary to determine, firstly, the territory or geographical area in which the company will compete; and, secondly, the strategy that will be used in the competition in this territory. These decisions will mark the boundaries or limits in which the efforts of the company will be concentrated, and indicate the directions for the distribution of these efforts.

Territory selection

When entering international markets important point is the choice of the geographical territory in which the company is going to compete. To do this, it is necessary to determine the number and type of countries in which it will compete, as well as the geographical scope of activities. An important element influencing the last decision is the level of competition: global, regional, transnational or national. However, it should be noted that even though the main competitors are global or regional, companies do not necessarily compete with them on the same level. For example, Green Kao competes regionally in the detergent market in Germany and Japan, respectively, with international giants such as P&G, Colgate and Unilever.

In determining in which countries and at what level to compete, the main factor is the company's resources and skills compared to the resources and skills of its competitors. Competing in a global market with a wide range of products is likely to require significant resources and capacity. Therefore, a small company entering international markets may prefer to concentrate its resources and operate on a more limited scale, focusing on a limited number of countries or regional markets. However, thanks to the reduction of distances around the world through the development of communication technologies, an increasing number of small and medium-sized companies are able to find target segments in the form of market niches around the world, such as in the production of medical equipment and peripheral computer equipment. Thus, the geographical scope of activities is wide, although the range of goods is limited.

Also, when choosing a territory of competition, it is necessary to decide whether the company will compete in the competitor's home market or in a neutral territory, and consider the degree of concentration or diversification when choosing markets. In its home market, a competitor may benefit from a strong position through customer loyalty, an established distribution network, or the patronage of its government. However, it may be more vulnerable in its domestic market, as the domestic market may account for a significant portion of the profits. In the US, for example, Kodak benefits from significant customer loyalty and represents a major obstacle to Fuji's expansion into the market. In neutral territory, where there is no major domestic competitor, competition can take place more on an equal footing.

Another factor in a firm entering the international market with an innovative product or product line is the threat of a competitor launching a similar product. If such a threat is large, you should release such a product to as many markets as possible as soon as possible in order to get ahead of competitors.

Choosing a Competitive Strategy

The choice of territory determines the geographic area in which the company will operate. Next, the company must choose a strategy by which it will compete in this territory. Three types of possible strategies are usually distinguished: price leadership, product differentiation, and a hybrid strategy, which is a combination of the first and second.

Price leadership is usually based on manufacturing efficiency, which allows a company to offer a product of equivalent quality at a price lower than its competitors. This strategy is often pursued by Japanese companies such as Casio in calculators, Seiko in watches, and recent times this example was followed by Korean companies producing color televisions, VCRs, etc. In order for price superiority to exist for a long time and to withstand competition in international markets from firms from countries with cheap resources, it must be based on real production efficiency. Otherwise, price cuts can lead to price wars that can hurt profits.

The differentiation strategy is based on the product, and its goal is to create an idea of ​​the uniqueness of the product and its advantageous difference from the products of competing firms. The company can offer a product that is superior in quality to the products of all other firms. Examples of such products are Bang & Olufsen audio equipment and Leica optics. Either the company may be considered the best in terms of product reliability, service or delivery. For example, IBM has a strong worldwide reputation for delivering superior product and service.

Innovating is another way to differentiate a product. A company can also create a strong or unique brand image for its product. Trademark Nike, for example, is shrouded in a certain mystique, which largely explains its worldwide success. Similarly, Philippe Patek watches and Rolls Royce cars create images of prestige and luxury. 3. You can use a hybrid strategy that combines a price leadership strategy and a differentiation strategy. If executed effectively, such a strategy can enable the firm to establish a strong position in global markets. Heinz, for example, has spent heavily on advertising to build strong brands in many markets, while at the same time maintaining cost leadership by tailoring its purchasing activities and technologies to local conditions.

So, based on the main competitive advantage of the company and its competitive strategy, a strategic offensive is carried out in global markets. In the same time competitive strategy defines the main parameters for the development of the company's strategy in international markets, its investment strategy in relation to the various areas of the company's activities and geographical areas.

Market coverage and segmentation

The second component of a firm's strategic offensive in global markets concerns the geographic coverage of the market and the configuration of target segments. There are two issues to consider here: the degree of integration across geographic markets and the breadth of the target market (Figure 2). Both issues are closely intertwined with the choice of territory and competitive strategy.

Degree of integration

In deciding whether to offer its products to the same customer segments around the world, or to focus on specific target segments in each country, company management must examine the similarities in customer behavior and response patterns in different geographic markets, as well as the importance of linkages between markets. The interests and behavior patterns of some consumers, such as senior administrative staff, mature young people, children, are very similar and do not depend on nationality. Therefore, certain products and marketing strategies will be effective when working with similar customer segments around the world. Similarly, in some manufacturers' markets, such as those for polymers, large computers, and medical equipment, consumer requirements are essentially the same throughout the world. In some cases, special product lines are developed for specific market segments around the world. For example, cosmetics manufacturers offer products for problem skin to teenagers, anti-wrinkle collagen creams to middle-aged people, and environmentally friendly cosmetics to consumers concerned about the environment. This strategy is based on the assumption that the similarity

The skin care needs of these segments in different countries outweigh national differences.

On the other hand, if the desired consumer benefits or the nature of the product market vary widely across countries, products and marketing strategies will need to be tailored to specific geographic areas or markets. Then the differences between countries are more significant than the differences within the country. Such a strategy may be suitable for companies operating in the food industry. Findus, the frozen food division of Nestle, produces in various countries different kinds goods adapted to local food preferences. Products such as fish fingers and fish cakes are sold in the UK, "coq au vin" and "bceuf bourguignon" in France, and "dim sum" in Singapore.

Increasingly, companies are pursuing hybrid strategies, offering some products and brands globally and tailoring other product options to the needs of specific regions or local markets. For example, Coca-Cola sells its Classic Juice worldwide and a diet cola, most commonly Light Juice, in many markets around the world. It also sells regional brands of soft drinks such as Sarru fruit drink in Turkey, Germany, Hungary, Poland and Romania; cola without sugar called "Tab Extra" - in the Scandinavian countries. In addition, it sells non-alcoholic beverages that cater to specific national preferences, such as pineapple-grapefruit flavored soda or a combination of mango and passionflower flavors called "Lilt" in the UK and Georgia; a series of coffee drinks in jars - in Japan, where they are very popular.

Degree of coverage of the target market

It is also necessary to determine the breadth, or degree of coverage, of the target market. Management may, for example, decide to pursue a strategy of broad coverage, offering a product to all segments or potential buyers in a given market, or, conversely, to focus their efforts on a single segment.

In the automotive industry, companies such as GM, Ford and Toyota offer a wide range of products worldwide, while Ferrari and Lamborghini offer merchandise for the luxury sports car segment. A broad coverage strategy implies that efforts are directed to the entire market. In some cases, this can lead to mass production, where there is little differentiation or adaptation of the product to individual market segments. In other cases, a company may produce a wide range of products to meet individual needs while still enjoying economies of scale and efficient distribution. A concentrated reach strategy, on the other hand, is targeted at a specific market segment and is likely to be most appropriate for a company with relatively limited resources or where special skills are needed to meet the needs of individual segments, such as fashion design or software development. security. With the exception of globally integrated industries such as aerospace or chemicals, outreach strategies usually require some adaptation to specific geographic markets or regions, while concentrated outreach strategies are more easily transferable anywhere in the world.

Thus, the competitive strategy determines the parameters of the company's activities and its driving force in the global market, while segmentation determines the configuration of its activities. This, in turn, provides directions for developing tactics that the company will use in international markets in relation to each of the elements of the marketing mix. These aspects are discussed in more detail below.

4. Development of marketing mix elements

When determining tactics in relation to the elements of the marketing mix, it is necessary to answer the main question: to what extent these elements will be standardized in different countries. The answer depends on the scope of the market chosen: whether it is global, regional, transnational or national; on what basis the company will compete: on the basis of price leadership or differentiation; and on the segmentation strategy being implemented. Even where the market for a product is global, there may be barriers to a fully standardized strategy, such as the nature of the marketing infrastructure or government regulations (see Buzzel, 1968). Often obstacles affect the choice of territory. These relationships are shown in Fig. 3.

Although the overall positioning of a product or brand may be global or regional, individual marketing tools-mix or

Territory

Marketing mix

Competitive strategy

Strategy options

Price leadership

Differentiation

Hybrid strategy

Product positioning

Promotion policy

>Distribution strategy

" Pricing

Rice. 3. Global competitive strategy

their implementation may require changes. For example, a product or service may remain the same, but its positioning may vary to some extent in different countries, or different advertising themes or distribution strategies may be used. Also, even when using the same main advertising theme, it may be necessary to adapt the content of advertising materials to specific national or cultural contexts. Thus, the degree of uniformity or adaptation may vary from complete uniformity of all marketing tools, or uniformity in individual elements of the marketing mix and adaptation of others, to some adaptation of all marketing tools. Next, we consider this question in relation to the main elements of the marketing mix: product, promotion, distribution, and pricing.

Product positioning

Product positioning is the cornerstone of the marketing mix. Positioning defines the product's market boundaries and the corresponding set of competing products, the specific benefits or features of the product that need to be emphasized, and the segment whose needs and interests the company seeks to satisfy. As a result, positioning provides a mechanism for the practical implementation of the firm's competitive strategy.

When formulating a positioning strategy, the main question is whether or not to apply the same positioning around the world. The global positioning strategy provides a number of benefits. First, it creates the same image all over the world. Secondly, cost savings can be achieved as there is no need to tailor products or develop separate promotional materials for different markets. Benetton, for example, uses the same commercials all over the world, thus not only saving on production costs, but also strengthening its global image. good ideas and technology, whether in relation to product, advertising or distribution, can be transferred from one country to another and used internationally.

On the other hand, even if the needs and interests of buyers are uniform across the world, there may be a number of barriers to adopting a global positioning strategy. First, government regulations may set certain product standards (for example, regarding safety or environmental pollution) or restrict the use of comparative advertising. Second, differences in marketing infrastructure, such as limited access to the media, lack of supermarkets or discount stores, may prevent the same positioning strategy from being used or change the way it is implemented. Finally, different competition different markets can limit the effectiveness of a unified positioning strategy. For example, Perrier's use of the idea of ​​"health" in positioning in international markets prevented Evian from using the same tactics when entering the global market, although it successfully used it in its national market.

Such factors may lead to the need to modify or adapt the positioning strategy for most or only some countries or markets in the world. For example, the Renault 5's positioning strategy was modified in Germany, where Volkswagen competes, to emphasize engine performance and safety, and in Italy, excellent road handling characteristics were emphasized to compete with Fiat. In some cases, even when the core product remains the same, positioning strategies may change significantly to emphasize other benefits or offer the product to other segments.

Promotion policy

In the area of ​​product promotion policy, significant benefits can be gained from standardization in the form of cost savings, a uniform image, the use of good ideas, etc. interpreting and translating advertising texts all present barriers to standardization. For example, all types of comparative advertising and the mention of competing brands are prohibited in Germany.

Because of these obstacles, compromise decisions are often made. A prototype advertising campaign is being developed, in which key themes and ideas are identified. Then the practical implementation of the advertising campaign is adapted to the specific cultural contexts and infrastructure of each country. For example, Unilever's ice cream division uses similar product positioning around the world that emphasizes friendliness. An advertisement for her signature product shows an ice cream vendor with a cart being swarmed by a group of children. However, the specific implementation is adapted to local conditions. In the US, the commercial features a benevolent salesman selling ice cream from a van to lively music. In the Czech Republic, a handcart vendor sells ice cream on the streets of Prague, while in China, a similar scenario is played out by an Asian vendor and children.

Distribution strategy

With regard to the distribution strategy, the benefits of the standard strategy are perhaps the least obvious. There are significant differences in the nature of distribution channels, as well as the presence of certain types of retail outlets. This situation often precludes the development of a standardized strategy. key factor in this area is the role played by small independent firms and other retailers such as kiosks, open markets, sales agents, representing an alternative to large-scale organized distribution. In many developing countries, the former form a significant part of the distribution system.

Retail fragmentation usually means that wholesalers play a major role in the distribution system. In Japan, for example, wholesalers usually not only perform shipping and storage functions, but also finance retailers by offering them goods on credit or by selling goods on consignment terms.

Such differences in the distribution system often lead to the need to adapt the distribution strategy to the specific characteristics of the local system in order to provide the desired level of coverage and control, as well as customer service.

Pricing

The final component of the marketing mix is ​​pricing. Again, especially in consumer markets, many factors prevent the establishment of a unified pricing strategy. These include, for example, differences in cost structures across countries, in the nature of demand, in competitor prices, and in government or market price regulation.

Differences in the final cost of a product can be caused by fluctuations in labor costs, lack of resource management experience, or differences in other operating costs in different countries, as well as transportation costs, tariffs, customs duties, etc. Sharp price escalation often occurs when exporting at the expense of the costs associated with transportation, customs duties and payment of duties and services of agents. Local retail, wholesale and dealer margins vary, as do local taxes, resulting in significant price differences. Differences in the nature of demand and prices of competitors in different countries also lead to the idea that, in order to increase its competitiveness, it is better to use a differentiated approach in setting prices. In the automotive market, for example, prices vary from country to country, not only because of taxes and markups, but also because of differences in positioning.

Government and trade price controls, wholesale margins, sales taxes and VAT are the final factors preventing uniform pricing. They represent the basic parameters for the pricing policy. Although the company's management can control other factors, such as costs, the above factors are usually "givens" in which the company is forced to work.

It is necessary to weigh the benefits of standardization or uniformity, on the one hand, and adaptation, on the other, for each element of the marketing mix. Even if the overall positioning is global, this does not necessarily mean that each element of the marketing mix will or can be uniform or its practical implementation will be the same in each case. However, it is important that in each area the tactics are consistent with the overall positioning strategy. For example, a positioning strategy based on the idea of ​​product reliability and service must be supported by reliable service, whether it is provided by a distributor, manufacturer, or reseller. Similarly, positioning based on the quality of the product must be supported by a high price so that an appropriate image of the product emerges.

5. Building a global business portfolio

Defining a global strategy is an important and decisive first step. However main characteristic The global marketing strategy is the fact that it is carried out in relation to the markets of many countries and in relation to the various activities of the company. This is not a single strategy, but a set of strategies that must act in a coordinated and purposeful manner. The firm must create a business portfolio that takes into account the degree of interconnectedness of the markets and activities of the company around the world. Going forward, the firm's portfolio structure must be constantly restructured to ensure optimal growth and maximum profitability.

The firm needs to consider how it can compose its business portfolio of countries, company activities and market opportunities, taking into account current trends and changing situations. In this way, it receives directions for investment and determines which activities and geographic areas to develop and which to abandon. At the same time, the company's management can assess whether the existing portfolio provides the direction and pace of future growth and whether the risks associated with the company's activities in different markets are sufficiently balanced. Once the portfolio structure has been restructured to provide the desired growth direction, management may consider whether and how to consolidate and integrate activities across geographies and business sectors to avoid duplication of effort and streamline operations.

Development of business portfolio structure

As in the domestic market, business portfolios can be analyzed in terms of different levels of an organization's activities: at the level of the corporation as a whole, at the level of an individual company activity or product line, and at the level of various units, i.e. products, market segments or departments of the company. The inclusion of appropriate levels usually depends on the diversity of the firm's activities, its portfolio and target markets, and its position in the various levels of the value chain.

Most general level analysis - global corporate business portfolio. For example, a diversified company with three core businesses and operations around the world might explore its position in the global market, in regional markets, or in key countries. The next level is the type of activity or group of goods. Here the company can examine the position a separate division or product groups in more detail. The analysis is most often carried out at this level.

The creation of a global business portfolio must begin at the planning level, which is essential to the implementation of a marketing strategy. For example, the components of a portfolio's strategic business units (SBUs) may be defined as separate activities in a particular geographic area. While in some cases this corresponds to the national market for a given activity, geographic units may be larger or smaller in scope. Some countries are large enough and diverse enough to be divided into several NEPs. For example, in China, Beijing, Shanghai and Guangzhou may be separate SEPs.

Once the components have been identified, the next step is to assess the interconnectedness of this activity across geographic units. Then it is necessary to consider the interrelationships between the activities.

Interconnectivity of geographic markets and activities

With the growth of communications and connections between countries, the assessment of the interconnectedness of geographic markets is of particular importance. It is crucial in assessing the possibility of market expansion or curtailment of activities, as well as in deciding whether to consolidate the firm's operations around the world or in certain regions.

When evaluating the interconnectedness of geographic markets, two things need to be considered. important aspects: (1) the degree of relatedness of markets and (2) the degree of similarity. Markets are connected when they have common customers or competitors, when they have a high volume of trade with each other, can be accessed through the same distributors or media networks, or when actions taken in one market affect operations in another. . Markets are similar when consumers in them have the same tastes, interests or purchasing behavior and when they have a similar market environment, such as similar trade or advertising regulations or similar media infrastructures or distribution systems.

In cases where markets are closely related, it is advisable to consider them as one unit. Even in cases where management cannot achieve cost savings or synergies by integrating operations or pursuing a common strategy, direct actions by the firm or its competitors may affect operations in another market. For example, an attack on a competitor in one market may cause a reaction in another. Where markets are similar, actions in one market do not necessarily affect results in another, but company management can increase profits by using a common strategy or coordinating operations.

Interconnectedness of Geographic Markets

Geographic markets can be linked in various ways. Markets that are next to each other are often connected. Firms, including customers, suppliers, distributors, and service organizations, can expand into neighboring markets, thus linking them. Neighboring markets may share the same media, or media from one market may have access to another. Trade flows and other movements of people, as well as communications, are usually highly developed between neighboring markets, and they are further developed by the trend towards integration of regional markets. In some cases, though not always, consumers in neighboring countries exhibit the same purchasing patterns.

Similarity of geographic markets

In addition to analyzing the interconnectedness of geographic markets, management should also examine the similarity of markets. The similarity of markets provides opportunities for consolidation of operations, especially in relation to marketing strategy. For example, management may decide to launch a single range of products or brands in similar markets and use common positioning strategies in them, thus making it easier to use a common promotion strategy, create promotional materials, etc. At the same time, this approach may free up opportunities for consolidation of production and logistics.

Interconnection of activities

In addition to assessing the interconnectedness of geographic markets, company management must also assess the interconnectedness of activities. Activities can be related in various ways. For example, they may serve the needs of the same target market, use common production facilities or distribution mechanisms, or use the same R&D programs, the same information technology or marketing knowledge and experience. Businesses or product lines may benefit from an established corporate image, use a family brand strategy, different businesses may use the same vendors, or share marketing costs with other businesses. Thus, activities can be interconnected at different levels of the value chain, both within the same geographic market and across various markets. Activities with strong and broad links at different stages of the value chain should be treated as a single SEP for more efficient planning, and not as different SEPs.

Business Portfolio Reconfiguration

After the firm has analyzed all of its business portfolios and their interconnectedness, management can move on to portfolio reconfiguration. First of all, management must determine whether the current business portfolio of countries, activities, market segments and departments of the company can achieve corporate goals. In particular, it is important to determine whether the existing business portfolio provides the desired direction for future expansion, while at the same time providing the necessary balance between emerging and established markets, as well as the desired level of risk diversification. In addition, management should evaluate the need to restructure strategic business portfolio units (SEPs) and consolidate and integrate operations to increase global knowledge and efficiency.

Business Portfolio Expansion

In charting directions for future growth, management must determine whether the firm will expand its geographic reach into new national or regional markets, or whether it will expand into new activities or market segments within its existing geographic area of ​​operations. Management may enter new geographic markets with existing or modified product lines, or expand its operations to serve the same or similar target segments in other countries. On the other hand, management may focus on new market segments, new activities, or other steps in the value chain within existing geographies.

Expansion into new geographic markets is a major issue faced by companies around the world. As more new markets open up in different parts of the world, such as those in Eastern Europe, China or India, and communication channels between markets develop, expansion into them presents an increasingly attractive opportunity for growth. Management therefore needs to review its business portfolio to understand how it fits into these markets. If such analysis reveals a concentration in those countries and regions of the world that do not have or few high-growth markets, management should consider moving investments to new high-growth markets in order to ensure continued growth in the future.

The advantages and disadvantages of geographic expansion opportunities need to be weighed against adding or acquiring new high-growth activities in existing markets. As noted above, a facility that is related to the firm's core business and based on the same technology, or a facility that can be sold through the same distribution channels, provides an attractive opportunity for expansion. This expansion allows the firm to achieve economies of scale. At the same time, if the geographical boundaries of such an activity coincide with the current boundaries of other activities, the new addition does not increase either the level of macroeconomic risk or the geographical diversification of the firm.

Reducing the business portfolio

A business portfolio review may lead management to decide not to produce a particular product line, a particular business, or operations in a particular country, region, or world. Those units of the business portfolio that are weakly competitive are prime candidates for divestment, freeing up resources for expansion plans. In some cases, abandonment of an activity may be due to hostile conditions, such as increased political or financial risk, or foreign government regulations. In other cases, such refusal is due to low profitability due to aggressive competition, price controls, or simply due to a drop in demand.

When deciding to downsize a business portfolio, it is important to consider the interconnectedness of the various SEPs and therefore the impact that the withdrawal of one SEP may have on other SEPs in the same geographic area or other parts of the world. The abandonment of one activity in a particular country may affect the profitability of other activities through general marketing costs, general production capacity or distribution mechanisms. On the other hand, exiting one country or region may result in loss of economies of scale or adversely affect the image of the company's brand or product in other countries.

Consolidation

In addition to aggressively expanding its international presence, the firm should consider consolidating its global operations. These opportunities can be identified by analyzing the degree of interconnectedness of geographic markets and activities, which may reveal opportunities for standardizing a product or product line across countries, or for consolidating research and development or manufacturing activities in a region or globally. For example, individual geographic units for a given activity within a particular region or around the world may be grouped into one SEP. On the other hand, assortment groups of goods or activities within the same geographic units can be combined into one SEP.

Synergies can be achieved not only through economies of scale or improved coordination and integration of activities, but also through the transfer of ideas, know-how and experience from one activity to another or from one national or regional market to another. Connectivity analysis provides opportunities for transferring research and development expertise or innovative ideas for new products, advertising, or other marketing tactics tailored to the conditions in one country or region to other countries or regions. Similarly, skills in production, management and marketing acquired in a given activity or setting can be transferred to other activities or similar settings.

Global Business Portfolio Valuation

The final step is to evaluate the new business portfolio as a means to ensure continued growth. To do this, two aspects need to be considered: the balance between emerging and mature markets and the degree of interconnectedness between markets. As on a national scale, striking a balance between emerging and established markets is essential to ensure that the company is well positioned for future development. At the same time, it is necessary to consider the degree of interconnectedness between these markets, as it affects the company's ability to diversify risks when operating in independent markets, or, on the other hand, achieve economies in operating in highly interconnected markets by gaining a strong competitive position.

Striking a balance between emerging and mature markets

As with the analysis of a business portfolio for the domestic market, it is necessary to consider the balance between presence in high-growth and established markets. For international markets, this issue is even more complex, as management must consider this balance both in terms of geographic areas and in terms of activities. Not only participation in advanced industries must be balanced with the production of new goods, but also activities in developed countries and regions of the world such as the United States and Western Europe must be balanced with activities in rapidly developing areas such as China and Southeast Asia.

While developing countries typically provide very attractive growth opportunities, their markets are often characterized by high levels of economic and financial volatility. The risks associated with transactions in such markets are usually significantly higher than in mature markets. In addition, the costs associated with entering and operating in such markets are usually higher because these markets lack an efficient distribution structure and require significant advertising costs to create company or brand awareness. Therefore, an appropriate balance needs to be struck between emerging and mature markets and between the different types of risks associated with market conditions and operations.

Concentration and interconnectedness of markets

In addition to considering the balance between emerging and established markets, management must consider the degree to which markets are interconnected. As in the previous case, this should be done for both geographic units and activities. Focusing on highly interconnected markets (such as markets within the same geographic region) that have similar demand patterns and similar market infrastructures allows a firm to realize significant savings. Companies with limited resources compared to their competitors may also opt for a similar strategy in order to focus their efforts. However, it is important to be aware that such a strategy may be vulnerable to changes in the economy and downturns in the markets, as well as in the event of increased attack from competitors.

On the other hand, operating in a number of markets with a low degree of interconnectedness allows management to spread the exposure to macroeconomic and competitive risks across more markets and a variety of economic conditions. By operating in different markets, companies can balance the risks associated with fluctuations in the economy, market, foreign exchange rates, as well as competitive risks. Diversifying operations across independent markets or regions also limits exposure to competitive threat. In the event of an attack in one market or in one region, you can redirect resources from another market in order to strengthen your position and repel the attack. At the same time, management should not scatter resources too much, as this can lead to a weakening of the firm's competitive position.

Thus, the analysis of the global business portfolio is an important tool that allows management to identify directions for development in global markets. It can be used to select target markets for future expansion and growth, to determine which resources should be reallocated, which operations to terminate, and to identify opportunities for efficiency gains through improved coordination and integration of operations across countries.

As markets around the world become more interconnected and more competitive, firms that are going to succeed in the competition must approach business from a global perspective and plan their marketing strategies on a global scale. To do this, it is necessary to consider a number of issues that go beyond the development of a strategy on a national scale. In this chapter, we have tried to highlight some of the key components of a global marketing strategy. Due to the limited scope of our article, these issues have not been considered in all details and with all the necessary depth. Those readers who are faced with the task of developing a strategy for entering the international arena may refer to the works (Douglas and Craig, 1995; Bradley, 1997; Yip, 1995), in which they will find a deeper consideration of the problem.

Susan P. Douglas, New York University C. Samuel Craig, Stern School of Busines

Literature

Bradley, Frank (1997) International Marketing Strategy, London: Prentice-Hall International. Buzzell, Robert D. (1968) "Can you standardize multinational marketing?", Harvard Business Review

November-December: 102-13. Day, George S. (1984) Strategic Market Planning: The Pursuit of Competitive Advantage, St. Paul, MN:

West Publishing Co.

Douglas, Susan P. and Craig, C. Samuel (1995) Global Marketing Strategy, New York: McGraw-Hill. Yip, George S. (1995) Total Global Strategy, Englewood Cliffs, NJ. Prentice Hall.