RFID

confidencehandElectronics - Devices

Nov 27, 2013 (3 years and 10 months ago)

71 views










Pat Eskew


October 5, 2004


http://
www.pbs.org/wgbh/commandingheights/lo/story/ch_menu_03.html












Pat Eskew


October 5, 2004

Introduction to Globalization and

Global Marketing


Pat Eskew

University of Arkansas

October 5, 2004










Pat Eskew


October 5, 2004

An interactive exchange to discuss the following:


What is globalization/anti
-
globalization?


How does this relate to global marketing?


Why is China such a big deal to global marketers?


Case Study: Dell in China 2002

Objectives and Agenda










Pat Eskew


October 5, 2004

Globalization/Anti
-
Globalization










Pat Eskew


October 5, 2004

Globalization



Integration

of the world's
culture
,
economy
, and
infrastructure

driven by the lowering of
political barriers

to transnational
trade

and
investment
, and by the rapid proliferation of
communication

and
information
technologies
. The term is often used in reference to the
substantial impact of
free
-
market

forces on local, regional and
national economies.

Globalization/Anti
-
Globalization

“The Commanging Heights”, accessed on http://www.pbs.org/wgbh/commandingheights, September 29, 2004










Pat Eskew


October 5, 2004

The success of globalization can be seen in many ways:



29 million net new jobs were created in the US from 1980 to 1998
as manufacturing jobs were replaced by “knowledge” jobs


Under the same time frame, Europe (with roughly twice US population)
only add 4 million net new jobs, in part because of policies restricting
globalization advances


Global exporting countries are 20% more productive than their non
-
exporting counterparts and pay wages and benefits at least 15%
higher


The USA is by far the biggest trading nation with 20% of all goods
and 16% of all services by value in world trade


Since 1990, the value of global trade has increased 54%. Since 1970
that number is 2200%


“Economic Isolation is not an Option”, Mike Eskew, accessed on www.pressroom.ups.com, September 29, 2004

Globalization/Anti
-
Globalization










Pat Eskew


October 5, 2004

Despite its benefits and evidence of success, globalization is a
source of concern to many people.


A Google search for “pro
-
globalization” reveals 5500 hits, “anti
-
globalization” reveals 114,000.


Sources of concern:


Job losses from home country


Labor rights and protections against child labor


Environmental protection


Cultural diversity


Food and personal safety


Immigration flows


Anti
-
capitalism in general


Globalization/Anti
-
Globalization

“Globalization”, accessed on Wikipedia.com, September 29, 2004

In 2003, the New York Times dubbed the anti
-
globalization
movement the “world’s second largest superpower” after 10 million
people demonstrated against the war in Iraq










Pat Eskew


October 5, 2004

Global Marketing Considerations










Pat Eskew


October 5, 2004

Given the importance and sensitivities of global markets, how can
you as a Global Marketer best capture the opportunity?


Global Marketing Management shares the same primary process
elements of all Marketing Strategy

What is Marketing
:

1.
What

-

Define the
Value Proposition

of the good or service offered

2.
Who



Define the
Target Population(s)

who have the strongest
affinity to that Value Proposition

3.
How



What Product, Price, Positioning and Promotion (
4 Ps
)
strategy will most effectively capture this market opportunity?


Global Marketing

The main distinction for Global Marketing is the process
of
assessing the

individual country or regional
market

for local and global sensitivities










Pat Eskew


October 5, 2004

Market assessment
-

Key things to look for:



Understand corporate objectives for market entry such as:


Corporate earnings potential


Learn vs. earn


Competitive advantage by being first


Identify product
-
market drivers and
enabling conditions

such as:


Distribution infrastructure


Advertising and media availability


Purchasing power of consumers (including credit facilities)


Forecast demand as possible purchases in next 3
-
5 years, as
well as long
-
run potential


First mover advantage exists when customers/partners are tied
in. Watch for first
-
mover disadvantage

Global Marketing

Source: David Arnold, International Marketing Management Course, Harvard Business School, Fall 2002










Pat Eskew


October 5, 2004

The first, and possibly most important, element
of Global Marketing is the market entry decision

What are key drivers of marketing model?

Are enabling conditions in place for this marketing model?

What is the cost of entry?

What is the cost of waiting?

Is risk/control trade
-
off appropriate?

Global Marketing

Source: David Arnold, International Marketing Management Course, Harvard Business School, Fall 2002

What questions can you ask to get
the data you need

to
answer these questions effectively?










Pat Eskew


October 5, 2004

Market assessment decision framework

COUNTRY


Economics


Politics


Regulation

MARKET


Size


Growth


Competition

COMPANY


Drivers of global expansion


Regional experience


Risk tolerance



MARKETING MODEL

Key points to determine success:



Value creation



Value capture

ENTRY AND TIMING

Global Marketing

Source: David Arnold, International Marketing Management Course, Harvard Business School, Fall 2002










Pat Eskew


October 5, 2004

China Market Considerations










Pat Eskew


October 5, 2004

China

By 2008, China will rival Germany for the world’s third largest
economy, behind US and Japan

Lieberthal, Kenneth, “The Great Transition”, Harvard Business Review, October 2003

0
0.5
1
1.5
2
2.5
Italy
China
France
Britain
Germany
2001 GDP
2008 GDP
Figures in $
trillions










Pat Eskew


October 5, 2004

China

1998

2003

Population

21.1%

20.5%

Aluminum

10.3%

18.6%

Cell Phones

7.5%

20.1%

Cigarettes

30.8%

34.8%

Computers

3.3%

6.1%

Cotton

22.2%

32.7%

Electricity

8.0%

10.2%

Ice Cream

14.1%

19.1%

Petroleum

5.5%

7.7%

Soda

2.9%

3.9%

Soybeans

14.2%

19.6%

Washing Machines

10.6%

18.0%

China’s consumer consumption as a % of world consumption
is exploding, driving marketers around the world to focus
particular attention there

Cherry, Brenda, “What China Eats (And Drinks And …)”, Fortune, October 4, 2004










Pat Eskew


October 5, 2004

China

This rapid rise in Chinese consumers is driving Procter and Gamble,
and their rivals to focus global marketing attention on China

Penhirin, Jacques, “Understanding the Chinese Consumer”, The McKinsey Quarterly, 2004 Special Edition

0
200
400
600
800
1000
1200
1400
1600
1800
1993
1995
1997
1999
2001
2003
P&G China Rev
Figures in $ millions

P&G's emerging market rev (2002)
24%
35%
35%
6%
China
Latin America
Rest of Asia
Others









Pat Eskew


October 5, 2004

China

GDP per Capita

(PPP US$)

Rank

Population
(millions)

Rank

Luxembourg

$53,780

1

NA

NA

USA

$34,320

2

294

3

Japan

$25,130

14

127

10

Mexico

$8430

58

105

11

Brazil

$7320

64

182

5

China

$4020

102

1294

1

India

$2840

115

1049

2

Indonesia

$2940

114

234

4

Despite it’s rising consumer class, China still has the 102
nd

largest per capita GDP

“List of Most Populous Nations”, TheFreeDictionary.com, accessed on September 29, 2004










Pat Eskew


October 5, 2004

Case Study: Dell in China 2002










Pat Eskew


October 5, 2004

Tying it all together: How Should Dell Consider
the Following?

What are key drivers of marketing model?

Are enabling conditions in place for this marketing model?

What is the cost of entry?

What is the cost of waiting?

Is risk/control trade
-
off appropriate?

Source: David Arnold, International Marketing Management Course, Harvard Business School, Fall 2002

What questions can you ask to get
the data you need

to
answer these questions effectively?

Case study: Dell in China 2002










Pat Eskew


October 5, 2004

China Market
Assessment

Customer Segments Affected by Voids

Dell Market
Expansion Criteria


Related Voids and Limitation

in Chinese PC Market

Relationship

SMB

Consumer

Market size


current and
potential

Very
Strong

Political influences

Legal en
forcement







Availability of
human
resources


sales force

Limited

Limited number of skilled labor








Availability of
human
resources


management

Limited

Limited number of skilled labor







Local acceptance
of Dell direct model

Limited

Low int
ernet penetration

Lack of credit card facility

Price sensitive consumer

Hesitation to purchase online







Suppliers ability to
deliver parts on
short notice

Strong

None (70% of components are supplied
in China by global suppliers)




Adequate
arrangem
ents with
shipping carriers

Sufficient

Underdeveloped logistical infrastructure

Regulation on shipper to operate in
China






Operating costs

Limited

All the
voids
are related








Eskew, Pat, “Can Dell Replicate Its Direct Model in China?”, December 2002

As Dell considers the China PC market of 2002, the following
enabling conditions are of most importance (and concern)

Case study: Dell in China 2002










Pat Eskew


October 5, 2004

Eskew, Pat, “Can Dell Replicate Its Direct Model in China?”, December 2002

Despite all the challenges, the overall market potential seems to
render the question “should Dell enter the market” irrelevant

Case study: Dell in China 2002

Market Segment

Competitive Rank

Share

YoY Growth

Rel
ationship

#3

8.6%

28.0%

SMB

#5

5.0%

15.8%

Consumer

#9

1.7%

879.0%

Total

#4

4.8%

40.9%


China PC Market Growth Trends

Dell Position with China PC Market by Customer Segment










Pat Eskew


October 5, 2004

Appendix










Pat Eskew


October 5, 2004

Signs of Globalization


Increase in international
trade

at a faster rate than the World
Economy


Increase in international flow of
capital

including foreign direct
investment


Greater trans
-
border
data

flow, using technology including Internet,
satellites and telephones


Greater international
cultural

exchange through export via
Hollywood or Bollywood


Erosion of national
sovereignty

and borders through international
agreements leading to organizations like the WTO and OPEC


Greater international
travel

and tourism


Greater
immigration
, including illegal immigration


Increase in the share of the world economy controlled by
multinational
corporations


Increase in the number of
standards

applied globally, e.g. copyright
laws


“Globalization”, accessed on Wikipedia.com, September 29, 2004

Globalization/Anti
-
Globalization










Pat Eskew


October 5, 2004

Globalization/Anti
-
Globalization

City

2000

Continent

Shanghai

13,278,000

Asia

Mumbai

12,622,000

Asia

Buenos Aires

11,928,000

South America

Moscow

11,273,000

Europe

Karachi

10,899,000

Asia

Delhi

10,400,000

Asia

Manila

10,330,000

Asia

Sao Paolo

10,260,000

South America

Seoul

10,165,000

Asia

Istanbul

9,631,000

Asia

Jakarta

8,987,000

Asia

Mexico City

8,705,000

North America

Lagos

8,682,000

Africa

Lima

8,380,000

South America

Tokyo

8,294,000

Asia

New York City

8,091,000

North America

It’s a BIG world after all and Asia is home to 17 of the world’s
30 biggest cities and is second to Africa as the fastest growing
region in the world

“List of the World’s Most Populous Cities”, September 29, 2004, available from The Free Dictionary.com,










Pat Eskew


October 5, 2004

Market entry (Positioning) modes

CONTROL

RISK

Exporting

Trading companies

Piggybacking

Cooperation

Licensing

Joint ventures

Direct exporting

Distributor

Franchising

National

subsidiary

Global Marketing

Source: David Arnold, International Marketing Management Course, Harvard Business School, Fall 2002










Pat Eskew


October 5, 2004

Market assessment
-

standard criteria


Market size and growth trends


Industry structure and level of competition


Customer response and marketing mix fit


Availability of local management / partners


Availability of (regionally) experienced HQ executives



Global Marketing

Source: David Arnold, International Marketing Management Course, Harvard Business School, Fall 2002










Pat Eskew


October 5, 2004

First Mover Advantage? What value is accrued by moving
first into a market


Build brand loyalty


Lock up best suppliers, partners


Earn host government goodwill and investment incentive


Gain from low marketing costs


Benefit from pent up demand


Benefit from threshold effect


Participate in development of national infrastructure

Global Marketing

Source: David Arnold, International Marketing Management Course, Harvard Business School, Fall 2002










Pat Eskew


October 5, 2004

Reasons to delay entry


Enabling conditions absent


Lack experience in region or type of market


Low customer switching costs (later entrants can free
-
ride)


Lack resources (financial, managerial)


Desire high level of control


Cannot enter at low cost


Volatile or hostile government

Global Marketing

Source: David Arnold, International Marketing Management Course, Harvard Business School, Fall 2002










Pat Eskew


October 5, 2004

China

North American companies have the least favorable view on the
economic risk associated with China’s political leadership


How confident are you that China’s leadership can continue to
liberalize and manage economic growth effectively?

“What Global Executives ”, The McKinsey Quarterly, 2004 Special Edition

0
50
100
Developing
Markets
Asia Pacific
Europe
North America
Confident
Not Confident









Pat Eskew


October 5, 2004

China is positioning itself for the future as well as the present,
leading all countries in number of science & engineering
students

China
U.S.
Russia
India
Sout h
Korea
Japan
France
Germany
U.K.
Brazil
It aly
Spain
Mexico
Canada
Aust ralia
Turkey
Thailand
Poland
Romania
Higher Education Students

Higher Education Students in Science & Engineering

Source: UNESCO 2000

Total Student Population: 88.2 million

Students in Science & Engineering: 23.6 million

China: 3 million students
in Science & Engineering

(6 million total)

United States: 2.7 million students
in Science & Engineering

(15 million total)

China










Pat Eskew


October 5, 2004

Eskew, Pat, “Can Dell Replicate Its Direct Model in China?”, December 2002

Despite all the challenges, cont’d…

Case study: Dell in China 2002

Province

GDP per capita

(RMB)

PC penetration
rate (%)

Province

GDP per capita

(RMB)

PC penetration
rate (%)

S
hanghai

30,674

36.9

Hunan

6,039

15.2

Beijing

20,373

41.9

Henan

5,908

7.9

Tianjin

18,194

20.5

Qinghai

5,752

7.5

Zhejiang

14,524

18.6

Chongqing

5,650

17.5

Guangdong

13,563

33.3

Shanxi

5,424

7.5

Jiangsu

12,936

12.2

Ningxia

5,295

6.7

Fujian

12,379

15.7

A
nhui

5,199

7.5

Liaoning

12,001

9.5

Jiangxi

5,193

4.9

Shandong

10,439

13.6

Sichuan

5,118

11.4

Heilongijang

9,344

5.5

Shaanxi

5,032

9.3

Hebei

8,326

8.3

Yunan

4,846

10.9

Xinjiang

7,908

7.2

Guangxi

4,660

14.0

Hubei

7,803

10.9

Gansu

4,174

6.0

Jilin

7,553

7.3

Guizhou

2,849

7.2

Hainan

6,851

8.2

Tibet

n.a.

n.a.

Inner Mongolia

6,502

4.2

National ave.

7,636

17.8


China PC Consumer Usage by Province