Marketing (Edexcel A Level Business): Revision Note

Glocalisation

• Global marketing strategy is the process of planning, producing, placing and promoting a business’s product or service in the global market 

• Glocalisation is a strategy where businesses aim to reach customers globally and also take into consideration the needs of the local market 

  • The saying "think global, act local" is used to describe the strategy of glocalisation

Example

Domino's Pizza uses a consistent global brand, restaurant format and ordering system worldwide but adapts its menu significantly to local tastes.

In India, it offers India-exclusive pizzas such as Tandoori Paneer and Paneer Makhani, with a menu that leans far more vegetarian and spicier than in Western markets

Advantages and disadvantages of glocalisation

Different marketing approaches

• There are several marketing approaches that a business can take when it comes to expanding its operations to other countries or regions

Domestic/ethnocentric approach

• Businesses see the domestic market and foreign markets as very similar

• This approach is based on the belief that the company's home country culture and marketing practices are superior to those of other countries

• There will be no changes to the products for overseas customers, and marketing of the product will be the same

Example

Apple sells standardised products across global markets, e.g. iPhones and iPads, which helps the company reduce costs, as it can benefit from economies of scale

Advantages and disadvantages of the ethnocentric approach

Polycentric/international approach

• Businesses adapt their marketing strategy by tailoring their products to the local market 

• A business treats each country as a unique market and develops a customised marketing mix for each market

Example

Nestle has developed different adaptations of KitKat to reach different consumers in the international market 

Packaging of KitKats in Japan includes cherry blossoms, a symbol of good luck

Additional flavours, such as purple sweet potato and matcha powder, were included to appeal to the tastes of the local market

Advantages and disadvantages of the polycentric approach

The geocentric/mixed approach 

• This strategy is a mix of the polycentric and ethnocentric approaches

• This approach utilises the benefits of standardised products but also tailors products to meet the needs of local markets overseas while maintaining a consistent brand image across markets

Example

McDonald's does not offer beef or pork in India due to religious reasons. However, in the majority of Western countries, McDonald's has standardised products such as the Big Mac

Advantages and disadvantages of the geocentric approach

Adapting and applying the marketing mix to global markets

• The marketing mix is the set of controllable marketing tools that a company uses to promote its brand or product in a market

  • Businesses adapt their marketing mix to overseas markets to ensure the success of their product/service

• By adapting the marketing mix to meet local needs, companies can effectively penetrate global markets and build a strong global brand

Adapting the marketing mix to global markets

Adapting and applying Ansoff's matrix to global markets

• Ansoff's matrix is a strategic planning tool that helps businesses identify potential growth opportunities by analysing their product and market strategies

  • The matrix consists of four growth strategies - market penetration, market development, product development and diversification

• Expanding outside domestic markets generates risks for a business, so it needs to ensure that it adopts the right strategy

  • By doing so, businesses can effectively penetrate global markets and achieve long-term success

Ansoff’s matrix

Market penetration

• In a global context, this means increasing sales of existing products within a market the business already operates in abroad, rather than entering for the first time

• This might involve increased localised marketing spend, loyalty schemes tailored to that country's culture, or strengthening relationships with existing local distributors

• Because the business is not entering unfamiliar territory, this remains the lowest-risk global growth strategy

Product development

• Globally, this usually means adapting or creating new product variations specifically for an existing overseas market, rather than developing entirely new product lines

• This links closely to glocalisation, as businesses use local market research to identify what changes will make a product more appealing in that country

Example

KFC's menu in China includes congee (rice porridge), soy milk and youtiao, developed specifically to suit local breakfast preferences rather than offering its standard Western menu

Market development

• This strategy involves entering entirely new countries with a business's existing products

• Success depends on understanding local consumer habits, culture and regulations before entry

  • A lack of local market knowledge is a common reason global expansion fails

Example

Tesco opened stores in China but later withdrew from the market, as the company lacked understanding of Chinese consumer habits

Diversification

• Global diversification is the highest-risk strategy, as a business enters an unfamiliar country and launches an unfamiliar product at the same time

• Businesses attempting this need a very deep understanding of local market conditions, since they can't rely on existing knowledge of either the product or the market to reduce risk

• Many businesses use a joint venture or partnership with a local company to reduce this risk, gaining local market knowledge they would otherwise lack