Chapter 18 ‒ Global Marketing and Business Analytics
Global Marketing and
Business Analytics
Learning Objectives
• LO18-1: Understand the
importance of business analytics
and international market research.
• LO18-2: Explain why it might
make sense to vary the attributes
of a product from country to
country.
• LO18-3: Recognize why and how
a firm’s distribution strategy might
vary among countries.
• LO18-4: Identify why and how
advertising and promotional
strategies might vary among
countries.
The focus of this chapter is on how marketing
and R&D can be performed so they will
reduce the costs of value creation and add
value by better serving customer needs.
A global marketing strategy that views the
world’s consumers as similar in their tastes
and preferences is consistent with the mass
production of a standardized output. By mass-
producing a standardized output, the firm can
realize substantial unit cost reductions from
experience curve and other scale economies.
But ignoring country differences in consumer
tastes and preferences can lead to failure.
Thus, an international business’s marketing
function needs to determine when product
standardization is appropriate and when it is
not and adjust the marketing strategy
accordingly. Similarly, the firm’s R&D
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Chapter 18 ‒ Global Marketing and Business Analytics
The opening case explores the
use of sports superstars in global
marketing campaigns.
Companies like Nike and Adidas
rely on people like LeBron James
to represent their companies to
buyers everywhere. The closing
case explores the era of fake
news and alternative facts. Social
media sites like Facebook have
been at the center of the storm on
whether it is ethical to allow
knowingly inaccurate stories to
run.
Chapter 18 ‒ Global Marketing and Business Analytics
OUTLINE OF CHAPTER 18: GLOBAL MARKETING AND
BUSINESS ANALYTICS
Opening Case: Marketing Sneakers
Introduction
Globalization of Markets and Brands
Market Segmentation
Management Focus: Global Branding, Marvel Studios, and Walt Disney
Company
Business Analytics
International Marketing Research
Product Attributes
Cultural Differences
Economic Development
Product and Technical Standards
Configuring the Marketing Mix
Product Development and R&D
The Location of R&D
Integrating R&D, Marketing, and Production
Cross-Functional Teams
Building Global R&D Capabilities
Chapter Summary
Chapter 18 ‒ Global Marketing and Business Analytics
Chapter 18 ‒ Global Marketing and Business Analytics
CLASSROOM DISCUSSION POINT
Review the passage by Theodore Levitt at the beginning of the chapter with students.
Then, pick a company like McDonald’s, The Gap, or Starbucks and ask students to
discuss whether the company standardizes its marketing mix, or adapt it to the local
market. Ask students to explore the company’s website—specifically its international
sites. Next, ask students to identify differences and similarities in the marketing mix
across countries. Finally, ask students to explain their findings using Levitt’s hypothesis.
OPENING CASE: Marketing Sneakers
Summary
The opening case explores the use of celebrity athletes as a marketing tool to reach
sneaker buyers around the world. Having a contract with a sports superstar like Michael
Jordan or LeBron James, athletes that appeal to people around the world, can take the
company to a new level of notoriety. While contracts with athletes who play globally
enjoyed sports are perhaps more sought after, even contracts with athletes who play
sports with less appeal can be quite lucrative. Discussion of the case can begin with the
following questions:
QUESTION 1: Why are celebrities athletes like LeBron James and Shaun White so
valuable to the companies they represent?
ANSWER 1: Watching LeBron James leaping impossibly high to dunk a ball is a thing of
beauty, and “free” advertising if you’re Nike. Nike, which has teamed up with LeBron
James since he joined the NBA, knows that while it may pay James significant sums of
money, he will make the highlight reel for every game, highlights that are then shared
over and over on various types of media around the world. The bang for the buck payoff
of having the famous swoosh flash by in all of those highlights is strong. Students will
QUESTION 2: What assumptions about customers are companies like Nike and Adidas
making when they hire athletes to endorse their products? What are the dangers of this
strategy?
ANSWER 2: Companies like Nike and Adidas are attracted to celebrity athletes like
LeBron James because they recognize that the star power of these athletes is something
Chapter 18 ‒ Global Marketing and Business Analytics
QUESTION 3: What makes an athlete a hot commodity for advertisers? How do athletes
like LeBron James draw in customers not only in the United States, but across the globe?
ANSWER 3: Thanks to television, excellence in athletics is readily accessible around the
world every weekend and many weekdays as well, as professional athletes display their
abilities in their chosen sport. Yet despite the numbers of athletes at the top of their
games, only a few are chosen to represent companies like Nike and Adidas. Students will
probably agree that to be in this select group, not only must the athlete display superior
LECTURE OUTLINE
This lecture outline follows the Power Point Presentation (PPT) provided along with this
instructor’s manual. The following provides a brief overview of each Power Point slide
along with teaching tips and additional perspectives.
Slide 18-3 Introduction
The marketing mix (the choices the firm offers to its targeted market) is composed of
product attributes, distribution strategy, communication strategy, and pricing strategy.
Slide 18-4 Globalization of Markets and Brands
Culture and consumer tastes drive the need to localize. Globalization seems to be the
exception rather than the rule in many markets.
Chapter 18 ‒ Global Marketing and Business Analytics
spans multiple countries, transcending national borders, is often called an intermarket
segment.
Slides 18-7 ‒ 18-14 Business Analytics
Business analytics refers to the knowledge, skills, and technology that allow for the
exploration and deeper investigation of a company’s international business strategies and
activities to gain insight and drive future strategy development and implementation.
Large data sets involve big data.
Business analytics can be focused on one of three core applications: descriptive,
predictive, and prescriptive.
The basic data that companies want collected in international market research include:
1. Data on the country and potential market segments (geography, demography,
sociocultural factors, and psychological factors)
2. Data to forecast customer demands within specific country or world region
(social, economic, consumer, and industry trends)
3. Data to make marketing mix decisions (product, distribution, communication, and
price)
The process for conducting international market research typically includes defining the
research objectives, determining the data sources, assessing the costs and benefits of the
research, collecting the data, analyzing and interpreting the data, and reporting the
research findings.
Chapter 18 ‒ Global Marketing and Business Analytics
Economic Development
Consumers in highly developed countries tend to demand a lot of extra performance
attributes, while consumers in less developed nations tend to prefer more basic products.
Product and Technical Standards
Differences in product and technical standards may require the firm to customize
products.
Differences between Countries
There are four main differences in distribution systems:
1. Retail concentration
• Concentrated retail system versus fragmented retail system
2. Channel length
3. Channel exclusivity
• Exclusive distribution channel
4. Channel quality
Choosing a Distribution Strategy
The optimal strategy depends on the relative costs and benefits of each alternative.
Slides 18-24 – 18-33 Communication Strategy
Communication channels available to a firm include direct selling, sales promotion,
direct marketing, and advertising via different media.
Barriers to International Communication
The effectiveness of a firm’s international communication can be jeopardized by cultural
barriers, source effects and country of origin effects, and noise levels.
Chapter 18 ‒ Global Marketing and Business Analytics
• A push strategy emphasizes personnel selling.
• A pull strategy emphasizes mass media advertising.
The choice between push and pull strategies depends upon product type and consumer
sophistication, channel length, and media availability.
CONNECT
Case Analysis
Push or Pull Promotional Strategy
Summary
This activity focuses on international marketing and specifically on push or pull promotional
strategies. The choice of communication strategy includes direct selling, sales promotion, direct
marketing, and advertising. That choice may be influenced by the channel choice.
CONNECT
Case Analysis
Overcoming Cultural Barriers to Selling Tampons
Summary
This activity focuses on international marketing and specifically on cross-cultural challenges in
international marketing. Cultural barriers can make it difficult to use a standardized message for a
product or service. What works well in one market may not work well in another.
Chapter 18 ‒ Global Marketing and Business Analytics
Global Advertising
Standardized advertising makes sense when it has significant economic advantages,
creative talent is scarce and one large effort to develop a campaign will be more
successful than numerous smaller efforts, and brand names are global.
Standardized advertising does not make sense when cultural differences among nations
are significant, and country differences in advertising regulations block the
implementation of standardized advertising.
Slide 18-34 – 18-39 Pricing Strategy
There are three issues to consider—price discrimination, strategic pricing, and regulatory
influence on prices.
CONNECT
Click and Drag
Pricing Strategy
Summary
This activity focuses on the pricing strategy in the international business. Pricing is an important
part of the marketing mix. Pricing can be influenced not only by the competition, but also by a
range of other variables including regulatory factors, demand, and more.
Price Discrimination
Price discrimination occurs when firms charge consumers in different countries
different prices for the same product. The price elasticity of demand is a measure of the
responsiveness of demand for a product to changes in price.
Strategic Pricing
Strategic pricing has three aspects:
1. Predatory pricing—involves using the profit gained in one market to support
aggressive pricing designed to drive competitors out in another market.
Chapter 18 ‒ Global Marketing and Business Analytics
Regulatory Influences on Prices
A firm’s ability to set its own prices may be limited by:
1. Antidumping regulations
2. Competition policy
Slides 18-40 – 18-44 Configuring the Marketing Mix
Differences in culture, economic conditions, competitive conditions, product and
technical standards, distribution systems, government regulations, and the like may
require variation in product attributes, distribution strategy, communications strategy, and
pricing strategy.
CONNECT
Case Analysis
Global Branding, Marvel Studies, and Walt Disney Company
Summary
This activity focuses on international marketing and how to assess and analyze target markets to
identify differences that could impact the marketing mix. In making this assessment, international
businesses consider a range of variables including culture, economic systems, competitive
conditions, government regulations, and so on.
Slides 18-45 – 18-50 Product Development and R&D
Firms today need to make product innovation a priority. This requires close links between
R&D, marketing, and manufacturing.
The Location of R&D
New product ideas come from the interactions of scientific research, demand conditions,
and competitive conditions.
Chapter 18 ‒ Global Marketing and Business Analytics
Integrating R&D, Marketing, and Production
A firm’s new product development efforts need to be closely coordinated with the
marketing, production, and materials management functions.
Cross-Functional Teams
Effective cross-functional teams should be
• Led by a heavyweight project manager with status in the organization
• Include members from all the critical functional areas
CRITICAL THINKING AND DISCUSSION QUESTIONS
QUESTION 1: Imagine you are the marketing manager for a U.S. manufacturer of
disposable diapers. Your firm is considering entering the Brazilian market. Your CEO
believes the advertising message that has been effective in the United States will suffice
in Brazil. Outline the possible objections to this. Your CEO also believes that the pricing
decisions in Brazil can be left to local managers. Why might she be wrong?
ANSWER 1: While babies’ behinds serve the same function in all cultures, and the
product’s technical standards may be similar, sensitivity to bodily functions does vary
across cultures. Thus, the advertising message may need to be changed for different
attitudes towards what is appropriate advertising. Likewise, where it might be progressive
QUESTION 2: Within 20 years, we will have seen the emergence of enormous global
markets for standardized consumer products. Do you agree with this statement? Justify
your answer.
ANSWER 2: One could either choose to agree or disagree, while the best answer would
likely hedge it somewhere in the middle. There are already enormous global markets for
Chapter 18 ‒ Global Marketing and Business Analytics
QUESTION 3: You are the marketing manager of a food products company that is
considering entering the Indian market. The retail system in India tends to be very
fragmented. Also, retailers and wholesalers tend to have long-term ties with Indian food
companies; these ties make access to distribution channels difficult. What distribution
strategy would you advise the company to pursue? Why?
ANSWER 3: The firm should sell to either wholesalers or import agents. Because the
retail system in India is very fragmented, it would be very expensive for the firm to make
contact with each individual retailer. As a result, it would be more economical for the
QUESTION 4: Price discrimination is indistinguishable from dumping. Discuss the
accuracy of this statement.
ANSWER 4: In some specific instances this statement is correct, but as a general rule it is
not. When a firm is pricing lower in a foreign country than it is in its domestic market, it
QUESTION 5: You work for a company that designs and manufactures personal
computers. Your company’s R&D center is in Michigan. The computers are
manufactured under contract in Taiwan. Marketing strategy is delegated to the heads of
three regional groups: a North American group (based in Chicago), a European group
(based in Paris), and an Asian group (based in Singapore). Each regional group develops
the marketing approach within its region. In order of importance, the largest markets for
your products are North America, Germany, Great Britain, China, and Australia. Your
company is experiencing problems in its product development and commercialization
process. Products are late to market, the manufacturing quality is poor, costs are higher
than projected, and market acceptance of new products is less than hoped for. What might
be the source of these problems? How would you fix them?
ANSWER 5: The dispersion of activities makes sense—products are produced in the
lowest cost location and marketed by people familiar with local conditions. Yet this
Chapter 18 ‒ Global Marketing and Business Analytics
CLOSING CASE: Fake News and Alternative Facts
Summary
The closing case explores the use of targeted advertising and the prevalence of fake news
and alternative facts. Advances in technology have facilitated the collection of big data
allowing businesses to abandon their reliance on mass advertising in favor of more
targeted advertising. Technology is also facilitating the rather disturbing trend of targeted
fake news and alternative facts via companies like Facebook. Discussion of the case can
begin with the following questions:
QUESTION 1: Should it be the responsibility of news media and social media
organizations like Facebook, Twitter, Instagram, and LinkedIn to monitor fake news, or
should it be up to consumers to interpret the messages?
ANSWER 1: This question will probably generate considerable debate among students.
Some will argue that companies like Facebook absolutely have an ethical responsibility
to ensure that the news they present to consumers is factual. Students sharing this point of
QUESTION 2: Most people would argue that information and data should be presented
in an accurate, trustworthy, and correct manner. The focus is instead on interpreting the
truth of the data and information. Can we trust people to correctly interpret the
information flowing on social media and in media in general? Why or why not?
ANSWER 2: Gone are the days when people looked to newscasters like Walter Cronkite
to provide an accurate and unbiased summary of the news. Today, television news along
with newspapers are often, quite accurately, accused of providing biased perspectives of
new stories, a situation that is complicated with the vast quantity of facts, alternative
Chapter 18 ‒ Global Marketing and Business Analytics
for people to agree that any individual or entity could be counted on to provide accurate
interpretations of events and situations.
QUESTION 3: If we do not trust people to interpret the messaging and information on
social media, who should be monitoring that information and whether it is true or not?
Can we develop a system to monitor fake news? What about alternative facts? If 97
percent of the world’s climate scientists say global warming is real, is that a high enough
percentage to say that global warming is real?
ANSWER 3: Students will likely be divided on this question and their responses will
follow the same arguments as for the previous question. Many students will hold
companies like Facebook accountable for what is on their sites, but they may disagree
with whether Facebook has the right to “correct” information. Some students may
suggest that it is incumbent upon social media site to offer users accurate assessments of
inaccurate stories that are posted, but other students may argue that if someone does not
MHE INTERNATIONAL BUSINESS VIDEO LIBRARY
ongoing stream of updated video suggestions correlated by key concept and major topic.
Every new clip posted is supported by teaching notes and discussion questions. Please
feel free to leave comments in the library that you feel might be helpful to your
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Chapter 18 ‒ Global Marketing and Business Analytics
CONNECT
Geography
Summary
This activity is designed to test the student’s knowledge of geography. Questions related to
chapter material are asked, requiring students to understand the topics and the locations of the
countries involved.
INCORPORATING globalEDGE™ EXERCISES
Exercise 1
The consumer purchase of specific brands is an indication of the relationship that
develops over time between a company and its customers. Locate and retrieve the most
current ranking of best global brands. Identify the criteria used. Which countries appear
to dominate the top 100 global brands list? Why do you think this is the case? Now look
at which sectors appear to dominate the list, and try to identify the reasons. Prepare a
short report identifying the countries that possess global brands and the potential reasons
for success.
Exercise 2
Part of developing a long-term R&D strategy is to locate facilities in countries that are
widely known to be competitive. Your company seeks to develop R&D facilities in Asia
to counter recent competitor responses. A publication which evaluates economies based
on their competitiveness is the Global Competitiveness Report. Locate this report, and
develop a presentation for the top management team that presents the benefits and
drawbacks for the top five Asian economies listed.
Answers to Exercises
Exercise 1 Answer
Search phrase: best global brands
Chapter 18 ‒ Global Marketing and Business Analytics
Additional Info:
Best Global Brands is an annual ranking that has been published by Interbrand since
2001. It provides a breakdown of the brands by sector, and by region, and features several
other insightful charts and graphs to discuss how branding has been evolving globally.
Additional Info:
The Global Competitiveness Report assesses the competitiveness landscape of about 150
economies, providing insight into the drivers of their productivity and prosperity. The
report tries to analyze sustainable competitiveness by looking at basic requirements
(infrastructure, health, education, institutional framework), efficiency enhancers (market
size, technology, financial markets, labor efficiency, etc.), and innovation and
sophistication factors.