Lecture Global marketing management (7th edition): Chapter 19 - Masaaki Kotabe, Kristiaan Helsen

GLOBAL
MARKETING
MANAGEMENT
Seventh Edition
MASAAKI KOTABKE | KRISTIAAN HELSEN

Chapter 19 PowerPoint
Global Marketing and the
Internet


Chapter Overview
1. Barriers to Global Internet Marketing
2. Global Internet Consumers
3. Globally Integrated versus Locally Responsive
Internet Marketing Strategies
4. The Internet and Global Product Policy
5. Global Pricing and the Web
6. Global Distribution Strategies and the Internet
7. The Role of the Internet for Global
Communication Strategies
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Introduction
• The internet has revolutionized the international

business arena and global marketing in particular.
• Although the Internet originated in the United States,
it has rapidly morphed into a global phenomenon.
• Nearly 88 percent of the Internet company’s
business derives from outside the United States.

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Introduction
• Household Internet penetration in the developed
world is close to saturation.
• This chapter looks at challenges international
marketing managers face and the impact of the web
on global marketing strategies.

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Exhibit 19-1: Top 15 Countries in Internet

Usage

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1. Barriers to Global Marketing
• Language Barriers
– English is still the leading language on the internet, but
the web is becoming increasingly multilingual.
– A study by Forrester research found that business users
on the web are three times more likely to purchase when
the website is in their native tongue.

• Cultural Barriers
– Cultural norms and traditions can complicate global ecommerce.
– Credit card penetration in many countries is still very low,
necessitating cash on delivery, wire transfers or e-cash.
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Exhibit 19-2: Number of Languages Used

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1. Barriers to Global Internet Marketing
– Culture sensitivity also matters in website design.
– Patriotism is another important consideration.

• Infrastructure
– Hardware infrastructure, such as broadband penetration,
Wi-Fi hotspots, security of internet connections, and the
quality and coverage of the mobile phone grid play a role.
– Delivery of goods bought online is another challenge

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Exhibit 19-3: Average Connection Speeds
(Q3 2015)

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Exhibit 19-4: Population without Access to
Affordable Broadband (Millions)

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1. Barriers to Global Internet Marketing
• Knowledge barriers
– Digital literacy is the ability to locate, understand, and
create information using digital information.
– Governments have launched initiatives to improve digital
literacy within their society.

• Legal Environment and Government Regulations
– The host country’s legal environment is another critical
factor that affects international internet marketing.

– Government regulation is necessary to defend intellectual
property rights and to stamp out cybercrime.

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1. Barriers to Global Internet Marketing
• Other barriers
– Shipping costs
– Delivery delays
– Credit card fraud and low credit card penetration

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2. Global Internet Consumers
• Tasks facing global marketers
– Gaining a solid understanding of prospective
customers
– Finding to what degree internet users differ across

cultures

• The most important driver of perceived value is the
utilitarian experience associated with the website
• The effect of privacy/security protection on
perceived value is strongest in countries high on
individualism
• Websites should be adapted to the symbols, culture,
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19
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and
language of Copyright
the country.
Inc.


3. Globally Integrated versus Locally
Responsive Internet Marketing Strategies
• At the core of any global web marketing strategy is
the conflict between local responsiveness and
global integration.
– Consumers have a higher purchase intention and
better attitude toward highly adapted websites.

• Four possible types of internet marketing strategies:
–
–
–

–

Nationally differentiated strategies
Pure local adaptation
Global cost leadership
Transnational cost adaptation strategies

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Exhibit 19-5: Global Internet Strategies
According to Nature of Good or Service
Being Sold

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4. The Internet and Global Product Policy
• Global Branding and the Internet
– Many multinationals allow their local subsidiaries to

set up their own websites.
– Some amount of coordination between sites is
required.

• Web-Based Global New Product Development
– The internet plays a role in global product design,
generating new product ideas through consumer cocreation, and new product diffusion.
– Companies leverage social media to stimulate sales
for new products.
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4. The Internet and Global Product Policy
• For Effective Consumer Co-creation:
–
–
–
–

Signal credibility to potential contributors.
Create incentives to participate.
Establish a clear model of leadership
Get the brand right before engaging in co-creation

• Diffusion of new products within and across

countries
• Web-Based Marketing of Services
–
–
–
–

Intangibility
Simultaneity
Heterogeneity
Perishability

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5. Global Pricing and the Web
• Global Pricing
– Price transparency hazards
•
•
•
•

Reduces company’s ability to price discriminate
Products can devolve to commodity goods

Brand loyalties may vanish
Consumer backlash about fairness of price

– Corporate responses to price transparency
• Align prices
• Localize products
• Refuse overseas orders
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5. Global Pricing and the Web
• Group Buying
– Price is heavily discounted under condition that a minimum
number of buyers participate in the deal
– Primarily used by smaller, service-oriented brands and
businesses
– Not advisable to launch a new product unless its whole
positioning is value based.

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6. Global Distribution Strategies and the
Internet
• Distribution
– Role of Existing Channels
• Replacement effect/complementary effect
• Online-to-offline (O2O) business

– E-Tailing Landscape
• Click-and-mortar retailing model
– Virtual shopping malls
– E-Tailing model depends on three factors: Consumer
behavior, cost structure, and government policies

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Exhibit 19-6:
Complement
ary versus
Replacement
Effect of the
Internet

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7. The Role of the Internet for Global
Communication Strategies
• Global Communication and the Web:
– Online advertising advantages
• Internet’s global reach
• Get precise information about website visitors
• Instantly assess whether a particular advertisement is
working.

– Banner ads and search engine advertising
– Success of online campaign depends on
• The nature of the product
• The target market
• Choice of site and platform
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7. The Role of the Internet for Global
Communication Strategies
• Nontraditional (NT) Web-Based Communication
• Online monitoring
– Counting page views
– Measuring sentiment or “buzz”

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