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Marketing can be defined as the process by which buyer and seller exchange value for valuethrough a voluntary exchange process.

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Marketing Is Everything

Old New Future/Now

Means

End

Focus

Marketing Is…

Product Customer Way of DoingBusiness

Tellingand

Selling

IntegratedMarketing

Mix

Knowledgeand

Experience

Profit Profit MutuallyBeneficial

Relationship

Selling A Function Everything

C o n c e p t

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R & D Engineering Manufacturing CustomerValue

Customer Needsand Wants

M a r k e t i n g

Value ChainBoundaryless

Marketing

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Market-Driven Philosophy Companies should look at

their business through the eyes of the consumer, not look at the consumer through the eyes of their business.–Broad vs. narrow perspective–Benefit vs. feature orientation–Competitive frame of reference

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Key Marketing Principles

Customer Value

Focus

Competitive Advantage

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The Value Equation

V =BP

Where:• V = Value• B = Perceived Benefits -

Perceived Costs*• P = Price

* For example, switching costs

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Globalization of Markets

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Coca-ColaGlobal Marketing

Strategy

Think Globally

Act Locally

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The View from Honda

“We are the most international of the Japanese companies. At the moment we are the most diversified, and we will be more diversified in the future. Still, I think it would be very hard to build a one-type world car. In the end, I don’t think it would be very efficient.”

Nobuhiko KawamotoPresident and CEO, Honda Motor Company

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The View from Toyota

Our global strategy used to center on “world cars,” which we would modify slightly to accommodate demand in different markets. Today our focus is shifting to models that we develop and manufacture especially for selected regional markets.

Examples• North America: Avalon and Camry coupe and station wagon. 1997

Sienna minivan. • Europe: Carina E • Southeast Asia: Toyota Utility Vehicle (Kijang in Indonesia,

Tamaraw in Philippines)

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•Size of the Market•Sourcing of Resources•Protect Domestic Market•Extend Product Life Cycle•Attain Economies of Scale•Reduce the Foreign Debt•Intense Domestic Competition

Importance of Global Marketing

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The Coming Boom

Wealthy Industrial Countries 2.9 2.7

Developing Countries 3.0 4.8

East Asia 7.5 7.6

South Asia 4.8 5.3

Latin America 2.6 3.4

Eastern Europe* 1.0 2.7

Sub-Saharan Africa 2.0 3.9

Middle East & North Africa 1.2 3.8

*Includes former Soviet Union

1974-1993

1994-2003

Real GDP growth, annual average %

Source: World Bank, The Economist

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Acceleration of Development CostsAcceleration of Development Costs

Public Telecommunications

Time

1950’s

1970’s

1980’s

Product

Electro-mechanicalswitchingsystems

Analog systems

Digital systems

Development Costs

$10 million

$200 million

$1 billion

Life Cycle

25 years

12-15 years

8-12 years

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GLOBAL INTEGRATION

Restraining Forces

Technology

Market Needs

Cost

Free Markets

Economic Integration

Peace

Management Vision

Strategic Intent

Global Strategy and Action

Culture

Market Differences

Costs

National Controls

Nationalism

War

Management Myopia

Organization History

Domestic Focus

Driving Forces

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•Ethnocentric Orientation•Polycentric Orientation•Regiocentric Orientation•Geocentric Orientation

Management Orientation