Global CMO™ August 2013

Issue 6 | Volume 1

August 2013

New Frontiers In Adland: China Mark Tungate

“Corpnations” The Metamorphosis Of 20th Century Institutions Anuja Prashar pgmn

Value To Each Customer The Only Pricing Strategy That Really Works Peter Hill

Marketing In Africa Is Changing Darrell Kofkin fgmn

The Panel Building A Global Marketing Strategy

Svend Hollensen

:

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‘Glocalisation’

The Mantra For Today’s Global Marketing Strategies Global CMO is the Official Magazine of Global Marketing Network, the Global CMO™ Body The Magazine August 2013 | 1 Global for Marketing Professionals. www.theglobalcmo.com

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We’re Going Global Six months are already in the books. Thank you for all your support so far, and welcome to the Global Marketing Strategy issue of Global CMO™ The Magazine.

We’re truly ‘going global’ this issue with a fascinating look into the world of Glocalisation from this months ‘cover model’ Professor Svend Hollensen, the GMN Programme Director for Global Marketing Strategy.

Accompanying this on our global tour is the first instalment in a great three part series by Anuja Prashar on Emerging Economies and the New Marketing Landscape. Along with pieces on the ‘Adspace’ in China, our favourite podcasts form Bizradio in South Africa, right through to a story on Renato Pita a European Rally Championship driver from Portugal.

We also have some new endorsed events announced in this issue, in both New York and London, as well a special event for the launch of the new GMN global certification programmes - just to add to the global flavour a little more.

But for us, this issue, the big news has to be the appointment of the GMN South Africa President, and the announcement of our first regional edition of Global CMO™ The Magazine which is being launched - Global CMO™ Africa Edition.

Of course, all your regulars are back.

Andrew touches on the keys to keeping control of your brand when you have a global reach. David continues on ‘Manifestoing’, and we have a new flavour for our ‘View From The C-Suite’ feature called ‘The Panel’.

Thank you once again for your support, and a big thank you to all our contributors.

Issue 6 | Volume 1

August 2013

New Frontiers In Adland: China Mark Tungate

“Corpnations” The Metamorphosis Of 20th Century Institutions Anuja Prashar

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Value To Each Customer The Only Pricing Strategy That Really Works Peter Hill

Marketing In Africa Is Changing Darrell Kofkin

fgmn

The Panel Building A Global Marketing Strategy

Svend Hollensen

fgmn

:

‘Glocalisation’

The Mantra For Today’s Global Marketing Strategies Global CMO is the Official Magazine of Global Marketing Network, the Global CMO™ Body The Magazine August 2013 | 1 Global for Marketing Professionals. www.theglobalcmo.com

Cover Image: Svend Hollensen fgmn

Global CMO™ The Magazine Issue 6 | Volume 1 | August 2013 www.theglobalcmo.com The official Magazine of Global Marketing Network, the Global Body for Marketing Professionals.

Advertising and Sponsorship: sales@theglobalcmo.com Click here to view media pack and rate card Production: production@theglobalcmo.com

Until next time - Think Global, Act Local.

Editorial:

Fiona

Fiona Vesey

pgmn

Editor-in-Chief

editorial@theglobalcmo.com Editorial Board: Editor-in-Chief | Fiona Vesey GMN CPD Director | David Hood GMN Global Faculty | Professor Greg Marshall GMN South Africa | Dr Anthony Michail GMN Global Advisory Council | MaryLee Sachs GMN Global Faculty | Professor Michael Solomon GMN Brand Guardian | Andrew Vesey

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As the publishers of Global CMO™ The Magazine, we take every care in the production of each issue. We are however, not liable for any editorial error, omission, mistake or typographical error.

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Copyright: This magazine and the content published within are subject to copyright held by the publisher, with individual articles remaining copyright to the named contributor.

Express written permission of the publisher and contributor must be acquired for reproduction.

August 2013 | 5

Inside This Issue Cover Story 30.

‘Glocalisation’ The Mantra For Today’s Global Marketing Strategies Svend Hollensen fgmn

Features 12.

42.

New Frontiers In Adland: China

Mark Tungate

Development Of An International Marketing Plan

Svend Hollensen fgmn

50.

15.

Metamorphosis Of 20th Century Institutions, Into The 21st Century “Corpnation”

Marketing Leaders Of Tomorrow

Write For Global CMO, Get Published And WIN!!

Anuja Prashar pgmn

40.

68.

Achieving Global Marketing Strategy Capabilities With Global Marketing Network

Value To Each Customer – The Only Pricing Strategy That Really Works

16. Our Global Family

46. BizRadio Roundup

Renato Pita: Educating Today, The Drivers Of Tomorrow

23. A Special Invitation A GMN Launch Event

28. Event Recap AGP Localises Globalisation For African Graduate Employability

44. Joining The Family Our New GMN South Africa President

Highlights Of Our Favourite Podcasts

48. Join GMN At Brand2Global Find Out About The Inaugural Event In London

63. Upcoming Events Keep Track Of All The Upcoming GMN Official And Endorsed Events

64. Partners For Marketing Growth The Global Marketing Network Partner Directory

45. Global Growth Global CMO™ Africa Edition 6 | August 2013

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8. A View From The C-Suite Building A Global Marketing Strategy.

Dennis Roman - CMO, Tata Consultancy Services (TCS) Financial Solutions

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Marion Gamel - VP Marketing EMEA, Eventbrite

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24. The Brand GAME Going Global? Keep In Control Andrew Vesey ggmn

60. The Marketing Manifesto Marketing And Finance: It Is Time To Unite!

David J Hood pgnm

67. GMN Fellow Profile Marylee Sachs fgmn GMN Global CMO Czar

Founder | CEO | CMO, Changing MO LLC

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Are You Going Global, or Are You Proudly Local?

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August 2013 | 7

THE

PANEL Welcome to The Panel.

In this, the first of a regular feature, we hear from current Marketing leaders in the C-Suite and beyond. They share with us their own thoughts on the topics, tactics and strategies we as Marketers, all want to know more about.

Dennis Roman Chief Marketing Officer, Tata Consultancy Services (TCS) Financial Solutions

This Month’s Question:

Web: www.tcs.com

What do you believe is the most important factor in building a Global Marketing Strategy?

Twitter: @TCS_News Experienced personnel are the magic and most important ingredient in building a strategy that will produce the required on par results and especially for outsized outcomes. Why is it that experience generates the greatest impacts?

Besides obviously being able to craft and assemble all the moving relevant parts in to a working synergistic whole, experience also quickly dispatches with red herrings of all strips and sizes of potential pursuits that will likely only lead to dead ends at best or reversals at worst.

Do you have a question you would like some thought leadership on?

Would you like to join our panel?

Contact us at ThePanel@theglobalcmo.com 8 | August 2013

All of us have had our auto navigation systems ask us if we wanted to take the most direct or the fastest route to a certain location. The casual observer might wonder “What is the difference?” Whereas the more experienced traveller will know that DIRECT means shortest in DISTANCE, whereas FASTEST means shortest in TIME. So very often the two do not coincide and without experience one might be lulled in to thinking one was as good as another. For a short trip of 2 miles that might not matter much. But for a marathon like a Global Marketing Strategy, sprinters (aka the less experienced) will find themselves soon looking for new jobs when theirs comes to an all too soon demise when the short run does not produce the results to keep their firms growing at the competitive rate.

Global CMO™ The Magazine

A View From The C-Suite

Marion Gamel VP Marketing EMEA, Eventbrite

Alan See Web: www.eventbrite.com Twitter: @eventbrite

First, scalability is really important because you can’t possible start from scratch every time you add a new territory or product to the strategy. You need to build templates and I strongly believe in the 70-20-10 approach: 70% of time should be spent re-using strategies and campaigns that have been tried and tested in other markets; 20% of time should be focused on specific local activities; and 10% of time should be spent looking for the next BIG idea, preferably a big idea that can be applied to multiple markets.

Second, local relevance is crucial. Without it, your brand remains “foreign” in any market apart from the one where it was created and you reduce your addressable audience too much. Again, local relevance has to be scalable, so you should create a best practice handbook on how to tackle a market with specific characteristics based on past experience. I really believe in co-marketing partnerships to bring local relevance to a foreign brand. Being introduced in a new market by a local player who is already trusted by local users is very powerful.

Chief Marketing Officer, DocuStar

Web: www.docustar.com Twitter: @alansee

“Glocalisation.”

That is an organisations ability to “think global, but act local.” Generating localized marketing messages at scale is no problem if you have an unlimited budget and personnel, but that is not reality.

That means you’re going to need to leverage technology with existing local staff. Marketing Resource Management systems that facilitate the creation of templates at the corporate level that can then be localized by field sales is an example of how to meet the challenge of marketing a global brand at a local level.

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August 2013 | 9

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New Frontiers In Adland: China Mark Tungate

In 1918, an American former journalist and pioneering adman put his name on the door of Carl Crow Inc, ‘the largest organisation in the Far East devoted exclusively to advertising’. The story of Crow’s Shanghai outpost is colourfully told in Paul French’s excellent book Carl Crow – A Tough Old China Hand.

As French recounts, Shanghai after the First World War was booming as trade picked up. ‘Europe needed just about everything China could produce – rubber, coal, soybean oil, cotton and silk, as well as other goods such as cigarettes…’ Well-heeled Western visitors mingled with an emerging Chinese nouveau riche. The Bund became a showcase for corporate architecture; fine department stores sprang up and Nanking Road was nicknamed ‘the Oxford Street of the Orient’. Foreign brands ‘were attracted by low import tariffs as much as the dream of a seemingly limitless consumer market’. Indeed, Crow’s adventures in advertising later formed the basis of his own bestselling book, Four Hundred Million Customers, published in the 1930s.

Overseas brands and local merchants clearly needed to advertise, and Crow was in the perfect position to help them do so. Having already worked in China for many 12 | August 2013

years, he could do business with both domestic clients and newcomers from Europe and the United States. As described

by French, the Crow operation sounds conspicuously modern. He bought space in newspapers and magazines all over China, and compiled the first guide to the country’s publications. He engaged in market research, studying consumer behaviour and spending habits and providing intelligence on competing clients. He employed teams of billposters in 60 cities. When the authorities cracked down on flyposting, he leased official poster sites across the country – ‘at one point he had 15,000 of these locations’.

Carl Crow Inc was in the creative avant-garde, too. Crow commissioned some of Shanghai’s leading cartoonists and illustrators. The most important of these was TK Zia, also known as Xie Zhiguang, whose illustrations of spirited, seductive, yet distinctly Chinese young women contributed to the mythology of wicked Shanghai. ‘Xie’s sexual messages became… explicit and his models wore ruby red lipstick and transparent qipaos [mandarincollared sheath dresses] with high slits up the legs, and had the artist’s trademark penetrating eyes that drew the consumer’s attention.’ An ad for Pond’s Vanishing Cream in the Shenbao newspaper in March 1920 is believed to have ‘heralded the modern girl image in Shanghai advertising

Global CMO™ The Magazine

that was to become ubiquitous throughout the 1920s and 1930s’, writes French. Other sources suggest that Xie’s advertising images revolutionized women’s dress styles in China, encouraging them out of trousers and into skirts.

But Crow had more than sex to sell. He believed that the Chinese consumer was distrustful of advertising, so he insisted that his illustrations of cigarette packs and soap bars should be as accurate as possible.

Nor was his the only international advertising agency in Shanghai. Advertising and the media in China were largely the creation of Westerners: the first modern newspapers and magazines had been established by expatriates in the 19th century. In 1921, a British agency called Millington Ltd was founded. Advertising continued to grow until the SinoJapanese War in 1937, when the overseas shops pulled out. Local agencies continued operating until the 1960s, but after being brought into state ownership they eventually became a casualty of the Cultural Revolution (1966–76).

Overseas agencies returned with China’s ‘Open Door’ policy of the late 1970s. Dentsu was first into the market, in 1979, followed by McCann- Erickson, which was able to establish a representative office thanks to its joint venture with Jardine Matheson, the famous Hong Kong trading

company. Having been rendered irrelevant by the Cultural Revolution, advertising was politically correct again. In 1987, then-premier Wan Li stated: ‘Advertising links production and consumption. It is an important part of the economic activities of modern society. It has become an indispensable element in the promotion of economic prosperity’ (‘400 million to more than 1 billion consumers: a brief history of the foreign advertising industry in China’, International Journal of Advertising, vol 16, no 4, 1997).

This vast market was once again open for business.

The parallels between Carl Crow’s Shanghai and the booming China of today are striking. China is now the world’s third largest advertising market, according to ZenithOptimedia, which means that AsiaPacific is poised to overtake North America as the world’s biggest advertising spender in the very near future – if it hasn’t done so by the time you pick up this book. The region’s advertising expenditure currently stands at more than US $140 billion.

Sir Martin Sorrell is well aware of the importance of China.

And he suggests that it would be foolish to underestimate

Global CMO™ The Magazine

August 2013 | 13

Chinese creative talent. With their vast heritage in the fields of luxury craftsmanship and the arts, these people have creativity in their genes. ‘The future is probably being invented by a bunch of young graduates in a shed in Beijing or Shanghai,’ Sorrell says. Kevin Roberts, the worldwide boss of Saatchi & Saatchi, states: ‘The most important market for advertising over the next 10 years is going to be China. And after that, it will still be China.’ One man who knows China well is Arto Hampartsoumian, who has headed the BBH office in Shanghai since it opened there in November 2006. Changes to World Trade Organisation rules the previous year allowed foreign agencies to enter the market without having to form a joint venture with a local partner. BBH got off the ground with an 18-strong operation, handling clients such as Johnnie Walker, Bailey’s, Bose audio equipment and the World Gold Council.

‘The most extraordinary thing you feel here is the enormous sense of optimism,’ Hampartsoumian says.

‘While in the West there is an underlying anxiety about the future, here there is a conviction, particularly among the young, that things are going to get better and better.

And let’s face it – if you were born in China in the early eighties, you’ve witnessed unprecedented growth in wealth and opportunities. India is a far more mature market in comparison, and its relationship with Western brands goes back much longer.’

China’s questionable human rights record is certainly not perceived as a barrier to entry by foreign brands. As they have demonstrated in the past, they are insensible to local politics if the economic conditions are favourable and the media accessible. Hampartsoumian accepts, ‘This is still the Wild East – it’s the last frontier. I realize that living in Shanghai is not living in China. There’s no doubt that the disparity between rich and poor will continue to be a problem, and the social implications of the speed of development here are enormous. But this generation is very different and far harder to control. I believe that for China, there is no going back.’

WIN THIS BOOK Simply tweet a #FollowFriday message, recommending these Twitter feeds to your followers: @TheGlobalCMO @GMNhome @KoganPage Entries close 15th September 2013 One entry per Tweet so take part every Friday!

Mark Tungate Author, Journalist Mark Tungate is the author of the bestselling Fashion Brands, as well as Adland - A Global History of Advertising, Branded Male, and Media Monoliths. His latest book is Luxury World - The Past, Present and Future of Luxury Brands.

Tungate is a journalist specialising in branding and communication. Based in Paris, he has a weekly column in the French media magazine Stratégies, and writes regularly about advertising, style and popular culture for the trends intelligence service WGSN. His work has appeared in The Times, The Independent and The Telegraph newspapers. He is also the co-author of The Epica Book, an annual review of the best European advertising.

In addition, Mark teaches courses about branding and advertising at Parsons Paris School of Design. He has addressed conferences around the world and has been on the juries of several advertising competitions.

Reproduced by kind permission of Kogan Page, from the Mark Tungate title ‘Adland - A Global History of Advertising’.

Adland Mark Tungate Adland is a ground-breaking examination of modern advertising, from its early origins, to the evolution of the current advertising landscape.

Bestselling author and journalist Mark Tungate examines key developments in advertising, from copy adverts, radio and television, to the opportunities afforded by the explosion of digital media.

Adland focuses on key players in the industry and features exclusive interviews with leading names in advertising today, including Jean-Marie Dru, Sir Alan Parker, John Hegarty and Sir Martin Sorrell, as well as industry luminaries from the 20th Century such as Phil Dusenberry and George Lois.

Exploring the roots of the advertising industry in New York and London, and going on to cover the emerging markets of Eastern Europe, Asia and Latin America, Adland offers a comprehensive examination of a global industry and suggests ways in which it is likely to develop in the future. http://www.koganpage.com/editions/adland/9780749464318

14 | August 2013

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Marketing Leaders Of Tomorrow

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Are You A Full Time Student?

Write An Original Article For Global CMO™ The Magazine

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Submit your original piece (Max 500 words) on the following topic, by 1.00pm (GMT), 30th December 2013, via the entry form at: www.theglobalcmo.com/leaders-of-tomorrow/

“Given your understanding of the challenges faced by organisations, what are the qualities required to be a Marketing Leader of today?“ • All qualifying entrants will receive a complimentary 1 Year GMN Student Membership • Three shortlisted entrants shall be profiled in the February 2014 issue of Global CMO™. They shall also each receive a collection of the latest marketing and business books to help them be a Leader of Tomorrow.

• The winner (as well as Silver and Bronze awards) will be be announced in the March issue of Global CMO™.

• The winners piece will be Published in March’s issue of Global CMO™ and posted online • They will receive a complementary ticket to a 2014 Global CMO™ Masterclass of their choice • Plus the opportunity to write a Cover Feature Article for Global CMO™ The Magazine in 2014 • The winner will also receive a Years Mentoring from one of our highly respected GMN Fellows • Plus the winning entrant shall secure Annual Academic Membership for their University

Deadline For Submissions Extended To 30th December 2013 Entry Requirements, Judging Criteria and Methodology, Terms and Conditions can be viewed at www.theglobalcmo.com/leaders-of-tomorrow/

Our Global Family Educating Today, The Drivers Of Tomorrow GMN is proud to be supporting European Rally Championship driver Renato Pita of Portugal. On the track, and in the classroom as he helps to educate children about road safety.

When he was young, he used to dream about being a racing driver. Today he competes with the best drivers in the world. Renato Pita has come a long way since he began his career as a driver in Portugal, at the wheel of a modest Peugeot 106 1.3 Rallye. Nowadays, he drives a Peugeot 208 R2 in one of the most competitive championships, the European Rally Championship.

The Driver and the Competition Portugal knows him for his performance, competence and the professional attitude shown in every event, qualities that helped him become the runner-up in Portugal’s national championship in 2012. In 2013, and with a private structure developed according to his needs, he has decided to take a step forward and compete in the European Rally Championship, which is a very demanding championship in terms of technical expertise, physical fitness and budget, but with great possibilities for his sponsors.

After Tour de Corse, also known as the Rally of the 10,000 Corners, due to its many twists and turns, and the Geko Ypres Rally in Belgium, a far more demanding rally in terms of concentration, comes the Barum Czech Rally Zlín in the Czech Republic next August, the Croatia Rally in September, the Rallye Sanremo in October and the Rallye International du Valais in Switzerland in November.

Renato Pita is currently the only Portuguese driver in this competition and receives strong support from the Portuguese communities at every event he races in.

real racing driver and getting close to a rally car. Children learn road safety rules in an entertaining and educational way and become aware of important civic ideas that will stay with them all their lives. So, it’s no surprise that the slogan on his racing car is “Educating Today, The Drivers of Tomorrow”.

This project has already visited some Portuguese cities, including Viana do Castelo, with 1200 students, and more recently Faro, where Etapa Segura celebrated International Children’s Day with 2000 students. Next September, thousands of children will be targeted in Porto’s main square.

Renato Pita is currently the only racing driver to take on a project of this type and dimension.

The next step is the driver’s openness to new partners and sponsors, which will allow this project to be promoted and turn it into a national and international reference. To provide high visibility and increasing press to the brands that partner the project is the commitment of someone who aims at “Educating Today, The Drivers Of Tomorrow”.

Visit Renato’s official website at www.renatopita.pt

Etapa Segura – Road Safety Campaign When Renato is not competing, he focuses his attention on a project aimed at youngsters, the Etapa Segura project, a road safety campaign developed for primary schools all over the country. This is a social responsibility he took on and which combines road safety values and principles with motorsport.

How? By taking his racing car to schools, taking advantage of children’s fantasies about fast cars and fulfilling many of those children’s dreams of spending some time with a 16 | August 2013

Click the above image to see the Etapa Segura Campaign in action

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Global CMO™ The Magazine

August 2013 | 17

FT FuTure oF MarkeTing SuMMiT The race to the Top: globalize, Monetize and Socialize neW York

September 12, 2013 | Metropolitan Club

This one-day conference chaired by Andrew Edgecliffe-Johnson, Global Media Editor of the Financial Times, will bring together the most forward-thinking marketers, innovators and entrepreneurs, to discuss the leading edge of the evolving media landscape. Through a series of thought-provoking interviews, discussion, debate and case studies, this program will address the challenges and opportunities afforded by social media, big data, video, mobile and beyond.

Confirmed speakers include: Linda Boff, Executive Director, Global Brand Marketing, GE B. Bonin Bough, Vice President, Global Media and Consumer Engagement, Mondelēz International Michael Dubin, Founder & Chief Executive Officer, DollarShaveClub.com David edelman, Principal, McKinsey & Company Scott Ferber, Chairman and CEO, Videology Jeff Jarvis, Author, “Public Parts” Brian Lesser, CEO, Xaxis Candace Matthews, Chief Marketing Officer, Amway Meabh Quoirin, Managing Director, Future Foundation Bryan rhoads, Intel Media Lab, Intel Vikram Somaya, General Manager, WeatherFX, The Weather Company Don Sorensen, Principal, Big Blue Robot raj Subramaniam, EVP, Global Marketing and Communications, Fedex early rates available. For more information and to register, please visit:

www.ft-live.com/marketing2013 Lead Sponsors

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New York Event FT Future Of Marketing Summit September 12, 2013 | New York www.ft-live.com/marketing2013 Staying ahead of the competition for marketers is often interpreted as doing it all.

They must be the first on a new social media platform, be on every single platform, lead with content, create compelling videos, harness big data, implement a strong global strategy and above all ensure ROI. The opportunities the media landscape offers for marketers are abundant and rich, but also overwhelming and keeping your eye on the prize is not always simple. The key to achieving a competitive advantage is being able to identify which tools you should harness and how to drive tangible business growth.

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This one-day conference chaired by Andrew EdgecliffeJohnson, Global Media Editor of the Financial Times, will bring together the most forward-thinking marketers, innovators and entrepreneurs, to discuss the leading edge of the evolving media landscape. Through a series of thought-provoking interviews, discussion, debate and case studies, this program will address the challenges and opportunities afforded by social media, big data, video, mobile and beyond.

•• Forecasting the future: The top 10 trends to prepare for •• Making sense of the noise: Achieving ROI with social media strategies •• Harnessing the deluge: The transformative power of big data •• Ads and apps: Monetizing mobile •• Content is still king: The importance of storytelling

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Thoughts From The Boardroom Marketing In Africa Is Changing By 2020 it is forecast that…

Marketing In Africa Is Changing

•• Africa’s collective GDP will be in the region of USD$2.6 Trillion.

•• Africa’s consumer spending by 2020 will be $1.4 Trillion.

•• The number of African households with discretionary income will be 128 million.

In the face of growing customer choice and market transparency, the rise in the empowered consumer, the influence of digital technologies, and the requirement for Marketing to deliver a demonstrable return on its investment, the shift in marketing in recent years has been profound.

And given the forecasts above the role of today’s and tomorrow’s African Marketing Leaders is going to become ever more critical to the success of African business.

African Sales and Marketing Professionals are therefore only going to become more critical to business success in Africa in the 21st century as international businesses enter Africa and as domestic organisations strive to develop products and services that appeal to their customers and aim to differentiate their offerings in the increasinglycrowded African marketplace.

We are delighted that African marketing leaders are committing to our widely-shared vision for a stronger marketing profession worldwide. Leaders such as Aegis Media CEO Dawn Rowlands who has accepted our invitation to become the inaugural GMN South Africa President.

Dawn embodies all the characteristics of a world-leading marketing professional - business-focused, innovative, entrepreneurial and committed to building marketing capabilities across Africa.

So, we are now inviting your organisation to become a GMN Corporate Member in Africa. Being a Corporate Member will not only enable us together to contribute towards a stronger Marketing Profession in Africa, but it will also help you recruit and retain the brightest marketing talent, in so doing improving your organisation’s own marketing performance.

This is your opportunity to become part of the only global membership network dedicated to raising standards in marketing practice worldwide. Together we are a stronger profession, together we can achieve more.

View full details in our new Africa Corporate Membership Brochure. We look forward to welcoming you and your organisation as a member soon.

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Darrell Kofkin Global Marketing Network

Five Easy Steps To Becoming Globally Accredited 1. Click here to identify the Grade of Membership you are eligible to apply for 2. Check here to find out the Membership Fee for your country and apply 3. Complete the application form and pay your membership fee through our secure payment gateway 4. Our Membership Committee reviews your application 5. You are notified by email as to whether you have been successful in your application for Global Accreditation.

You can then start using the GMN designatory letters and shall receive your printed Certificate of Membership

Darrell Kofkin

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CEO, Global Marketing Network Darrell is the co-founder and Chief Executive of Global Marketing Network, the global accreditation body for marketing professionals.

Leading its global development and expansion, Darrell works extensively with leading marketing academics and thought-leaders, Deans of international business schools, consultancies and global publishers.

With over twenty years experience in marketing Darrell divides his time between the worlds of practice and academia and is a member of the visiting faculty for several UK universities, teaching the next generation of marketing professionals. He is currently writing his first book ‘The Marketer’s Global Survival Guide’, due for publication in 2014.

Learn more about Global Marketing Network at www.gmnhome.com

Be Part of the Future of Marketing Join GMN and become more than just a number We enjoy the collaboration and support of a great many long established, highly successful and world-class individuals and organisations from both academia and business.

So when you join GMN you become part of a network containing some of the world’s leading marketing experts. Assuring you that you are in good company, and part of growing global network of Marketing Professionals where standards are high… and rising. Connecting you with thoughtleaders, so you can network with senior decision-makers, access the very latest research and practices and improve your marketing capabilities

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• Be awarded GMN letters and Certificate to demonstrate that you have been recognised as a leading Marketing Professional • Receive a Seal for use on your website and promotional materials once you become accredited • Get profiled in the Online Members Directory • Receive invitations to special networking events, book launches and selected conferences • Qualify for substantial savings on future GMN Certification, Executive Education and Conferences • 25% discount on all Kogan Page books and publications • 10% discount on Design and Brand Management services from Vesey Creative • Access to premium Members only content on Global CMO™ The Community • Download access to the full Global CMO™ The Magazine back catalogue • 20% discount on advertising in Global CMO™ The Magazine • Premium Members Only offers in Global CMO™ The Magazine and Global CMO™ The Community

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22 | August 2013

A Special Invitation

GMN Launch Reception National Liberal Club, 1 Whitehall Place, London, UK 18th September, 6pm –9pm Global Marketing Network and Pearson Education are delighted to invite you to join them on the evening of 18th September to celebrate the launch of the new GMN global certification programmes and the launch of the 6th edition of Svend Hollensen’s bestselling book, Global Marketing Strategy, A Decision Oriented Approach.

You will also be amongst the first to hear about GMN’s plans for Africa and India.

This event will feature a special keynote presentation from Professor Svend Hollensen who will deliver a lecture entitled Glocalization’ The Mantra For Today’s Global Marketing Strategies’.

Global Marketing

Network

A panel session will also take place chaired by Anuja Prashar, GMN Programme Director for Emerging Markets.

The panel members shall include: •• Anurag Saxena, former Head of Marketing for Barclays Africa, GMN Board Director and GMN Special Advisor – Africa, •• Sarajit Mitra - former Head of Global Marketing, HSBC, and GMN Special Advisor- India •• David Haigh – Founder and Chief Executive, Brand Finance Bookings Number are strictly limited. To secure your place at this event and to enquire about sponsorship opportunities associated with this event please email Sushma Patel at sushmapatel@theglobalmarketingnetwork.com.

About the venue The National Liberal Club was established by William Ewart Gladstone in 1882 for the purpose of providing club facilities for Liberal Party campaigners among the newly enlarged electorate after the Third Reform Act. The club’s impressive neo-gothic building over the Embankment of the river Thames is the second-largest clubhouse ever built. Designed by Alfred Waterhouse, it was not completed until 1887. It is located at 1 Whitehall Place, close to the Houses of Parliament, the Thames Embankment, and Trafalgar Square

24 | August 2013

Global CMO™ The Magazine

The Brand GAME Going Global? Keep In Control Andrew Vesey ggmn

I’ve said it before, and I’ll keep saying it until I’m no longer able to speak: Consistency of execution is one of the keys to the success (or failure) or your brand’s development and marketing.

This level of execution is important whether you are working in a local market, or are looking globally. What changes when working on a larger scale is the level of difficulty you face.

Locally, regionally, globally. The further you expand your reach, the more you stretch and complicate your brand supply chain. More internal staff, more contractors, more brand carriers, more cooks in the kitchen, more chances to mess it up. Even more so when branding across cultural borders.

It is important that your guardian has a strong understanding of what is on and off brand, and needs absolute authority on the approval process.

Please note that this role does not have to be filled by someone inside the marketing department. There is no requirement to create and branding or marketing collateral, purely to act as a quality assurance valve. Therefore, the clear understanding of the brand and the absolute authority over approval are the deciding requirements.

2. Systemise, Systemise, Systemise

Ok. Enough of the doom and gloom. Let’s get onto the stuff you want to know about - How do you keep in control?

Before you get too concerned over the number of brand guardians you’ll need to appoint, it’s helpful to know just how much of the workload can be removed to systemising your brand.

1. Utilise Brand Guardians

Having a set approval process in place, can speed things up for you - and time is money. There are option out there for online collaboration tools and online proofing tools which can be utilised to maximise your efficiencies. The key for these is that the investment made in them must be paid back in man hours saved, and costly mistakes due to lack of communication being averted.

Even with so many cooks in the kitchen, you still need your master chef to create the magic and your executive chef to manage and quality assure all the other people responsible for cooking up your brand.

Brand guardians are officially appointed members of the team (internal or external) who have the responsibility to monitor and the authority to approve or reject all brand material originating from their allocated unit.

For smaller teams, a single brand guardian role will do. As you get into larger organisations, you then need to decide what is the best structure for your business. One guardian per unit/division, per region, country, etc.

If you have a single guardian role involving numerous timezones, then you will want to look at servicing different zones with separate guardians (one role, serviced by a team, at different times).

This is to keep on deadlines and avoid brand and marketing bottle necks from having to wait an

additional day to get approval.

Having a full armoury of standardised and templated brand and marketing collateral takes a lot of the pressure off the approval process and makes keeping control that much easier.

A standardised piece of collateral requires not brand approval as nothing is altered in any way and can only be used in approved ways. A templated piece means that your brand guardian only needs to do a quick check of the variables (image, text, offer or such).

You can create a full library of these and control who has access to what and when certain pieces are available. With the benefits of the internet, you can control the entire thing from head office and every global centre can have their own requirements met without the man hours and

Global CMO™ The Magazine

August 2013 | 25

money required of having local teams in every region.

Here’s a little hint that can make a big difference.

Depending on your available investment, required versatility and monitoring capabilities, you have a number of options.

These range from a simple series of folders with online access, to a dedicated digital asset management system, a brand and design management system or a full marketing management system.

Include the why.

The different levels of systems offer widely varying features and flexibility. So it is important to take a good look at your business and work out what is the best you. By choosing the right system, you may even be able to remove other redundant processes and systems to streamline your business even more.

And one last tip. This goes for all three of these tools.

3. Create A Complete Brand Manual People can’t do what they don’t know.

On the flip-side. Make it a ‘no-brainer’ and you’ll be amazed at how little work is involved in educating your team and brand carriers and monitoring their performance.

I know what you’re saying right now - “Yeah, we have one of those. It’s got our logo, colours and fonts all listed” That’s great - but it’s only the beginning.

A complete brand manual should include the following (and this is a good suggested order too):

Why those images? Why the white space? What that font?

When people understand, they remember. And when they remember, it makes it much easier to follow.

Make sure they reflect your brand.

Do your procedures fit with your brand’s culture?

Did you appoint/hire people who reflect your brand values as brand guardians?

Is your brand manual presented with your brand’s personality?

If your brand is authentic, people will buy into it. The same goes for your brand management protocols. If they fit with your brand, you will get much better buy-in and much better results.

On that note. I will now leave you to your plans for global domination, and look forward to catching you again next time.

Until then. Be good to your brand.

•• The brand’s story •• A message from the brand’s leader. Explaining why it’s important to follow the guidelines and thank people for doing so.

•• Your core brand values and explanation of the brand’s personality •• Samples of brand messaging •• Your brandmark, colours and font’s •• Your overall visual identity •• Samples/templates of brand and marketing collateral •• Information on brand etiquette (selection of images, type of promotions and offers, where you should be seen) •• Samples of brand scripts •• Brand and marketing collateral creation and approval procedures •• Your approved brand carriers •• A full contact list of those responsible for brand production, approval and implementation Make this manual as comprehensive as possible - and as relevant as possible. If you have different brand message, designs or procedures, then either create independent manuals or independent sections/supplements for each region. Without proper differentiation, mistakes can easily be made.

26 | August 2013

Andrew Vesey

ggmn

Founder | Creative Director, Vesey Creative Andrew is a member of the GMN Global Advisory Council and the Founder and Creator of Global CMO The Magazine and Director of the New Zealand and United Kingdom based Graphic Design and Branding Agency, Vesey Creative - the official Brand Guardians for GMN. Working in partnership with a wide variety of clients around the globe, Andrew’s business experience includes over a dozen years leading design and branding studios and agencies, including the launch of his own agency Vesey Creative over 9 years ago.

Andrew is a strong believer in continually upskilling, learning and staying relevant in business.

This ‘education brings growth’ mentality lead him to create Brand Quarterly, a not for profit digital magazine for SMEs, and the magazine you are now reading.

2014 will see Andrew’s first book for SMEs published “The Brand GAME - Business Growth Through Real World Brand Management”.

TM

You’re In Safe Hands You’ve put a lot of time and effort into building your Brand’s strategy and Marketing plans - now you need to implement them.

Choose the Brand and Design Agency which specialises in working with Marketers, and put your Brand in the hands of Global Marketing Network’s Brand Guardians.

For Brand and Marketing Collateral Design contact us today, and experience firsthand, our ‘no risk, all reward’ Seal of Satisfaction Guarantee.

| Brand | Implementation | Design |

Event Recap AGP Localises Globalisation For African Graduate Employability

Building Tomorrow’s Africa Global Leaders Today

Dr Sola Adesola, Founder, Advantage Global Positioning & Senior Lecturer, Oxford Brookes University

Advantage Global Positioning (AGP) held its 2nd International Business & Enterprise Summer Conference on Saturday 27th July 2013 in Milton Keynes. The conference theme was “Making Global Your Local – Enhancing Employability, Encouraging Entrepreneurship”. Delegates ranged from final year undergraduates, PhD students and young professionals.

Linkcoz Ltd who, straight from Nigeria that morning, educated the delegates on “Think Glocal”.

Chaired by Darrell Kofkin, CEO, Global Marketing Network, this session raised discussion on the current state of affairs in doing business in Nigeria and other parts of Africa.

The conference addressed the issues of employability and entrepreneurship for African students and graduates planning to seek employment/business startup in the UK and Africa. The day started with the aspect of employability, unique attributes and mindset required by employers to stand out from the crowd.

Delegates benefited from hearing it straight from the horse’s mouth! Tunde Makinde in his position as Executive Consultant for Executives in Africa Ltd, gave insight into what recruiters in Africa look for in filling senior positions.

Dr Sola Adesola, the Conference Organizer/Founder Director of Advantage Global Positioning presented the anecdotal analogy of the man at the top of the mountain to show that there is more to life than 9-5 work.

Speakers from various industries shared the issues, challenges and opportunities available in their sectors whilst also telling stories of their own career paths.

Ketan Makwana, CEO Enterprise Lab Ltd, during his workshop on “From Ideas to Action”, shared the story of his journey from MacDonalds to “Rockstar” with his array of companies created to develop youth and student enterprise and employability.

The career route in corporate trade and finance was presented by Ralph Tanyi, Managing Director of Cofires Consulting Ltd. An oil and gas engineering student from Cranfield University, Stanley Ononiwu gave an inspiring presentation on the future of Africa and opportunities available to Africa diaspora students encouraging what he called “immigrant mentality” The conference switched up a gear with the lively character of keynote speaker, Anurag Saxena, Managing Director,

28 | August 2013

Breakout sessions (moderated by Anurag Saxena and Anuja Prashar, Assistant Professor, Hult International Business School/Founder APP Consulting) allowed the delegates to cool down from the heat of the day, and get down to interactive discussions on the two key issues: ‘Building responsible and entrepreneurial minded global leadership’ and ‘Educating African students for global competition’.

In the Closing Panel Forum, chaired by Adetope Kayode, Senior Financial Analyst, ARM Investment Managers and MSc Finance & Management student at Cranfield University.

Contribution by Gbonju Fanimokun, Credit Derivatives Operations Associates, Goldman Sachs provided industry thinking on the issue of responsible global leadership.

Informative, unique and inspiring, the conference left delegates walking away with more than they expected, including certificates from AGP, complimentary Affiliate Membership with GMN and surprise enterprise book prizes for two winners, generously donated by Jamie Dunn of Spark Global Business Limited.

Special thanks to the Conference Chairman, Dr Gareth Davies, volunteer ambassadors, our sponsor, Global Marketing Network, supporter, Summit School of Leadership & Management and all the speakers of the day. www.advantageglobalpositioning.com

Global CMO™ The Magazine

Twitter: @AGPUK

London Event

iStrategy Is Coming Back To London!

Get ready for two-days of thought-leading speakers, engaging programme content and plenty of coffee-fuelled networking opportunities. Clear your diaries: This year’s event will be held on September 30 - October 1 2013 at Twickenham Stadium.

GMN Members and Global CMO™ Readers Receive a

Last year’s London events were a huge success, with digital marketing luminaries such as Brian Solis, Mari Smith and Ken Segall all wowing our audience of big brands and digital marketing mavens with guidance on how to create more effective, engaging and successful marketing campaigns.

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Want to learn how to improve customer experience, drive online conversions and develop campaigns that positively ring with authenticity, relevancy and significance? Interested in building communities, harnessing customer data and understanding your customers?

Use the booking code: LON13GMN30

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Then iStrategy London is for you!

Transform your digital strategy

WIN A TICKET TO iStrAtegy

iStrategy is an inspirational, two-day digital marketing conference. We showcase the best speakers, the sharpest ideas and the most innovative technologies in order to help you make social and digital media marketing work for your business. Want to integrate your online and offline efforts to improve the customer experience, increase lead generation, reach new markets and drive more sales? Then you need to be here.

Tweet us @TheGlobalCMO using the hashtag and link ‘ #istrategy http://bit.ly/13OkI8D ’

We’re stoked about social. We’re mad about mobile. We know that the web – in all its various forms – is the future of marketing. And we want to share that passion with you.

Become part of the iStrategy community today.

- tell us which speaker interests you most.

You can find a full list of the iStrategy London speakers HERE.

www.istrategyconference.com/events/london-13

BE QUICK Entries close 1st September 2013

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One entry per Tweet, so keep them coming!

August 2013 | 29

‘Glocalisation’ The Mantra For Today’s Global Marketing Strategies Svend Hollensen fgmn

The purpose of this article is to analyze the forces for driving the company toward ‘Globalisation’, respectively ‘Localisation’ and to show that ‘Glocalisation’ can be a good alternative for many companies, which go international these years.

Basically ‘global marketing’ consists of finding and satisfying global customer needs better than the competition, and of coordinating marketing activities within the constraints of the global environment. The form of the firm’s response to global market opportunities depends greatly on the management’s assumptions or beliefs, both conscious and unconscious, about the nature of doing business around the world.

30 | August 2013

Many international markets are converging, as communication and logistic networks are integrated on a global scale. At the same time, other international markets are becoming more diverse as company managers are encountering economic and cultural heterogeneity. This means that firms need to balance tensions in adapting to different demands from customers in divergent markets, which require different skills and resources while attempting to transfer knowledge and learning between the established markets and these new markets (Douglas & Craig, 2011).

This leads us to a definition of global marketing:

Global CMO™ The Magazine

Global marketing is defined as the firm’s commitment to coordinate its marketing activities across national boundaries in order to find and satisfy global customer needs better than the competition. This implies that the firm is able to: •• develop a global marketing strategy, based on similarities and differences between markets; •• exploit the knowledge of the headquarters (home organisation) through worldwide diffusion (learning) and adaptations; •• transfer knowledge and ‘best practices’ from any of its markets and use them in other international markets.

There follows an explanation of some key terms: •• Coordinate its marketing activities: coordinating and integrating marketing strategies and implementing them across global markets, which involves centralisation, delegation, standardisation and local responsiveness.

•• Find global customer needs: this involves carrying out international marketing research and analysing market segments, as well as seeking to understand similarities and differences in customer groups across countries.

•• Satisfy global customers: adapting products, services and elements of the marketing mix to satisfy different customer needs across countries and regions.

Global CMO™ The Magazine

August 2013 | 31

•• Being better than the competition: assessing, monitoring and responding to global competition by offering better value, low prices, high quality, superior distribution, great advertising strategies or superior brand image.

The second part of the global marketing definition is also illustrated in Figure 1 and further commented on below.

Glocalisation Developed by Robertson (1992, 1994), glocalisation is a theoretical concept that is a combination of the words, globalisation and localisation. Glocalisation refers to the interface between a global and a local marketing strategy, by combining dynamics of cultural homogenisation and heterogenisation. Whereas globalisation, in and of itself, stresses the omnipresence of corporate or cultural processes worldwide, glocalisation stresses particularism of a global idea, product, or service. Glocalisation is not merely another take on niche-marketing, now global.

Rather, glocalisation also adds accuracy to the present globalisation approach among scholars and practitioners.

Glocalisation The development and selling of products or services intended for the global market, but adapted to suit local culture and behaviour. (Think globally, act locally.)

Glocalisation theory fuses relationships, balance, and harmony between cultural homogenisation and heterogenisation, standardisation and adaptation, homogenisation and tailoring, convergence and divergence, and universalism and particularism. Glocalisation is important because it questions the very model of Western cultural imperialism. From this vantage point, globalisation strengthens the consciousness of the world that pervades both the local and the global. This opposed the argument that globalisation is a fully homogeneous process. On the contrary, while globalisation gears toward some degree of cultural homogenisation, glocalisation simultaneously permits people to identify more strongly with their local culture.

Glocalisation emphasizes that relocating a theme, product, or service elsewhere has a higher chance of success when it is accommodated to the local culture in which it is introduced.

This glocalisation strategy strives to achieve the slogan, ‘think globally but act locally’, through dynamic interdependence between headquarters and subsidiaries.

Organisations following such a strategy coordinate their efforts, ensuring local flexibility while exploiting the benefits of global integration and efficiencies, as well as ensuring worldwide diffusion of innovation.

Principally, the value chain function should be carried out where there is the highest competence (and the most cost-effectiveness), and this is not necessarily at the headquarters.

Globaliza;on

Localiza;on

(Standardiza;on)

(Differen;a;on)

100%

100% Economies of Scale

Global Low-­‐cost Produc;on and Selling Global roll-­‐out of Concepts / High speed

Culturally Close to customers

GLOCAL

Regional and local market penetra;on

Low complexity

Figure 1: The overlap of Globalisation + Localisation = Glocalisation

32 | August 2013

Flexible Response to local customer needs

Source: Based on Hollensen (2014), p. 22

Global CMO™ The Magazine

Figure 2: The Principle of transferring knowledge and learning across borders

Source: Based on Hollensen (2014), p. 23

Core global business strategy (HQ)

Country A

Country B

Country C

Country D

Feedback

Feedback

InternaAonalizing the strategy

Transferring global know-­‐how and ‘best pracAces’ between countries with feedback to HQ

Consequently, the two extremes in global marketing, globalisation and localisation, can be combined into the ‘glocalisation’ framework, as shown in Figure 1.

A key element in knowledge management is the continuous learning from experiences. In practical terms, the aim of knowledge management as a learning-focused activity across borders is to keep track of valuable capabilities used in one market that could be used elsewhere (in other geographic markets), so that firms can continually update their knowledge. This is also illustrated in Figure 2 with the transfer of knowledge and ‘best practices’ from market to market. However, knowledge developed and used in one cultural context is not always easily transferred to another.

The lack of personal relationships, the absence of trust and ‘cultural distance’, all conspire to create resistance, frictions and misunderstandings in cross-cultural knowledge management.

With globalisation becoming a centerpiece in the business strategy of many firms – be they engaged in product development or providing services – the ability to manage the ‘global knowledge engine’ to achieve a competitive edge in today’s knowledge-intensive economy is one of the keys to sustainable competitiveness. But in the context of global marketing the management of knowledge is de facto a cross-cultural activity, whose key task is to foster and continually upgrade collaborative cross-cultural learning. Of course, the kind and/or type of knowledge that is strategic for an organisation and which needs to be managed for competitiveness varies depending on the business context and the value of different types of knowledge associated with it.

In the following the three different strategies illustrated in Figure 1 will be further explained and illustrated by an

example from each category of strategy for the international market place: Global strategy, Glocal strategy and Local strategy:

Example of a Global strategy: Ford Focus Global Marketing Plan The global marketing campaign for the 2012 Ford Focus compact car, including that for the U.S. launch, has been developed by a European team, a move that runs counter to the conventional wisdom that marketing is best developed locally. Ford’s marketing departments in 110 countries had the authority to create their own marketing programs. Ford used up to 15 ad campaigns for individual countries when it launched the Focus globally.

The Focus’ 2012 global marketing plan approach is thus the latest iteration of the drive for ‘One Ford’ - a company free of regional barriers that can create global products sharing design, parts and engineering for a single Ford brand. The Focus is in many ways a logical car for a global marketing campaign. It was developed globally for markets around the world. The U.S. and European versions, for example, share 80 percent of their parts, setting a new high for across-the-Atlantic cooperation.

The task of developing a global marketing campaign for Focus was given to the European Ford Headquarters because of their expertise in marketing cars similar in size, which are the heart of the European market. In a multinational company like Ford it is also a question of realizing where the main competencies are for developing the marketing plan. For trucks it might be in North America, but for this type of car it is in Europe.

Global CMO™ The Magazine

August 2013 | 33

Ford will not limit its global marketing strategy to the Focus. Ford says all future vehicle launches will follow a similar approach, with one central group in a chosen region heading the marketing effort around the world for that vehicle. Marketing managers in a country or region can choose which of one or two main campaigns to use, but they cannot start from scratch and make their own.

This might result in a better and more consistent message across markets and lowered costs. Ford already tested the approach with the Fiesta.

The Ford Focus global marketing theme Ford Focus is normally perceived as a compact-car brand.

Car buyers normally look at smaller cars as Ford Focus as a commodity. The global Ford Focus team wanted to make the transition for customers to look at these cars as premium brands. The Focus TV spots had to convey premium despite its compact-car status.

In developing the overall global marketing campaign the global Ford Focus team was therefore inspired by European luxury car companies, e.g. BMW’s overall campaign theme “ultimate driving machine”. Just the BMW commercial itself and the portrayal of the product is premium. BMW make the engine look beautiful. When people see it, they think that it is very expensive.

The global Ford Focus team worked for two years on the Focus global marketing approach. The resulting 50 Focus TV spots feature the same technology and message no matter where they are aired around the world.

One example of the premium approach was an ad 34 | August 2013

developed in Europe for the 2012 Focus global campaign, which highlighted the sedan’s self-parking system.

A global approach saves money The economic downturn pushed marketers to embrace any strategy that saves money, and going global should cut costs.

Earlier a lot of TV commercials, photo sessions and auto show displays were produced locally for global launches.

Now, Ford insists that global departments work together to share resources and reduce costs.

Take photographs. Typically, each region and operating group - including design, marketing and public relations took their own set of photos to support a vehicle launch.

The Ford management insisted that all photo requests for the Focus should be handled by a single photo shoot. Ford got 800 photo requests for the global Focus launch from different countries. But the Ford Focus global marketing team realized that there was a lot of overlap between the different photo requests.

The global advertising launch budget for a car such as the Focus would typically be about USD 100 million.

Production costs, which cover photos, printing and so on, make up 5 to 10 percent of the usual vehicle-launch ad budget. By eliminating the duplication and overlap, Ford cut those costs by 70 percent, which could mean that the cost savings could work out to app. USD 5 million. At the same time Ford achieves a more similar cross-country customer perception about what Ford Focus stands for.

(Based on various public media sources, among others www.ford.com)

Global CMO™ The Magazine

Example of a Glocal strategy Henkel: Persil Black & Persil Abaya = Glocalisation - same product, but different packaging and market communication Founded in 1876, Henkel holds globally leading market positions both in the consumer and industrial businesses with well-known brands such as Persil, Schwarzkopf and Loctite.

With headquarters in Düsseldorf / Germany, Henkel has some 47,000 employees worldwide. In 2012 Henkel generated revenues of EUR 16.5 billion and net profits of EUR 1.5 billion. In 2012, Henkel reinforced its position in the emerging markets, where 43 percent of its sales are generated and 54 percent of their total workforce of 47,700 is employed.

Persil Abaya is a liquid detergent that Henkel Company introduced to the Saudi Arabia market in 2007 and later to the rest of the Gulf Cooperation Council markets. Henkel markets this liquid as a detergent specialized for black abayas and dark apparel. The abaya is the predominantly black overgarment worn by most Arab women. The liquid detergent combines true cleaning power with special color protection for black and dark garments – particularly important if these are washed frequently.

While black is the traditional shade for women in the Africa/Middle East region, the popularity of black and dark clothing has also steadily risen in Western European markets over recent years.

Therefore in June 2011, Persil Black was also introduced in Germany, Austria and Switzerland – catching the crest of this fashion wave.

Persil Black and Persil Abaya is a good example of how the mix of common global technology & scale (Economies of scale = low cost production) can be combined with a local and regional marketing strategy. The two Persil brands have common product formulations (except fragrances which are tailored to the cultural preferences), but with regionally tailored product marketing, in form of different packaging and market communication.

Persil Abaya was launched in the Gulf States through a mix of TV commercials and a very successful viral online marketing campaign. An interactive website was set up and Henkel also sponsored a reality TV designer competition (in cooperation with Swarovski Elements), in order to show that the abaya have transcended from traditional garment to individual fashion statement. In the Western European markets, the consumer campaign for Persil Black relied mainly on classic TV advertising, complemented by social media activities such as a game on Facebook.

(Source: Based on Henkel Annual Report 2011 www.henkel.com)

Global CMO™ The Magazine

August 2013 | 35

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Example of a Local strategy Electrolux is adapting its vacuum cleaner for the Japanese market Electrolux is one of the world’s largest producers of vacuum cleaners. Electrolux opened its first vacuum-cleaner plant outside Sweden as early as 1926, and its vacuum cleaners are currently sold in more than 50 countries around the world.

for the Japanese market. Japanese homes are relatively small and vacuum cleaners need to be quiet in order not to disturb family members and neighbors. The Japanese customers are also very careful about cleanliness in their homes and thus clean them regularly.

In order to meet all these demands the R&D team (together with Electrolux’s marketing and design team) developed an ultra-compact vacuum cleaner designed especially to the Japanese market.

Vacuum cleaners are suitable for ‘globalisation’, as the shipping costs per unit are relatively low. Consequently the vacuum cleaner industry is more globalized in comparison with kitchen and laundry appliances, and most vacuum cleaners are produced in low-cost countries.

The new ‘Electrolux Ergothree’ vacuum cleaner was introduced in Tokyo in late 2011 with more than 100 Japanese journalists attending the event.

However, this does not mean that a manufacturer should just sell exactly the same vacuum cleaner all over the world. The brand may also vary across regions.

In the following we will try to explain and discuss the driving forces that move the company toward the Globalisation end of Figure 1, respectively Localisation

All Electrolux’ vacuum cleaners sold in Asia and Latin America are Electrolux brands. In Europe Electrolux is the dominant manufacturer and here its brands include Volta, Tornado, Progress, AEG-Electrolux and Zanussi. In the United States, most of its vacuum cleaners are sold under the Eureka brand and the more exclusive Electrolux branded models.

Electrolux has never been a market leader for vacuum cleaners in Japan, and in order to get to this leading position, the Japanese Electrolux managers asked the Electrolux R&D headquarters to develop a special localized vacuum cleaner for the Japanese market.

It was challenging for Electrolux to adapt its vacuum cleaner

(Source: Based on Electrolux Annual Report 2011 and www.electrolux.com)

Driving forces for ‘Globalisation’ In the process towards globalisation, greater importance will be attached to transnational similarities for target markets across national borders and less on cross-national differences. The major drivers for the move towards globalisation are: •• Removal of trade barriers (deregulation). Removal of historic barriers, both tariff (such as import taxes) and non-tariff (such as safety regulations), which have constituted barriers to trade across national boundaries. Deregulation has occurred at all levels:

Global CMO™ The Magazine

August 2013 | 37

national, regional (within national trading blocs) and international. Thus deregulation has an impact on globalisation since it reduces the time, costs and complexity involved in trading across boundaries.

•• Global accounts/customers. As customers become global and rationalize their procurement activities they demand suppliers provide them with global services to meet their unique global needs. Often this may consist of global delivery of products, assured supply and service systems, uniform characteristics and global pricing. Several multinationals such as IBM, Boeing, IKEA, Siemens and ABB make such ‘global’ demands on their smaller suppliers, typical SMEs. For these SMEs managing such global accounts requires cross-functional customer teams, in order to deploy quality consistency across all functional units.

•• Relationship management/network organisation.

As we move towards global markets it is becoming increasingly necessary to rely on a network of relationships with external organisations, for example, customer and supplier relationships to preempt competition. The firm may also have to work with internal units (e.g. sales subsidiaries) located in many and various parts of the world. Business alliances and network relationships help to reduce market uncertainties, particularly in the context of rapidly converging technologies and the need for higher amounts of resources to cover global markets.

However, networked organisations need more coordination and communication.

•• Standardized worldwide technology. Earlier differences in world market demand were due to the fact that advanced technological products were primarily developed for the defense and government sectors before being scaled down for consumer applications.

However, today the desire for gaining scale and scope in production is so high that worldwide availability of products and services should escalate. As a consequence we may witness more homogeneity in the demand and usage of consumer electronics across nations.

•• Worldwide markets. The concept of ‘diffusions of innovations’ from the home country to the rest of the world tend to be replaced by the concept of worldwide markets. Worldwide markets are likely to develop because they can rely on world demographics.

For example, if a marketer targets its products or services to the teenagers of the world, it is relatively easy to develop a worldwide strategy for that segment and draw up operational plans to provide target market coverage on a global basis. This is becoming increasingly evident in soft drinks, clothing and sports shoes, especially in the Internet economy.

•• ‘Global village’. The term ‘global village’ refers to the 38 | August 2013

phenomenon in which the world’s population shares commonly recognized cultural symbols. The business consequence of this is that similar products and similar services can be sold to similar groups of customers in almost any country in the world (Levitt, 1983). Cultural homogenisation therefore implies the potential for the worldwide convergence of markets and the emergence of a global marketplace, in which brands such as Coke, Nike and Levi’s are universally aspired to.

•• Worldwide communication. New Internet-based ‘low-cost’ communication methods (e-mailing, e-commerce, etc.) ease communication and trade across different parts of the world. As a result customers within national markets are able to buy similar products and similar services across parts of the world.

•• Global cost drivers. These are mainly categorized as ‘economies of scale’ (‘economies of scope’ is more in the category of glocalisation, as the company here can utilize the synergies and similarities between different international markets).

Driving forces for ‘Localisation’ These are as follows: •• Cultural differences. Despite the ‘global village’ cultural diversity clearly continues. Cultural differences often pose major difficulties in international negotiations and marketing management. These cultural differences reflect differences in personal values and in the assumptions people make about how business is organized. Every culture has its opposing values.

Markets are people, not products. There may be global products, but there are not global people.

•• Regionalism/protectionism. Regionalism is the grouping of countries into regional clusters based on geographic proximity. These regional clusters (such as the European Union or NAFTA) have formed regional trading blocs, which may represent a significant blockage to globalisation, since regional trade is often seen as incompatible with global trade. In this case, trade barriers that are removed from individual countries are simply reproduced for a region and a set of countries. Thus all trading blocs create outsiders as well as insiders. Therefore one may argue that regionalism results in a situation where protectionism reappears around regions rather than individual countries.

•• Deglobalisation trend. More than 2,500 years ago the Greek historian Herodotus (based on observations) claimed that everyone believes their native customs and religion are the best. Current movements in Arab countries, the big demonstrations accompanying

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conferences such as the World Economic Forum in Davos, or the World Trade Organisation (WTO) meetings show that there could be a return to old values, promoting barriers to the further success of globalisation. Rhetorical words such as ‘McDonaldisation’ and ‘Coca-Colonisation’ describe in a simple way fears of US cultural imperialism.

Svend Hollensen

fgmn

Associate Professor, University of Southern Denmark

Conclusion And Implications For Companies With a starting point in Figure 1, each company must find its own position on the scale from 100% Globalisation to 100% Localisation. This position depends on the nature of the product or service, but it also depends on e.g. the degree of culture sensitivity among the global customers.

If it is low, the company can choose to launch a global marketing plan, as in the case of Ford Focus. This would also save money on the global launch and provide common values around the global brand. If the culture sensitivity is high, as in the case with Electrolux Ergothree for Japan, the company can choose to develop a special product and a special communication for this market. If the company realizes that it belongs somehow in the middle of Figure 1’s scale, it will probably choose a ‘Glocalisation’ strategy, where it can utilize advantages from each end of the scale. The ‘Persil Black Gel’ & ‘Persil Abaya’ case shows, that Henkel can utilize ‘Economies of Scale’ (low production cost) in the development and production of the basic content in the bottles, but by adapting the bottles (packaging) and the market communication it can also utilise the special culture around women’s use of abayas in the Arabic culture.

Professor Svend Hollensen is GMN Programme Director of Global Marketing Strategy and Research Director at the Department of Cross Border Studies, University of Southern Denmark.

Recognised as one of the world’s leading authorities on global marketing strategy he commenced his career in international marketing for a large Danish multinational enterprise before receiving his PhD from Copenhagen Business School in 1992.

In February 2008 he was awarded the BHJ Fund award for `Excellent Education and Teaching` at University of Southern Denmark.

He has published articles in journals and is the author of two case books that focus on general marketing and international marketing.

With Pearson Education he has published Marketing Management – A Relationship Approach as well as Marketing Research – An International Approach (published May 2006), together with Marcus Schmidt.

With a lifetime sales of 100,000 copies worldwide his book on global marketing strategy, Global Marketing - A Decision Oriented Approach (Pearson) is the bestselling text on the subject outside USA and is the recommended text on many postgraduate programmes, as well as being used by marketers and business owners to help them design and develop their global marketing programmes.

He has received widespread praise for this book. Indian and Spanish editions have been developed in co-operation with co-authors. The textbook Global Marketing has also been translated into Chinese, Russian, Spanish and Dutch. In 2014 an Arabic translation of his ‘Marketing Management’, 2e (Pearson) will be published by ‘Darwael for Publishing and Distribution’ (Amman, Jordan) for distribution in the Arabic region.

Svend now divides his time as an academic, an author, a consultant and around the world as a speaker on global marketing issues.

Svend Hollensen’s other research interests are within Relationship Marketing, Globalisation and Internationalisation of companies.

References: Douglas, S. P. & Craig, C. S. (2011) ‘Convergence and Divergence: Developing a Semiglobal Marketing Strategy’, Journal of International Marketing, 19(1): 82-101.

Hollensen, S. (2014). Global Marketing. Pearson Education, Harlow, UK Levitt, T. (1983), The Globalisation of Markets, Harvard Business Review, 61(3): 93-102 Robertson, R. (1992). Globalization: Social theory and global culture. London: Sage.

Robertson, R. (1994). Globalisation or Glocalisation?. Journal of International Communication, 1(1): 33–52.

Read more from Svend online with his new, fully updated LEGO - Global Marketing case study at Global CMO™ The Community.

Visit www.theglobalcmo.com/lego-global-marketing and you could WIN A Copy Of

Global Marketing

Sixth Edition

Hot Off The Press!

Entries close 15th September 2013

Global CMO™ The Magazine

August 2013 | 39

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The days of isolated or shielded markets where foreign suppliers or competitors cannot play are no more. All companies now operate in an international environment where customers can be scattered around the globe and new entrants can emerge from any economy with different business models and cost structures. This presents an It’s A W a r O exciting but daunting challenge for those with responsibility ut Ther How To e...

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Svend Hollensen delivers one-day and two-day masterclasses based upon his bestselling book on Global Marketing Strategy, from September in its 6th Edition, with lifetime sales of over 100,000 copies. It presents a proven five-stage plan that enables marketing and business professionals to design, organise, execute and evaluate successful marketing activities in our complex and constantly altering global environment.

By the end of this Masterclass participants are able to:•• develop, implement, execute and evaluate international marketing programmes that respond simultaneously to both global national issues ad challenges

Our First Global Survey It’s Time To Be Heard Managing Change The Why, The What, The How The Rise Of The Personal Brand What Your Company Needs To Know Brand Quarterly™

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Check Out The Latest Issue And Secure Your Free Subscription Today •• Get back your time by systemising your Brand and Marketing •• Managing Change - The Why, The What, The How •• The Rise Of The Personal Brand •• Is Your Brand A Social Standard Bearer?

•• Our First Global Survey AND MUCH MORE...

@brandquarterly www.brandquarterly.com

Svend’s Top Tips For Global Marketing Success •• increase the global competitiveness of your organisation •• decides which markets and countries to enter •• evaluate which markets are most attractive for the organisation •• analyse market and sales potential •• develop market expansion strategies •• decide how to enter selected markets •• design international marketing programmes •• implementing, coordinate and evaluate international marketing programmes.

Later this year you shall also be able to GMN participate on the new GMN Global Marketing Strategy Certification programme developed by Svend Hollensen. Designed to build global marketing strategy capabilities worldwide this eight week module will be fully integrated with the bestselling textbook and delivered online with instruction from GMN Accredited Instructors.

To request more information about these programmes and how you can book Professor Svend Hollensen for training or conferences contact us here.

1. The key issue for further internationalisation of your company is to consider if the internal competences are ready for this process. The degree of preparedness is dependent on the ability to carry out strategies in the international marketplace (i.e. the actual skills you have in international business operations). These skills or organisational capabilities may consist of personal skills (e.g. language, cultural sensitivity), the management team’s international experience or the company’s financial resources.

2. Even if your organisation has been very careful in selecting the right agents and distributors, a need can arise for it to leave the relationship if sales in the local market are static or declining.

The two most important criteria for evaluating international distribution partners are the performance of the distributor partner and the general attractiveness of the market where the distribution partner operates.

3. When your organisation has decided to internationalise a key challenge is to select the most attractive markets (countries). In this ‘screening’ process you should try to match the internal competences with the external market opportunities. For example many organisations are considering the so-called BRIC nations (Brazil, Russia, India and China). Whilst the total BRIC population accounts for approximately 42% of the world’s population, it only accounts for around 20% of the world’s GDP. However, this percentage is expected to increase in future as a result of the increasing economic activity in the BRIC countries compared with the “old” economies of Europe and North America.

4. Consider the general attractiveness of the market where your distribution partner operate.

Even if your organisation works with goodperforming distributors around the world there is a need to understand the end-customers’ requirements in order to create the best possible ‘value proposition’ for the end-customers. You cannot delegate this to agents and distributors because they are normally more concerned about generating short-term profits for themselves in the local market.

5. Many organisations with excellent products and strong brands struggle because they are seen by the local partners as arrogant, untrustworthy and unhelpful. In other words, they have a ‘low mindshare’ with the local partner. Your organisation needs to understand the partner’s business model. But you also need to look at the long-term value of the relationship and how you can create a win-win situation with the partner.

This can be used to justify further investments in the relationship from both sides.

Global CMO™ The Magazine

August 2013 | 41

Development Of An International Marketing Plan an Extract from Svend Hollensen, Global Marketing Sixth Edition, courtey of Pearson Education.

8 Part I The decision wheTher To inTernaTionalize CHaPter 1 GloBal MarKeTinG in The FirM

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Figure 1.2

development of an international marketing plan

42 | August 2013

Global CMO™ The Magazine

I The decision wheTher To inTernaTionalize

Source: Hollensen, S. (2008) Essentials of Global Marketing, FT/Prentice Hall, pp. 6–9. Copyright © Pearson Education Limited.

11

The globalisation of companies is the involvement of customers, producers, suppliers, and other stakeholders in the global marketing process. Global marketing therefore reflects the trend of firms selling products and services across many countries. Drawing on an incomparable breadth of international examples, Svend Hollensen not only demonstrates how global marketing works, but also how it relates to real decisions around the world.

CHaPter 1 GloBal MarKeTinG in The FirM

Source : Hollensen, S. (2008) Essentials of Global Marketing , FT/Prentice Hall, pp. 6–9 . Copyright © Pearson Education Limited Continued Figure 1.2

This book offers a truly global approach with cases and exhibits from all parts of the world, including Europe, the Middle East, Africa, the Far East, North and South America. It provides a complete and concentrated overview of the total international marketing planning process, along with many new, up-to-date exhibits and cases, which illustrate the theory by showing practical applications.

Pre-Order your copy today at Amazon: http://amzn.to/14CO8bF

Global CMO™ The Magazine

August 2013 | 43

Joining The Family Dawn Rowlands Named South Africa’s GMN President Aegis Media Sub-Saharan Africa’s CEO, Dawn Rowlands has been appointed as the Global Marketing Networks South African president. She joins GMN’s global board of recognized thought leaders and will drive the industry from the tip of Africa upwards through sharing of industry insights, education and training of marketing professionals and the access of information to marketing professionals.

“I have always believed that the sharing of industry insights and key learning’s by professionals in the marketing sector was one of the leading ways to continue to uplift and encourage those in the sector to keep striving for greatness. Africa has the largest economic growth potential globally and ensuring that people in the marketing industry are equipped for this challenge is something that is very close to my heart. I am honoured to take up this challenge of marketing professionals and will do all I can to ensure that we prepare young people going into the field and support and up skill those already in the field”, says Rowlands.

Says GMN Chief Executive Darrell Kofkin.

“We are honoured and delighted that Dawn has accepted our invitation to become the inaugural GMN South Africa President.

Dawn embodies all the characteristics of a world-leading marketing professional business-focused, innovative, entrepreneurial and focussed on creating a stronger, more capable marketing profession.”

Rowlands has unsurpassed experience and expertise in the marketing, advertising and media industries in Sub-Saharan Africa and has been has been responsible for the growth of Aegis Media in SSA of over 200% in the last 3 years from both revenue and staffing perspectives.

Aegis Media has gone from almost obscurity in Sub Saharan Africa under Rowland’s guidance to having 5 Network brand agencies; Carat, Posterscope, Isobar, iProspect and Vizeum. Currently 50% of Aegis' income comes from its digital interests in Sub Saharan Africa and over 50% of the staff are invested in a "digital environment' and this space continues to grow even faster throughout region.

Rowlands has continued to lead the market with innovation - the biggest one in the past year has been the conception and implementation of the Aegis Media’s Thought Leadership Programme, hosting monthly Thought Leadership Digibates - http://www.bizradio.co.za/category/digibate/ .

Over the past two years she has gained local and global recognition for her leadership and innovation and has been named Business Woman of the Year 2012, Maverick of the Year, Innovation Through Technology Awards for the Aegis Media Thought Leadership Digibates in Africa, a global STEVIE award for both her personal marketing performance and the Digibate concepts, has served as a judge at Cannes Lions and Cristal Media Festival Awards.

Rowlands is a mother of 2, a founding partner of NotaBene, and the founder of Posterscope SA – currently leaders in the Out of Home arena. From a personal perspective she has set very clear goals for the company and keeps linking these to their overall vision and values. She has however accentuated one value, Ambition, to ensure that everyone knows and buys into where Aegis Media is heading. Her personal ambition is for Aegis Media to be the leading communications network in Africa within the next 3 years.

44 | August 2013

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Global CMO™ Africa Edition Launching In September For marketers in Africa and those outside of its borders excellent Marketing Thought Leadership specific to their markets has been difficult to obtain. GMN and Vesey Creative are proud to be providing Marketing Thought Leadership throughout Africa, with the release of Global CMO™ Africa Edition.

Danette Breitenbach

A Message From Your New Editor:

Every month, African Marketers will receive the very best of Global CMO™ The Magazine as well as their own dedicated content which is relevant specifically to the African Market.

“Ifriqiya rise up” Little is known about Africa, with many offer assuming that it is a homogenous continent. It is very much the opposite; made up of 54 countries, all with vastly different cultures, traditions and even language. Within the countries themselves there are often more than one cultures and language. South Africa alone has 11 official languages.

To achieve this and ensure the best possible content for our African readers, we have enlisted the expertise of Danette Breitenbach, until recently the Editor of AdVantage Magazine, a Marketing industry standard for 20 years on the continent.

But what I really wanted to say was that a little known fact is that Africa’s name is derived from an ancient area in modern day Tunisia known as Ifriqiya or sunny place.

Issue one of Global CMO™ Africa Edition, is due for release September 2nd 2013. So make sure you get it, by simply subscribing here.

Africa has not really been viewed as a sunny place, and many of the world’s developing economies can be found on the continent.

However as emerging economies have come to the fore globally, Africa has increased its rate of economic growth.

From 1995 to 2005 its rate of economic growth increased – an average of 5% in 2005. Many are viewing it as an continent full of opportunities. China, in particular, has been increasing its ties with countries on the continent.

This year, during a visit to Africa recently, President Varack Obama announced a US$7 billion plan to further develop infrastructure, while also working more closely with African heads of state. Trade Africa, a new programme, is designed to boost trade within the continent and between Africa and the US. Many marketers are seeing the value of being in Africa and are either looking to or have established themselves on the continent.

Global CMO™ Africa Edition will be providing marketing thought leadership, case studies, profiles and opinions, making it an invaluable tool for marketers.

August 2013 | 45

BizRadio Roundup

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Marketing In Africa Is Changing Darrell Kofkin fgmn GMN Chief Executive

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Stop The Lip Service And Get To Work In Africa Dawn Rowlands CEO Aegis Media Sub-Saharan Africa GMN South Africa President

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Is Creativity Effective In Advertising?

Dr Sarah Britten Founder, The Creativity Project

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The Re-Emergence Of Retail Flagship Stores Craig Page-Lee Managing Director, Posterscope 46 | August 2013

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Join Grant Jansen every weekday morning from 10am to noon (CAT) for the Daily Biz on Biz Radio.

Catch #MarketingBiz Fridays at 10.30am.

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Getting Your GAME On Fiona Vesey pgmn & Andrew Vesey ggmn GMN’s Official Brand Guardians Creators, Global CMO™ The Magazine

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Skills & Technology Needed To Thrive In The New Media Landscape Jo Kerwane Operations Manager, Howzit MSN

The Evolving Role Of Sales And Marketing

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Professor Greg Marshall fgmn GMN Programme Director for Contemporary Selling and Sales Management

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August 2013 | 47

We are delighted to confirm that the following GMN Faculty Members are confirmed speakers at this prestigious event, sharing their latest research and examples of best practices:

Join GMN At Brand2Global 16-18 September 2013, Doubletree by Hilton Tower of London Hotel, London UK Global Marketing Network is delighted to be endorsing the upcoming Brand2Global Conference taking place in September in London.

Featuring presentations from industry experts with global marketing experience the conference presentations are designed to answer a number of key questions facing the global marketer, including: •• What is your brand essence and how can you assure that it is established accurately in each target country?

•• What are the best practices for global advertising campaigns that combine a universal message, yet can be easily translated into local campaigns?

•• What is the best strategy for international SEO and how can you take advantage of it while building your global brand and campaigns?

•• How are social media outlets revolutionizing the way your brand interacts with customers across borders and how can you track and integrate the sentiments of your global customers in an effective manner?

Congratulations Tina Stewart Vice President, Marketing at Vormetric The winner of our ‘Be Social’ Competition. For her support, Tina has won herself a 2 day main conference pass.

Sponsorship Opportunities Still Available Join GMN as a sponsor of Brand2Global and show your dedication to helping Global Marketers thrive.

Sponsorship packages have been designed to give you the maximum exposure for each particular level of participation.

For further information or questions regarding sponsorship, download our Sponsorship Brochure, and contact Grainne Maycock with any queries at grainne@brand2global.com 48 | August 2013

16th September - Professor Robert Shaw, GMN Programme Director for Marketing Analytics will be delivering a 1-day Global CMO Masterclass, Measuring Marketing Performance.

See following page for details.

Robert will also be delivering a one hour session on Measuring Marketing Performance on 17th September.

17th September - Dr Markus Pfeiffer, Founder and CEO of Bloom Partners, and GMN Programme Director for Digital Strategy and Innovation will be delivering a one-hour session entitled ‘Winning the Empowered Consumer’, sharing with delegates the results of the “Digital Readiness” Study 2013, providing some deep insights on key success factors for winning in a digital-first era.

18th September – David Haigh, Founder and CEO of Brand Finance plc and GMN Programme Director for Brand Valuation shall be delivering a one hour session on the results of the recent Brand Finance Brand League Tables and what the drivers of success are in building a global brand.

NEW SESSION ANNOUNCED 18th September - 21st Century Global CMO for a Globalised and Digitised World GMN is delighted that Brendan Dineen, IBM Director of Marketing - Demand Programs in the UK and Ireland will be speaking at this session moderated by GMN Chief Executive Darrell Kofkin. As the former Director of Marketing and Communications for the Chairman of IBM in EMEA and a former CMO for IBM in the UK, Ireland and South Africa, Brendan shall be sharing the results of the most recent IBM Global CMO Study and share his personal insights on what it takes to operate successfully as a Global CMO in the 21st Century, the skills and capabilities required to be a Marketing Leader of today and the challenges of operating in a more globalised, digitised environment.

Come and join us and meet the GMN team and partners at this unique event.

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Measuring Marketing Performance Masterclass 16th September, 2013 In today’s challenging business environment, Measuring Marketing Performance is “one way direction” for marketers. This highly interactive Masterclass will offer them the latest techniques and tools, in order to use data to make strategic marketing decisions, optimize their brand and marketing strategy and maximize marketing ROI. The Participants will learn:

All Masterclass Delegates will also receive: •• Electronic notes •• GMN/Marketing Week Certificate of Attendance signed by Dr Shaw (to be presented the end of the Masterclass); •• Complimentary one-year GMN Affiliate Membership; •• FREE upgrade to GMN Professional Membership if application made within one month of the event.

•• how to use data to make better decisions •• what data is available and what do you need most •• how make strategic marketing decisions with data •• how to maximise the lifetime value of customers •• how to optimise your brand strategy •• how to optimise the marketing mix: advertising, promotions, pricing, innovation •• how to use econometric models

Full Day Pre-Conference Masterclass with Dr Robert Shaw - £600 (excluding UK VAT)

Book Now

•• how to use optimisation models to maximise marketing ROI

Main Conference Packages Available (pricing excluding UK VAT):

2 Day Main Conference - £1250 Single Day Registration For Conference - £675 Main conference registration also includes lunch and two refreshment breaks each conference day plus the chance to win prizes from our exhibitors during our Closing Session.

Book Now

GMN Members and Global CMO Readers Receive a

15% Discount

on 1 and 2 Day Conference Registrations.

Use the booking code: GMN15

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August 2013 | 49

Metamorphosis Of 20th Century Institutions, Into The 21st Century “Corpnation” Anuja Prashar pgmn

This is the first article in a three part series which address the question of ‘what is the new marketing landscape of the 21st Century and the impact of emerging economies on the strategic thinking of a future global CMO? ’ This first article introduces the concept of “Corpnation” as the new emerging institutional form of systems and organisations in the 21st century. The second article deals with Emerging Economies and the increasing influence of ‘development agenda’ on corporate objectives. The third and last article will explore the emerging relationships between United Kingdom, European Union and the Emerging Economies, within the dynamic emerging global political economy.

The current rapid formation of transnational corporations, transnational governance institutions and transnational networks heralds the embryonic formations of a new 21st century model for institutional organisation. This article does not discuss the reasons for the emergence of these new formations or judge whether these are desirable or undesirable developments. The author’s premise that transnational organisations are superseding formations of Nation States and Inter-National commercial ventures is 50 | August 2013

upheld today by extensive research within disciplines of Economics, Sociology and Politics. ((Sklair 2001; Dickens 2008; Useem 1984; O’Conner 1994; Rothkopf 2008; Sassen 2006; W. I. Robinson 2007; Stiglitz 2002; Castells 2004; Apeldoorn, 2004 ) If transnational corporations are superseding or are equally influential in determining the course of national and global economies, then surely they should now also become responsible and accountable for how, where and when they influence society and the economy – both within the nations in which they operate and generally across the globe. This article focuses on how these emerging transnational structures should now be actively developed and managed in order to align them with the plural values, diverse economic circumstances and future requirements of an inter-dependant global human society of the 21st century.

A focus on values and changing corporate values is justified by the understanding that the most successful enterprises and ‘best marketing practice’ serve the needs of the market, and seek satisfaction of the customer, which

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in turn reflects the values of that society. (Quelch, 2009) ie.

Consumption within market lead economies is a result of a needs based response. As we witness wide spread public uprising and protests across the globe, it will be easy to transfer all responsibility for remedies to the national apparatus of these countries.

However, as professionals who believe that Marketing can be a mechanism for greater good because it serves the democratic demands of people and does not only chase a profit motive (Quelch, 2009) we must consider three trends.

First, those developed countries where economic growth is ‘bumping along the bottom’ and will probably continue to do so for another decade, are being transformed from a market of many with wealth and few in poverty, to a market place with increasing numbers of the population without means to consume as they did in the past. Secondly, the ‘emerging economy’ countries with significant and sustained economic growth over the past 15 years have burgeoning middle classes that are cautious consumers, in a country with very high infrastructure and developmental needs. Thirdly, the developing countries which are still overwhelmed with large proportions of their populations living in poverty, by deep contrast are becoming starkly visible in an increasingly inter-connected and economically polarized world.

As these 3 trends within the global economy - (a) Countries bumping along the bottom (b) Countries emerging to become key influential drivers of global economy (c) Countries where the large population demand for poverty elimination is the primary national driver - become entrenched over the next decade, we will require a realignment of fundamental values to serve the need of the larger proportion of humanity – whether as consumers or as citizens of a nation or as citizens of a global society.

Past and current institutional formations have been based on the ideology of market capitalism and military organisation (Sennet 2006), that resulted eventually into the formation of the nation state and international business organisations (Schumpeter 2012; Sennet 2006; Goldthorpe 1996) These formations alongside political forces have served to ensure that countries following the ‘old’ model have prospered with unprecedented scales of wealth and standards of living for large populations of their citizens.

(Maddison 2007; Hobson 2004) This has created a world of disproportionate distribution of wealth across the globe (Hardt & Negri 2001; Negri 2004).

In the 21st century we are beginning to see a ‘shift’ of distribution of wealth towards the so called ‘emerging economies’ that suggests a redistribution of wealth and wealth creation across the globe over the next 30 years.

However, we should be cautious to think that these initial shifts will solve the inequity of the past 500 years.

The reasons for these shifts and trends are numerous and geographically specific for each nation state and regional space. Common understanding of these shifts

Wealth Shares 2010 By Region (%) 2% India 4% Latin America

1% Africa

8% China 32% Europe 22% Asia-Pacific

31% North America

Source: Credit Suisse Global Wealth Databook, Shorrocks/Davis/Lluberas

are associated with the concept of Emerging Market Economies (Antoine van Agtmael 1980) and the flow of capital (Srinivasan 2003) particularly associated with the growing economies of the BRIC countries and an increasing emphasis on ‘bottom up’ development in order that these nations are enabled to distribute wealth and infrastructure to their larger disadvantaged populations. Therefore, there will have to be a move away from the rigidity of discussing and understanding market and international relationships only through the singular prism of nation states. (Bottero 2004) The economies of most of the Fortune 500 companies are larger than most of the countries on the globe and astonishingly are even larger than many nation states within the developed world. Of the 190 countries monitored by the World Bank only 26 countries have an economy larger than the top ranking Fortune 500 Corporation. There are 120 countries with economies smaller than the top 50 Fortune 500 transnational corporations.

In the 21st century transnational era, where time and space are collapsed by technology and influence is exerted through monetary prowess, size matters. Thus the measurements of GDP for size of a country’s economy and the measurement of Revenues (turnover) as size of transnational corporation’s economy may be used to make a comparison. Of the 190 countries the World Bank measures, there are only 26 countries with a GDP larger than the total revenues of the top ranked transnational corporation. Countries ranked after 26 shown on the following page.

Global CMO™ The Magazine

August 2013 | 51

COMPANY Company Name World Rank 1 Wal-Mart

Revenues ($b) 469.20

COUNTRY COUNTRY Economy World Rank 27 Austria

GDP Billions $ 399.65

2

Exxon Mobil

449.90

28

South Africa

384.31

3

Chevron

233.90

29

Venezuela, RB

382.42

4

Phillips

169.60

30

Colombia

369.81

5

Berkshire Hathaway

162.50

31

Thailand

365.56

6

Apple

156.50

32

United Arab Emirates

360.24

7

General Motors

152.30

33

Denmark

314.24

8

General Electric

146.90

34

Malaysia

303.53

9

Valero Energy

138.30

35

Singapore

274.70

10

Ford Motor

134.30

36

Chile

268.31

11

AT&T

127.40

37

Hong Kong SAR, China

263.26

12

Fannie Mae

127.20

38

Nigeria

262.60

13

CVS Caremark

123.10

39

Egypt, Arab Rep.

257.29

14

McKesson

122.70

40

Philippines

250.27

15

Hewlett Packard

120.40

41

Finland

250.02

16

Verizon Communications

115.80

42

Greece

249.10

17

UnitedHealth Group

110.60

43

Israel

242.93

18

J.P. Morgan Chase & co

108.20

44

Pakistan

231.18

19

Cardinal Health

107.60

45

Portugal

212.45

20

International Business Machines

104.50

46

Ireland

210.33

21

Bank of America Corp

100.14

47

Iraq

210.28

22

Costco Wholesale

99.10

48

Algeria

207.96

23

Kroger

96.80

49

Kazakhstan

201.68

24

Express Scripts Holding

94.40

50

Peru

197.11

25

Wells fargo

91.20

51

Czech Republic

195.66

26

Citigroup

90.80

52

Kuwait

176.59

27

Archer Daniels Midland

89.00

53

Ukraine

176.31

28

Procter & Gamble

85.10

54

Qatar

172.98

29

Prudential Financial

84.00

55

Romania

169.40

30

Boeing

81.70

56

Vietnam

141.67

31

Freddie Mac

80.60

57

New Zealand

139.77

32

Amerisource Bergan

79.70

58

Hungary

125.51

33

Marathon Petroleum

76.80

59

Bangladesh

115.61

34

Home Depot

74.80

60

Angola

114.20

35

Microsoft

73.70

61

Puerto Rico

101.50

36

Target

73.30

62

Morocco

96.73

37

Walgreen

71.60

63

Slovak Republic

91.62

38

American International Group

70.10

64

Ecuador

84.53

39

INTL FCStone

69.30

65

Syrian Arab Republic

73.67

40

Metlife

68.20

66

Oman

71.78

41

Johnson & Johnson

76.20

67

Azerbaijan

67.20

42

Caterpillar

65.90

68

Belarus

63.27

43

Pepsico

65.50

69

Sri Lanka

59.42

44

State farm Insurance Cos

65.30

70

Dominican Republic

58.77

45

Conoco Phillips

63.40

71

Sudan

58.77

46

Comcast

62.60

72

Luxembourg

57.12

47

WellPoint

61.70

73

Croatia

56.44

48

Pfizer

61.20

74

Uzbekistan

51.11

49

Amazon.com

61.10

75

Bulgaria

51.03

50

United Technologies

59.80

76

Guatemala

50.80

52 | August 2013

Global CMO™ The Magazine

Even though China is celebrated as the national economy that has enjoyed over 8% growth for the past 15 years, the economy of China is still only half of that of the USA. The BRIC (Brazil, Russia, India, China) countries are celebrated as the ‘emerging economies’ to watch and which will provide future opportunities for all transnational corporations to grow. However, China’s economy is larger than the economies of all BRICS together. The CIVETS (Columbia, Indonesia, Vietnam, Egypt, Turkey, and South Africa) are also viewed as key future markets, with sustained growth rates post 2008 financial crisis and with very young growing populations. Over the next ten years most of the growth of the global economy will occur in developing countries, thus the developmental agenda for all growing economies will by necessity become a key focus and one that all CMOs will do well to keep their eye on.

The demographics of these countries alone are so significant - over one third of the world’s population live in India and China - that they will almost dominate future decision making strategic thinking for all transnational corporations.

As Africa becomes a focus and driver for economic growth and change (Mahajan 2012; Robertson 2012) the other third of the world’s needs either as consumers, as citizens of a nation or as citizens of a global society, will all need to be accounted for.

These shifts of economic and political influence from ‘North to South’ or global changes of orientation from ‘West to East’ raise key issues for all corporations and CMOs as to which values are to become the drivers for global economic development in the future. The current short sighted option that most transnational corporations have adopted is to retain the ‘old’ model of operations and target existing consumer markets (Carroll & Carson 2003) so they only need to align their strategy for capitalizing on the growing middle class in the emerging economies.

Millions in the BRICs to Enter Middle Class Income Bracket By 2020, Far Surpassing The G7

Millions of people

Source: Goldman Sachs 2006 BRICS report

Percentage Of Global Population However, the scale of ‘developmental need’ of two thirds of the world population is so great that this old ‘tried & tested’ strategy will not be sustainable. (Negri 2001; Stiglitz 2002; Etzioni 2004; Basu 2004) and will also need to be adopted as a core strategic objective for all corporations. This is the subject of my second article. Another key area that has to be addressed, as Capitalism wins and now reigns over global systems, is to question if Capitalism can indeed deliver on the global developmental agenda and how. This is the subject of my third article.

19% China 35% Rest Of World 18% India 10% Remaining G20 Countries

3% Brazil

4% Indonesia

7% EU - 27

4% USA

Source Euro Statistics 2013

So far 20% of the world’s population living in industrialized counties consumes 80% of the world’s resources (Lambin 2009). However the growth of consumption in the BRICs markets – especially of India and China – is causing an inevitable shift, with associated implications for economic, social and political influence. (Cornia 2004).

In order to understand the context for the changing trends of the 21st century, the focus for this first article has to be on how the two considerations mentioned above, are already beginning to influence the recent formation of new structures and systems, towards what I call the ‘Corpnation’ – an institutional formation that incorporates the values and objectives of both a transnational business and that of a nation state. I would also like to suggest that this new formation may hold the seeds of possibility for solving many of the 21st century challenges.

Lesley Sklair (past Professor at the London School of Economics, UK) suggests “a transnational capitalist class (TCC) based on the transnational corporations is emerging that is more or less in control of the processes of globalisation” driven by an ideology of consumerism (Sklair 2001). For Sklair the TCC includes transnational corporations, media, professional political lobbyists and professional supporters of the corporations.

Global CMO™ The Magazine

August 2013 | 53

If Sklair is right, and my research suggests that he may be, the TCC determines the direction and future characteristics of global processes, which includes the changes in all economic, political, social and ideological spheres. According to Sklair the transnational capitalist class (TCC) is not identified with a particular country, but is only identified with the global capitalist system. (Sklair 2001) I dispute this with evidence from my PhD research and because we will come to see that the TCC is not a homogenous grouping with values that only display a profit driven consumerist ideology. Sklair also suggests a distinct separation between nation states and large transnational corporations, linked only by an ambiguous thread of political lobby groups. However, there is an obvious marriage within these two organisational formations within many countries.

(Carroll & Carson 2003; Prashar ,PhD Thesis 2015) After the Financial crisis of 2008, largely founded by and experienced in the ‘western developed countries’, with

the resulting increased pressure for economic solutions to be found from a wider global economy, we witnessed an expansion of the countries of G8 ‘club’ to include 12 new countries to form the G20. We now have to become cognizant of the fact that China, India and other significant emerging economies are beginning to have a far greater influence within the TCC and that we need to be able to assess how and why this matters. (Sheth 2006) On the surface emerging economies and corporations of emerging economies are following the traditional structural and organisational system for growth and institutional forms to compete within the global economy – That is namely through the institutions of transnational corporations.

However, on closer inspection the driver and the relational organisations of these ‘Emerging Economy’ transnational corporations are significantly different. In the case of China most of the transnational corporations are wholly or largely owned by the state.

China Top 10

Rank

Corporation Name

Revenues Billions $

Sector / General Info

1

Sinopec

208

Global Rank – 5. China Petroleum & Chemical Corp., known more briefly as Sinopec, supplies 80% of China’s fuel and is Asia’s biggest oil refiner.

2

China National Petroleum

181

Global rank – 6. Known as PetroChina, the world’s largest company by market value. Its stock has risen 35% this year, allowing it to overtake Exxon as the world’s biggest company by market cap.

3

State Grid

164

Global rank – 7. China’s biggest power company oversees energy lines across the entire country -- reaching more than 1 billion people.

4

ICBC

71

Global rank – 54. State-owned Industrial & Commercial Bank of China (ICBC) is worth $236 billion in market value -- $40 billion more than its closest rival, Britain’s HSBC. Since going public in 2006, the Beijing bank has grown to nearly 200 million customers.

5

China Mobile

65

Global rank – 77. Controls 70% of the China wireless market, China Mobile is the country’s dominant provider.

6

China Construction Bank

58

Global rank – 81. It ranks as China’s No. 2 bank with a market value of $200 billion. Shares rocketed up by 54% this year as it lent record sums for China’s $585 billion stimulus. China Construction Bank is one of the country’s Big Four state-owned banks.

7

China Life Insurance

55

Global rank – 84. The country’s largest life insurance company controls nearly half the market.

8

Bank Of China

51

Global rank – 93. Fourth largest of China’s state-owned Big Four banks, with 350 million customers and 24,000 branches.

9

Agricultural Bank Of China

48

Global rank – 113. Focused on lending in the country’s rural districts.

One of China’s state-owned Big Four banks, but least successful of them all.

Sino Chem

44

Global rank – 129. State-owned Sinochem is one of China’s largest umbrella companies, with businesses in oil, agriculture pesticides, financial services and high-end real estate.

10

Source Fortune 500 October 2009 & CNNMoney

54 | August 2013

Global CMO™ The Magazine

The privatisation of many transnational and local corporations within Indian and China has raised significant equity for the individual companies. However due to the very large markets within which China and India operate, the total percentage share issued for public offering can remain significantly low. China’s construction bank, although has shares exchanged daily on stock market is largely state

owned. China Construction Bank shares rocketed up by 54% this year as it loaned record sums for China’s $585 billion infrastructure and construction projects. In 2010, India Coal made a 10% Public stock offer and the stock closed 40% higher than IPO price after only the 1st day of trade and raised 2.6 Billion $.

Fortune 500 Top 10 Indian Companies

Rank

1

Corporation Name

Indian Oil Corporation

Revenue Billions $

Sector / General Info

86

Global rank - 83. India’s flagship national oil company with business interests straddling the entire hydrocarbon value chain – from refining, pipeline transportation and marketing of petroleum products to exploration & production of crude oil & gas, marketing of natural gas and petrochemicals.

2

Reliance Industries Ltd

76

Global rank - 99. The flagship company, for Reliance Group& the largest private sector company in India. Reliance pursued a strategy of backward vertical integration - in polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain.

3

Bharat Petroleum Coproration Limited

45

Global rank - 225. Indian state-controlled oil and gas company headquartered in Mumbai

39

Global rank - 267. The Bank is actively involved since 1973 in non-profit activity called Community Services Banking. “Our commitment to nation-building is complete & comprehensive”.

37

Global rank - 285. Government of India Enterprise with a Navratna Status, 20% Marketing share in India among PSUs and a strong market infrastructure and 40% of the India’s total Lube Base Oil production.

4

5

State Bank Of India

Hindustan Petroleum

6

Tata Motors Limited

35

Global rank - 314. Largest manufacturer in Indian automotive industry. It is the leader for commercial vehicles and among the top 5 for passenger vehicles

7

Oil And Natural Gas Corporation

31

Global rank - 357. multinational oil and gas company headquartered in Dehradun, India

28

Global rank - 401. 12th-largest steel producing company in the world, with an annual crude steel capacity of 23.8 million tons, and the largest private-sector steel company in India.

14

NO global rank - an aluminum manufacturing company and is a subsidiary of the Aditya Birla Group. One of the world’s largest aluminum rolling companies and one of the biggest producers of primary aluminum in Asia

11

No global rank - Indian state-controlled coal mining company headquartered in Kolkata, West Bengal. India and the world’s largest coal miner. In 2010 the 10% Public stock offer stock closed 40% higher than IPO price after 1st day and raised 2.6 Billion $.

8

9

10

Tata Steel

Hindalco Industries

Coal India

Source Fortune 500 October 2009 & CNNMoney

Global CMO™ The Magazine

August 2013 | 55

Many in the west dismiss these notions of the increasing influence of transnational corporations from emerging economies as mere drama or exaggeration. However, an analysis of the Global Fortune 500 over time reveals a significant trend in which the number of transnational corporations from the BRICS, CIVETS and other emerging economies are increasing at a rapid rate. In May 2013 the Global Fortune 500 listed that USA had now only 132, Japan 68, Germany 32, France 32, UK 26. China has increased to a resounding 73 and against remarkable odds; India and Brazil both have 8 and Russia with 7 transnational corporations in the top global 500.

More revealing than mere size and numbers are the mission statements and objectives displayed on the websites of these organisations, one cannot help but be struck by the consistent articulation of a commitment to raising living standards for citizens and the developmental agenda.

•• COAL INDIA Ltd “ To Produce planned quantity of coal Efficiently and Economically in an Eco-friendly manner with due regard to Safety, Conservation & Quality”.

•• CHINA LIFE “ While carrying out a scientific development approach to achieve better and faster growth of business, China Life integrates economic returns with social benefits and fully undertakes industrial and social responsibility and therefore, contributes to the construction of a harmonious society”.

•• PETROBRAS (Brazil) “Petrobras is driven by the challenge of supplying energy that propels development and ensures the future of the society with competency, ethics, cordiality and respect for diversity” It will be misleading to suggest that only emerging economies are displaying the embryonic formations of ‘Corpnations’. In the developed world we are visibly beginning to see the new configuration of transnational organisational patterns which reflect a regional driver.

After the 2008 financial crisis and the almost explosive Euro Crisis, we are witnessing the forced creation of a transnational system which will be unique in it’s regional operation, presiding over the geography of a regional collection of sovereign nation states – we are observing the creation and not painless birth of a Euro zone central bank, that will potentially be able to deal with the first trend; namely that of developed countries with economic growth patterns that are merely ‘bumping along the bottom’.

I am not suggesting that there is a move towards a form of Statism, but rather transcendence from state level to an organisational transnationalism which straddles both private and public space. This unique transnational formation serving the needs of individual or collective sovereign nation states operated through market forces will only engender greater mobility and accelerated opportunities for transnational corporations to serve the needs of the market. However, the economic climate in which the larger share of the market is shifting to the ‘South’ countries, there will by necessity be a drive to create a 21st century focus on greater cooperation and sharing with other nation states and corporations, in order to achieve primary corporate, national and transnational objectives and goals.

With the focus upon delivery into a market structure organized around 21st century values of pluralism, internationalism and social justice, transnational corporations will also have to become secondary owners of social welfare and reform of social structures in these newer markets. In other words, if transnational corporations wish to retain operational effectiveness and sustainable growth in future they will have to embrace a long term strategy of marketing mix which serves a combination of developmental and corporate goal.ie. Transnational corporations will need to add a strategic arm to serve the ‘bottom of the pyramid’ and the growing welfare needs of all nations whether developed or developing.

The best example to date for the type of future formations of a ‘corpnation’, that will eventually transcend both national and regional boundaries and reflect only the shared values and commitment to development of all society within the market, is the formation of a BRICS Development Bank.

This trans-regional and trans-national formation is only an abstract concept today, but will be configured in reality very soon.

“The BRICS development bank could be set up by 2015”, Russian Deputy Finance Minister Sergei Storchak told the St. Petersburg Economic Forum in June 2012. Indian Commerce and Industry Minister Anand Sharma, confirmed that 2015 was a realistic target for the launch of the BRICS Development bank and said “You can count on the wisdom of the experts in the BRICS’ central banks that are working on this.” China Investment Corporation President, Gao Xiqing emphasized that “Wisdom is required from the participating countries, we need the knowledge and experience of the participating countries.”

These statements suggest that more than the simple profit or consumer motive of the past will be required for successful organisational and implementation strategy of the new ‘Corpnation’ type of structure. The focus of the future formations of corporate activity will need to become development and economic upliftment of two thirds of the world’s population.

Albeit in embryonic stage, these configurations of transnational and trans-regional formations I call the ‘Corpnation’ heralds a new era for global business and global market professionals, who will require the cultural dexterity and operational skills to first transcend ‘old’ systems of national and international structure and secondly learn to implement and strategise within deeply rooted contexts of development and consumer behavior, which reflect social needs of a dawning emergent ‘South’ and not the commercial consumerist ideology of a ‘North’ dominated past.

Anuja Prashar

pgmn

Founder | Executive Dirctor, APP Consulting Anuja Prashar is GMN Programme Director for Emerging Markets and sits on the GMN Global Advisory Council. She is involved in academia, consultancy and politics.

She teaches in Higher education on International Business, Emerging Economies, Global Management, Globalisation, Political Identity & Cross Cultural Communication Anuja has a BA Economics (Hons.) from University of Michigan, AnnArbor (USA), an MSc Race & Ethnic Relations. Birkbeck College, University of London and MPhil Sociology, She is currently completing her PhD. Anuja has a long standing record of civic participation in Interfaith & Race Relations work. International experience includes building water wells in villages of Kenya with International women’s group, being appointed to Global Strategic Hindu & Jewish Schloars team: Hindu Acharya Sabha, (2007) and appointed to Indian National Commission for Minority Educational Institutions: sub-committee (2007) Anuja is currently a Liberal Democrat Euro Parliamentary Candidate for London Region 2014 and Chair of British United Indian Liberal Democrats (BUILD).

She writes regularly for Indialink International magazine, UK on issues of Religion, Transnational Business & Political Identity

Catch the second article in this three part series on Emerging Economies and the New Marketing Landscape, in the next issue of Global CMO™ The Magazine - Out Monday September 2nd 2013.

BIBLIOGRAPHY: Apeldoorn, B. v. (2004a). Theorizing the transnational : a historical materialist approach. Journal of International Relations and Development(7), 142-176.

Apeldoorn, B. V. (2004b). Theorizing the transnational: a historical materialist approach. Journal of international Relations and Development, 7(2), 142-176 Basu, K. (2005). India’s emerging economy: Performance and Prospects in the 1990s and Beyond: Oxford University Press.

Bottero, W. (2004). Class Identities and the Identity of Class. Sociology, 38(Number 5), 985-1001.

Carroll, W. K., Carson, Colin. (2003). The network of global corporations and elite policy groups: a structure for transnational capitalist class formation? Global networks: A Journal pg transnational affairs, 3(1), 29-57.

Castells, M. (2004a). The power of identity - the information age: economoy, society & culture volume II (Second ed.): Blackwell publishing.

Castells, M. (2004b). The power of identity - The information age, economy, society and culture (second ed. Vol. 2): Blackwell Publishing.

Cornia, G. A. (Ed.). (2004). Inequality, growth and poverty in an era of liberalisation anf globalization. (World Institute for development Economics; United Nations University ed.): Oxford University Press Dicken, P. (1998). Global Shift - transforming the world economy (Third ed.): Paul Chapman Publishing Ltd. Etzioni, A. (2004). From Empire to Community: Palgrave McMillan Goldthorpe, J. H. (1996). Class analysis and the reorientation of class thoery : the case of persisting differentials in educational attainment. British Journal of Sociology(45), 481-505.

Goldthorpe, J. H. (1998). Rational action theory for sociology. British Journal of Sociology, 49(2), 167-192.

Hobson, J. M. (2004). The Eastern Origins of Western Civilisation: Cambridge University Press.

Kurien, P. A. (2007). A place at the multicultural table : The development of an American Hinduism Negri, A. H., Michael. (2000). Empire: First Harvard University Press.

Negri, A. H., Michael (2004). Multitude - War and Democracy in the age of Empire: Penguin Press. New York Robinson, W. I. (2007). Beyond the theory of imperialism ; Global capitalism and the transnational state. Societies without boundaries(2), 5-26.

Rothkopf, D. (2008) Supercalss : The global power elite and the world they are making. Little,Brown Sassen, S. e. A. (2007a). Decipering the global : It’s Scales, Spaces and Subjects.: Routledge Schumpeter, J. A. (1989). Essays : On entrepreneurs, Innovations, Business cycles and the Evolution of Capitalism Sennett, R. (2006). The culture of the new capitalism: Yale University Press - New Haven & London.

Sheth, J. S., Arun. (2006). India as a Global Supplier of Products and services: Expectations and emerging Challenges.

Sklair, L. (2001). The transnational capitalist class: Blackwell publishers Stiglitz, J. E. (2002). Globalisation and it’s discontents: W.W.Norton & Company .

New York. London.

Useem, M. (1984). The inner circle: Oxford University Press

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Marketing And Finance: It Is Time To Unite!

David J Hood pgmn

The Cynic knows the price of everything and the value of nothing (Oscar Wilde) This issue, the confrontation between marketing and finance, was one of the largest and most important Chapters in ‘The Marketing ‘Manifesto’ book. It is self-evident that the axis between marketing and finance is critical, and is the heart and artery of every organisation. The circulatory system keeping the revenue stream managed and maintained. But we all know that we have never seen eye to eye...

Finance and Marketing are forever at loggerheads. Finance thinks we do nothing but spend money. We think that Finance just look for ways to thwart our creative schemes by hitting us with the ‘perennial ROI Question’. Differing worldviews, differing perspectives. Both professions think they are right, but both are fundamentally wrong and continually at odds.

60 | August 2013

The Heart Of The Feud ‘Clan Marketing’ and ‘Clan Finance’ have played out this feudal game over decades. The advent of new technologies, and a growing realisation in both camps that there must be a more systemic way to align both perspectives, has meant that the long heralded new means to have greater accountability and control over marketing spend must be within our grasp. Surely?

So apart from a realisation that issues and differing prognoses remain irresolvable, what is at the heart of the feud? In one sentence: it is the Cost Fixation and Value Conundrum - it is the existence of different and misguided measurements that are at the heart of the problem. In an effort to ‘manage’ business and commerce we humans have, over time, inadvertently dehumanised our organisations and polarised the two salient objectives - efficiency and effectiveness. The former is leading the business and its financial measurements; how can we sell more and deeper to the market, rather than including the latter, how can we more effectively satisfy the human beings in the market.

Global CMO™ The Magazine

The Marketing Manifesto So Is Finance The Enemy Of The Customer?

It is not that we Marketers - or our colleagues in Finance have set out to dehumanise business, nor try to serve our fellow humans any less. But the measurements that we hold dear actually result in doing just that. We do it every time that ‘efficiencies’ - and its various conflicting and selffulfilling variants - are used over and above ‘effectiveness’.

We have discussed in previous ‘Marketing Manifesto’ columns here in Global CMO™ magazine that the divergence between ‘what we wish to make, deliver and sell’ directly contrasts and collides with ‘what the market would wish us to do for them’, and this results in an unresolvable conflict between the organisation and its market. This is compounded by the polarised conflict between efficiency and effectiveness. Why do we measure efficiency, yet find it so difficult to measure effectiveness, subjugating all to drab self-seeking metrics and indeed, actually even negating any aspiration to meet qualitative, effectiveness goals? I guess it is because, simply, efficiencies are easier to measure and effectiveness less so. And most of the ‘change’ advocated by the business chattering classes reflects this. (Footnote: witness the recent creation of Richard Branson’s ‘Plan B’ initiative to attempt to address the ‘non-human’ attributes of business thinking).

It’s The Fear Factor Humans are averse to loss more than attracted to gain.

We know this as marketers, and indeed cynically employ this facet in our campaigning strategies. How is this important in combating the Finance v Marketing feud? Well, as efficiencies and costs are much easier to gauge and reduce than effectiveness and value are to maximise, then our whole corporate thinking - our efforts to improve and save our own behinds in our jobs - are based on the fear of spending and adding unnecessary costs.

The Finance Department, Director, Manager or your Accountant will tell you precisely what your costs are to the nearest cent or penny... that is what is expected of them.

But what they cannot tell you is what true value is or where it is to be found. That is the difference. They can maybe help with some ‘purchasing benefits’ for the customer, but they won’t be able to help you in your quest for ‘operational or experiential benefits’ to offer the market, and secure the customer.

A primary and fundamental conflict exists - similar to the one uncovered in my previous article - but this time it is that the pressure of finding and creating real value is

stymied by the cost-plus world of the number-crunchers. I am not being unfair to our colleagues in Finance - that is the way they have been taught to behave and operate. That is how they are measured. Likewise, we have been taught that all we need to do is be ‘creative’. Their inability to see value adds to the uncertainty of our ‘unbridled creativity’ - resulting in a kind of ‘corporate rigor mortis’. No-one wishes to spend money on marketing, if they can help it.

Especially in the current financial climate. The Fear Factor of the cost accountancy world means marketing is seen as a necessary evil - or even an unnecessary evil!

A New Alignment And Enlightenment Can we align, not only the market with the company, but continue that alignment all the way into the company to the Finance Director, Manager or Accountant? We Marketers strive to construct a fair price based on value, or market perceptions; Finance price up based on margin and incremental contribution to overhead. Do you think the people who pay for our products and services come up with a price in the heads that is dependent on our internal accounting principles? Just because our latest change in efficiency, product/service ‘improvement’ or tweaked campaign did not lose money, it also probably didn’t mean that we made as much as we could have done, nor served the market any better.

It is a complete fallacy to think we have a better handle on what value is than the market. It is an even greater delusion to think that our measurements - our company’s performance metrics based on efficiencies - mean squat to the customer and to the market. If the measurements are misaligned, then the organisation and market are misaligned. Simple.

The Requirement For Evolved Alignment I know, not exactly a catchy phrase... But there is a serious message in all of this. Not just for us Marketers who are wishing to ‘give better value to our markets and charge accordingly’ but also as professionals seeking and striving to recapture the initiative so our expenditure is not just seen as a budgetary line item, but as an investment for our organisation. And who knows, be taken a bit more seriously

by Finance. If we can align our fellow professionals in Finance with the market and marketing, we can break the ‘Clan feud’.

Core accounting methods haven’t changed much since the days of the industrial revolution. The way

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we fundamentally record and submit corporate returns hasn’t changed since the mid 1800’s. And we run our companies on the same metrics. But our markets, customers, deliverables, processes and just about everything else in business has changed. But changing efficiency measures ad nauseum, which simply tinkers with cost-plus and cost-accountancy methods, is not the change that is required. Nor cynical ways to better cajole the customer for less cost.

Price - what we charge the customer and is supposed to reflect value - is the hardest ‘P’ to set in the Marketing Mix. Ever wondered WHY? It all boils down to this fixation on costs and efficiencies, and their combination results in a total and profound misalignment with value from the market’s perspective. Q.E.D. Bob Wells, American Editor for Windows and Net magazine, said ‘Your true value depends entirely on what you are compared with’. Note, Bob didn’t say our value depends on what we think it is, nor on some intrinsic aspiration or concept of ‘worth’. Markets and customers wont compare your internal measurements or care about our idea of ongoing success - they only use external measurements, by definition.

The Challenge And ‘The Epsilon Project’ How much time is spent - in meetings and analysis, in searching for cost cutting measures - in proportion to time with the customer, on REAL added-value activity? Can we collaborate with the Finance people, bringing them out to visit customers and involving them more directly in marketing investments? ‘The onus is on us, people’- not Finance - to get our house in order. Only then will marketing cease to be a ‘budget line item’ and expense, and become a firm and virtuous investment in continuous revenue creation. That is why we are aiming at to do our bit to crack at least one major ROI issue before the end of this year.

We are undertaking an initiative to stop the tweaking with the Proposition, which will help bring Finance onside, and we’ve set up a headline initiative ‘The Epsilon Project’ (@projectepsilon) to do just that. We want to ‘show them the money’. Let’s crack this, for the sake of marketing, and in turn raise our own personal value in the organisation and as professionals.

We inadvertently allow ourselves to be led by wrongful measurements, that in turn choke our genuine efforts to be competitive by compromising - immersing ourselves in our own internal, finance-fixated view of worth or value. Our view - the organisations current view - on value actually leads inexorably to commoditisation, not competitive differentiation and an edge. It can be otherwise. Let’s crack ROI. Let’s kiss and make up with Finance.

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Competitiveness Strategist David James Hood is a member of the GMN Global Advsiory Council. A proficient and experienced Competitiveness Strategist who thrives on seeking improved revenue performance using realistic and practical market-led methods, David’s passion is to lead the call for the smaller business to improve marketing effectiveness through the ‘Competitive SME’ initiative.

He has served on the UK’s Marketing and Sales Standards Setting Body and the manufacturing trade body competitiveScotland.

He is Co-Director of the ‘Competitive SME’ mission, and is also a Guest Lecturer at the University of Glasgow.

In 2013, Addressing the Marketers ongoing issue of “Getting the Proposition Right, First Time…” David has launched ‘The Epsilon Project’ (on Twitter @projectepsilon) David’s two new books, are available through Kogan Page - ‘The Marketing Manifesto’, for professional marketers and marketing, improving prowess for both the Marketer and the organisation, and ‘Competitive SME’.

Upcoming Events Official GMN Events: GMN Mauritius Launch 5 September 2013, Mauritius

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GMN Fellow Profile

Marylee Sachs

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GMN Global CMO Czar Founder, CEO, CMO Changing MO LLC

MaryLee Sachs is the GMN Global CMO Czar and former US chairman & worldwide director of consumer marketing of WPP firm Hill & Knowlton (2005-2011).

and campaign execution spanned the European region or were international in scope. Most work included integration across marketing disciplines.

MaryLee was previously President/CEO US for three years (2002-2005), during which time she restructured the US leadership team, revamped the firm’s governance and marketing efforts, upgraded its social media offer and revitalized its business development practices. Prior to her US post, MaryLee was based in London as EVP of the firm’s worldwide consumer marketing practice.

Highly active in the marketing space, MaryLee has been a member of the Marketing 50 and an advisor to The CMO Club in the US for over three years. She also has retained her membership of the Marketing Group of Great Britain and The Marketing Society in the UK since the early 1990s.

In 2009, MaryLee served on the inaugural PR Jury at the Cannes Lions International Advertising Festival.

She is Founder, CEO and CMO of newly-formed Changing MO consultancy group, based on the tenets of the book she launched in 2011 - The Changing MO of the CMO: How the Convergence of Brand and Reputation is Affecting Marketer. She has worked with and advised many bluechip organisations including Procter & Gamble, PepsiCo, Kellogg’s, American Express, HSBC, Johnson & Johnson, Kodak, Motorola, Anheuser-Busch, Patek Philippe, Porsche, Beiersdorf and others. In many cases, strategic direction

Are you a Marketing Leader?

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Hear from Marylee in our Marketing Leadership Issue.

Out Monday 2nd September

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Everyone has different favourites and assigns value differently.

Value To Each Customer – The Only Pricing Strategy That Really Works Peter Hill

In a perfect world you would set a unique price for every single customer based on the value to them of each individual product or service you provide, and at that specific point in time. That is value pricing.

I can pay more? We might also consider the significance of the item itself at that point in time, so that if a customer is desperate and needed your product right then, the price could be higher than if they had time to shop around.

This would take into account factors such as their ability to pay, so you might charge more to those customers who can afford it and less to those who can’t. Now that is not just the fact that they have the money to pay, but actually that our perception of value is distorted by our financial situation. I would never think flying first class was value for money when I have to work as hard as I do to pay for it, but if I won the lottery and had £5m in the bank, I may well decide to fly first class. The product hasn’t changed, the value on offer is the same, but my perspective on it has changed. So should the supplier charge more just because

There are many people who will struggle with these ideas.

They would see it as profiteering or perhaps ripping people off. You may want to consider, though, that every business should make a profit which reflects the effort and risk that they take each day that they open for business, and very few achieve this. This may mean that the business will need to seize opportunities to make very good profits on some transactions, and accept lower profits and perhaps even losses on other transactions, knowing that it will balance out over time.

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The overall critical objective is to set prices based on the value to the customer. Consider a new model smartphone for example. The cost to make this is around £120. If the manufacturer adopted a cost plus mentality they might double it or even treble it. If they adopted a last year’s pricing plus a bit approach, they might take the previous model price and add say 20 per cent for the uplift to the newer one. The manufacturer of course wants to get the best price possible and they do a lot of research to establish what the perception of value is within its marketplace. How does it compare to the alternative products customers could choose? Are typical customers spending business money or their own cash? Even down to some specific market research that would ask: ‘How much would you pay for a phone that did this?’.

Based on the information Apple gathered, they set the price at £500. This captures the early adopters that buy it because they must have the latest model, or the geeks that want the most up-to-date technology. As demand reduces, or newer versions are brought to the market, they will gradually reduce the price to sweep up more customers for whom the value perception may be lower. They absolutely never rely on just anecdotal evidence of what their competitors offer and at what price. They will know every detail of the alternative products, having researched them extensively in deciding where their own products sit within that very crowded marketplace.

Imagine a young man who ventures into a car showroom.

In front of him is a shiny red convertible sports car. He wanders around it looking at all the gadgets opening the doors, putting the roof up and down, and examining all of the buttons and knobs. The salesperson offers him a test drive where he hears the roar of the engine, and feels the exhilaration of speed.

He gets back to the showroom and the salesperson launches into the sales patter covering all the features and benefits, optional extras and eventually the price and the easy-payment terms that are available.

The reality is, of course, that it is very difficult to have unique pricing for each customer, and therefore we end up having a more generic approach. Eventually this evolves into a one-size-fits-all pricing policy, where all customers pay broadly the same irrespective of circumstances. The problem with this is the same as we might have if we operated a one-size-fits-all clothing policy. In clothing we would need to have the largest size possible in order that everyone can at least wear it, however ridiculous it might look on smaller people. With pricing this simplicity of onesize-fits-all means that the prices are driven down towards the lowest prices that appease the most price-sensitive customers, and are way below the levels the top customers could and would pay.

Now, he will of course need to consider lots of issues before he can make a buying decision, such as whether he can afford to buy or to run the car. He will need to consider whether it is a practical option; ie whether he has kids or a dog to transport. He may also need to consider how it will be perceived by others; ie does it provide the image that he aspires to, and depending on his circumstances, whether his wife or girlfriend would approve!

Think back to the last time that you bought a car, and the wide range of issues that you considered, particularly for what is of course one of the most expensive purchases that any of us buy in our lives.

You may have decided that the satnav upgrade wasn’t worth the price, but that the leather seats option was.

What were all the questions you asked the salesperson when selecting the model and specification of the car you chose?

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What I am certain of is that neither the young man looking at the red sports car, or you when you bought your last car, sat down with the salesperson and asked, ‘Can you tell me how much it cost the manufacturer to make it?’

WIN THIS BOOK Simply tweet a #MarketerMonday message, recommending these Twitter feeds to your followers:

There is a really simple point here.

The way in which you set prices requires a degree of thought and research that very few businesses invest in. How can you set prices that maximize the profit your business makes without research, analysis, testing and then training to react properly to the responses from customers?

@TheGlobalCMO @GMNhome @KoganPage Entries close 15th September 2013 One entry per Tweet so take part every Monday!

For each of the options it is important to think about what you would do if circumstances changed, as in the cost plus example. If your cost price went up 25 per cent would you expect to pass this on,and could you? What if it fell by 25 per cent, would you drop your prices to match?

What if you aimed to be just under your competitors’ prices? If they dropped them by 25 per cent would you do the same? Could you? If they increased them, would you?

The only true way to set your selling prices is through value pricing, which is establishing a value to each of your products for each of your customers and then pricing them accordingly.

What I see time and again are businesses that operate a pricing policy which is far too simplistic (to make it easy for them to calculate) and linked to some formula that ignores completely the value to the customer. To make matters worse, when the costs or competitors’ prices change, most businesses lack the courage to move their prices up when needed, yet almost always drop the prices in a blink when their costs or competitors’ prices fall. If you want your prices and profits to increase, you will need to tackle these issues. As with most things in business, it is all about value for money. The cost price, what competitors charge or even economic factors such as inflation or interest rates may influence pricing decisions, but the value to the customer is the only real issue.

Peter Hill Partner, Mark Holt and Co Limited and Healium LLP Peter Hill is a qualified accountant (both Chartered and Certified) with 30 years’ experience. He is a partner at Mark Holt and Co Chartered Accountants and Healium LLP business growth specialists.

He has worked as a business consultant for over 15 years, driving up the financial performance of businesses of all sizes.

Peter is also a sought-after business speaker and runs business seminars on pricing and profit improvement across the UK and internationally, for most of the major banks (Lloyds, Barclays, HSBC), for the Ran One accountancy network, and for SWAT, the largest UK trainer of accountants.

Reproduced by kind permission of Kogan Page, from the Peter Hill title ‘Pricing For Profit’.

Pricing For Profit Peter Hill Price is the most significant factor affecting the profitability of every business, profit centre or department. When the pressure is on to perform or grow, your instinct may be to discount, undercut your competitors, cut costs and promote through price. Yet these are often the last things you should do.

Pricing for Profit is the most practical guide on pricing available. Using a firm, profit-focused framework developed running real projects for real businesses, this book shows you how by getting your pricing structures right you can make a huge difference to your bottom line. It gives business owners, managers and leaders simple, achievable pricing strategies that will deliver sustainable business growth.

Can you afford to leave money on the table?

If not, Pricing for Profit is the guide for you. www.koganpage.com/editions/pricing-for-profit/9780749467678

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Midnight Worries lawyers convert sub-clauses into Warhols & medium-sized yachts, suitability is seldom considered beyond the balance sheet, the enlarged boardroom table & staff redundancies.

Are you going global, or are you proudly local?

Walter Spoonbill of Spoonbill & Coot sees many roads that lead to Rome, or Krakow.

Dear Walter, Our investment bank has just bought an overseas bank that has a good reputation in its country. Our bank is younger, more aggressive. Their bank is seen as more conservative - & not as profitable. Our CEO has asked me whether to retain their brand, or change to ours. He intends buying more banks, so this will be an ongoing issue. What guidelines are there?

Brand Consultant

Managing different brands requires the juggler’s art of keeping several balls in the air – difficult but doable & rewarded when done well.

Managing different cultures at the same time is the juggler entering the lion cage – you will be lucky if you have any balls left. Ask the survivors of Daimler-Chrysler or Time Warner AOL disasters. We are tribal animals & our culture determines our tribe. In the business world we may not go to war against other corporate tribes with guns & tanks, but knifing the other in the back is still considered fair game.

You have acquired another bank, with an alien culture in an alien territory. You will be playing an away game – so at least dictate the rules. We suggest three, that we call BCC – short for Business, Culture, Communications.

• Business Now you are one organisation, with one set of shareholders, ensure you have one set of business practices.

First centralise risk management, ROI, the way you report.

Dear BrandCon –

• Culture

Coot, being somewhat ascetic, does not understand the shopping spree – whether it is for shoes, sports-cars or companies. I take a pragmatic approach – acquiring stuff is a Vitamin B shot for the brain. Splashing the cash usually earns you some decent treatment & the trophy that is bought is a mute testament to self-worth.

Instil a common purpose – the ‘why’ you are here. And common values – ‘how’ you do what you do. If you are the acquiring company, you spread your purpose & your values. If it is a merger of equals you negotiate, but reach up to consensus, not be dragged down to compromise. Then operationalise your values – starting with making them 50% of a performance evaluation. And do not be shy to show the door. FIFO is a harsh way to start – harsher is muddling along until you stumble over the inevitable precipice.

Buying companies, chirps Coot, may be more fun than building up companies, but it also threatens corporate culture. While

• Communication With business practices & a common culture in place, start harmonising communications. Adopt the same look, the same style. Then as you move to one global brand, it feels like a natural progression, rather than an untimely smash & grab.

Dear Walter, We are local potato chip makers in Krakow. How can we compete with the global giants?

Local Yokel Dear Yokel, Unusually, Coot & I agree. The global giants’ strength is their weakness. They may know the world, but they don’t know Krakow like you do. A brand is a series of relationships & so strengthen those relationships in your home base. Be a good employer, a reliable supplier. Be evident in your community. Sponsor the kit of local soccer teams, from youth upwards.

Have proudly Krakovian delivery vans.

Create local flavours, Coot would try sauerkraut-flavoured chips & I am a sucker for sour cucumber.

Whilst Frito Lay offer the world $1 million for a new flavour, offer citizens of Krakow local fame & royalties for a bunch of regional recipes. Then publicise your local flavours to the seven million tourists a year who come to taste your culture.

May you be you, wherever you may be

W.Spoonbill.~

Walter Spoonbill

Wspoonbill@theglobalcmo.com Spoonbill & Coot North Corner, Southern Tip, Western Cape, South Africa

Do e-mail Walter with your Midnight Worry – the most intriguing will be published & answered.

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