is headed by Goeran Lindahl. The company’s motto is “ABB is a global com-
pany local everywhere.” It established English—or “broken English,” as Lindahl
says—as the company’s official language (all ABB managers must be conversant
in English), and all financial results must be reported in dollars. ABB aims to
reconcile three contradictions: to be global and local; to be big and small; and
to be radically decentralized with centralized reporting and control. ABB has
only 170 staff people at headquarters (with about 19 nationalities among them),
compared to the 3,000 who populate Seimens headquarters. The company’s
many product lines are organized into 8 business segments, 65 business areas,
1,300 companies, and 5,000 profit centers, with the average employee belong-
ing to a profit center of around 50 employees. Managers are regularly rotated
among countries and mixed-nationality teams are encouraged. Depending on
the type of business, some are treated as superlocal businesses with lots of au-
tonomy and others as global businesses with major central control.part three
Developing
Marketing(^388) Strategies
SUMMARY
1.Companies cannot simply stay domestic and expect to maintain their markets. De-
spite the many challenges in the international arena (shifting borders, unstable
governments, foreign-exchange problems, corruption, and technological pirating),
companies selling in global industries need to internationalize their operations.
2.In deciding to go abroad, a company needs to define its international marketing
objectives and policies. The company must determine whether to market in a few
countries or many countries. Then it must decide on which types of countries to
consider. In general, the candidate countries should be rated on three criteria: mar-
ket attractiveness, risk, and competitive advantage.
3.Once a company decides on a particular country, it must determine the best mode
of entry. Its broad choices are indirect exporting, direct exporting, licensing, joint
ventures, and direct investment. Each succeeding strategy involves more commit-
ment, risk, control, and profit potential. Companies generally begin with indirect
exporting, then proceed through later stages as they gain more experience in the
international arena.
4.In deciding on the marketing program, a company must decide how much to adapt
its marketing mix (product, promotion, price, and place) to local conditions. At
the two ends of the spectrum are standardized and adapted marketing mixes, with
many steps in between. At the product level, firms can pursue a strategy of straight
extension, product adaptation, or product invention. At the promotion level, firms
may choose communication adaptation or dual adaptation. At the price level, firms
may encounter price escalation and gray markets, and it may be very difficult to
set standard prices. At the distribution level, firms need to take a whole-channel
view of the challenge of distributing its products to the final users. In creating all
elements of the marketing mix, firms must be aware of the cultural, social, political,
technological, environmental, and legal limitations they face in other countries.
5.Depending on the level of international involvement, companies manage their in-
ternational marketing activity in three ways: through export departments, inter-
national divisions, or a global organization. Most firms start with an export
department and graduate to an international division. A few become global com-
panies in which the top management plans and organizes on a global basis.
APPLICATIONS
CONCEPTS
1.Because of shrinking domestic markets due to competition, a moderate-size com-
pany in the salad-dressing industry is trying to decide “whether to go abroad.”