Global and Relationship Marketing — International Markets and CRM

1. Global Marketing Entry Strategies

Exporting

Indirect export: use export intermediaries
Direct export: own export department

Contractual Modes

Licensing: grant intellectual property rights (royalties)
Franchising: grant the entire business model
Contract manufacturing: outsource production to a local manufacturer

Investment Modes

Joint Venture (JV): co-ownership with a local partner
Wholly Owned: establish or acquire a subsidiary

Low commitment → High commitment

Exporting → Licensing → Franchising → JV → Wholly Owned

2. Standardization vs. Localization

Standardization

Same marketing mix worldwide
Economies of scale, brand consistency
Examples: Coca-Cola logo, McDonald’s Golden Arches

Localization

Adapt to local culture and consumers
Higher cost, but better local reception
Examples: McDonald’s menus vary by market (India = vegetarian options; USA = McRib; Philippines = rice meals)

Glocal Strategy

Global brand + local adaptation
Combines the advantages of both approaches

3. Relationship Marketing and CRM

Relationship Marketing

Retaining existing customers is more valuable than acquiring new ones
One loyal customer > the value of five or more new customers

CRM (Customer Relationship Management)

Collect and analyze customer data
Deliver personalized communications
Maximize value over the entire customer relationship

Customer Lifetime Value (CLV)

Present value of all profits expected from a customer relationship
Invest heavily in high-CLV customers

Customer Retention Rate

A 5% increase in retention can boost profits by 25–95%
Analyze reasons for churn and respond proactively

4. Digital Transformation and Marketing

Marketing 4.0 (Kotler)

Integration of traditional and digital marketing
Blurring of online/offline boundaries

5A Customer Journey

Aware → Appeal → Ask → Act → Advocate
Advocate (brand champion) is the ultimate goal after purchase

Data-Driven Marketing

Big data and AI-powered insights
Personalized recommendations
Real-time targeting

5. Key Concept Cards

Global Entry Mode Commitment: Export → Contract → Investment ★★★★★ : Commitment, risk, and control all increase as you move from exporting to contractual to investment modes. Memory tip: each step requires more skin in the game

Glocal = Global + Local ★★★★★ : The balance between standardization and localization. Memory tip: think globally, act locally

CLV = Customer Lifetime Value ★★★★☆ : The present value of the total revenue a customer generates over the entire relationship. Memory tip: CLV = a long-term investment in each customer

6. Practice Quiz

Q. What is the difference between licensing and franchising?

Licensing: grants only intellectual property rights — patents, trademarks, technology. The licensor receives royalties. The licensee is permitted to manufacture a product (e.g., Disney character merchandise licenses). Franchising: grants the entire business model, including operations and standards. Much more comprehensive control. Franchisees operate with the same brand, menu, and training. McDonald’s and Starbucks are classic examples of franchising.

Q. Why does customer retention rate have such a large impact on profitability?

Acquiring a new customer costs 5–7 times more than retaining an existing one. Existing customers have higher repurchase probability, make additional purchases, and generate word-of-mouth. Securing high-CLV customers is the key to long-term growth. Research shows that a 5% reduction in churn can increase profits by 25–95%. This is the theoretical foundation for CRM, membership programs, and loyalty schemes.