Ch01 Kotabe

3,197 views
2,895 views

Published on

Global Imperative

0 Comments
6 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
3,197
On SlideShare
0
From Embeds
0
Number of Embeds
25
Actions
Shares
0
Downloads
0
Comments
0
Likes
6
Embeds 0
No embeds

No notes for slide

Ch01 Kotabe

  1. 1. Global Marketing Management, 5e <ul><li>Chapter 1 </li></ul><ul><li>Globalization Imperative </li></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  2. 2. Chapter Overview <ul><li>1. Why Global Marketing is Imperative </li></ul><ul><li>2. Globalization of Markets: Convergence </li></ul><ul><li>and Divergence </li></ul><ul><li>3. Evolution of Global Marketing </li></ul><ul><li>4. Appendix: Theories of International Trade and the Multinational Enterprise </li></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  3. 3. Introduction <ul><li>Products have been traded across borders throughout recorded civilization, extending back beyond the Silk Road that once connected East with West from Xian (China) to Rome (Italy). </li></ul><ul><li>Total world merchandise trade volume grew from $7.6 trillion in 2000 to $16.3 trillion in 2008. </li></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  4. 4. Introduction <ul><li>Big Emerging Markets (BEMs): In the next ten to twenty years, BEMs such as the Chinese Economic Area (CEA: including China, Hong Kong Region, and Taiwan), India, South Korea, Mexico, Brazil, Argentina, South Africa, Poland, Turkey, and the Association of Southeast Asian Nations (ASEAN: including Indonesia, Brunei, Malaysia, Thailand, the Philippines, and Vietnam) will provide many opportunities in global business. </li></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  5. 5. 1. Why Global Marketing is Imperative <ul><li>Saturation of domestic markets : Domestic-market saturation in the industrialized parts of the world and marketing opportunities overseas are evident in global marketing. </li></ul><ul><li>Global competition : Competition around the world and proliferation of the Internet have been on the rise and are now intensifying. </li></ul><ul><li>Need for global cooperation : Global competition brings global cooperation. </li></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  6. 6. 1. Why Global Marketing is Imperative <ul><li>Internet revolution : The Internet and electronic commerce (e-commerce) are bringing major structural changes to the way companies operate worldwide. </li></ul><ul><li>The term global epitomizes both the competitive pressure and expanding market opportunities. </li></ul><ul><li>Whether a company operates domestically or across national boundaries, it can no longer avoid competitive pressures from around the world. </li></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  7. 7. Exhibit 1-1: Change in World’s 100 Largest Companies and Their Nationalities Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  8. 8. 2. Globalization of Markets: Convergence and Divergence <ul><li>Per capita income is an important determinant of consumer buying behavior. </li></ul><ul><li>When a country’s per capita income is less than $10,000, much of the income is spent on food and other necessities, and very little disposable income remains. </li></ul><ul><li>As a country’s per capita incomes reaches $20,000, the disposable portion of income increases dramatically. </li></ul><ul><li>This increased disposable income level results in increased convergent pressures on consumer buying behavior. </li></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  9. 9. 2. Globalization of Markets: Convergence and Divergence <ul><li>People with higher incomes tend to enjoy similar educational levels, desires for material positions, ways of spending leisure time, and aspirations for the future. </li></ul><ul><li>Globalization does not suffocate local cultures, but rather liberates them from the ideological conformity of nationalism, with consumers becoming more receptive to new things. </li></ul><ul><li>Consumers also have a wider, more divergent “choice set” of goods and services to choose from. </li></ul><ul><li>In other words, the divergence of consumer needs is taking place at the same time. </li></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  10. 10. 2. Globalization of Markets: Convergence and Divergence <ul><li>International trade consists of exports and imports. </li></ul><ul><li>International business includes international trade and foreign production. </li></ul><ul><li>Extensive international penetration of companies is called global reach. </li></ul><ul><li>International trade and foreign production activities are managed on a global basis. </li></ul><ul><li>Growth of Multinational Corporations (MNCs) and intra-firm trade is a major aspect of global markets. </li></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  11. 11. 2. Globalization of Markets: Convergence and Divergence <ul><li>Who manages international trade? </li></ul><ul><ul><li>Intrafirm trade: Trade between MNCs and their foreign affiliates. Comprises 34 percent of world trade. </li></ul></ul><ul><ul><li>An additional 33 percent of world trade was exports between MNCs and their affiliates. </li></ul></ul><ul><ul><li>In other words, two-thirds of world trade is managed one way or another by MNCs. </li></ul></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  12. 12. 3. Evolution of Global Marketing <ul><li>What is marketing? </li></ul><ul><li>Marketing involves the planning and execution of the conception, pricing, promotion, and distribution of ideas, products, and services. </li></ul><ul><li>Marketing involves customer satisfaction and their current and future needs. </li></ul><ul><li>Marketing is much more than selling and involves the entire company. </li></ul><ul><li>Within marketing strategies, companies are always under competitive pressure to move forward both reactively and proactively . </li></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  13. 13. 3. Evolution of Global Marketing <ul><li>Five stages in the evolution of global marketing (see Exhibit 1-2) : </li></ul><ul><li>1. Domestic Marketing (domestic focus; home country customers; ethnocentric orientation). </li></ul><ul><li>2. Export Marketi n g (indirect vs. direct exporting; country choice, exports; ethnocentric orientation; home country customers). </li></ul><ul><li>3. International Marketing (markets in many countries; polycentric orientation; use of multidomestic marketing when customer needs are different across national markets). </li></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  14. 14. 3. Evolution of Global Marketing <ul><li>4. Multinational Marketing (many markets; consolidation on regional basis; regiocentric orientation; standardization within regions). </li></ul><ul><li>5. Global Marketing (international, multinational & geocentric orientation; company’s willingness to adopt a global perspective; global products with local variations). </li></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  15. 15. Exhibit 1-2: Evolution of Global Marketing Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  16. 16. 3. Evolution of Global Marketing <ul><li>Global Marketing refers to marketing activities that emphasize the following: </li></ul><ul><ul><li>Standardization efforts. </li></ul></ul><ul><ul><li>Coordination across markets. </li></ul></ul><ul><ul><li>Global integration. </li></ul></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  17. 17. 3. Evolution of Global Marketing <ul><li>Global marketing does not necessarily mean that products can be developed anywhere on a global scale. </li></ul><ul><li>The economic geography, climate, and culture affect how companies develop certain products. </li></ul><ul><li>The Internet adds a new dimension to global marketing. </li></ul><ul><li>E-commerce retailers gain substantial savings by selling online. </li></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  18. 18. 4. Appendix: Theories of International Trade & the Multinational Enterprise <ul><li>Comparative Advantage Theory </li></ul><ul><li>(see Exhibit 1-3) </li></ul><ul><ul><li>Absolute Advantage </li></ul></ul><ul><ul><li>Comparative Advantage </li></ul></ul><ul><ul><li>Commodity Terms of Trade </li></ul></ul><ul><ul><li>Principles of International Trade </li></ul></ul><ul><ul><li>Factor Endowment Theory </li></ul></ul><ul><li>International Product Cycle Theory </li></ul><ul><li>(see Exhibit 1-4) </li></ul><ul><ul><li>Economies of Scale </li></ul></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  19. 19. Exhibit 1-3: Comparative Advantage at Work Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  20. 20. Exhibit 1-4: International Product Life Cycle Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  21. 21. 4. Appendix: Theories of International Trade & the Multinational Enterprise <ul><ul><li>Economies of Scope </li></ul></ul><ul><ul><li>Technological Gap </li></ul></ul><ul><ul><li>Preference Similarity </li></ul></ul><ul><ul><li>Stages of International Product Cycle Theory: </li></ul></ul><ul><ul><ul><li>Introduction Stage </li></ul></ul></ul><ul><ul><ul><ul><li>A U.S. company innovates on a new product in its home country. </li></ul></ul></ul></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  22. 22. 4. Appendix: Theories of International Trade & the Multinational Enterprise <ul><ul><ul><li>Growth Stage </li></ul></ul></ul><ul><ul><ul><ul><li>Product standards emerge and mass production becomes feasible. </li></ul></ul></ul></ul><ul><ul><ul><li>Maturity Stage </li></ul></ul></ul><ul><ul><ul><ul><li>Many U.S. and foreign companies vie for market share in the international markets. </li></ul></ul></ul></ul><ul><ul><ul><li>Decline Stage </li></ul></ul></ul><ul><ul><ul><ul><li>Companies in the developing countries also begin producing the product and marketing it in the rest of the world. </li></ul></ul></ul></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.
  23. 23. 4. Appendix: Theories of International Trade & the Multinational Enterprise <ul><li>Internalization/Transaction Cost Theory </li></ul><ul><ul><li>Appropriability Regime </li></ul></ul><ul><ul><li>Dominant Design </li></ul></ul><ul><ul><li>Manufacturing and Marketing Ability </li></ul></ul>Chapter 1 Copyright (c) 2009 John Wiley & Sons, Inc.

×