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Ch01 Kotabe
 

Ch01 Kotabe

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Global Imperative

Global Imperative

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    Ch01 Kotabe Ch01 Kotabe Presentation Transcript

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