TARLAC STATE UNIVERSITY COLLEGE OF BUSINESS AND ACCOUNTANCY MASTER IN BUSINESS ADMINISTRATIONTOPIC: “DESIGNING GLOBAL MARKET OFFERINGS” Submitted by: MR. ALAIN D. OBERES Submitted to: DR. SUSAN D. RAMIREZ MBA 505 MARKETING MANAGEMENT January 26, 2008
QUESTIONS TO CONSIDER What factors should a company review before deciding to go abroad? How can companies evaluate and select specific foreign markets to enter? What are the major ways of entering a foreign market? To what extent must the company adapt its products and marketing program to each foreign country? How should the company manage and organize its international activities?
COMPETING ON A GLOBAL BASIS Although some U.S. businesses may one to eliminate foreign competition through protective legislation, the better way to compete is tocontinuously improve products and at home and expand into foreign markets. Ironically, although companies need to enter and compete in foreignmarkets, the risks are high: huge foreign indebtedness, shifting borders, unstable governments, foreignexchange problems, tariffs and other tradebarriers, corruption and technological pirating. Still, we believe that companies selling in global industries have no choice but to internationalize theiroperations. Global Industry is an industry in which the strategic positions of competitors in major geographic or national markets are fundamentally affected by their overall global positions. Global Firm is a firm that operates in more than one country and captures R & D, production, logistical, marketing and financial advantages in its cost and reputation that are not available to purely domestic competitors. Global firms plan, operate and coordinate their activities on a worldwide basis.
MAJOR DECISIONS IN INTERNATIONAL MARKETING DECIDING WHETHER TO GO ABROAD DECIDING WHICH MARKETS TO ENTER DECIDING HOW TO ENTER THE MARKET DECIDING ON THE MARKETING PROGRAM DECIDING ON THE MARKETING ORGANIZATION
DECIDING WHETHER TO GO ABROADWHY GO GLOBAL? Global firms offering better products or lower prices can attack the companys domestic market. The company might want to counter attack these competitors. The company discovers that some foreign markets present higher profits opportunities that the domestic market. The company needs a larger customer base to achieve economies of scale. The company wants to reduce its dependence on any one market. The companys customers are going abroad and require international servicing.WHY NOT GO GLOBAL? The company might not understand foreign customer preferences and fail to offer a competitively attractive product. The company might not understand the foreign countrys business culture or know how to deal effectively with foreign nationals. The company might underestimate foreign regulations and incur unexpected costs. The company might realize that it lacks managers with international experience. The foreign country might change its commercial laws, devalue its currency, or undergo a political revolution and expropriate foreign property.
DECIDING WHICH MARKET TO ENTER A company should consider the following: > marketing objectives and policies product should possess both local and global appeal > what proportion of total sales will it seek? dependent on market share and industry > when going abroadstart small or venture in a bigger plans investing strategy > going through the internet global ecommerceHOW MANY MARKETS TO ENTER The company must decide whether: > to market in a few countries or many countries selective marketing > determine how fast to expand depends on the sales outcome and market response > attractiveness of the market influenced by product, geography, income and population, political climate and other factors. > the regional free trade zones EU, NAFTA, MERCOSUL AND APEC > evaluating potential markets to consider high market attractiveness, low in market risk and market should possess a competitive advantage
DECIDING ON THE MARKETING PROGRAM > standardized marketing mix standardization of the product, advertising and distribution channels > adapted marketing mix producer adjusts the marketingmix elements to each target market.DECIDING ON THE MARKETING ORGANIZATION > export department is created when a company goes to international market > international division is created to handle all international activity as a result of international marketing and ventures > global organization refers to several firms with worldwide operations