Int to Mktng ch5

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Int to Mktng ch5

  1. 1. Developing a Global Vision CHAPTER 5 Marketing 10 Lamb, Hair, McDaniel Designed by Prepared by Eric Brengle Amit Shah B-books, Ltd. Frostburg State University Copyright ©2009 by Cengage Learning Inc. All rights reserved 1
  2. 2. Learning Outcomes LOI Discuss the importance of global marketing Discuss the impact of multinational firms LO2 on the world economy Describe the external environment facing LO3 global marketers 2 Copyright ©2009 by Cengage Learning Inc. All rights reserved
  3. 3. Learning Outcomes LO4 Identify the various ways of entering the global marketplace List the basic elements involved in LO5 developing a global marketing mix Discover how the Internet is affecting LO6 global marketing 3 Copyright ©2009 by Cengage Learning Inc. All rights reserved
  4. 4. LOI Rewards of Global Marketing Discuss the importance of global marketing Copyright ©2009 by Cengage Learning Inc. All rights reserved 4
  5. 5. LOI Rewards of Global Marketing Global Marketing Global Marketing Individuals and organizations using a global vision to effectively market goods and services across national boundaries. Copyright ©2009 by Cengage Learning Inc. All rights reserved 5
  6. 6. LOI Rewards of Global Marketing Having a global vision means… • Recognizing and reacting to international marketing opportunities • Using effective global marketing strategies • Being aware of threats from foreign competitors Copyright ©2009 by Cengage Learning Inc. All rights reserved 6
  7. 7. LOI Importance of Global Marketing to the U. S. • U.S. exports a fifth of industrial production. • One of every 5 jobs in U.S. is supported by exports. • Every U.S. state has realized net employment gains directly attributed to foreign trade. • U.S. businesses export over $800 billion in goods. Copyright ©2009 by Cengage Learning Inc. All rights reserved 7
  8. 8. LOI Importance of Global Marketing to the U. S. • Exports account for 25 percent of U.S. economic growth . • U.S. is world’s leading exporter of farm products. • Chemicals, office machinery and computers, automobiles, aircraft, and electrical and industrial machinery make up almost half of all nonagricultural exports • About half of U.S. merchandise imports are raw materials, capital goods, and industrial products Copyright ©2009 by Cengage Learning Inc. All rights reserved 8
  9. 9. LOI The Fear of Trade and Globalization • Millions of Americans have lost jobs • Millions fear losing jobs • Threat of outsourcing if workers do not accept pay cuts • Vulnerability to operations moving offshore Copyright ©2009 by Cengage Learning Inc. All rights reserved 9
  10. 10. Benefits of Globalization • Expands economic freedom • Spurs competition • Raises productivity and living standards • Offers access to foreign capital, global export markets, and advanced technology • Promotes higher labor and environmental standards • Acts as a check on government power LOI Copyright ©2009 by Cengage Learning Inc. All rights reserved 10
  11. 11. LOI REVIEW LEARNING OUTCOME The Importance of Global Marketing Know global marketing Know global marketing is important because is important because Fears Fears of economic Benefits Benefits of economic interdependencies interdependencies Identify Identify Compete against Compete against global marketing global marketing foreign competition foreign competition opportunities opportunities in domestic markets in domestic markets Understand Understand global global distribution distribution networks networks Globally-minded marketing managers: Copyright ©2009 by Cengage Learning Inc. All rights reserved 11
  12. 12. LO2 Multinational Firms Discuss the impact of multinational firms on the world economy Copyright ©2009 by Cengage Learning Inc. All rights reserved 12
  13. 13. LO2 Stages of Global Business Development Companies operate in one country and Companies operate in one country and 1 1 sell into others sell into others 2 2 Set up foreign subsidiaries to handle sales Set up foreign subsidiaries to handle sales Operate an entire line of business in Operate an entire line of business in 3 3 another country another country 4 4 Virtual operation Virtual operation Copyright ©2009 by Cengage Learning Inc. All rights reserved 13
  14. 14. Global Marketing LO2 Standardization Global Marketing Production of uniform Global Marketing Standardization products that can be sold Standardization the same way all over the world. Copyright ©2009 by Cengage Learning Inc. All rights reserved 14
  15. 15. LO2 REVIEW LEARNING OUTCOME Impact of Multinational Firms th • Human Resources Grow e u • Physical Resources Reven its Prof • Financial Resources MNC Global Global Marketing Marketing Copyright ©2009 by Cengage Learning Inc. All rights reserved 15
  16. 16. LO3 External Environment Facing Global Marketers Describe the external environment facing global marketers Copyright ©2009 by Cengage Learning Inc. All rights reserved 16
  17. 17. LO3 External Environment Facing Global Marketers Culture Culture Economic and Economic and Technological Technological Development Development Political Political Structure Structure Demographic Demographic Makeup Makeup Natural Natural Resources Resources Copyright ©2009 by Cengage Learning Inc. All rights reserved 17
  18. 18. LO3 Culture The common set of values Culture Culture shared by its citizens that determine what is socially acceptable. Copyright ©2009 by Cengage Learning Inc. All rights reserved 18
  19. 19. LO3 Economic and Technological Development Developed Developed Complex, sophisticated Complex, sophisticated Country Country industries industries Less Developed Less Developed Basic industries Basic industries Country Country Copyright ©2009 by Cengage Learning Inc. All rights reserved 19
  20. 20. LO3 Political Structure and Actions No private ownership Minimal individual freedom Little central government Maximum personal freedom Copyright ©2009 by Cengage Learning Inc. All rights reserved 20
  21. 21. LO3 Legal Considerations A tax levied on goods entering Tariff a country Limit on the amount of a Quota product entering a country Exclusion of products from Boycott a country Foreign exchange must be Exchange Control sold to a control agency Market Grouping Common trade alliance An agreement to stimulate Trade Agreement international trade Copyright ©2009 by Cengage Learning Inc. All rights reserved 21
  22. 22. LO3 Political and Legal Considerations The Uruguay Round made changes in world trading practices: Entertainment, pharmaceuticals, integrated circuits, and software Financial, legal, and accounting services Agriculture Textiles and apparel Created a new trade organization: The World Trade Organization 22 Copyright ©2009 by Cengage Learning Inc. All rights reserved
  23. 23. LO3 Political and Legal Considerations Agreements Agreements and Organizations and Organizations European European CAFTA CAFTA NAFTA NAFTA Union Union Copyright ©2009 by Cengage Learning Inc. All rights reserved 23
  24. 24. LO3 Demographic Makeup Marketing Considerations: • Population density • Urban or rural • Personal income • Age Copyright ©2009 by Cengage Learning Inc. All rights reserved 24
  25. 25. LO3 Shortages in Natural Resources Create… • International dependencies • Shifts of wealth • Inflation and recession • Export opportunities if resources are abundant • Stimulus for military intervention Copyright ©2009 by Cengage Learning Inc. All rights reserved 25
  26. 26. LO3 Natural Resources • Petroleum • Foodstuffs • Precious metal • Timber • Water Copyright ©2009 by Cengage Learning Inc. All rights reserved 26
  27. 27. LO3 REVIEW LEARNING OUTCOME External Environment Facing Global Marketers Copyright ©2009 by Cengage Learning Inc. All rights reserved 27
  28. 28. LO4 Global Marketing by the Individual Firm Identify the various ways of entering the global marketplace Copyright ©2009 by Cengage Learning Inc. All rights reserved 28
  29. 29. LO4 Global Marketing Questions • What are our options in selling abroad? • How difficult is global marketing? • What are the potential risks and returns? Copyright ©2009 by Cengage Learning Inc. All rights reserved 29
  30. 30. LO4 Why “Go Global”? • Earn additional profits • Leverage a unique product or technological advantage • Possess exclusive market information • Saturated domestic markets • Excess capacity • Utilize “economies of scale” Copyright ©2009 by Cengage Learning Inc. All rights reserved 30
  31. 31. LO4 Risk Levels for Global Entry High Risk risk/ Direct high Joint Invest- return Contract Venture ment Manu- Export Licensing facturing Low risk/ low return Return Copyright ©2009 by Cengage Learning Inc. All rights reserved 31
  32. 32. LO4 Entering the Global Marketplace Sell domestically produced Export products to buyers in other countries Legal process allowing use of Licensing manufacturing/patents/knowledge Contract Private-label manufacturing by a Manufacturing foreign country Domestic firm buys/joins a foreign Joint Venture company to create new entity Active ownership of a foreign Direct Investment company/manufacturing facility Copyright ©2009 by Cengage Learning Inc. All rights reserved 32
  33. 33. LO4 Export Intermediaries Assumes all ownership risks and Assumes all ownership risks and Buyer for Export Buyer for Export sells globally for its own account. sells globally for its own account. Plays the traditional broker’s role Plays the traditional broker’s role Export Broker Export Broker by bringing buyer and seller by bringing buyer and seller together. together. Acts like a manufacturer’s agent Acts like a manufacturer’s agent Export Agent Export Agent for the exporter in the foreign for the exporter in the foreign market.. market Copyright ©2009 by Cengage Learning Inc. All rights reserved 33
  34. 34. LO4 REVIEW LEARNING OUTCOME Entering the Global Marketplace Copyright ©2009 by Cengage Learning Inc. All rights reserved 34
  35. 35. LO5 The Global Marketing Mix List the basic elements involved in developing a global marketing mix Copyright ©2009 by Cengage Learning Inc. All rights reserved 35
  36. 36. LO5 Product and Promotion Same Change Product Product Same One Product Product Message One Message Adaptation Change Promotion Product Message Adaptation Invention Copyright ©2009 by Cengage Learning Inc. All rights reserved 36
  37. 37. LO5 Place (Distribution) • Adequate distribution is necessary for success in global markets – Some countries have complicated systems – Lack of distribution infrastructure and cultural differences create problems • Innovative distribution systems can create competitive advantage Copyright ©2009 by Cengage Learning Inc. All rights reserved 37
  38. 38. LO5 Pricing • Must consider transportation and insurance costs, taxes, and tariffs • Determine what customers will spend • Ensure that foreign buyers will pay price • May need to simplify a product to lower price • Don’t assume that low-income countries are willing to accept lower quality Copyright ©2009 by Cengage Learning Inc. All rights reserved 38
  39. 39. LO5 Exchange Rates The price of one’s currency Exchange Rates Exchange Rates in terms of another country’s currency. Copyright ©2009 by Cengage Learning Inc. All rights reserved 39
  40. 40. LO5 Dumping 1. Trying to increase an overseas market share 2. Temporarily distributing products to overseas markets to offset slack demand at home 3. Lowering unit costs by exploiting large-scale production 4. Attempting to maintain stable prices during periods of exchange rate fluctuations Copyright ©2009 by Cengage Learning Inc. All rights reserved 40
  41. 41. LO5 Countertrade A form of trade in which all Countertrade Countertrade or part of the payment for goods or services is in the form of other goods or services. Copyright ©2009 by Cengage Learning Inc. All rights reserved 41
  42. 42. LO5 REVIEW LEARNING OUTCOME Developing a Global Marketing Mix PROMOTION PLACE PRICE One Product, One Message Channel Choice Dumping Product Invention Channel Structure Countertrade Product Adaptation Country Infrastructure Exchange Rates Message Adaptation Purchasing Power Copyright ©2009 by Cengage Learning Inc. All rights reserved 42
  43. 43. LO6 The Impact of the Internet Discover how the Internet is affecting global marketing Copyright ©2009 by Cengage Learning Inc. All rights reserved 43
  44. 44. LO6 REVIEW LEARNING OUTCOME The Impact of the Internet Copyright ©2009 by Cengage Learning Inc. All rights reserved 44

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