Global firms plan, operate and coordinate their activities on a worldwide basis.The firm will price its products appropriately worldwide, nationally and locally, and promote, deliver access and information to its customers in the most cost-effective way., The firm will price its products appropriately worldwide, nationally and locally, and promote, deliver access and information to its customers in the most cost-effective way., It operates in more than one country and captures R & D, production, logistical, marketing, and financial advantages not available to purely domestic competitors.

1. Philip kotler

2. • Global firms plan, operate and coordinate their activities on a worldwide
basis
• It operates in more than one country and captures R & D, production,
logistical, marketing, and financial advantages not available to purely
domestic competitors.
• The firm will price its products appropriately worldwide, nationally and
locally, and promote, deliver access and information to its customers in
the most cost-effective way.,
Introduction

3. Key Drivers Influencing to go Global Market
 Diversify the markets and customer base.
 Changes in consumer needs, attitudes and behavior in the existing
market
 Reduce dependence on current markets by spreading the risk.
 Increasing awareness of consumers
 Counter seasonal fluctuations. If you sell a seasonal product, when
it’s summer here, half the world is experiencing winter and vice
versa.
 Create economies of scale in production
 Availability of real estate/ infrastructure in foreign country
 Technological Advances

4. Steps for Deciding Global Marketing

5. Deciding Whether To Go Abroad
• Factors drawing companies into the
international arena:
– Global firms offering better products or lower prices can attack the
company’s domestic market.
– The company discovers that some foreign markets present higher profit
opportunities than 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 company’s customers are going abroad and
need servicing.

6. • Before going abroad, the company must
weigh several risk:
– The company might not understand foreign customer preferences
and fail to offer a competitively attractive product.
– The company might not understand the foreign country’s 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 property.
Deciding Whether To Go Abroad

7. • How many markets to enter
– a company should enter fewer countries when:
• Market entry and market costs are high
• Product and communication costs are high
• Population and income size and growth are high in the
initial countries chosen
• Dominant foreign firms can establish high barriers to
entry
Deciding Which Markets to Enter

8. Deciding Which Markets to Enter
• Regional free trade zones
– The European Union
– NAFTA
– MERCOSUL
– APEC
• Evaluating potential markets
– Psychic proximity

9. Deciding How to Enter the Market
• Indirect and direct export
– Occasional exporting
– Active exporting
– Indirect exporting
– Domestic-based export merchants
– Domestic-based export agents
– Cooperative organizations
– Export-management companies

10. Companies carry on business by any of the following:
• Domestic-based export department or division
• Overseas sales branch or subsidiary
• Traveling export sales representatives
• Foreign-based distributors or agents
Deciding How to Enter the Market

11. • Licensing – Licensor issues a license to a foreign company to use a
manufacturing process, trade mark, patent, trade secret, or other item of
value for a fee or royalty.
o Licensor – gains entry at little risk
o Licensee – gains production expertise or a well-known
product or brand name.
1) Management contracts :owners of foreign hotels manage these businesses
for a fee
2) Contract manufacturing : The firm hires local manufacturers to produce the
product
3) Franchising : the franchisor offers a complete brand concept and operating
system, the franchisee invests in and pays certain fees to the franchisor.
- Eg: McDonald’s, KFC
Deciding How to Enter the market

12. • Joint ventures- Foreign investors joined with local investors due to economic
or political reasons or foreign firm might lack the financial, physical or managerial
resources or condition of foreign governments . For eg; Maruti Suzuki
• Direct investment-The foreign company can buy part or full interest in a local
company or build its own facilities.
• The Internationalization Process
– Johanson and Wiedersheim-Paul identified four stages
in the internationalization process:
• No regular export activities
• Export via independent representatives (agents)
• Establishment of one or more sales subsidiaries
• Establishment of production facilities abroad
Deciding How to Enter the Market

13. • Standardized marketing mix
-Standardization of the product,
communication, and distribution channels.
• Adapted marketing mix
-where producers consistent with the marketing
concept, holds consumer needs vary and tailors
marketing programs to each target group.
Deciding on the Marketing Program

14. Deciding on the Marketing Program
• Product
1) Straight extension-introduces in the foreign market
without any changes. eg; Cameras
2) Product adaptation-alters the product to meet local conditions
or preferences.
3) Product invention
• Backward invention-Reintroducing earlier products
• Forward invention-creating a new product to meet need.
• Promotion
– Communication adaptation
– Dual adaptation

15. Figure 13.3: Five International Product and Promotion
Strategies

16. • Price
1) Price escalation
• Companies have three choices
– Set a uniform price everywhere
– Set a market-based price in each country
– Set a cost-based price in each country
2) Dumping-charging either less than its costs or less than it charges at home.
3) Arm’s-length price-the price charge by another competitors for the same or a similar
product.
4) Gray market
-branded products diverted form authorized distributions channels in the country of
product origin
-Dealers in the low price country find ways to sell some of their products in higher
price countries to earn more.
Deciding on the Marketing Program

17. Deciding on the Marketing
Program
 Place (distribution channels)
 Seller’s international marketing headquarters
 Channels between nations
 Channels within foreign nations
Whole-Channel Concept for
International Marketing

18. Deciding on the Marketing Organization
1) Export department
2) International division
– Geographical organizations
– World product groups
– Establishing International
subsidiaries for product/service

19. 3) Global organization
– Bartlett and Ghoshal distinguish three
organizational strategies:
• A global strategy treats the world as a single market.
• A multinational strategy treats the world as a portfolio of
national opportunities.
• A “glocal” strategy standardizes certain core elements
and localizes other elements.
Deciding on the Marketing Organization

20. Pros of Global marketing environment
Global marketing environment gives lot of opportunities
:
 Economies of scale in production and distribution
 Lower marketing costs
 Power and scope
 Consistency in brand image
 Ability to leverage good ideas quickly and efficiently
 Uniformity of marketing practices
 Helps to establish relationships outside of the
“political arena”
 Helps to encourage ancillary industries to be set up to
cater for the needs of the global player

21. Cons of global marketing environment
 Differences in consumer needs, wants, and usage patterns for
products
 Differences in consumer response to marketing mix elements
 Differences in brand and product development and the
competitive environment
 Differences in the legal environment, some of which may
conflict with those of the home market
 Differences in the institutions available, some of which may
call for the creation of entirely new ones (e.g. infrastructure)
 Differences in administrative procedures
 Differences in product placement.
 Differences in the statutory compliances which changes from
country to country.

22. Thank you