Chapter 19: The Global Marketplace

Objectives
  • •Understand how the international trade system, economic, political-legal, and cultural environments affect a company’s international marketing decisions.
  • •Learn three key approaches to entering international markets.
 

 

Objectives
  • •Understand how companies adapt their marketing mixes for international markets.
  • •Learn how to identify the three major forms of international marketing organizations.
 

 

 

Please Open The Following Figures In Different Windows and Leave Them Open:

Animated Figure 19-1 , Animated Figure 19-2 , Animated Figure 19-4

 

Case Study

Coca-Cola          worldcocacola.gif (2235 bytes)

 
  • •1900: Coca-Cola was available in foreign countries
  • •Early branding efforts placed logo prominently abroad
  • •1971: “I’d like to buy the world a coke” TV ad
 
 
  • •Coca-cola has recently entered India, China and Indonesia
  • •Consistent positioning and taste worldwide
  • •Ads and promotions are adapted to local markets
  • •Sprite: a global success

 

Definitions
•Global Firm
  • §A firm that, by operating in more than one country, gains R&D, production, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors.
 
 

 

Global Marketing in
the 21st Century
  • •International trade is booming
  • •Many U.S. firms are successful international marketers
  • •Global competition is intensifying
  • •Global companies face several problems
  • •Companies face six major decisions in international marketing
 
 

 

Global Marketing in
the 21st Century
International Marketing Decisions
  • •Looking at the global environment
  • •Deciding whether to go international
  • •Deciding which markets to enter

 
  • •Deciding how to enter the markets
  • •Deciding the global marketing problem
  • •Deciding on the global marketing organization

 

Looking at the Global Marketing Environment
•The International Trade System
  • §Tariffs, quotas, embargos, exchange controls, nontariff trade barriers
  • §World Trade Organization and GATT
  • §Regional free trade zones
  1. v European Union
  2. v North American Free Trade Agreement
  3. v Other free trade areas
 
 

 

Looking at the Global Marketing Environment
•Economic Environment
  • §Industrial structure
  1. v Subsistence economies
  2. v Raw material exporting economies
  3. v Industrializing economies
  4. v Industrial economies
  • §Income distribution
 
 

 

Looking at the Global Marketing Environment
•Political-Legal Environment
  • §Attitudes toward international buying
  • §Government bureaucracy
  • §Political stability
  • §Monetary regulations
  • v Countertrade: barter, compensation, counterpurchase
 
 

 

Looking at the Global Marketing Environment
•Cultural Environment
  • §Impact of Culture on Marketing Strategy
v        Cultural traditions, preferences, behavior
  • §Impact of Marketing Strategy on Cultures
v       Globalization vs. Americanization
 
 

 

Deciding Whether to
Go International
  • •Not all companies need an international presence
  • •Globalization may triggered by several factors
  • •Risk and the ability to operate globally must be carefully assessed
 

 

Deciding Which
Markets to Enter
  • •Define international marketing polices and objectives, and sales volume goals
  • •Decide how many countries to target
  • •Decide on the types of countries to enter
  • •Screen and rank each of the possible international markets using several criteria
  1. §Market  size, market growth, cost of doing business, competitive advantage, risk level
 
 

 

Deciding How
to Enter the Market
  • •Exporting
  • §Direct vs. indirect
  • •Joint Venturing
  • §Licensing, contract manufacturing, management contracting, joint ownership
  • •Direct Investment
  • §Assembly facilities, manufacturing facilities
 

 

Deciding on the Global Marketing Program
  • •Standardized Marketing Mix
  • §Same basic product, advertising, distribution, and other elements of the marketing mix are used in all international markets.
  • •Adapted Marketing Mix
  • §The marketing mix elements are adjusted for each international target  market.
 

 

Deciding on the Global Marketing Program
•Product Strategies for the Global Market
  • §Straight product expansion
  •  Marketing the product with no changes
  • §Product adaptation
  •  Altering the product to meet local conditions or
     the wants of the foreign market
  • §Product invention
  •  Creating new products or services for foreign
     markets
 
 

 

Deciding on the Global Marketing Program
•Global Promotion Strategies
  • §Standardized global communication
  •  Advertising themes are standardized from country to country with slight modifications
  • §Communication adaptation
  •  Advertising messages are fully adapted to local markets
 
 

 

Deciding on the Global Marketing Program
•Global Pricing Strategies
  • §Companies face many problems
  1.  Price escalation
  2. v Pricing to foreign subsidiaries
  3. v Recent economic and technological forces
  4. v The Internet
 
 

 

Deciding on the Global Marketing Program
•Global Distribution Channels
  • §Whole-channel view
  1.  Seller’s headquarters organization
  2. v Channels between nations
  3. v Channels within nations
  4. v Numbers and types of intermediaries
 

 

Deciding on the Global Marketing Organization

 
•Managing International Marketing Activities
  • §Step 1: Organize export department
  • §Step 2: Create an international division
  • §Step 3: Become a global organization
 

Chapter 19: The Global Marketplace

Study Guide
  • Concepts Check

 

Study Guide
  • Concepts Challenge

 

 
  • Video Case

 

 
  • Chapter Outline

 

 
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 Chapter 19: The Global Marketplace

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