kerinmarketing70

A GLOBAL
ENVIRONMENTAL SCAN

•Cultural Diversity

§Cross-cultural analysis

•Values
•Customs

§Foreign Corrupt Practices Act

•Cultural Symbols

§Semiotics

•Language

§Back translation

•Cultural ethnocentricity

§Consumer ethnocentrism

Cross-Cultural Analysis

A cross-cultural analysis involves the study of similarities and differences among consumers in two or more nations or societies.

A society’s values represent personally or socially preferable modes of conduct or states of existence that are enduring.

Customs are the norms and expectations about the way people do things in a specific country.

Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act makes it a crime for U.S. corporations to bride an official of a foreign government or political party to obtain or retain business in a foreign country.

Cultural Symbols

Cultural symbols are things that represent ideas and concepts.

Semiotics is concerned with the correspondence between symbols and their role in the assignment of meaning for people.

Back Translation

In back translation, a translated word or phrase is retranslated into the original language by a different interpreter.

Consumer Ethnocentrism

Consumer ethnocentrism is the tendency to believe that is inappropriate or immoral to purchase foreign-made products.

A GLOBAL
ENVIRONMENTAL SCAN

•Economic Considerations

•Stage of Economic Development
•Economic Infrastructure
•Consumer Income and Purchasing Power

•Currency exchange rates

•Political-Regulatory Climate

•Political Stability
•Trade Regulations

FIGURE 7-5 How purchasing power
differs around the world

Currency Exchange Rate

A currency exchange rate is the price of one country’s currency expressed in terms of another country’s currency.

1.Semiotics involves the study of
_________________________
_________________________
_________________________ .

cultural symbols and their role in

the assignment of meaning for

people

2. When foreign currencies can by more U.S. dollars, are U.S. products more or less expensive for a foreign consumer?

A: Less expensive.

GLOBAL MARKET-ENTRY STRATEGIES

FIGURE 7-6 Alternative global market-entry strategies

GLOBAL MARKET-ENTRY STRATEGIES

•Exporting
•Licensing
•Joint Venture
•Direct Investment

Exporting is producing goods in one country and selling them in another.

Under licensing, a company offers the right to a trademark, patent, trade secret, or other intellectual property for a royalty or fee.

When a foreign company and a local firm invest to create a local business, it is called a joint venture.

Direct Investment

Direct Investment entails a domestic firm actually investing in and owning a foreign subsidiary or division.

1. What mode of entry could a company follow if it has no previous experience in global marketing?

A: Indirect exporting through intermediaries.

2. How does licensing differ from a joint venture?

A: In licensing, the firm offers the right to a trademark, patent or trade secret, in return for a fee or royalty. In a joint venture, a foreign and a local firm to produce some product or service. The two companies share ownership, control, and profits of
the new entity.

CRAFTING A WORLDWIDE MARKETING EFFORT

•Product and Promotion Strategies

§Product extension
§Product adaptation
§Product invention

Distribution Strategy

•Pricing Strategy

§Dumping
§Gray market

FIGURE 7-7 Five product and promotion strategies for global marketing

FIGURE 7-8 Channels of distribution in global marketing

Dumping is when a firm sells a product in a foreign country below its domestic price or below its actual cost.

A gray market is a situation where products are sold through unauthorized channels of distribution.

1. Products may be sold globally in three ways. What are they?

A: Product extension, product adaptation, and product invention.

2. What is dumping?

A: Dumping is when a firm sells a product in a country below its domestic price or below its actual cost.

Chapter 7 - Summary

The dollar value of world trade has more than doubled in the past decade and will exceed $11.5 trillion in 2005. Manufactured goods and commodities account for 75 percent of world trade, while services account for 25 percent.
A global perspective on world trade views exports and imports as complementary economic flows. A country's exports affect its imports and vice versa. This phenomenon is called the trade feedback effect.
The United States is the world's perennial leader in terms of gross domestic product and among the world's leaders in exports. Nevertheless, the United States has incurred a continuing balance of trade deficit since 1975.
The reason some companies and some industries in a country succeed globally while others do not lies in their nation's competitive advantage. A nation's competitive advantage arises from specific conditions in a nation that foster success.
Four recent trends have significantly affected world trade: (a) a gradual decline of economic protectionism, (b) an increase in formal economic integration and free trade among nations, (c) global competition among global companies forglobal consumers, and (d) the emergence of a networked global marketspace.
Although global and domestic marketing are based on the same marketing principles, many underlying assumptions mustbe reevaluated when a firm pursues global opportunities. A global environmental scan typically considers three kinds of uncontrollable environmental variables. These include cultural diversity, economic conditions, and political-regulatory climate.
Four global market-entry strategies are exporting, licensing, joint venture, and direct investment. The relative difficulty of global marketing, as well as the amount of financial commitment, risk, marketing control, and profit potential, increase in moving from exporting to direct investment.
Crafting a worldwide marketing effort involves designing, implementing, and controlling a marketing program that standardizes marketing mix elements when there are cultural similarities and adapting them when cultures differ.

Chapter 7 ( conti..)

Marketing: Reaching Global Markets
1 2

1 2

Chapter 7 ( conti..)

Marketing: Reaching Global Markets 1 2

1 2

Marketing: Reaching Global Markets
1 2