Download Global Marketing

Chapter 8
GLOBAL
MARKETING
© 2014 Cengage Learning. All Rights Reserved. May
not be scanned, copied or duplicated, or posted to a
publicly accessible website, in whole or in part.
1
Chapter 8 Global Marketing
The Importance of Global Marketing
▮Demand for foreign products is increasing in
fast-growing economies
▮Globalization and the Internet allow every
marketer to be an international marketer
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2
Chapter 8 Global Marketing
Service and Retail Exports
▮Nearly four of every five dollars in the
nation’s gross domestic product comes from
services
▮United States is the world’s largest exporter of
services and retailing
• Profitable exports include services such as
engineering, financial, computing, legal services,
insurance, and entertainment
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
3
Chapter 8 Global Marketing
1. What are the benefits of going global?
Copyright © 2013 by South
Western, a division of Cengage
Learning.
All rights
© 2014 Cengage
Learning.
All reserved.
Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 8 Global Marketing
Benefits of Going Global
▮Additional revenue
▮New insights into customer behavior
▮Alternative distribution strategies
▮Advance notice of new products
▮New marketing techniques
▮Gain invaluable experience
▮To leverage core competencies
▮New markets
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
5
Chapter 8 Global Marketing
2. What are the various influences in the
international marketing environment?
Copyright © 2013 by South
Western, a division of Cengage
Learning.
All rights
© 2014 Cengage
Learning.
All reserved.
Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 8 Global Marketing
International Economic Environment
▮Factors that determine a nation’s prospects as
a host for international business expansion
• Size
• Per-capita income
• Stage of economic development
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
7
Chapter 8 Global Marketing
International Economic Environment
▮Infrastructure is an important economic
factor to consider when planning to enter a
foreign market
▮Changes in exchange rates can complicate
international marketing
• Exchange rate - Price of one nation’s currency in
terms of another country’s currency
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
8
Chapter 8 Global Marketing
International Social-Cultural Environment
▮To be effective, marketers must understand a
nation’s culture
▮Language plays an important role in global
marketing
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
9
Chapter 8 Global Marketing
Copyright © 2012 by South
Western, a division of Cengage
Learning.
All rights
© 2014 Cengage
Learning.
All reserved.
Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 8 Global Marketing
International Technological Environment
▮The Internet transcends political, economic,
and cultural barriers to reach every corner of
the globe
▮Technology presents challenges for global
marketers that extend beyond the Internet and
other telecommunication innovations
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
11
Chapter 8 Global Marketing
International Political-Legal Environment
▮Global marketers must stay abreast of laws
and trade regulations in each country in which
they compete
▮Firms set up internal political risk assessment
units
▮The political environment involves labor
conditions in different countries
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
12
Chapter 8 Global Marketing
International Political-Legal Environment
▮International law
• U.S. has friendship, commerce, and navigation
(FCN) treaties with other governments
• Europe has pushed for mandatory ISO certification
to standardize quality levels
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
13
Chapter 8 Global Marketing
International Political-Legal Environment
▮U.S. law
• Various trade regulations, tax laws, and import and
export requirements affecting international
marketing
• Export Trading Company Act of 1982 exempts
exporters from antitrust regulations
• Foreign Corrupt Practices Act makes it illegal
to bribe a foreign official in an attempt to
solicit new or repeat sales abroad
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
14
Chapter 8 Global Marketing
International Political-Legal Environment
▮Legal requirements of host nations
• Example: Despite China’s many advances in recent
years, the Chinese government continues to censor
the Internet
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
15
Chapter 8 Global Marketing
Trade Barriers
▮Barriers fall into two major categories
• Tariff - Tax levied against imported goods
• Administrative barriers
▮GATT and WTO agreements have eliminated
many tariffs on many products
• Countries frequently use nontariff barriers to boost
exports and control the flows of imported
products
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
16
Chapter 8 Global Marketing
Tariffs
▮Two types of tariffs
• Revenue tariffs - Designed to raise funds for the
importing government
• Protective tariffs - Designed to raise the retail
price of an imported product to match or
exceed that of a similar domestic product
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
17
Chapter 8 Global Marketing
Other Trade Barriers
▮Import quotas - Limit the number of units of
products in certain categories that can cross a
country’s border for resale
▮Embargo - Complete ban on the import of
specified products
▮Subsidies - Government financial support of a
private industry
▮Exchange control - Method used to regulate
international trade among importing organizations
by controlling access to foreign currencies
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
18
Chapter 8 Global Marketing
Dumping
▮Controversial practice of selling a product in a
foreign market at a price lower than what it
receives in the producer’s domestic market
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
19
Chapter 8 Global Marketing
Multinational Economic Integration
▮Free-trade area in which participating
nations agree to free trade among themselves,
abolishing tariffs and trade restrictions
▮Custom union establishes a free-trade area
and uniform tariffs for nonmember nations
▮Common market extends a customs union by
seeking to reconcile all government
regulations affecting trade
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
20
Chapter 8 Global Marketing
General Agreement on Tariffs and Trade
(GATT)
▮International trade accord that has helped
reduce world tariffs
▮In 1994, Uruguay round produced several
important outcomes
• Reduced farm subsidies
• Increased protection for patents, copyrights, and
trademarks
• Included services under international
trading rules
• Phased out import quotas on textiles and clothing
from developing nations
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
21
Chapter 8 Global Marketing
World Trade Organization (WTO)
▮Succeeded GATT
▮Oversees GATT agreements
▮Serves as a forum for trade negotiations
▮Mediates trade disputes
▮Monitors national trade policies
▮Works to reduce trade barriers throughout the
world
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
22
Chapter 8 Global Marketing
World Trade Organization (WTO)
▮WTO has made slow progress toward its
major policy initiatives
• Liberalizing world financial services
• Telecommunications
• Maritime markets
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
23
Chapter 8 Global Marketing
3. What are the various free trade areas in the
world?
Copyright © 2013 by South
Western, a division of Cengage
Learning.
All rights
© 2014 Cengage
Learning.
All reserved.
Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 8 Global Marketing
North American Free Trade Agreement
(NAFTA)
▮Accord removing trade barriers among
Canada, Mexico, and the United States
▮Particularly important to U.S. marketers
because Canada and Mexico are two of its
largest trading partners
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
25
Chapter 8 Global Marketing
The Free Trade Area of the Americas and
CAFTA-DR
▮Proposed free trade area stretching the length
of the entire Western hemisphere
▮Designed to extend free trade benefits to
additional nations in North, Central, and South
America
• Central American Free Trade Agreement–DR
(CAFTA-DR) - Trade agreement among the
United States, Central American nations, and the
Dominican Republic
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
26
Chapter 8 Global Marketing
European Union (EU)
▮Customs union that is moving in the direction
of an economic union by:
• Adopting a common currency
• Removing trade restrictions
• Permitting free flow of goods and workers
throughout the member nations
▮Goal is to remove all barriers to free trade
among its members
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
27
Chapter 8 Global Marketing
Figure 8.2 - The 27 Members of the European
Union
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
28
Chapter 8 Global Marketing
4. What are the various strategies for entering
international markets?
Copyright © 2013 by South
Western, a division of Cengage
Learning.
All rights
© 2014 Cengage
Learning.
All reserved.
Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 8 Global Marketing
Strategies for Entering Foreign Markets
▮Three basic choices
• Importing and exporting
• Contractual agreements such as franchising,
licensing, and subcontracting
• International direct investment
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
30
Chapter 8 Global Marketing
Importing and Exporting
▮Decision to import, or bring in foreign goods
to sell domestically or use as component parts,
depends on:
•
•
•
•
Ability of supplier to maintain quality
Flexibility in filling orders that vary
Response time in filling orders
Total costs
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
31
Chapter 8 Global Marketing
Importing and Exporting
▮First-time exporters can reach foreign
customers through:
• Export-trading companies
• Export-management companies
• Offset agreement
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
32
Chapter 8 Global Marketing
Franchising
▮Contractual arrangement in which a
wholesaler or retailer agrees to meet the
operating requirements of a manufacturer or
other franchiser
▮Benefits are risk reduction, standardized
operations, and greater recognizability
▮Success depends on ability to adapt to local
customer preferences
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
33
Chapter 8 Global Marketing
Foreign Licensing
▮Agreement that grants foreign marketers the
right to distribute a firm’s merchandise or to
use its trademark, patent, or process in a
specified geographic area
▮Gives access to local partner’s marketing
information and distribution channels, and
protection from legal barriers
▮Allows quick entry into a foreign market with
a known product
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
34
Chapter 8 Global Marketing
Subcontracting
▮Contractual agreements that assign the
production of goods or services to local or
smaller firms
▮Can prevent mistakes involving local culture
and regulations
▮Can provide protection from import duties
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
35
Chapter 8 Global Marketing
International Direct Investment
▮High involvement and high risk are the major
characteristics
▮Firms choosing this method often have a
competitive advantage
▮Several forms
• Acquisition
• Joint venture
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
36
Chapter 8 Global Marketing
Figure 8.3 - Levels of Involvement in Global
Marketing
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
37
Chapter 8 Global Marketing
5. What are the stages in the
internationalization process?
Copyright © 2013 by South
Western, a division of Cengage
Learning.
All rights
© 2014 Cengage
Learning.
All reserved.
Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 8 Global Marketing
Stages in the internationalization process
▮Domestic firm
▮International firm
▮Multinational firm (MNC)
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
39
Chapter 8 Global Marketing
6. Differentiate between a global marketing
strategy and a multidomestic marketing
strategy?
Copyright © 2013 by South
Western, a division of Cengage
Learning.
All rights
© 2014 Cengage
Learning.
All reserved.
Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 8 Global Marketing
Developing an International Marketing
Strategy
▮Multidomestic marketing strategy Application of market segmentation to foreign
markets by tailoring the firm’s marketing mix
to match specific target markets in each nation
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
41
Chapter 8 Global Marketing
Stages in the internationalization process
▮Domestic firm
▮International firm
▮Multinational firm (MNC)
▮Global corporation
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
42
Chapter 8 Global Marketing
Developing an International Marketing
Strategy
▮Global marketing strategy - Standardized
marketing mix with minimal modifications
that a firm uses in all of its domestic and
foreign markets
• Can effectively market some goods and services to
segments in many nations that share cultures and
languages
• Can be highly effective for luxury products that
target upscale consumers everywhere
• Major benefit is its low cost to implement
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
43
Chapter 8 Global Marketing
Stages in the internationalization process
▮Domestic firm
▮International firm
▮Multinational firm (MNC)
▮Global corporation
▮Transnational corporation
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
44