Download PowerPoint Chapter 4

Chapter 4
Global Dimensions
of Marketing
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This Video is of a company
(GM, GMC) that is in the top
3 in the world.
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The Importance of Global Marketing
 Global marketing is rapidly becoming a
necessity
 The Internet makes it possible for every
marketer to become an international marketer
 International Trade accounts for at least 25%
of U.S. GDP
Exporting
Importing
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 AT&T: One of the World’s Leading
Telecommunications Company
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 Warner Lambert
A Global Leader In
Pharmaceuticals
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 Ericsson
Telecommunicati
ons Equipment Is
a Major U.S.
Import
This ad by
Ericssonwas
placed in
magazines in
the U.S.
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 Service Exports
U.S. is a big exporter of services
U.S. is the world’s largest exporter of services
The most profitable U.S. service exports are
business and technical services
Financial services industry is going global via
the WWW
Entertainment is another major service export
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 Financial Services: a New Global Frontier
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 Benefits of Going Global
Additional revenues
New insights into consumer behavior
Alternative distribution strategies
Advance notice of new products
Positioned to compete with foreign firms
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Visa, and Many Firms Who
Accept It, Enjoy the Benefits
of Being
Global Marketers
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The International Marketplace
 Market Size
Over six billion people
Eight billion worldwide by 2025
Urban population increasing faster than rural
As a nation develops, an affluent, educated,
and cosmopolitan middle-class emerges
International marketers also see growth in
middle-income households in booming
economies
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 Buyer Behavior
Behavior differs
among both nations
and market
segments within
each nation
Change marketing
mix, or change local
buyer behavior
 Leatherman
marketers fill customer
needs around the
globe with their unique
product.
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Buyer Behavior Research Must Focus on:
Demand
Competitive environment
Economic environment
Social-cultural environment
Political-legal environment
Technological environment
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Technological Innovations Like
The One Featured in This
“Classic” Ad Are Used by
Consumers in both Developed
and Developing Nations
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The International Marketing Environment
International
economic
environment
International
Marketing
mix
International
technological
environment
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International
social-cultural
environment
International
political-legal
environment
 International Economic Environment
A nation’s size, per-capita income, and
stage of economic development determine
desirability
Infrastructure
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 Transportation Systems: Important Components of
a Nation’s Infrastructure
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The exchange rate is the price of one
nation’s currency in terms of another
country’s currencies
Soft currencies vs. hard currencies
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 International Social-Cultural Environment
A nation’s culture, including language,
education, religious attitudes, and social
values, must be considered
The use of pictures can help when
language is a problem
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Advertisements Like This One
From Nike Show How Pictures
Can Help to Effectively Sell a
Product Across Many Different
Cultures
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 American Airlines
Targeting Latin
American Travelers
With Spanish and
Portuguese In-flight
Magazines
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 International Technological Environment
The Internet transcends political,
economic, and cultural barriers, reaching
into every corner of the Globe
The Web is reshaping social and cultural
values
BUT, the overwhelming majority of the
world population has no Internet access
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 GUILD.COM
The Internet:
Connecting Small
Firms to the World
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 International Political-Legal Environment
Marketers must know the current laws and
regulations for each country in which they
operate
U.S. businesses impacted by International
Law, U.S. Law, and Host country Laws
Political conditions often influence
international marketing
Friendship, Commerce, and Navigation
(FCN) treaties
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 Forbes Global
offers coverage of
international
business and
finance news as it
sends the message
of capitalism around
the globe
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 AON
Helping Marketers
Deal With Political
Turmoil
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McDonalds, like so many other
international firms must consider
 International law
 U.S. law
 Legal requirements of host nations.
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 Trade Barriers
Tariffs are taxes levied against imported
goods
Revenue Tariffs
Protective Tariffs
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Administrative Barriers
Import Quotas
Embargos
Exchange Controls
Dumping: Selling a product in a foreign
market at a price below the cost
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 Pepsi
 Offering Small
Prizes to Everyone
in This Ad
Overseas, Obeying
a Law That Forbids
Offering a Few
“Dream” Prizes
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Multinational Economic Integration
 GATT: International trade accord that has
helped reduce world tariffs
 World Trade Organization: Oversees
agreements, mediate disputes, and reduce
trade barriers
WTO’s decisions are binding
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 NAFTA: Accord removing trade barriers among
Canada, Mexico, and the United States
 MERCOSUR: Customs union comprising Brazil,
Argentina, Paraguay, Uruguay, Chile, and Bolivia
 The Free Trade Area of the Americas
Proposed free trade area designed to extend
free trade benefits to additional nations in
North, Central, and South America.
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 European Union: A customs union that is
becoming a true economic union.
Includes 15 European countries with 350
million people and a combined gross
domestic product of $5 trillion
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 The Fifteen
Nations of the
European
Union
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Going Global
First Steps in Deciding to Market Globally
 Secure top management’s support
 Research potential markets
 Useful Research contacts:
U.S. Department of Commerce
Trade shows
The American Management Association’s
“Green Book”
European Society of Opinion and Market
Research
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 International
marketers benefit
from trade shows
such as those held at
the TWTC, Taiwan
World Trade Center,
where thousands of
regional and global
firms meet to
network.
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 Strategies for Entering International
Markets
Three basic strategies for entering
international markets include:
Exporting
Contractual agreements
International Direct Investment
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 Contractual Agreements
Franchising
Foreign Licensing
Subcontracting
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 Franchising:
A Global Strategy for
Ruth’s Chris Steak
House
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 Schlotzsky’s Deli
 Entering
International
Markets Through
Franchising
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 International Direct Investment
An additional strategy for entering global
markets
Requires direct investment in foreign firms,
production, and/or marketing facilities
U.S. firms have invested nearly $2.2 trillion
overseas
Foreign firms have invested nearly $2.1
trillion in the U.S.
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Honda has made direct
investments in the US in
both distribution and
production facilities.
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From Multinational Corporation to Global
Marketer
 A multinational
corporation is a firm
with significant
operations and
marketing activities
outside its home
country
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Developing an International Marketing
Strategy
 Global marketing strategy
 Multi-domestic marketing strategy
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 The universal image
of long-lasting power
in an Energizer
battery is
communicated in
Latin America with
this poster . . . Part of
Energizer’s global
marketing strategy.
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 Alternative International Product and Promotional Strategies
Same Product
Product Adaptation
Straight Extension
Product Adaptation
New Product
Same
Promotion
Product
Invention
Different
Promotion
Promotion
Adaptation
Dual Adaptation
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 Promotion Adaptation
Strategy in International
Marketing
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 International Distribution Strategy
 International Pricing Strategy
Competitive, economic, political, and legal
constraints often limit pricing decisions
Must adapt to local markets and change when
conditions change
Should research countertrade where
appropriate
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 U.S. Postal Service –
Competing with
International Overnight
Delivery Services on
Price and Service
Quality
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U.S. Entertainment Properties
rely heavily on global
distribution.
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The U.S. as a Target for International
Marketers
 The U.S. is an inviting target for many foreign
marketers…why?
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This Highly Visual Ad for
Japan’s Nissin “Cup
Noodles” Demonstrates That
Even Simple Products Find a
Ready Market in the U.S.
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 The popularity of British import Teletubbies among
U.S. preschoolers is used in a promotion for Jell-O
custard sold at Burger King restaurants.
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