Download Principles of Marketing Global Edition

Principles of Marketing
Global Edition
Kotler and Armstrong
Chapter 19-20:
The Global Marketplace
Social Responsibility and
Ethics
Lecturer:
Szilvia Bíró-Szigeti, PhD
Department of Management and Corporate
Economics
Principles of Marketing
Global Edition
Kotler and Armstrong
Chapter 19:
The Global
Marketplace
Global Marketing Today
A global firm
• operates in more than one country
• gains marketing, production, R&D, and financial
advantages not available to purely domestic
competitors
• sees the world as one market
Global Marketing Today
Major International Marketing Decisions
Global Marketing Today
Global firms ask a number of basic questions:
•
What market position should we try to establish in our own country, in
our economic region, and globally?
•
Who will our global competitors be, and what are their strategies and
resources?
•
Where should we produce or source our product?
•
What strategic alliances should we form with other firms around the
world?
Looking at the Global Marketing Environment
The International Trade System
c
Tariffs are taxes on certain imported products designed to
raise revenue or to protect domestic firms.
Quotas are limits on the amount of foreign imports a
country will accept in certain product categories to
conserve on foreign exchange and protect domestic
industry and employment.
Looking at the Global Marketing Environment
The International Trade System
Exchange controls are a limit on the amount of foreign exchange
and the exchange rate against other currencies.
Nontariff trade barriers are biases against bids or restrictive
product standards that go against home product features.
Looking at the Global Marketing Environment
The International Trade System
Certain countries have formed
free trade zones or economic
communities.
• European Union (EU)
• North American Free
Agreement (NAFTA)
Trade
• Central American Free Trade
Association (CAFTA)
• Union of South American Nations
(UNASUR)
Looking at the Global Marketing Environment
Economic Environment
Economic factors reflect a country’s attractiveness as a market.
• Industrial structure
– Subsistence economies
– Raw material exporting economies
– Emerging economies (industrializing economies)
– Industrial economies
• Income distribution
– Low-income households
– Middle-income households
– High-income households
Looking at the Global Marketing Environment
Political-Legal Environment
• Country’s attitude toward international buying
• Government bureaucracy
• Political stability
• Monetary regulations
Looking at the Global Marketing Environment
Cultural Environment
• Impact of culture on marketing
strategy
• Impact of marketing strategy
on cultures
Deciding Whether to Go Global
Factors to Consider
• Can the company understand the consumers?
• Can company offer competitively attractive products?
• Will company be able to adapt to local culture?
• Can company deal with foreign nationals?
• Do the company’s managers have the necessary international
experience?
• Has management considered
environment of other countries?
regulation
and
political
Deciding Which Markets to Enter
•
•
•
•
Define international marketing objectives and policies
Foreign sales volume
How many countries to enter
Types of countries to enter based on:
– Geography
– Income and population
– Political climate
Deciding Which Markets to Enter
Rank potential global
markets based on:
• Market size
• Market growth
• Cost
of
doing
business
• Competitive
advantage
• Risk level
Deciding How to Enter the Market
Deciding How to Enter the Market
Exporting
Exporting is when the company produces its goods in the home
country and sells them in a foreign market. It is the simplest
means involving the least change in the company’s product
lines, organization, investments, or mission.
– Indirect exporting: working through independent international
marketing intermediaries. Indirect exporting involves less
investment and risk because the firm does not require an
overseas marketing organization or network.
– Direct exporting: whereby they handle their own exports. The
investment and risk are somewhat greater in this strategy, but
so is the potential return.
Deciding How to Enter the Market
Joint Venturing
Joint venturing is when a firm joins with foreign companies
to produce or market products or services.
– Licensing
– Contract manufacturing
– Management contracting
– Joint ownership
Joint venturing differs from exporting in that the company
joins with a host country partner to sell or market
abroad.
Deciding How to Enter the Market
Joint Venturing
Licensing is when a firm enters into an agreement with a licensee in a
foreign market. For a fee or royalty, the licensee buys the right to use the
company’s process, trademark, patent, trade secret, or other item of
value.
Contract manufacturing is when a firm contracts with manufacturers in the
foreign market to produce its product or provide its service. Benefits
include faster startup, less risk, and the opportunity to form a
partnership or to buy out the local manufacturer.
Deciding How to Enter the Market
Joint Venturing
Management contracting is when the domestic firm supplies
management skill to a foreign company that supplies capital.
The domestic firm is exporting management services rather
than products.
Joint ownership is when one company joins forces with
foreign investors to create a local business in which they share
joint ownership and control. Joint ownership is sometimes
required for economic or political reasons.
Deciding How to Enter the Market
Direct Investment
Direct investment is the development of foreign-based
assembly or manufacturing facilities. It offers a number
of advantages including:
– Labor
– Logistics
– Control
– Government incentives
– Lower costs
– Raw materials
Deciding on the Global Marketing Program
Standardized marketing mix involves selling the same products
and using the same marketing approaches worldwide.
Adapted marketing mix involves adjusting the marketing mix
elements in each target market, bearing more costs but
hoping for a larger market share and ROI.
Deciding on the Global Marketing Program
Product
Straight product extension means marketing a product in a
foreign market without any change.
Product adaptation involves changing the product to meet local
conditions or wants.
Product invention consists of creating something new for a
specific country market.
– Maintain or reintroduce earlier products
– Create new products
Deciding on the Global Marketing Program
Promotion
Companies can either adopt the same communication
strategy they use at home or change it for each market.
Even in standardized communications campaigns,
adjustments may be required for language or cultural
differences.
Deciding on the Global Marketing Program
Price
Uniform pricing charges the same price in all markets but does not
consider income or wealth where the price may be too high in
some or not high enough in other markets.
Standard markup pricing is a price based on a percentage of cost
but can cause problems in countries with high costs.
Deciding on the Global Marketing Program
Distribution Channels
Seller’s headquarters organization supervises the channel and
is also a part of the channel.
Channels between nations move the products to the borders
of the foreign nations.
Channels within nations move the products from their foreign
point of entry to the final customers.
Deciding on the
Global Marketing Organization
Typical management of international marketing activities
include:
• Establishing an exporting department with a sales
manager and staff
• Creating an international division organized by
geography, products, or operating units
• Becoming a complete global organization
Video Case: The U.S. Film Industry
Questions
•
Which part of the marketing environment
seems to be having the greatest impact on
U.S. films abroad? Why?
•
Which of the five strategies for adapting
products and promotion for the global
market is most relevant to the U.S. film
industry? Why?
•
Is the U.S. film industry now dependent
upon foreign markets for success?
Compare the export of U.S. films to other
U.S. exports.
Principles of Marketing
Global Edition
Kotler and Armstrong
Chapter 20:
Social Responsibility
and Ethics
Copyright © 2016 Pearson Education, Inc.
20-1
Sustainable Marketing
Meeting the needs of consumers while preserving the ability
of future generations to meet their needs
Social Criticisms of Marketing
Marketing’s Impact on Individual Consumers
High prices
Deceptive practices
High-pressure selling
Shoddy, harmful, or
unsafe products
Planned obsolescence
Poor service to
disadvantaged consumers
Social Criticisms of Marketing
High Prices
Marketing’s Impact on Individual Consumers
Complaint:
Response:
• Prices are too high
due to high costs of:
• distribution
• advertising
and
promotion
• excessive mark-ups
• Intermediaries
are
important and offer
value.
• Advertising informs
buyers of availability
and merits of a brand.
• Consumers
don’t
understand the cost
of doing business.
Social Criticisms of Marketing
Deceptive Practices
Marketing’s Impact on Individual Consumers
Complaint:
Companies use deceptive practices that lead customers to believe they will
get more value than they actually do.
These practices fall into three categories:
– Deceptive pricing: such as falsely advertising “factory” or
“wholesale” prices or a large price reduction from a phony high
retail list price.
– Deceptive promotion: such as misrepresenting the product’s
features or performance or luring customers to the store for a
bargain that is out of stock.
– Deceptive packaging: exaggerating package contents through subtle
design, using misleading labeling, or describing size in misleading
terms.
Social Criticisms of Marketing
Marketing’s Impact on Individual Consumers
Deceptive Practices
Response:
Support legislation to protect consumers from deceptive
practices
Make lines clear—is it deception, alluring imagery, or puffery
(exaggeration for effect)?
• Products that are harmful
• Products that provide little benefit
• Products that are not made well
Social Criticisms of Marketing
Marketing’s Impact on Individual Consumers
High-Pressure Selling
Complaint:
Response:
• Salespeople use highpressure selling that
persuades people to
buy goods they had
no
intention
of
buying.
• Most selling involves
building
long-term
relationships
with
valued
customers.
High-pressure
or
deceptive selling can
damage
these
relationships.
Social Criticisms of Marketing
Marketing’s Impact on Individual Consumers
Shoddy, Harmful, or Unsafe Products
Complaint:
Response:
• Products have
poor
quality,
provide
little
benefit, and can
be harmful.
• Good marketers
realize there is
no
value
in
marketing
shoddy, harmful,
or
unsafe
products.
Social Criticisms of Marketing
Marketing’s Impact on Individual Consumers
Planned Obsolescence
Complaint:
Response:
• Producers
cause
their
products
to
become
obsolete.
• Planned
obsolescence
is really the
result of a
competitive
market.
Social Criticisms of Marketing
Marketing’s Impact on Individual Consumers
Poor Service to Disadvantaged Consumers
Complaint:
• Marketers serve
disadvantaged
customers poorly.
Response:
• Some marketers
profitably target
these customers
and have taken
action
against
marketers that
do.
Social Criticisms of Marketing
Marketing’s Impact on Individual Consumers
False Wants and Too Much Materialism
Complaint:
Response:
• The marketing
system
urges
too
much
interest
in
material
possessions.
• People do have
strong defenses
against
advertising and
other marketing
tools.
Social Criticisms of Marketing
Marketing’s Impact on Individual Consumers
Too Few Social Goods
Complaint:
Response:
• Businesses
oversell private
goods at the
expense
of
public goods.
• There needs to
be a balance
between
private
and
public goods.
Social Criticisms of Marketing
Marketing’s Impact on Individual Consumers
Cultural Pollution
Complaint:
Response:
• Marketing and
advertising
create cultural
pollution.
• Marketing and
advertising are
planned
to
reach only a
target audience
and consumers
have
alternatives.
Consumer Actions to Promote Sustainable Marketing
Consumerism is the organized movement of citizens and
government agencies to improve the rights and power of
buyers in relation to sellers.
Traditional buyers’ rights include:
– The right not to buy a product that is offered for sale
– The right to expect the product to be safe
– The right to expect the product to perform as claimed
Comparing these rights, many believe that the balance of power
lies on the seller’s side.
Consumer Actions to Promote Sustainable Marketing
Consumerism
Advocates call for:
• The right to be well informed about important aspects
of the product
• The right to be protected against questionable products
and marketing practices
• The right to influence products and marketing practices
in ways that will improve the “quality of life”
• The right to consume now in a way that will preserve
the world for future generations of consumers
Consumer Actions to Promote Sustainable Marketing
Environmentalism
Environmentalism is an organized movement of
concerned citizens, businesses, and government
agencies to protect and improve people’s living
environment.
Environmental sustainability involves earning profits
while helping to save the planet.
Consumer Actions to Promote Sustainable Marketing
Environmentalism
Environmental Sustainability
Pollution prevention involves not just cleaning up waste but also
eliminating or minimizing waste before it is created.
Product stewardship involves minimizing the pollution from
production and all environmental impact throughout the full
product life cycle.
Design for environment (DFE) practices involve thinking ahead to
design products that are easier to recover, reuse, or recycle.
Consumer Actions to Promote Sustainable Marketing
Environmentalism
Environmental Sustainability
New clean technologies involve looking ahead and
planning new technologies for competitive advantage.
Sustainability vision is a guide to the future that shows the
company that the company’s products, processes, and
policies must evolve and what is needed to get there.
Consumer Actions to Promote Sustainable Marketing
Public Actions to Regulate Marketing
Business Actions Toward Sustainable Marketing
Sustainable Marketing Principles
View marketing activities
from the consumer's
point of view
Deliver superior value
Invest in customer-valuebuilding marketing
Create value for customers
ConsumerOriented
Marketing
CustomerValue
Marketing
Sense-ofmission
Marketing
Define mission in broad
social terms rather than
narrow product terms
Company seeks real
product and marketing
improvements
Innovative
Marketing
Societal
Marketing
Business Actions Toward Sustainable Marketing
Marketing Ethics
Corporate marketing ethics policies are broad guidelines that
everyone in the organization must follow that cover
distributor relations, advertising standards, customer service,
pricing, product development, and general ethical standards.
• Who should guide companies?
– The free market and the legal system?
– Individual companies and managers?
Social Responsibility and Ethics
Corporate Marketing Ethics Policies
Broad guidelines that everyone in the
organization must follow. These policies
should cover distributor relations,
advertising standards, customer service,
pricing, product development, and
general ethical standards.
Social Responsibility and Ethics
The Sustainable Company
At the foundation of marketing is the belief that companies
that fulfill the needs and wants of customers will thrive.
Companies that fail to meet customer needs, or that
intentionally or unintentionally harm customers, others in
society, or future generations will decline.
A sustainable company goes beyond carrying for the needs of
today’s customers and has concern for tomorrow’s customers
and the broader world.
Case Study: PATAGÓNIA
Discussion Questions
• Describe Patagonia’s Common Threads Initiative. What are its key objectives
and goals?
• What are some of the ways in which Patagonia promotes sustainability
through its products and global initiatives?
• What is one example of how product adaptation can promote sustainability?
• Can Patagonia’s philosophy be adopted by other industries? Which ones?
Provide examples and explain.
• Where does Patagonia go from here? From an environmental sustainability
standpoint, what might be next for the company?