Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Hult | Pride | Ferrell Marketing Foundations 5e Part 3 Customer Behavior and E-Marketing 6: Consumer Behavior 7: Business Buying Behavior 8: International Marketing 9: Digital Marketing and Social Media © 2013 South-Western, a part of Cengage Learning 8-2 Learning Objectives To understand the nature of global marketing strategy To analyze the environmental forces that affect international marketing efforts To understand several important international trade agreements To identify methods of international market entry To examine various forms of global organizational structures To examine the use of the marketing mix internationally © 2013 South-Western, a part of Cengage Learning 8-3 International Marketing Developing and performing marketing activities across national boundaries International markets provide growth opportunities Many countries offer assistance and research to encourage international business • CIBERs: Centers for International Business Educational Research Born Globals: Firms that are international from their inception • Often small technology-based firms • Earn most of their sales outside the U.S. © 2013 South-Western, a part of Cengage Learning 8-4 Environmental Forces in Global Markets Sociocultural Economic Technological Environmental Forces Political, Legal, and Regulatory Competitive Ethical and Social Responsibility © 2013 South-Western, a part of Cengage Learning 8-5 Environmental Forces Environmental forces may be dramatically different in international markets than in domestic markets Research to understand the needs/desires of international customers is crucial to global marketing success Proper environmental analysis of international markets can: Generate financial rewards Increase market share Heighten customer awareness of products © 2013 South-Western, a part of Cengage Learning 8-6 Sociocultural Forces Family Country of Origin Religion Social Influences Language Education Recreation © 2013 South-Western, a part of Cengage Learning Health 8-7 Influence of Sociocultural Factors Marketing activities are influenced by beliefs and values regarding family, religion, education, health and recreation Can be difficult to: Adapt marketing efforts to different preferences, tastes and idioms Transfer marketing symbols, trademarks, logos and sometimes products to international markets Consumer preferences for products depends on their impression of the country of origin Faster acceptance of a product or service through: Sensitivity to and understanding of cultural differences Cultural similarities © 2013 South-Western, a part of Cengage Learning 8-8 Discussion Questions In what ways do language differences impact global marketing strategy? Can you think of any examples from the book or from your experiences of advertisements or product names that did not translate well into other languages? © 2013 South-Western, a part of Cengage Learning 8-9 Economic Forces Global marketers must understand: • International trade systems • Economic stability/instability of nations • Trade barriers • Economic disparities between nations Instability is a guaranteed constant in the global business environment Developing nations, while poorer, offer much market potential © 2013 South-Western, a part of Cengage Learning 8-10 Economic Forces continued Many differences between nations exist Standards of living Availability of credit Buying power Income distribution National resources Exchange rates Gross domestic product (GDP): The market value of a nation’s total output of goods and services for a given period • Gives insights into a nation’s wealth and market potential © 2013 South-Western, a part of Cengage Learning 8-11 Comparative Analysis of Selected Countries Source: The CIA, The World Fact Book, (accessed February 24, 2010). © 2013 South-Western, a part of Cengage Learning 8-12 Political, Legal and Regulatory Forces Political, legal and regulatory forces are often intertwined • A nation’s legal and regulatory infrastructure reflect its political situation Import Tariff: Any duty levied by a nation on goods bought outside its borders and brought into the country Quota: A limit on the amount of goods an importing country will accept for certain product categories in a specific period of time Embargo: A government’s suspension of trade in a particular product or with a given country; is generally directed at a specific country or product © 2013 South-Western, a part of Cengage Learning 8-13 Trade Controls Exchange Controls: Government restrictions on the amount of a particular currency that can be bought or sold that can affect international trade Some countries promote international trade through free trade zones, which are multinational economic communities that eliminate trade barriers Balance of Trade: The difference in value between a nation’s exports and its imports • Go to US Trade Ticker to see the U.S. trade deficit grow Non-regulatory barriers, like stringent health or safety requirements, can also inhibit trade © 2013 South-Western, a part of Cengage Learning 8-14 Think About It Did you know that the United States has multiple embargos in place? Click here to access a list of sanctioned regions published by the U.S. Department of Commerce © 2013 South-Western, a part of Cengage Learning 8-15 Ethical and Social Responsibility Forces Accepted business practices vary from country to country • Differences exist in ethical standards • Bribes • Intellectual property protection • Different modes of operations Bribes are an entrenched part of the business culture in many nations • Illegal for U.S. firms, although small gifts are allowed © 2013 South-Western, a part of Cengage Learning 8-16 Think About It Clothing retailer, The Gap, was accused of using sweatshop labor in 2003 • It responded by improving its commitment to socially responsible actions – click here. • Has been featured on many lists of most ethical and most socially responsible companies What do you think about The Gap’s efforts to be more socially responsible? © 2013 South-Western, a part of Cengage Learning 8-17 Dealing with Different Cultures Self-Reference Criterion (SRC) The unconscious reference to one’s own cultural values, experiences and knowledge • Usually includes the sense that your culture is best Formed over a lifetime; worse in those who have little international travel exposure Cultural Relativism The concept that morality varies from one culture to another • “When in Rome, do as the Romans do” Most large international businesses will counteract this urge with international ethics and compliance programs © 2013 South-Western, a part of Cengage Learning 8-18 The Least and Most Corrupt Countries * The United States is perceived as the 19th least-corrupt nation. Source: “Transparency International Corruption Perceptions Index 2009,” (accessed March 1, 2010). © 2013 South-Western, a part of Cengage Learning 8-19 Most Frequently Counterfeited Goods Source: “Counterfeit Culture,” CBC News (accessed March 15, 2010). © 2013 South-Western, a part of Cengage Learning 8-20 Competitive Forces Competition is a staple of the global marketplace Technology and interconnectedness have created unique competitive forces in the international marketplace © 2013 South-Western, a part of Cengage Learning 8-21 Competitive Forces continued Firms that operate internationally should: Be aware of the competitive forces in the countries they target Identify the interdependence of countries and the global competitors in those markets Be mindful of a new breed of customers, i.e. the global customer © 2013 South-Western, a part of Cengage Learning 8-22 Competitive Forces continued Each country has unique competitive aspects • Shaped by the environmental forces that act upon it • Nations establish the infrastructure and rules for the types of competition that can take place The global consumer is changing international competition • Increased ability to compare products and prices around the globe © 2013 South-Western, a part of Cengage Learning 8-23 The World’s Most Competitive Countries Ranking Nation 1 Switzerland Sweden Singapore United States Germany Japan Finland Demark Netherlands Canada 2 3 4 5 6 7 8 9 10 © 2013 South-Western, a part of Cengage Learning 8-24 Discussion Question According to this advertisement, what gives AT&T a competitive advantage over its competition? © 2013 South-Western, a part of Cengage Learning 8-25 Think About It View Fortune magazine’s lists of most admired companies by: Location Industry Best and worst rankings © 2013 South-Western, a part of Cengage Learning 8-26 Technological Forces Technological advances have made international marketing easier, faster and more affordable • Email • Interactive web systems • Instant messaging • Podcasting Technological infrastructure varies by country • Many nations are leapfrogging straight into hightechnology © 2013 South-Western, a part of Cengage Learning 8-27 Regional Trade Alliances, Markets, and Agreements Regional trade alliances create opportunities and impose constraints on international trade North American Free Trade Agreement (NAFTA) European Union (EU) Common Market of the Southern Cone (MERCOSUR) Asia-Pacific Economic Cooperation (APEC) World Trade Organization (WTO) © 2013 South-Western, a part of Cengage Learning 8-28 North American Free Trade Agreement (NAFTA) Agreement that eliminates most tariffs and trade restrictions on agricultural and manufactured products to encourage trade among Canada, the U.S., and Mexico Controversial but has created new business opportunities with fewer barriers than before Click here to access more information on NAFTA © 2013 South-Western, a part of Cengage Learning 8-29 European Union (EU) A union of European nations established in 1958 to promote trade among its members One of the largest single markets in the world today • Twenty-seven countries Click here to access an interactive map of the EU © 2013 South-Western, a part of Cengage Learning 8-30 The Common Market of the Southern Cone (MERCOSUR) South American Common Market • Argentina • • • • Brazil Paraguay Uruguay Bolivia, Chile, Colombia, Ecuador and Peru are associate members Promotes free circulation of goods, services and production factors Common external tariff and commercial policy among member nations © 2013 South-Western, a part of Cengage Learning 8-31 Asia-Pacific Economic Cooperation (APEC) An international trade alliance that promotes open trade and economic and technical cooperation among members 21 member nations • Click here to access the APEC homepage © 2013 South-Western, a part of Cengage Learning 8-32 The World Trade Organization (WTO) International organization dealing with the rules of trade between nations Officially founded in 1995 Successor to GATT 153 members representing 95% of global trade Click here to access the WTO homepage © 2013 South-Western, a part of Cengage Learning 8-33 Modes of Entry Into International Markets Stage 1: No regular export activities Stage 2: Export via independent representatives (agents) Stage 3: Establishment of one or more sales subsidiaries internationally Stage 4: Establishment of international production/manufacturing facilities © 2013 South-Western, a part of Cengage Learning 8-34 Levels of Involvement in Global Marketing © 2013 South-Western, a part of Cengage Learning 8-35 Trading Company An organization that links buyers and sellers in different countries Is not involved in manufacturing and does not own assets related to manufacturing Acts like a wholesaler; purchases products in one country for a low price and sells them to buyers in another country • Reduces risk to the company wanting to trade internationally © 2013 South-Western, a part of Cengage Learning 8-36 Importing and Exporting Importing The purchase of products from a foreign source Exporting The sale of products to foreign markets • • • Exporting intermediaries can perform most marketing functions for minimal effort and cost Export agents unite buyers and sellers and collect a commission for arranging sales Export houses and export merchants purchase products from different companies and then sell them abroad © 2013 South-Western, a part of Cengage Learning 8-37 Licensing An alternative to direct investment that requires a licensee to pay commission or royalties on sales or supplies used in manufacturing An attractive alternative when: Resources for direct investment are not available Product sold is outside the core competency of a company A foreign country is politically unstable © 2013 South-Western, a part of Cengage Learning 8-38 Franchising A form of licensing in which a franchiser, in exchange for a financial commitment, grants the franchisee the right to market a product in accordance with the franchiser’s standards The franchisee must: Pay an initial fee and royalties to the franchiser Adhere to all franchise standards © 2013 South-Western, a part of Cengage Learning 8-39 Top Ten Global Franchises Franchise 1 2 3 4 5 6 7 8 9 10 Subway McDonald’s Hampton Inn/Hampton Inn Suites Supercuts H&R Block Dunkin’ Donuts Jani-King Ampm Mini Market Jan-Pro Franchising Int’l, Inc. Kumon Math and Reading Centers © 2013 South-Western, a part of Cengage Learning 8-40 Benefits of International Franchising Minimizes risks to franchiser: Does not have to put up a large capital investment Revenue stream is fairly consistent because franchisees pay a fixed fee and royalties Retains control of its name and increases global penetration Franchise agreements ensure a standard of conduct and protect the franchise name © 2013 South-Western, a part of Cengage Learning 8-41 Contract Manufacturing Hiring a foreign firm to produce a designated volume of the domestic firm’s product or a component of it to specification The final product carries the domestic firm’s name Marketing may be handled by the contract manufacturer or by the contracting company © 2013 South-Western, a part of Cengage Learning 8-42 Forms of Contract Manufacturing Outsourcing Contracting noncore operations with an organization that specializes in that operation Offshoring Moving a business process that was done domestically to a foreign country • The production accomplished in the foreign country may be performed by the local company or a third party Offshore Outsourcing Contracting with an organization to perform business functions in a country other than the country in which the product will be sold © 2013 South-Western, a part of Cengage Learning 8-43 Joint Ventures Joint Venture A partnership between domestic and a foreign firm or government • Popular in industries requiring large investments • May be a political necessity because of laws and regulations Strategic Alliances Partnerships formed to create global competitive advantages • Firms may be traditional rivals competing for the same market • Firms may compete in some markets while collaborating in others © 2013 South-Western, a part of Cengage Learning 8-44 Direct Ownership Direct Ownership A company owns subsidiaries or other facilities overseas Owning facilities may be too expensive for many firms Multinational Enterprise (Multinational Corporation) A firm that has operations or subsidiaries in many countries • Subsidiaries may be semi-autonomous or part of a network led by headquarters © 2013 South-Western, a part of Cengage Learning 8-45 The Ten Largest Global Corporations Source: “Global 500: 2009,” Fortune (accessed March 1, 2010). © 2013 South-Western, a part of Cengage Learning 8-46 Organizational Architecture © 2013 South-Western, a part of Cengage Learning 8-47 Global Organizational Structures An organizational structure should best leverage a firm’s resources and core competencies Export Departments • A subunit of the marketing department • Not present in all firms International Divisions • Centralizes all of the responsibility and communications related to international operations Internationally Integrated Structures • Firms with internationally integrated structures are most likely to engage in direct ownership internationally • Three most common: product division structure, the geographic area structure and the global matrix structure © 2013 South-Western, a part of Cengage Learning 8-48 Internationally Integrated Structures Product Division Structure • • • The form used by most multinational enterprises Good for firms that are diversified, yet driven by domestic operations Each unit is self-contained Geographic Area Structure • • Good for firms with low diversification Divides the world into logistical areas based on operations and customers’ characteristics Global Matrix Structure • • Designed to achieve global integration, cost efficiencies, knowledge transfers and local responsiveness Most firms do not use this structure © 2013 South-Western, a part of Cengage Learning 8-49 Customization vs. Globalization of International Marketing Mixes Marketers must realize that similarities and differences exist across all countries Customization • • Adapting marketing strategy and marketing mixes according to cultural, regional and national differences The traditional approach to marketing Globalization • • Development of marketing strategies that treat the entire world as a single entity Entails producing standardized products, promotion campaigns, prices and distribution channels for all markets © 2013 South-Western, a part of Cengage Learning 8-50 A Global Presence Maintaining a global presence creates five opportunities for creating value: 1. Adapt to local market differences 2. Exploit economies of global scale 3. Exploit economies of global scope 4. Mine optimal locations for activities and resources 5. Maximize the transfer of knowledge across locations © 2013 South-Western, a part of Cengage Learning 8-51 The Marketing Mix Internationally © 2013 South-Western, a part of Cengage Learning 8-52 The Marketing Mix Internationally continued © 2013 South-Western, a part of Cengage Learning 8-53 Important Terms International marketing Dumping Gross domestic product (GDP) Importing Import tariff Exporting Quota Trading company Embargo Licensing Exchange controls Franchising Balance of trade Contract manufacturing Cultural relativism Outsourcing © 2013 South-Western, a part of Cengage Learning 8-54 Important Terms continued North American Free Trade Agreement (NAFTA) Offshoring European Union (EU) Offshore outsourcing Common Market of the Southern Cone (MERCOSUR) Joint venture Asia-Pacific Economic Cooperation (APEC) Strategic alliances World Trade Organization (WTO) Direct ownership General Agreement on Tariffs and Multinational enterprise Trade (GATT) Globalization © 2013 South-Western, a part of Cengage Learning 8-55