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21
Tapping into
Global Markets
Chapter Questions
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What factors should a company review before
deciding to go abroad?
How can companies evaluate and select
specific foreign markets to enter?
What are the differences between marketing in
a developing and a developed market?
What are the major ways of entering a foreign
market?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
21-2
Chapter Questions
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To what extent must the company adapt its
products and marketing program to each
foreign country?
How do marketers influence country-of-origin
effects?
How should the company manage and
organize its international activities?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
21-3
What is a Global Firm?
A global firm is one that operates in more
than one country and captures R&D,
production, logistical, marketing, and financial
advantages in its costs and reputation that are
not available to purely domestic competitors.
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21-4
Major Decisions in
International Marketing
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Deciding whether to go
Deciding which markets to enter
Deciding how to enter
Deciding on the marketing program
Deciding on the marketing organization
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21-5
Reasons for Pursuing
Global Markets
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Better profit opportunities
Larger customer base to achieve economies
of scale
Less dependence on any one market
Desire to counterattack global competitors in
their home markets
Customers require international service
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21-6
Risks to Going Abroad
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Lack of knowledge of foreign culture
Lack of understanding of foreign needs
Lack of understanding of foreign regulations
Lack of managers with international expertise
Changes in the country environment
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21-7
Four Stages of
Internationalization
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Stage 1: No regular export activities
Stage 2: Export via independent agents
Stage 3: Establish sales subsidiaries
Stage 4: Establish production facilities abroad
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21-8
Momentum in Market Entry
Waterfall Approach
Sprinkler Approach
Born Global
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21-9
Local Dynamos
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21-10
Regional Free Trade Zones
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European Union
NAFTA
MERCOSUL
APEC
ASEAN
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21-11
Key Emerging Markets
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Brazil
Russia
India
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China
Indonesia
South Africa
21-12
Five Modes of Entry
into Foreign Markets
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Indirect exporting
Direct exporting
Licensing
Joint ventures
Direct investment
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21-13
Indirect Exporting Methods
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21-14
Direct Exporting Methods
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Domestic-based export department
Overseas sales branch or subsidiary
Traveling export sales representatives
Foreign-based distributors or agents
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21-15
Licensing
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21-16
Joint Ventures
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21-17
Direct Investment
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21-18
Table 21.2 Global Marketing
Advantages
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Economies of scale
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Lower marketing costs
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Power and scope
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Consistency in brand
image
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Ability to leverage
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Uniformity of marketing
practices
Disadvantages
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Differences in
consumer needs,
wants, usage patterns
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Differences in
consumer response to
marketing mix
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Differences in brand
development process
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Differences in
environment
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21-19
Cultural Dimensions
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Individualism vs. collectivism
Masculine vs. feminine
High vs. low power distance
Weak vs. strong uncertainty avoidance
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21-20
What Marketing Aspects Might Be
Adapted for International Marketing?
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Product features
Labeling
Colors
Materials
Sales promotion
Advertising media
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Brand name
Packaging
Advertising
execution
Prices
Advertising themes
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Commandments of Global Branding
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Understand similarities and differences in the
global branding landscape
Do not take shortcuts in brand building
Establish a marketing infrastructure
Embrace integrated marketing
communications
Establish brand partnerships
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21-22
Commandments of Global Branding
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Balance standardization and customization
Balance global and local control
Establish operable guidelines
Implement a global brand-equity measurement
system
Leverage brand elements
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21-23
Figure 21.3 Five International
Product and
Communication Strategies
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21-24
Levels of Product Adaptation
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Production of regional product versions
Production of country versions
Production of city versions
Production of retailer versions
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21-25
Price Choices
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Set a uniform price everywhere
Set a market-based price in each country
Set a cost-based price in each country
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21-26
What is a Gray Market?
A gray market consists of branded
products diverted from normal or authorized
distributions channels in the country of
product origin or cross international
borders; dealers in lower priced countries
sell products in higher priced countries
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21-27
Whole-Channel Concept for
International Marketing
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Seller
International headquarters
Channels between nations
Channels within nations
Final buyers
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21-28
Country of Origin Effects
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21-29
The Marketing Organization
Export Departments
International Divisions
Global Organization
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21-30
For Review




What factors should a company review
before deciding to go abroad?
How can companies evaluate and select
specific foreign markets to enter?
What are the differences between marketing
in a developing and a developed market?
What are the major ways of entering a
foreign market?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
21-31
For Review



To what extent must the company adapt its
products and marketing program to each
foreign country?
How do marketers influence country-of-origin
effects?
How should the company manage and
organize its international activities?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
21-32