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Chapter 15
The Global Marketplace
15-1
Road Map:Previewing the Concepts
Discuss how the international trade system,
economic, political-legal, and cultural
environments affect a company’s international
marketing decisions.
Describe three key approaches to entering
international markets.
Explain how companies adapt their marketing
mixes for international markets.
Identify the three major forms of international
marketing organization.
15-2
Global Marketing into the
Twenty-First Century
The world is shrinking rapidly with the advent of
faster communication, transportation, and
financial flows.
International trade is booming and now accounts
for a quarter of the United States’ GDP.
Between 1996 and 2006, U.S. exports are
expected to increase 51%.
Global competition is intensifying and few U.S.
industries are now safe from foreign competition.
15-3
Global Marketing into the
Twenty-First Century
To compete, many U.S. companies are continuously
improving their products, expanding into foreign
markets, and becoming global firms.
Global firms face several major problems:
High debt, inflation, and unemployment have resulted in
highly unstable governments & currencies,
Governments placing more regulations on foreign firms,
Protectionist tariffs and trade barriers,
Corruption.
15-4
McDonald’s in Beijing
Many U.S. companies
have long been
successful, including
McDonald’s, at
international marketing.
http://www.mcdonalds.
com/
15-5
Major International Marketing
Decisions (Fig. 15-1)
15-6
Looking at the Global Marketing
Environment
The International Trade System
i.e. Tariff, Quota, Embargo, Exchange
Control, and Nontariff Trade Barriers
The World Trade Organization and GATT
Treaty designed to promote world trade by reducing
tariffs and other international trade barriers
Regional Free Trade Zones
Group of nations organized to work toward
common goals in the regulation of international trade
15-7
When exporting goods to a foreign
country, a marketer may be faced with
trade restrictions. Discuss the effects
that a tariff might have on an exporter’s
marketing mix.
15-8
Economic Environment
Subsistence
Economies
Industrial
Economies
Types of
Industrial
Structure
Raw Material
Exporting
Economies
Industrializing
Economies
15-9
Political-Legal Environment
At Least Four Political-Legal Factors Should be
Considered in Deciding Whether to do Business in a
Given Country:
Attitudes Toward
International
Buying
Government
Bureaucracy
Monetary
Regulations
Political
Stability
15-10
Cultural Environment
Sellers Must Examine the
Following Before
Planning a Marketing
Program Within a Given
Country.
How Customers
Think About and
Use Products
Cultural Traditions,
Preferences, and
Behaviors
Business
Norms and
Behavior
15-11
Deciding Whether to Go
International
Reasons companies might consider international
expansion:
Global competitors attacking the domestic market,
Foreign markets might offer higher profit opportunities,
Domestic markets might be shrinking,
Need an enlarged customer base to achieve economies
of scale,
Reduce dependency on any one market,
Customers might be expanding abroad.
Most companies do not act until some situation or
event thrusts them into the global arena.
15-12
Deciding Which Markets to Enter
Define Organization’s Marketing Objectives
and Policies
What Volume of Foreign Sales is Desired?
How Many Countries Should the Firm Go Into?
What Types of Countries Should be Entered?
Rank by Market Size & Growth, Cost of Doing
Business, Competitive Advantage, & Risk Level.
15-13
Deciding How to Enter the
Market (Fig. 15-2)
15-14
Pair with the student on your left to
discuss the following situation.
Once a company has decided to sell in a
foreign country, it must determine the
best mode of entry. Assume that you
were the marketing manager for
Mountain Dew and devise a plan and
pick a mode of entry for marketing your
product in China.
15-15
Adapted Marketing
Mix
Adjusts the Marketing
Mix Elements to Each
International Target
Market.
i.e. Japanese Barbie
Changes in Product,
Advertising, Distribution
Channels, & Price
Deciding on the Global Marketing
Program
Standardized
Marketing Mix
Selling Largely the Same
Products and Using the
same Marketing
Approaches Worldwide .
i.e Coca-Cola
15-16
Five Global Product and Promotion
Strategies (Fig. 15-3)
15-17
International Pricing
Companies face many problems in setting their
international prices.
Possibilities in setting prices include:
Charge a uniform price all around the world.
Charge what consumers in each country could pay.
Use a standard markup of its costs everywhere.
International prices tend to be higher than
domestic prices because of price escalation.
Companies may become guilty of dumping – when
a foreign subsidiary charges less than its costs or
less than it charges in its home market.
15-18
Whole-Channel Concept for
International Marketing (Fig. 15-4)
15-19
Deciding on the Global Marketing
Organization
1. Organize an Export Department
2. Create an International Division
3. Become a Global Organization
Degree of Involvement in
International Marketing Activities
15-20
Rest Stop: Reviewing the Concepts
Discuss how the international trade system,
economic, political-legal, and cultural
environments affect a company’s international
marketing decisions.
Describe three key approaches to entering
international markets.
Explain how companies adapt their marketing
mixes for international markets.
Identify the three major forms of international
marketing organization.
15-21