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The Global Marketplace
•Chapter 18
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•Course name
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Principles of Marketing, Sixth Canadian Edition
Learning Objectives
18.2
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• After studying this chapter, you should be able to:
– 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
Principles of Marketing, Sixth Canadian Edition
Copyright © 2005 Pearson Education Inc.
Major Decisions in Global Marketing
18.3
• Importance of international trade
• Canada exports $468.5 billion in 2002
• One of three jobs in
Canada tied to trade
• Global firm: a firm that, by
operating in more than one
• Marketing environment
country, gains R&D, production,
characterized by:
– Faster communication
– Faster transportation
– Faster financial flows
marketing, and financial
advantages that are not available
to purely domestic competitors
Figure 18.1
Principles of Marketing, Sixth Canadian Edition
18.4
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The International Trade System
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•
•
•
•
Tariff
Quota
Embargo
Exchange controls
Non-tariff trade barriers:
– Bias against bids
– Product standards
• Trade organizations:
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–
–
–
–
WTO and GATT
European Union (EU)
NAFTA
APEC
MERCOSUR
Figure 18.1
Principles of Marketing, Sixth Canadian Edition
The International Trade System (continued)
18.5
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• Two factors influence attractiveness:
• Types of economies:
–
–
–
–
Subsistence economies
Raw-material-exporting economies
Industrializing economies
Industrial economies
• Income distribution
Figure 18.1
Principles of Marketing, Sixth Canadian Edition
The International Trade System (continued)
18.6
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• Political-legal environment:
– Attitudes toward international
buying
– Government bureaucracy
– Political stability
– Monetary regulations
• Countertrade
• Cultural
environment:
– Impact of culture on
marketing strategy
– Impact of marketing
strategy on cultures
Figure 18.1
Principles of Marketing, Sixth Canadian Edition
18.7
The Decision to go International
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• Reasons for entering international markets:
–
–
–
–
Growth opportunities outside of domestic markets
As a counterattack against competition at home
Reduce dependence on existing markets
Need a larger customer base to achieve economies of scale
• Factors to consider:
– Marketing objectives
– Volume of foreign sales
– How many countries
– Types of countries to enter
Figure 18.1
Principles of Marketing, Sixth Canadian Edition
18.8
Indicators of Market Potential
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Indicators of Market Potential
Demographic characteristics
Geographic characteristics
Economic factors
Size of population
Rate of population growth
Degree of urbanization
Population density
Age structure/composition
Physical size of country
Topographical characteristics
Climate conditions
GNP per capita
Income distribution
Rate of growth of GNP
Ratio of investment to GNP
Technological factors
Sociocultural factors
National goals and plans
Level of technological skill
Existing production technology
Existing consumption technology
Education levels
Dominant values
Lifestyle patterns
Ethnic groups
Linguistic fragmentation
Industry priorities
Infrastructure investment plans
Table 19.1
Principles of Marketing, Sixth Canadian Edition
18.9
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Major Entry Strategies
• Many companies begin with indirect exporting, the
simplest way to sell internationally
• Commitment, investment, potential for profit, and risk
increases over time
Figure 18.2
Principles of Marketing, Sixth Canadian Edition
18.10
Global Marketing Programs
• Standardized marketing mix: using the same marketing mix
Copyright © 2005 Pearson Education Inc.
elements for all of the company’s international markets
• Adapted marketing mix: adjusting the marketing mix elements
to better suit each international target market entered
Figure 18.3
Principles of Marketing, Sixth Canadian Edition
18.11
Whole Channel Concept
Copyright © 2005 Pearson Education Inc.
• Whole-channel view: designing international channels that take
into account all the necessary links in distributing the seller’s products
to final buyers, including:
– The seller’s headquarters organization,
– Channels between nations, and
– Channels within nations
Figure 18.4
Principles of Marketing, Sixth Canadian Edition
In Conclusion…
18.12
Copyright © 2005 Pearson Education Inc.
• The learning objectives for this chapter were:
– 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
Principles of Marketing, Sixth Canadian Edition