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Copyright © 2005 Pearson Education Inc. The Global Marketplace •Chapter 18 •PowerPoint slides •Express version •Instructor name •Course name •School name •Date Principles of Marketing, Sixth Canadian Edition Learning Objectives 18.2 Copyright © 2005 Pearson Education Inc. • 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 Copyright © 2005 Pearson Education Inc. The International Trade System • • • • • Tariff Quota Embargo Exchange controls Non-tariff trade barriers: – Bias against bids – Product standards • Trade organizations: – – – – – 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 Copyright © 2005 Pearson Education Inc. • 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 Copyright © 2005 Pearson Education Inc. • 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 Copyright © 2005 Pearson Education Inc. • 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 Copyright © 2005 Pearson Education Inc. 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 Copyright © 2005 Pearson Education Inc. 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