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Global Marketing
Global Marketing
• Coordinated performance of
marketing activities to create
exchanges across countries that
satisfy individual, organizational,
and societal objectives.
What is Unique about Global Marketing?
• Economic Environment
– Fiscal policies - tax and government
expenditures
– Monetary policies - regulate money supply
• Financial Environment
– Exchange rates and fluctuations
– Foreign exchange reserves
What is Unique about Global Marketing?
• Political Environment
– Tariff barriers
– Nontariff barriers
– Regulations
• Cultural Environment
– Values
– Beliefs
– Attitudes
Global Marketing Environment
Global
Regional
Local
Marketing Mix
Environment
Global Marketing Evolution
• Domestic Marketing (domestic focus; home
country customers; ethnocentric orientation).
• Export Marketing (ethnocentric orientation;
products developed for home country customers).
• International Marketing (markets in many
countries; polycentric orientation; use of
multidomestic marketing when customer needs are
different across national markets).
Global Marketing Evolution
• Multinational Marketing (many markets;
consolidation on regional basis; regiocentric
orientation; standardization within regions).
• Global Marketing (international,
multinational & geocentric orientation;
company’s willingness to adopt a global
perspective; global products with local
variations).
Global Marketing
• Standardization Efforts--product offerings,
promotional mix, price, and channel
structure.
• Coordination Across Markets—reducing
cost inefficiencies.
• Global Integration—participating in many
major world markets to gain competitive
leverage, subsidize operations in some
markets.
Global Marketing Decisions
Internationalize
Business?
Global
Marketing
Decisions
Country Market
Selection
Market Entry
Selection
Why Global Marketing?
• Exploiting Firm-Specific Capabilities
– Technological innovations
– Strong Trade Names
• Lowering Cost Structure
– Outsourcing
Why Global Marketing?
• Diversification and competitiveness
– Product/market portfolio
– Cross-subsidization
• Country market attractiveness
– Income
– Consumer preference
• Technology and market globalization
Why Global Marketing
• Saturation of domestic markets: Domestic
market saturation in the industrialized
countries and growing marketing
opportunities overseas.
• Global competition: Competition around the
world and proliferation of the Internet.
• Need for global cooperation: Global
competition brings global cooperation.
GLOBAL INTEGRATION
Driving Forces
Restraining Forces
Technology
Culture
Culture
Market Differences
Market Needs
Costs
Cost
National Controls
Free Markets
Nationalism
Economic Integration
War
Peace
Management Myopia
Management Vision
Organization History
Strategic Intent
Domestic Focus
Global Strategy and Action
Global Trade Importance
• World trade has grown from $200 billion to
more than $7 trillion in the past three
decades.
• The Iron Curtain is gone and capitalism is
the new economic order.
• Firms invest on a global scale.
• Increasingly more difficult to define
“where” products come from.
• New trading blocs are emerging.
Domestic and Global Trade Growth
Percentage of
Growth
12%
10%
8%
6%
4%
2%
Trade Growth
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
19
89
19
88
19
19
87
0%
Domestic Growth
Source: International Financial Statistics Yearbook
2000, International Monetary Fund, Washington D. C.
Year
The Changing Face of Exporting
400%
Growth (1983-1998)
350%
300%
250%
200%
150%
100%
50%
0%
Australia
Canada
Germany
Japan
USA
Source: The World Bank, World Development Report, 1999.
Merchandise Exports
Commercial Services Exports
Domestic Policy Repercussions in the US
•
•
•
•
1 out of every 3 U.S. farm acres is producing for export
1 of every 6 U.S. manufacturing jobs produces for export
$1 of every $7 of U.S. sales goes abroad
1 of every 3 cars, 9 out of 10 TVs, 2 out of 3 suits, and
every VCR sold in the U.S. is imported.
• Travel and tourism is the #1 source of U.S. foreign
exchange.
• $1 of every $4 of U.S. bonds & notes is issued to
foreigners.
“If we distributed pictures only
in the United States, we’d lose
money. It takes the whole world
now to make the economics of
movie-making work.”
- William Mechanic
President, 20th Century Fox
“Half the people in the world have
yet to take their first picture. The
opportunity is huge, and it’s nothing
fancy. We just have to sell yellow
boxes of film.”
- George M.C. Fisher
CEO, Eastman Kodak Company