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The Global Marketplace
For Brands and
Products
Marketing 3349
Chip Besio
Great American Brands
Caterpillar – 61% of sales from outside US
Johnson and Johnson – 49% of sales
Otis Elevator – 81% of sales
Great American Brands
Mc Donald’s
65% of $23.5 billion Sales from Outside U.S.
32,000 restaurant in 122 countries serve more than
100,000 people per day
Mc Donald’s Russia
Opened in Moscow in 1990
26 Cash Registers (more than a Wal-Mart
Supercenter)
900 Seats (average US – 50 seats)
240 restaurants in 40 Russian cities – 80 in
Moscow
850,000 customers per year – 2 times avg.
Global Marketing into the
Twenty-First Century
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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 1990 and 2010, global companies grew
from 30,000 to 60,000
Between 2000 and 2008 world trade grew by
7%/yr. outstripping GDP growth of 3%
Global competition is intensifying and few U.S.
industries are now safe from foreign
competition.
Global Companies Exceed
GDP in Some Countries
Of the 150 largest economies in the world:
89 are countries, 61 are companies
Wal-Mart the world’s largest company has
annual revenues that are larger than all
but the top 25 countries.
World trade in 2010 was $19.7 trillion about
28% of world GDP
Global Marketing into the
Twenty-First Century
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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:
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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.
Major Decisions in International
Marketing
Looking at the global marketing environment
Deciding whether to go international
Deciding which markets to enter
Deciding how to enter the market
Deciding on the global marketing program
Deciding on the global marketing organization
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
Economic Environment
Subsistence
Economies
Industrial
Economies
Types of
Industrial
Structure
Raw Material
Exporting Economies
Industrializing
Economies
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
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
Deciding Whether to Go
International
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Reasons companies might consider
international expansion:
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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
international market.
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.
Discussion Connections
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Assess China as a market for McDonald’s.
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Assess Canada as a market for McDonald’s.
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What factors make it attractive?
What factors make it less attractive?
In what ways is Canada more attractive than
China?
In what ways is it less attractive?
If McDonald’s could operate in only one of
these countries, which one would you choose
and why?
Deciding How to Enter the
Market
Exporting
Joint venturing
•Indirect
•Licensing
•Contract manufacturing
•Management Contracting
•Joint Ownership
•Direct
Direct investment
•Assembly
facilities
•Manufacturing
facilities
Deciding on the Global
Marketing Program
The Coca-Cola logo is the same throughout the world.
Adjusts the Elements
of the Marketing Mix
to Each International
Target Market. i.e.
Japanese Barbie
The Maharaja Mac is an example of an
Ad ap ted Marketing Mix
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Which other companies
use a standardized marketing mix?
Changes in Product,
Advertising,
Distribution Channels,
& Price
Adapted Marketing
Mix
This is an example of a
standardized marketing mix.
Do some companies use a blend of
adapted and standardized marketing
mix? Which ones?
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Standardized
Marketing Mix
Uses Basically the
Same Elements of the
Marketing Mix in all
the Company’s
International Markets.
i.e Coca-Cola
Five International Product and
Promotion Strategies
Product
Promotion
Don’t
Change
Product
Don’t
Change
Promotion
Adapt
Promotion
1. Straight
Extension
2. Communication
Adaptation
Adapt
Product
3. Product
Adaptation
4. Dual
Adaptation
Develop
New
Product
5. Product
Invention
International Pricing
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Companies face many problems in setting
their international prices.
 Possibilities in setting prices include:
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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 in its home market.
Whole-Channel Concept for
International Marketing
Seller
Seller’s
headquarters
organization
for
international
marketing
Channels
between
nations
Final
user
or buyer
Channels
within
nations
Deciding on the Global
Marketing Organization
Export Department
International Division
Global Organization
L
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Degree of Involvement in International
Marketing Activities
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