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GLOBAL MARKETING
Go Global
 Target throughout the world
 Global vision of multi-national firms
 Fear? Why?
The Fear of Trade and
Globalization
 Millions of Americans have lost jobs
 Millions fear losing jobs
 Threat of outsourcing if workers do not
accept pay cuts
 Vulnerability to operations moving
offshore
 Then, why is international marketing so hot?
Rewards of Global Marketing
 Recognizing and reacting to international
marketing opportunities
 Using effective global marketing strategies
 Being aware of threats from foreign
competitors
 Other rewards?
Did you know?…




U.S. exports a fifth of industrial production.
One of every 10 jobs in U.S. is supported by exports.
U.S. businesses export over $800 billion.
Exports account for 25 percent of U.S. economic
growth.
 U.S. is world’s leading exporter of farm
products.
Global Marketing Goals
 Offensive goals
 Increase long term growth and profit prospects
 Maximize total sales revenue
 Take advantage of economies of scale
 Improve overall market position
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
Global Marketing Goals
 Defensive goals
 To compete with foreign companies on their own turf
 Gain access to technological innovations in other
countries
 Take advantage of differences in operating costs
 Preempt competitors’ global moves
 Avoid being locked out of future markets by arriving
too late
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
The Competitive Advantage of
Nations
 Porter's diamond presents four factors that
determine the competitive advantage of
disadvantage of a nation
 Factor conditions
 Demand conditions
 Related and supporting industries
 Company strategy, structure, and rivalry
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
Porter’s Diamond of National
Advantage
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
Global Marketing Issues
 Cultural Misunderstanding
 Managers tend to use their own cultural values and
priorities as a frame of reference
 Political Uncertainty
 Government instability
 Social unrest
 Armed conflict
 Import Restrictions
 Tariffs, quotas, and other types of restrictions hinder
global business
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
Global Marketing Issues
 Exchange Controls and Ownership Restrictions
 Established by nations experiencing BOP problems
 Economic Conditions
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
Organizing the Multinational
Company
 Multidomestic company – Pursues different strategies
in each of its foreign markets
 The global company – Views the world as one market
and pits its resources against competition in an
integrated fashion
 Three alternative structures
 Worldwide product divisions
 Divisions responsible for all products sold within a
geographic region
 A matrix system – A combination of both these
arrangements
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
Factors Fostering Global Strategy
 External Factors
 Market Factors – Degree of homogeneous market needs,
transferable brands, and the ability to globalize
distribution channels
 Economic Factors – Worldwide economies of scale,
learning curves, global resourcing, etc.
 Environmental Factors – Communications ability,
favorable governmental policies, etc.
 Competitive Factors – Global moves by competitors,
preemptive strikes
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
External Environments
Factors Fostering Global Strategy
 Internal Factors
 Structure – Ease of installing a centralized global
authority
 Management processes – Capabilities and resources
available to perform operational functions on a global
scale
 Culture – Ability to project a global identity, increased
tolerance
 People – Availability of foreign nationals, frequent travel,
commitments to multicountry careers
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
Ten Commandments of Global
Branding
 Understanding similarities and differences in the global
branding landscape
 Do not take short cuts in global branding
 Establish marketing infrastructure
 Embrace integrated marketing communications
 Establish brand partnerships
 Balance standardization and customization
 Balance global and local control
 Establish operable guidelines
 Implement a global brand equity measurement system
 Leverage brand elements
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©2009 The McGraw-Hill Companies, All Rights Reserved
Global Marketing Research
 Population characteristics – Managers should be
familiar with total population and the regional, urban,
rural, and interurban distribution
 Ability to buy – Four broad measures to be examined
 Gross national product or per capita national income
 Distribution of income
 Rate of growth in buying power
 Extent of available financing
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©2009 The McGraw-Hill Companies, All Rights Reserved
Global Marketing Research
 Willingness to buy – Cultural framework of consumer
motives and behavior is integral to the understanding
of foreign customer
 Differences in Research Tasks and Processes
 Language barriers
 Data content
 Timeliness
 Availability in the U.S.
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©2009 The McGraw-Hill Companies, All Rights Reserved
Global Product Strategy
 Global marketing research can help determine
whether there is an unsatisfied need
 For which a new product could be developed to serve
foreign market
 That could be met with an existing domestic product,
either as is or adapted to foreign market
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
Product and Promotion
Same
Message
Change
Message
Same
Product
Change
Product
One Product
One Message
Product
Adaptation
Message
Adaptation
Product
Invention
Global Distribution Strategy
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
Global Pricing
 Rigidity in price structures found in many foreign markets
also poses an issue…
 Must consider transportation and insurance costs, taxes
and tariffs
 Determine what customers will spend
 Ensure that foreign buyers will pay price
 May need to simplify a product to lower price
 Don’t assume that low-income countries
accept lower quality
are willing to
Global Advertising and Sales
Promotion Strategy
 Language barriers
 Media are traditionally used
 Limited media available – Unable to reach out to target
audience
 Deciding on the type of agency – To prepare and
place the firm’s advertisement
 Sales promotion
 Used as a strategy for bypassing restrictions on
advertisements placed by some foreign governments
 Effective means for reaching people in rural locations
where media support for advertising is virtually
nonexistent
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
Which are more risky global
growth strategies?
Export
Sell domestically produced
products to buyers in other
countries
Licensing
Legal process allowing use of
manufacturing/patents/knowledge
Contract
Manufacturing
Private-label manufacturing
by a foreign country
Joint Venture
Domestic firm buys/joins a foreign
company to create new entity
Direct Investment
Active ownership of a foreign
company/manufacturing facility
Developing a Global Marketing Mix
PROMOTION
PLACE
Channel Choice
One Product,
Channel Structure
One Message
Product Invention Country
Product Adaptation Infrastructure
Message
Adaptation
PRICE
Dumping
Countertrade
Exchange Rates
Purchasing Power
Your thoughts?
 What are your ideas for selling abroad?
 How difficult is global marketing?
 What are the potential risks
and returns?