1 CHAPTER FOUR DEVELOPING A GLOBAL VISION Prepared by Jack Gifford Miami University (Ohio) © 2000...

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CHAPTER FOUR

DEVELOPING A GLOBAL VISION

Prepared by Jack Gifford

Miami University (Ohio)

© 2000 South-Western College Publishing

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THE REWARDS OF GLOBAL MARKETING

Global revolutions are under way in many area of our lives: management, politics, communications, and technology.

Global marketing is not simply an option... but an imperative for business


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GLOBAL VISION Recognizing and reacting to

international marketing opportunities

Being aware of threats from foreign competitors in all markets

Effectively using international marketing distribution networks


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IMPORTANCE OF GLOBAL MARKETING IN THE UNITED STATES

US exports 20% of industrial production and 33% of farm products

Almost 33% of US corporate profits generated from international trade and foreign investment

U.S. businesses export over $500 billion in goods to foreign countries every year

About 10% of all manufacturing businesses are regularly involved in international marketing

Your odds of being involved professionally in international business after graduation in some manner are close to 100%!


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Multinational vs International Marketing

International = is any individual or organization that buys or sells its goods or services from beyond its home nation’s boundaries

Multinational = any individual or organization that has substantial marketing activities in many nations and “thinks globally but acts locally.” They also adopt a corporate culture, business philosophy and marketing strategy that views the world rather than their “home of record” as their domain. A true multinational marketer is a “citizen of the world.”


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Imports vs Exports

Just a reminder….


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THE MULTINATIONAL ADVANTAGE

Can overcome trade problems like embargoes

Ability to sidestep regulatory problems

Multinationals can shift production from one plant to another as market conditions change

Can tap new technologies from around the world

Can often save a lot in labor costs, even in highly unionized countries


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GLOBAL MARKETING STANDARDIZATION

Because of global communications and cross-cultural experiences, there is an emerging global market for standardized consumer products… sometimes with minor variations.


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THE EXTERNAL ENVIRONMENT FACING GLOBAL MARKETERS

Culture Economic

development Technological

development Political structure Demographic makeup Natural resources


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THE EXTERNAL ENVIRONMENT FACING GLOBAL MARKETERS: CULTURE

Culture: “a common set of values shared by a country’s citizens that determine what is socially acceptable behavior” language, gestures, symbols customs and traditions social institutions assumptions and attitudes personal beliefs, values,

norms, roles

Interpersonal relationshipssocial structure


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THE EXTERNAL ENVIRONMENT FACING GLOBAL MARKETERS: ECONOMIC & TECHNOLOGICAL DEVELOMENT

Traditional Pre industrial Takeoff Industrializing

Fully industrialized


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CENTRALLY PLANNED ECONOMY

MARKET ORIENTEDECONOMY


THE EXTERNAL ENVIRONMENT FACING GLOBAL MARKETERS: POLITICAL STRUCTURE

Moscow St. Louis

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THE EXTERNAL ENVIRONMENT FACING GLOBAL MARKETERS: LEGAL CONSIDERATIONS

Justice and court system Legal structure Tariffs Quotas Boycotts Exchange control Trade alliances Trade agreements Trade organizations (WTO)

Special restrictions for certain industries (Hong Kong & textiles)

Japanese Keiretsu NAFTA European Union (EU) Recognition of

international accords/agreements


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THE EXTERNAL ENVIRONMENT FACING GLOBAL MARKETERS: DEMOGRAPHIC MAKEUP & NATURAL RESOURCES

DEMOGRAPHICS Size of middle class Per capita income Education Birth rate Housing market Population density Age distribution Etc.

In underdeveloped nations, secondary data is often bad or

nonexistent!

Natural Resources Physical Human capital Intellectual

capital


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GETTING INVOLVED IN INTERNATIONAL MARKETING: A FIVE STEP PROCESS

DO WE GET INVOLVED IN

INTERNATIONAL MARKETING?

IF YES, WHICH MARKETS?

HOW MUCH COMMITMENT

IN EACH MARKET?

HOW SHOULD WE

REORGANIZE OUR

OPERATIONS?

IMPACT ON DOMESTIC-

BASED MARKETING?


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FACTORS INFLUENCING WHETHER A FIRM BECOMES INVOLVED IN INTERNATIONAL MARKETING

ENCOURAGING FACTORS Saturated domestic

market Obsolete in domestic

market Govt. or EPA problems Foreign market

opportunities

DISCOURAGING FACTORS

High tariffs or low import quotas

Government restrictions or uncertainty

Negative uncontrollable market variables

Inadequate financial resources or human capital


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VARIOUS WAYS OF ENTERING THE GLOBAL MARKETPLACE BY LEVELS OF RISK

1st level: Exporting 2nd level: Joint Venturing

Franchising Licensing Contract manufacturing Joint ownership

3rd level: Direct Investment

LOW RISK

HIGH RISK


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Target Market

THE GLOBAL MARKETING MIX

PRODUCT PRICE

PROMOTIONPLACE

•Japan

•Russia

•China

•Sun City, Arizona USA


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THE GLOBAL MARKETING MIX:PRODUCT & PROMOTION

One product, one message

Product innovation New or drastic changes

in existing product

Product adaptation Message adaptation

•Japan

•Russia

•China



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THE GLOBAL MARKETING MIX:PRICING & DISTRIBUTION

Adjustment of price to economic conditions

Dumping Counter trade Number of channel levels Different intermediaries Unique supply chain

technological or communication requirements

•Japan

•Russia

•China



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Ethics in Global Marketing

Bribes? Gifts? Forced Loans? Protection money? Slotting fees?

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Whose standards of right and wrong?


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The key to future world peace and a universally enhanced quality of life depends upon successful and enlightened multinational business entities!


1 CHAPTER FOUR DEVELOPING A GLOBAL VISION Prepared by Jack Gifford Miami University (Ohio) © 2000...

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