Marketing 4Marketing 4Global MarketingGlobal Marketing

4.14.1

Developing a Global Vision - 4Developing a Global Vision - 4

Importance of global marketingImportance of global marketing Impact of multinational firmsImpact of multinational firms The International EnvironmentThe International Environment Level of involvement in International Level of involvement in International

MarketsMarkets Developing a Global Marketing MixDeveloping a Global Marketing Mix

4.24.2

Global Marketing IGlobal Marketing I

Global VisionGlobal Vision• Recognize/React to global opportunities Recognize/React to global opportunities

& threats& threats• Use global distribution networks Use global distribution networks

effectivelyeffectively

4.24.2

Global Marketing IIGlobal Marketing II

Importance of Global MarketsImportance of Global Markets• World Trade $7 TRILLIONWorld Trade $7 TRILLION• 12% of US GDP12% of US GDP• 20% of US industrial production exported20% of US industrial production exported• 1/3 of US farm products exported1/3 of US farm products exported• $731 Billion/Year US to World$731 Billion/Year US to World• International trade and foreign International trade and foreign

investments account for nearly 1/3 of US investments account for nearly 1/3 of US corporate profitscorporate profits

4.24.2

Global Marketing IIIGlobal Marketing III GlobalizationGlobalization

• Negative effectsNegative effects Lost jobsLost jobs Fear of losing jobFear of losing job Leverage against employees’ salary Leverage against employees’ salary

expectationsexpectations

• Positive effectsPositive effects ↑ ↑ Economic freedomEconomic freedom ↑ ↑ CompetitionCompetition ↑ ↑ ProductivityProductivity ↑↑Standard of livingStandard of living

4.24.2

Global Marketing IVGlobal Marketing IV Impact of Terrorism Impact of Terrorism

• ↑ ↑ insurance costsinsurance costs• ↑ ↑ security costssecurity costs• Tougher border inspectionsTougher border inspections

slower cargo movementslower cargo movement more paperwork/red tapemore paperwork/red tape

• Tighter immigrationTighter immigration

4.64.6

Levels of GlobalizationLevels of Globalization ExportExport: marketing products to : marketing products to

customers in other countriescustomers in other countries LicensingLicensing: License another firm to : License another firm to

use forms of proprietary knowledge use forms of proprietary knowledge Joint VentureJoint Venture: buy or partner with a : buy or partner with a

company to form a new entitycompany to form a new entity Multinational CorporationMultinational Corporation: :

company with operations and activities company with operations and activities in more than one countryin more than one country

Global CorporationGlobal Corporation: organization : organization that has markets worldwidethat has markets worldwide

MNC: Four Stages to Global MNC: Four Stages to Global Business DevelopmentBusiness Development

1.1. Operate in one country/sell in Operate in one country/sell in another.another.

2.2. Establish foreign subsidiaries to sell Establish foreign subsidiaries to sell in another country.in another country.

3.3. Operate an entire line of business in Operate an entire line of business in another country.another country.

4.4. Virtual corporation/structure not Virtual corporation/structure not limited by geographylimited by geography

4.74.7

Global vs. Customized Global vs. Customized StrategiesStrategies

Pro

duct P

rice

Promotion

Distribution

Single Marketing Mix World as One Market

Pro

duct

Price

Promotion

Distribution

Tailored Marketing Mixes World as Many Markets

Pro

duct

Price

Promotion

Distribution

Standard

Global

Strategy

CustomizedStrategies

4.84.8

Strategic Decisions Based on:Strategic Decisions Based on:

Target MarketTarget Market

Firm CapabilitiesFirm Capabilities

Market PotentialMarket Potential

4.34.3

External Environment for Global External Environment for Global MarketingMarketing

CultureCulture• PreferencesPreferences• What is AcceptableWhat is Acceptable• LanguageLanguage

Translation NOVATranslation NOVA ImagesImages

• Political/LegalPolitical/Legal Government Policies Government Policies (In) Efficiencies (In) Efficiencies Tariff; Quota; Boycott; Exchange Control; Tariff; Quota; Boycott; Exchange Control;

Trade Alliance; Trade AgreementTrade Alliance; Trade Agreement

4.44.4

External Environment for Global External Environment for Global MarketingMarketing

Economic DevelopmentEconomic Development Technology DevelopmentTechnology Development Political Political

• WTO (Formerly GATT)WTO (Formerly GATT)• Dropping Trade BarriersDropping Trade Barriers

NAFTA; Mercosur; FTAANAFTA; Mercosur; FTAA

• EU (USE?)EU (USE?)• World Bank & IMFWorld Bank & IMF

4.54.5

External Environment for Global External Environment for Global MarketingMarketing

Demographic MakeupDemographic Makeup• PopulationPopulation

Urban/Rural (Belgium vs. Kenya)Urban/Rural (Belgium vs. Kenya) AgeAge EducationEducation

• Standard of LivingStandard of Living Natural Resources Natural Resources

• Export ExcessExport Excess• Import DeficienciesImport Deficiencies

Five Methods for Entering Global Five Methods for Entering Global MarketplaceMarketplace

Export (Low Risk/Low Return)Export (Low Risk/Low Return) LicensingLicensing Contract ManufacturingContract Manufacturing Joint VentureJoint Venture Direct Investment (High Risk/High Direct Investment (High Risk/High

Return)Return)

The Global Marketing MixThe Global Marketing Mix

Product and PromotionProduct and Promotion• One product, one messageOne product, one message

• Product innovationProduct innovation

• Product adaptationProduct adaptation

• Message adaptationMessage adaptation

The Global Marketing MixThe Global Marketing Mix DistributionDistribution

PricingPricing• Exchange ratesExchange rates

• Purchasing powerPurchasing power

• DumpingDumping