© mcgraw-hill companies, inc., mcgraw-hill/irwin

© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

7-2© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

L E A R N I N G O B J E C T I V E S

Learning Objectives

What factors aid the growth of globalization?

How does a firm decide to enter a global market?

What ownership and partnership options do firms have for entering a new global market?

What are the similarities and differences between a domestic marketing strategy and a global marketing strategy?

How do ethical issues affect global marketing practices?

7-3© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Marriot Hotels

Dependable luxury and absolute quality

Marriot Commercial

7-4© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Growth of Global Market

7-5© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

General Agreement on Tariffs and Trade (GATT)

World Trade Organization (WTO)

WTO Website

7-6© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Assessing Global Markets

7-7© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Economic AnalysisGeneral Economic Environment

Gross domestic product

Gross national income

Purchasing power parity

Human development index

NationMaster Website

7-8© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Evaluating Market Size and Population Growth Rate

Population 2002

Population 2050

7-9© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Evaluating Real Income

P&G targets developing countries

Sotheby’s grows in Asia

7-10© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Analyzing Infrastructure and Technological Capabilities

Communication

Commerce

Transportation

Distribution Channel

7-11© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Analyzing Government Actions

7-12© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Both benefit domestically made products because they reduce foreign competition

Tariffs

•Tax•Artificially raises prices•Lowers demand

Quotas

•Maximum limit•Reduces availability of imported goods

Tariff and Quotas

7-13© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Boycott

Ethical Consumer Website

7-14© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Exchange Control

Exchange rate Countertrade

7-15© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Trade Agreements

7-16© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

The European Union (EU)

Monetary and Trade Union

Euro Membership does

not consists of Croatia, Macedonia, Turkey and several others

7-17© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Analyzing Sociocultural Factors

Culture

Power distance

Uncertainty avoidance

IndividualismMasculinity

Time orientation

7-18© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Country Clusters

7-19© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Spanish Ad

7-20© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Check Yourself

1. What are key metrics that can help analyze the economic environment of a country?

2. What types of government actions should we be concerned about as we evaluate a country?

3. What are five important cultural dimensions?

7-21© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Choosing a Global Entry Strategy

7-22© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Check Yourself

1. Which entry strategy has the least risk and why?

2. Which entry strategy has the most risk and why?

7-23© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Choosing a Global Marketing Strategy: Target Market (STP)

Cultural nuances

Subcultures

View of product and consumer role

Different positioning

Adaptation

Single positioning strategy

7-24© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

The Global Marketing Mix: Product or Service Strategies

Sell the same product or service in

both the home country market and

host country

Sell a product or service similar to that sold in home

country but include minor adaptations

Sell totally new products or services

7-25© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Global Marketing Mix: Pricing Strategies

Price

Tariffs

Quotas

Anti-dumpingPolicies

EconomicConditions

Competitivefactors

7-26© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Whole Foods in London

7-27© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Global Marketing Mix: Global Distribution Strategies

Some global channels are very long and complex.

Consumer shop local small local stores.

Suppliers must be creative in delivering to these outlets.

FedEx Commercial

7-28© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Global Marketing Mix: Global Communication Strategies

Literacy levels vary by country

Firms choose whether to adapt to language differencesCultural and religious differences also matter

7-29© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Ethical Issues in Global Marketing: Environmental Concerns

Waste Management Pollution

7-30© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Ethical Concerns: Global Labor Issues

Fair Wages

Working conditions

Child Labor

7-31© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Ethical Concerns: Impact on Host Country Culture

Cultural imperialism

7-32© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Check Yourself

1. What are the components of a global marketing strategy?

2. What are the three global product strategies?

7-33© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Glossary

A boycott pertains to a group’s refusal to deal commercially with some organization to protest against its policies.

Return to slide

7-34© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Glossary

Cultural imperialism is the belief that one’s own culture is superior to that of other nations.

Return to slide

7-35© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Glossary

Exchange control refers to the regulation of a country’s currency exchange rate, the measure of how much one currency is worth in relation to another.

Return to slide

7-36© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Glossary

The purpose of the General Agreement on Tariffs and Trade (GATT) was to lower trade barriers such as high tariffs on imported goods and restrictions on the number and types of imported products that inhibited the free flow of goods across borders.

Return to slide

7-37© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Glossary

Infrastructure is the basic facilities, services, and installations needed for a community or society to function.

Return to slide

7-38© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Glossary

A quota designates the maximum quantity of a product that may be brought into a country during a specified time period.

Return to slide

7-39© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Glossary

A tariff is a tax levied on a good imported into a country.

Return to slide

7-40© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin© McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Glossary

A trade agreement is an intergovernmental agreement designed to manage and promote trade activities for a specific region.

Return to slide