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9. Marketing Lamb, Hair, McDaniel. Designed by Eric Brengle B-books, Ltd. Prepared by Deborah Baker Texas Christian University. Developing a Global Vision. CHAPTER 4. Learning Outcomes. Discuss the importance of global marketing Discuss the impact of multinational firms - PowerPoint PPT PresentationTRANSCRIPT
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Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
1
Designed by Eric Brengle B-books, Ltd.
CHAPTER
4
Developing a Global Vision
Prepared byDeborah Baker
Texas Christian University
MarketingLamb, Hair, McDaniel
9
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2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
Learning Outcomes
Discuss the importance of global marketing
Discuss the impact of multinational firms
on the world economy
Describe the external environment facing
global marketers
LOI
LO2
LO3
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3Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
Learning Outcomes
Identify the various ways of entering the
global marketplace
List the basic elements involved in
developing a global marketing mix
Discover how the Internet is affecting
global marketing
LO5
LO6
LO4
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4Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
Discuss the importance of global marketing
Rewards of Global MarketingLOI
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5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LOI
Global MarketingGlobal MarketingMarketing that targets
markets throughout the
world.
Rewards of Global Marketing
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6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LOI Rewards of Global Marketing
Recognizing and reacting to international marketing opportunities
Using effective global marketing strategies
Being aware of threats from foreign competitors
Having a global vision means…
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7Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LOI Emerging-Market Companies
COMPANY COUNTRY INDUSTRY
América Móvil Mexico Telecom services
Cemex Mexico Building materials
China Mobile China Telecom services
CNOOC China Oil and gas
CVRD Brazil Mining
Embraer Brazil Aerospace
Gazprom Russia Oil and gas
Haier China Home appliances
Hisense China Electronics, appliances
Huawei Technologies China Telecom equipment
Adapted from “Emerging Giants,” Business Week, July 31, 2006.
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8Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
Importance of Global Marketing to the U. S.
LOI
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 in goods.
Exports account for 25 percent of U.S. economic growth .
U.S. is world’s leading exporter of farm products.
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9Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
The Fear of Trade and Globalization LOI
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
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10Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4 LOI
Benefits of Globalization
Expands economic freedom
Spurs competition
Raises productivity and living standards
Offers access to foreign capital, global export markets, and advanced technology
Promotes higher labor and environmental standards
Acts as a check on government power
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11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
REVIEW LEARNING OUTCOMEThe Importance of Global Marketing
LOI
Identifyglobal marketing
opportunities
Identifyglobal marketing
opportunities
Compete againstforeign competitionin domestic markets
Compete againstforeign competitionin domestic markets
Understandglobal
distributionnetworks
Understandglobal
distributionnetworks
Globally-minded marketing managers:
FearsFears BenefitsBenefitsKnow global marketing is important because
of economic interdependencies
Know global marketing is important because
of economic interdependencies
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12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
Discuss the impact of multinational firms
on the world economy
Multinational FirmsLO2
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13Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO2 Stages of Global Business Development
11
22
44
33
Companies operate in one country and sell into othersCompanies operate in one country and sell into others
Set up foreign subsidiaries to handle salesSet up foreign subsidiaries to handle sales
Virtual operationVirtual operation
Operate an entire line of business in another countryOperate an entire line of business in another country
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14Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO2
Global MarketingStandardization
Global MarketingStandardization
Production of uniform
products that can be sold
the same way all over the
world.
Global Marketing Standardization
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15Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
REVIEW LEARNING OUTCOMEImpact of Multinational Firms
LO2
Growth
Revenue
Profits
GlobalMarketing
GlobalMarketing
MNC
• Human Resources• Physical Resources• Financial Resources
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16Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
Describe the external environment facing
global marketers
External Environment Facing Global MarketersLO3
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17Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO3External Environment Facing
Global Marketers
Natural Resources
Natural Resources
Demographic Makeup
Demographic Makeup
Economic and Technological Development
Economic and Technological Development
CultureCulture
Political StructurePolitical
Structure
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18Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO3 Culture
CultureCulture The common set of values
shared by its citizens that
determine what is socially
acceptable.
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Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
Biz FlixLost in Translation
19
LO3
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20Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO3Economic and
Technological Development
Developed Country
Developed Country
Less DevelopedCountry
Less DevelopedCountry
Complex, sophisticated industriesComplex, sophisticated industries
Basic industriesBasic industries
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21Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO3 Political Structure and Actions
No private ownershipMinimal individual freedom
Little central governmentMaximum personal freedom
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22Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO3 Legal Considerations
Tariff
Quota
Boycott
Exchange Control
Market Grouping
Trade Agreement
A tax levied on goods entering a country
Limit on the amount of a product entering a country
Exclusion of products from a country
Foreign exchange must be sold to a control agency
Common trade alliance
An agreement to stimulateinternational trade
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23Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4 LO3
Political and Legal Considerations
The Uruguay Round made changes inworld trading practices
Entertainment, pharmaceuticals, integrated circuits, and software
Financial, legal, and accounting services
Agriculture
Textiles and apparel
And created a new trade organization: The World Trade Organization
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24Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4 LO3
Political and Legal Considerations
CAFTACAFTA NAFTANAFTA European Union
European Union
Agreementsand Organizations
Agreementsand Organizations
http://www.wto.org
Online
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25Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO3
Marketing Considerations:
Population density
Urban or rural
Personal income
Age
Demographic Makeup
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26Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO3
Create…
International dependencies
Shifts of wealth
Inflation and recession
Export opportunities if resources are abundant
Stimulus for military intervention
Shortages in Natural Resources
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27Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 4
LO3 Natural Resources
Petroleum
Foodstuffs
Precious metal
Timber
Water
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28Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
REVIEW LEARNING OUTCOMEExternal Environment Facing Global Marketers
LO3
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29Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
Identify the various ways of entering the
global marketplace
Global Marketing by the Individual FirmLO4
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30Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 4
LO4 Global Marketing Questions
What are our options in selling abroad?
How difficult is global marketing?
What are the potential risks and returns?
http://www.cat.com
Online
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31Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved
Chapter 4
LO4 Why “Go Global”?
Earn additional profits
Leverage a unique product or technological advantage
Possess exclusive market information
Saturated domestic markets
Excess capacity
Utilize “economies of scale”
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32Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO4 Risk Levels for Global Entry
Lowrisk/lowreturn
Highrisk/highreturn
Risk
Return
Export Licensing
ContractManu-
facturing
JointVenture
DirectInvest-ment
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33Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO4 Entering the Global Marketplace
Licensing Legal process allowing use of manufacturing/patents/knowledge
ContractManufacturing
Private-label manufacturing by a foreign country
Joint Venture Domestic firm buys/joins a foreign company to create new entity
Export Sell domestically produced
products to buyers in other countries
Direct Investment Active ownership of a foreign company/manufacturing facility
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34Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO4 Export Intermediaries
Buyer for ExportBuyer for Export Assumes all ownership risks and sells globally for its own account.
Assumes all ownership risks and sells globally for its own account.
Export BrokerExport Broker Plays the traditional broker’s role
by bringing buyer and seller together.
Plays the traditional broker’s role by bringing buyer and seller
together.
Export AgentExport Agent Acts like a manufacturer’s agent
for the exporter in the foreignmarket.
Acts like a manufacturer’s agent for the exporter in the foreign
market.
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35Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
REVIEW LEARNING OUTCOMEEntering the Global Marketplace
LO4
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36Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
List the basic elements involved in developing a global marketing mix
The Global Marketing MixLO5
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37Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO5 Product and Promotion
One ProductOne Message
Product Adaptation
MessageAdaptation
Product Invention
SameSameProductProduct
SameSameMessageMessage
ChangeChangeMessageMessage
ChangeChangeProductProduct
http://www.disney.go.com
Online
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38Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO5 Place (Distribution)
Adequate distribution is necessary for success in global markets– Some countries have complicated systems
– Lack of distribution infrastructure and cultural differences create problems
Innovative distribution systems can create competitive advantage
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39Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO5 Pricing
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 are willing to accept lower quality
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40Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO5 Exchange Rates
Exchange RatesExchange Rates The price of one’s currency
in terms of another
country’s currency.
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41Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO5
1. Trying to increase an overseas market share
2. Temporarily distributing products to overseas markets to offset slack demand at home
3. Lowering unit costs by exploiting large-scale production
4. Attempting to maintain stable prices during periods of exchange rate fluctuations
Dumping
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42Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
LO5
CountertradeCountertrade A form of trade in which all
or part of the payment for
goods or services is in the
form of other goods or
services.
Countertrade
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43Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
REVIEW LEARNING OUTCOMEDeveloping a Global Marketing Mix
PROMOTION
One Product, One Message
Product InventionProduct AdaptationMessage Adaptation
LO5
PLACE
Channel Choice
Channel Structure
Country Infrastructure
PRICE
Dumping
Countertrade
Exchange Rates
Purchasing Power
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44Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
Discover how the Internet is affecting
global marketing
The Impact of the InternetLO6
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45Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 4
REVIEW LEARNING OUTCOMEThe Impact of the Internet
LO6