Global MarketingGlobal Marketing
Chapter 5Chapter 5
Global MarketingGlobal Marketing
Why do I need to study this?Why do I need to study this?
Why Go Abroad?Why Go Abroad? Increased RevenueIncreased Revenue Economies of ScaleEconomies of Scale Cheap LaborCheap Labor
Why Not Go Abroad?Why Not Go Abroad? Lost JobsLost Jobs
OutsourcingOutsourcing
Global Marketing StrategiesGlobal Marketing Strategies
GlobalGlobal AKA InternationalAKA International Market existing products in the same wayMarket existing products in the same way
Multinational firmsMultinational firms AKA MultidomesticAKA Multidomestic Product variations for each countryProduct variations for each country
Transnational firmsTransnational firms Standardize across similar markets while Standardize across similar markets while
adapting them to specific marketsadapting them to specific markets
Environmental Factors- Environmental Factors- SocialSocial
Cultural diversityCultural diversity ValuesValues CustomsCustoms
Foreign Corrupt Foreign Corrupt Practices ActPractices Act
Nonverbal behaviorNonverbal behavior Cultural symbolsCultural symbols
SemioticsSemiotics LanguageLanguage
Back translationBack translation Cultural ethnocentricityCultural ethnocentricity
Consumer Consumer ethnocentrismethnocentrism
Source: http://www. facts-about-japan.com
Environmental Factors- Environmental Factors- EconomicEconomic
Stage of developmentStage of development Developed v. DevelopingDeveloped v. Developing
Gross domestic productGross domestic product Economic infrastructureEconomic infrastructure
Communications, transportation, financial, and Communications, transportation, financial, and distribution systemsdistribution systems
Consumer income and purchasing powerConsumer income and purchasing power Government subsidiesGovernment subsidies
Currency Exchange RatesCurrency Exchange Rates
Environmental Factors- Environmental Factors- Political-Regulatory ClimatePolitical-Regulatory Climate
ProtectionismProtectionism Why?Why? MethodsMethods
TariffsTariffs QuotasQuotas
Reducing ProtectionismReducing Protectionism General Agreement on Tariffs & Trade (1948)General Agreement on Tariffs & Trade (1948) World Trade Organization (1995)World Trade Organization (1995)
Chicken WarChicken War Trade blocs and International OrganizationsTrade blocs and International Organizations
Trade BlocsTrade Blocs
NAFTANAFTA 19941994 Three membersThree members PurposePurpose
CAFTACAFTA 20052005 EffectsEffects
Union of South American NationsUnion of South American Nations Mercosur + Andean Community Mercosur + Andean Community
ASEANASEAN
Trade BlocsTrade Blocs
European UnionEuropean Union 27 members27 members 500 million people500 million people $2 trillion $2 trillion
investmentinvestment EffectsEffects
International OrganizationsInternational Organizations
World BankWorld Bank Loans to developing Loans to developing
countriescountries International International
Monetary FundMonetary Fund Emergency loansEmergency loans
Group of 20 (G-20)Group of 20 (G-20) 20 largest 20 largest
economieseconomies
Source: http://www.topnews.in/
Source: http://www.topnews.in/
Environmental Factors- Environmental Factors- Political-Regulatory ClimatePolitical-Regulatory Climate
Natural ResourcesNatural Resources Oil-producing countriesOil-producing countries
Saudi ArabiaSaudi Arabia JapanJapan AfricaAfrica
Global Market-Entry Global Market-Entry StrategiesStrategies
Four strategiesFour strategies ExportingExporting LicensingLicensing Joint ventureJoint venture Direct investmentDirect investment
ExportingExporting
Indirect exportingIndirect exporting Use an intermediaryUse an intermediary Least profitLeast profit
Direct exportingDirect exporting Sell directly to foreign countrySell directly to foreign country
60 percent of U.S. firms using this 60 percent of U.S. firms using this strategy have less than 100 employeesstrategy have less than 100 employees
LicensingLicensing
AdvantagesAdvantages DisadvantagesDisadvantages Three typesThree types
Contract manufacturingContract manufacturing Contract assemblyContract assembly FranchisingFranchising
Joint VentureJoint Venture
Two companies (one foreign, one Two companies (one foreign, one local) go together to enter marketlocal) go together to enter market
AdvantagesAdvantages DisadvantagesDisadvantages
Direct InvestmentDirect Investment
Biggest commitmentBiggest commitment AdvantagesAdvantages DisadvantagesDisadvantages
Porter’s Competitive Porter’s Competitive Advantage of NationsAdvantage of Nations
Factor conditionsFactor conditions Demand conditionsDemand conditions Related and supporting industriesRelated and supporting industries Company strategy, structure, and rivalryCompany strategy, structure, and rivalry
Economic Espionage ActEconomic Espionage Act
Global Marketing MixGlobal Marketing Mix
ProductsProducts Product inventionProduct invention Product adaptationProduct adaptation
PromotionPromotion LanguageLanguage Source: http://www.cbsnews.com
Global Marketing MixGlobal Marketing Mix
PlacePlace ReebokReebok CokeCoke
PricingPricing Exchange ratesExchange rates DumpingDumping CountertradeCountertrade
BarteringBarteringSource: http://www.worldchanging.com