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Chapter 15
The Global Marketplace
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Road Map:Previewing the ConceptsDiscuss how the international trade system,economic, political-legal, and culturalenvironments affect a companys international
marketing decisions.Describe three key approaches to enteringinternational markets.
Explain how companies adapt their marketingmixes for international markets.
Identify the three major forms of internationalmarketing organization.
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Global Marketing into theTwenty-First Century
The world is shrinking rapidly with the advent offaster communication, transportation, and
financial flows.International trade is booming and now accountsfor a quarter of the United States GDP.
Between 1996 and 2006, U.S. exports areexpected to increase 51%.
Global competition is intensifying and few U.S.industries are now safe from foreign competition.
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Global Marketing into theTwenty-First Century
To compete, many U.S. companies arecontinuously improving their products, expanding
into foreign markets, and becoming global firms.Global firms face several major problems:
High debt, inflation, and unemployment have resulted inhighly unstable governments & currencies,
Governments placing more regulations on foreign firms,
Protectionist tariffs and trade barriers,
Corruption.
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McDonalds in BeijingMany U.S. companieshave long been
successful, includingMcDonalds, atinternational marketing.
http://www.mcdonalds.com/
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Major International MarketingDecisions (Fig. 15-1)
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Looking at the Global MarketingEnvironment
The International Trade Systemi.e. Tariff, Quota, Embargo, Exchange
Control, and Nontariff Trade Barriers
The World Trade Organization and GATTTreaty designed to promote world trade by reducing
tariffs and other international trade barriers
Regional Free Trade ZonesGroup of nations organized to work toward
common goals in the regulation of international trade
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When exporting goods to a foreigncountry, a marketer may be faced withtrade restrictions. Discuss the effectsthat a tariff might have on an exportersmarketing mix.
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Types ofIndustrialStructure
SubsistenceEconomies
Raw MaterialExportingEconomies
IndustrializingEconomies
IndustrialEconomies
Economic Environment
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Attitudes TowardInternational
Buying
GovernmentBureaucracy
PoliticalStability
MonetaryRegulations
At Least Four Political-Legal Factors Should beConsidered in Deciding Whether to do Business in a
Given Country:
Political-Legal Environment
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Cultural EnvironmentHow CustomersThink About and
Use Products
Cultural Traditions,Preferences, and
Behaviors
BusinessNorms andBehavior
Sellers Must Examine theFollowing BeforePlanning a MarketingProgram Within a GivenCountry.
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Deciding Whether to GoInternational
Reasons companies might consider internationalexpansion:
Global competitors attacking the domestic market,Foreign markets might offer higher profit opportunities,
Domestic markets might be shrinking,
Need an enlarged customer base to achieve economiesof scale,
Reduce dependency on any one market,
Customers might be expanding abroad.
Most companies do not act until some situation orevent thrusts them into the global arena.
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Deciding Which Markets to EnterDefine Organizations Marketing Objectives
and Policies
What Volumeof Foreign Sales is Desired?
How ManyCountries Should the Firm Go Into?
What Typesof Countries Should be Entered?
Rank by Market Size & Growth, Cost of DoingBusiness, Competitive Advantage, & Risk Level.
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Deciding How to Enter theMarket (Fig. 15-2)
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Pair with the student on your left todiscuss the following situation.
Once a company has decided to sell in aforeign country, it must determine thebest mode of entry. Assume that you
were the marketing manager forMountain Dew and devise a plan andpick a mode of entry for marketing yourproduct in China.
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ChangesinProduc
t,
Advertising,
Distribution
Channels,
&
Price
StandardizedMarketing Mix
Selling Largely the SameProducts and Using the
same MarketingApproaches Worldwide .
i.e Coca-Cola
Adapted MarketingMix
Adjusts the MarketingMix Elements to EachInternational Target
Market.
i.e. Japanese Barbie
Deciding on the Global Marketing
Program
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Five Global Product and Promotion
Strategies (Fig. 15-3)
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International PricingCompanies face many problems in setting theirinternational prices.
Possibilities in setting prices include:Charge a uniform price all around the world.Charge what consumers in each country could pay.
Use a standard markup of its costs everywhere.
International prices tend to be higher thandomestic prices because of price escalation.
Companies may become guilty of dumping whena foreign subsidiary charges less than its costs or
less than it charges in its home market.
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Whole-Channel Concept for
International Marketing (Fig. 15-4)
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1. Organize an Export Department
2. Create an International Division
3. Become a Global Organization
Degree of Involvement inInternational Marketing Activities
Deciding on the Global Marketing
Organization
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Rest Stop: Reviewing the ConceptsDiscuss how the international trade system,economic, political-legal, and culturalenvironments affect a companys international
marketing decisions.Describe three key approaches to enteringinternational markets.
Explain how companies adapt their marketingmixes for international markets.
Identify the three major forms of internationalmarketing organization.