1

7. The Global Marketplace

2

Issues inInternational Marketing

• Examining global marketing environment

• Methods of entering foreign markets

• Developing a global marketing program

3

Examining GlobalMarketing Environment

• Changing environment creates opportunities/threats– Globalized world economy

• Internet creates networked global marketspace

– More global companies• International firms & multinational firms

– Understanding of cultural realities important– Need for infrastructure important

– Complex international financial system– Complex international trade system

• Trade barriers:– Tariffs (revenue & protective) – Exchange controls– Quotas – Subsidies– Embargoes

4

Examining GlobalMarketing Environment (Cont.)

• Positive forces in international trade– General Agreement on Tariffs and Trade– World Trade Organization– Economic trading communities

• Free trade areas—e.g., NAFTA

• Customs Union—e.g., SACU, GCC

• Common Market—e.g., EU

5

Examining GlobalMarketing Environment (Cont.)

• Attractiveness of an international market depends greatly on economic, regulatory, & societal environments

• Economic environment– Industrial structure

• Subsistence economy

• Raw-material-exporting economy

• Industrializing economy

• Industrial economy

– Income distribution

6

Examining GlobalMarketing Environment (Cont.)

• Regulatory environment– International, host country, and U.S. law drive

regulatory environment– Political stability important—hence, political

risk assessment– Monetary regulations

• Countertrade/barter• Compensation (buyback)• Counterpurchase

7

Examining GlobalMarketing Environment (Cont.)

• Societal environment– Values– Folkways– Customs– Norms– Taboos– Language

8

Methods of Entering Foreign Markets

• Market entry strategies:– Exporting/importing

• Indirect/direct

– Contractual agreements• Foreign Licensing

• Franchising• Subcontracting (i.e., contract manufacturing)

• Management contracting

– Joint venturing (joint ownership)

– Direct investment

9

Developing a GlobalMarketing Program

• Approaches:– Standardized marketing mix: Global strategy– Adapted marketing mix: Multidomestic strategy

• Adapting the mix:– Product

• Straight product extension• Product adaptation• Product invention

– Promotion• Communication adaptation

– Dual adaptation (product & promotion)

10

Developing a GlobalMarketing Program (Cont.)

• Adapting the mix– Price

• Uniform price• “What market can bear”• Standard markup of costs

– Price escalation• Dumping

– Impact of economic & technological forces• Decreased price differentiation• Price transparency• Internet