©2002 south-western chapter 4 version 6e1 chapter developing a global vision 4 4 prepared by...
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Chapter 4 Version 6e 1©2002 South-Western
chapter
Developing a Global VisionDeveloping a Global Vision
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Prepared byPrepared byDeborah BakerDeborah Baker
Texas Christian UniversityTexas Christian University
Chapter 4 Version 6e 2©2002 South-Western
chapter
Learning ObjectivesLearning Objectives
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1.1. Discuss the importance of global Discuss the importance of global marketing.marketing.
2. Discuss the impact of multinational firms2. Discuss the impact of multinational firmson the world economy.on the world economy.
3. Describe the external environment facing 3. Describe the external environment facing global marketers.global marketers.
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Learning Objectives (continued)Learning Objectives (continued)
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4. Identify the various ways of entering the4. Identify the various ways of entering theglobal marketplace.global marketplace.
5. List the basic elements involved in 5. List the basic elements involved in developing a global marketing mix.developing a global marketing mix.
6. Discover how the Internet is affecting6. Discover how the Internet is affectingglobal marketing.global marketing.
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Learning Objective Learning Objective 11
Discuss the importance of global marketing.
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Global MarketingGlobal Marketing
Marketing that targets
markets throughout
the world.
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Global VisionGlobal Vision11
Recognize and react to internationalmarketing opportunities
Be aware of threats from foreign competitors
Use international distribution networks
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Importance of Global Marketing Importance of Global Marketing
U.S. exports a fifth of industrial production and one-third of its farm products
One of every sixteen jobs in U.S. is supported by exports
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Importance of Global MarketingImportance of Global Marketing
A third of U.S. corporate profits is from international trade and investment
Exports accounted for 20% of growth in economic activity (1999)
U.S. is world’s leading exporter of grain
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The Negatives of Global TradeThe Negatives of Global Trade
Millions of Americans have lost jobs
Millions fear losing jobs
Workers face pay-cut demands
Service and white-collar jobs are vulnerable to operations move
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The Advantages of Global TradeThe Advantages of Global Trade
Rise from poverty for foreign nations
Per capita income increases
Productivity and living standard increase
Inflation not as threatening
Open economy spurs innovation
Export jobs may pay more
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Learning Objective Learning Objective 22
Discuss the impact of Discuss the impact of multinational firmsmultinational firms
on the world economy.on the world economy.
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Multinational CorporationMultinational Corporation22
A company that is heavily
engaged in international
trade, beyond exporting
and importing.
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Multinational AdvantageMultinational Advantage
Overcome trade problems
Sidestep regulatory problems
Shift production from one plant to another
Tap new technology from around the world
Save in labor costs
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Global Marketing StandardizationGlobal Marketing Standardization22
Production of uniform
products that can be
sold the same way
all over the world.
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Global Marketing StandardizationGlobal Marketing Standardization
World markets are becoming more alike
Standardized products can be sold the same way worldwide
Successful companies may vary products for global markets
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Learning Objective Learning Objective
Describe the external environmentDescribe the external environmentfacing global marketers.facing global marketers.
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The External EnvironmentThe External Environment
Natural Resources
Natural Resources
Demographic Makeup
Demographic Makeup
Economic and Technological Development
Economic and Technological Development
CultureCulture
Environmental Factors
Environmental Factors
Political StructurePolitical Structure
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CultureCulture
The common set of values
shared by its citizens
that determine what is
socially acceptable.
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CultureCulture33
Language Religion Superstitions Etiquette Customs
Traditions Notion of time
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Lessons About the Notion of TimeLessons About the Notion of Time
1. Know appropriate arrival time.
2. Understand the line between work time and social time.
3. Study the rules of the waiting game.
4. Learn to reinterpret “doing nothing.”
5. Ask about accepted sequences.
6. Are people on clock time or event time?
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Economic and Economic and Technological DevelopmentTechnological Development
Type of Type of SocietySociety
Type of Type of SocietySociety DescriptionDescriptionDescriptionDescription
TraditionalTraditional
Pre-IndustrialPre-Industrial
TakeoffTakeoff
IndustrializingIndustrializing
Agricultural, Little Upward MobilityAgricultural, Little Upward Mobility
Social and Economic ChangeSocial and Economic Change
New IndustriesNew Industries
Spread of TechnologySpread of Technology
FullyIndustrial
FullyIndustrial
Exporter, Technology as Driverof New Innovation
Exporter, Technology as Driverof New Innovation
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Political Structure ExtremesPolitical Structure Extremes33
No private ownershipMinimal individual freedom
Little central governmentMaximum personal freedom
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Legal ConsiderationsLegal Considerations
TariffTariff
QuotaQuota
BoycottBoycott
Exchange ControlExchange Control
Market GroupingMarket Grouping
Trade AgreementTrade Agreement
Legal Structures Legal Structures Encourage or Encourage or
Limit TradeLimit Trade
Legal Structures Legal Structures Encourage or Encourage or
Limit TradeLimit Trade
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Legal ConsiderationsLegal Considerations
Tariff
Quota
Boycott
Exchange Control
Market Grouping
Trade Agreement
A tax levied on goods entering a country
Limit on the amount of a productthat can enter 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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Trade Agreements: Uruguay RoundTrade Agreements: Uruguay Round33
Reduces tariffs by one-third world-wide
Patent/copyright protection
Services under international rules
Reduction of farm subsidies
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Political and Legal ConsiderationsPolitical and Legal Considerations
MercosurMercosur
NAFTANAFTA
European UnionEuropean Union
Examples Examples
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Demographic MakeupDemographic Makeup
Marketing Considerations
Marketing Considerations
Population density
Urban or rural
Personal income
Rise of global middle class
Supply of professionals
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Natural ResourcesNatural ResourcesDifferences in natural resources create:
International dependencies Shifts of wealth Inflation and recession Export opportunities if resources
are abundant Stimulus for military intervention
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Learning Objective Learning Objective
Identify the various ways of entering Identify the various ways of entering the global marketplace.the global marketplace.
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Global Marketplace QuestionsGlobal Marketplace Questions44
What are our options in selling abroad?
How difficult is global marketing?
What are the potential risks and returns?
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Why “Go Global”?Why “Go Global”?
Earn additional profits
Leverage a unique product or technological advantage
Possess exclusive market information
Utilize “economies of scale”
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Risk Levels for Global EntryRisk Levels for Global Entry
LowLowrisk/risk/lowlowreturnreturn
HighHighrisk/risk/highhighreturnreturn
RiskRisk
ReturnReturn
Export Licensing
ContractManu-
facturing
JointVenture
DirectInvest-ment
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Entering the Global MarketplaceEntering the Global Marketplace
LicensingLicensing Legal process allowing use of manufacturing/patents/knowledge.
Legal process allowing use of manufacturing/patents/knowledge.
ContractManufacturing
ContractManufacturing
Private-label manufacturing by a foreign country
Private-label manufacturing by a foreign country
Joint VentureJoint Venture Domestic firm buys/joins a foreign company to create new entity.
Domestic firm buys/joins a foreign company to create new entity.
ExportExport Sell domestically produced products to buyers in other countries.
Sell domestically produced products to buyers in other countries.
Direct Investment
Direct Investment
Active ownership of a foreign company/manufacturing facility.Active ownership of a foreign
company/manufacturing facility.
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Export IntermediariesExport Intermediaries44
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 foreign market.
Acts like a manufacturer’s agent for the exporter in the foreign market.
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Learning Objective Learning Objective
List the basic elements involved in List the basic elements involved in developing a global marketing mix.developing a global marketing mix.
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Product and PromotionProduct and Promotion
One ProductOne MessageOne ProductOne Message
Product AdaptationProduct
Adaptation
MessageAdaptationMessage
AdaptationProduct InventionProduct Invention
SameSameMessageMessage
SameSameProductProduct
ChangeChangeMessageMessage
ChangeChangeProductProduct
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PricingPricing55
Must consider transportation and insurance costs, taxes and tariffs
Determine what customers will spend
Ensure that foreign buyers will pay them
May need to simplify a product to lower price
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DumpingDumping
The sale of an exported product
at a price lower than that charged
for the same or a like product
in the exporter’s
“home” market.
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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.
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Distribution ChallengesDistribution Challenges
Japanese distribution system is the most complicated in the world
Retail institutions may differ from company’s domestic market
Distribution channels and physical infrastructure may be inadequate
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Learning Objective Learning Objective 66
Discover how the Internet is Discover how the Internet is affecting global marketing.affecting global marketing.
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Going GlobalGoing Global66
Internet e-commerce sites
Language translation software
Global shippers