fhbm1124 marketing chapter 15 16-global marketing ethics

8/18/2019 FHBM1124 Marketing Chapter 15 16-Global Marketing Ethics

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Copyright 2007, Prentice-Hall Inc. 15-5

International Marketing

Many US companies have long been

successful at international marketing:

Coca-Cola, General Electric, IBM,

Colgate, Ford, Boeing, McDonald’s

and etc. But while global trade is growing,

global competition is intensifying.

Foreign firms are expending

aggressively into new international

markets, and home markets are not

longer as rich in opportunity.

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Figure 15-1

Major International Marketing Decisions


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8/48Copyright 2007, Prentice-Hall Inc. 15-8

Key Influences in the Global MarketingEnvironment

The International Trade System – The Wor ld Trade Organization and GATT (GeneralAgreement on Tariffs and Trade), Regional Free TradeZones

Economic Environment (industr ial structu re &income distr ibu t ion)

– Subsistence econom ies, Raw material export ingeconom ies, Indus tr ial iz ing econom ies, Indus tr ialeconomies

Political-Legal Environment - Countertrade Cultural Environment

– Impact of cu l ture on market ing strategy and impactof market ing s trategy on cu l tures



The Impact of Culture on Marketing Strategy

Nike inadvertently offended Chinese

officials when it ran an advertisementfeaturing LeBron James crushing a

number of culturally revered Chinese

figured in a kung-fu themed TV spot

Chinese government found that the

ad violated regulations to uphold

national dignity and respect of the

“motherland culture” and yanked the

multi-million dollar campaign.

With an egg on its face, Nike

released a formal apology.



The Impact of Marketing Strategy on Cultures

Americanization: Social critics

contend that large Americanmultinationals aren’t just

“globalizing” their brands, they

are “Americanizing” the world’s

cultures. In China, most peoplenever drank coffee before

Starbucks entered the market.

Example: McDonald’s, Coca-

Cola, Nike, Microsoft, Disneyand MTV

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Reason to consider going global:

– Foreign at tacks on domest ic markets.

– Foreign markets w i th higher p rof i topportuni t ies.

– Stagnant or shr ink ing domest ic markets .

– Need larger cus tomer base to achieve

econom ies o f scale. – Reduce dependency on sing le market .

– Fol low cus tomers who are expanding .

Deciding Whether to Go International



Marketing to China

Many marketers are

attracted to the

Chinese market due

to its substantialpopulation size and

potential for growth.

Colgate’s efforts

have expanded their

market share from7% to 35% in less

than a decade.

Market ing in Act ion



Figure 15-2Market Entry Strategies


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Exporting

COMPARING GLOBAL

MARKET-ENTRY STRATEGIESEXPORTING

• Indirect Exporting

• Direct Exporting

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Contract ManufacturingReebok uses Korean

contract manufacturers

COMPARING GLOBAL

MARKET-ENTRY STRATEGIESLICENSING

Contract Assembly

Franchising

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Joint Venture

COMPARING GLOBAL

MARKET-ENTRY STRATEGIESJOINT VENTURE AND DIRECT INVESTMENT

DirectInvestment

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Can use a standardized

theme globally, but may have

to make adjustments for

language or cultural

differences.

– Communication Adaptat ion:

Fully adapting an advertisingmessage for local markets.

– Changes may have to be made

due to media avai labi l i ty.

Global Promotion Strategies

FARTFULL Work Bench

from IKEA


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Companies face many problems in

setting their international prices.

– Standard pr ic ing methods such asuni form pr ic ing, standard markup of

costs everywhere, or charging what the

market wi l l bear ignores cost

di f ferent ials and local market cond i t ion s.

Global Pricing Strategies


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International prices tend to be higher than

domestic prices because of pr ice escalat ion .

Companies may become guilty of dumping

when a foreign subsidiary charges less thanits costs or less than it charges in its home

market.

The Internet makes global price differencesobvious and the euro has reduced the

amount of price differentiation.

Global Pricing Challenges


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International firms must take a whole-channel view of distributing products tofinal consumers.

Differences in the numbers and types ofintermediaries serving each foreignmarket require time and money to

navigate. Size and character of retail units differ as

well, presenting challenges.

Global Distribution


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Criticisms of Marketing

High prices

- High cos ts o f Distr ibut ion, High Advert is ing and

Promo t ion cos ts, and Excessive Markups Deceptive practices

- Decept ive pricing, Decept ive promotion and

Decept ive packaging .

High-pressure selling

- Persuades people to bu y goods they had no

though t of buy ing.


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Criticisms of Marketing

Shoddy, harmful, or unsafe products

- Poor qual i ty or func t ion , l i t t le benefi t or harm ful, and

increased prod uct complexi ty.

Planned obsolescence- Produc ts become obsolete before the they actual ly

should need replacement.

Poor service to disadvantaged consumers

- The urban poor often must shop in smaller stores

that carry infer ior goods and charge higher pr ices.


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Marketing’s Impact onSociety as a Whole

False wants and too much materialism.

- “greed is good” and “shop till you drop”

- Materialism

Producing too few social goods.- oversell ing p rivate goods at the expense

of publ ic good s

Cultural pollution.- Our sense are being constant ly assaulted

by market ing and advert is ing.

Too much political power.

http://www.gettyimages.com/detail/90436846/The-Image-Bank


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Critics charge that a firm’s marketing

practices can harm other companies

and reduce competition. – Acqu is i tions o f competi tors .

– Market ing pract ices that create barr iers to

entry. – Unfair compet i tive market ing pract ices.

Marketing’s Impact on OtherBusinesses


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The right to . . .1. introdu ce any produc t in any s ize and style,

prov ided i t is not hazardou s to personal health orsafety; o r, i f i t is, to inc lude proper warnings and

contro ls.2. charge any p r ice for the product, prov ided nodiscr imination exis ts among simi lar k inds ofbuyers.

3. spend any amoun t to prom ote the product ,

prov ided i t is not def ined as unfai r compet it ion.4. use any p rodu ct message, prov ided i t is not

m isleading or dishonest in content or execut ion .

5. use any buying incent ive schemes, provided they

are no t un fair or m isleading.

Sellers’ Rights


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The right to:

1. not buy a prod uct that is offered fo r sale.

2. expect the product to be safe.

3. expect the prod uct to perform as c laimed.

4. be wel l informed about impo rtant aspects of th e

product.

5. be protected against q uest ionable prod ucts and

marketing pract ices.

6. inf luence produc ts and market ing p ract ices in

ways that will improve “quality of life.”

Buyers’ Rights

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Consumer desire for more information led topacking labels with useful facts, form ingredients

and nutrition facts to recycling and country of origin

information. Jones Soda even puts customer

submitted photo on its labels

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fhbm1124 marketing chapter 15 16-global marketing ethics

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