global mkt

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-1

REACHING GLOBAL

MARKETS

CHAPTER


AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:

1. Identify the major trends that have influenced the landscape of global marketing in the past decade.

2. Identify the environmental factors that shape global marketing efforts.


AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:

3. Name and describe the alternative approaches companies use to enter global markets.

4. Explain the distinction between standardization and customization when companies craft worldwide marketing programs.


MATTEL’S GLOBAL MARKETING IS MORE THAN CHILD’S PLAY


• Decline of Economic Protectionism

Protectionism

Tariff

Quota

World Trade Organization (WTO)

DYNAMICS OF WORLD TRADE


FIGURE 7-1 FIGURE 7-1 How protectionism affects world trade


• Rise of Economic Integration

European Union

North American Free Trade Agreement (NAFTA)

Asian Free Trade Agreements

• Euro



FIGURE 7-2FIGURE 7-2 The countries of the European Union in 2006; Bulgaria and Romania are expected to join in 2007


Euro TV AdWhat are the benefits of economic integration?


Global Competition

• A New Reality: Global Competition among Global Companies for Global Consumers



Diet PepsiWhat is global competition?


Global Companies


• International Firm

• Multinational Firm

• Transnational Firm

• Global Brand

Global Marketing Strategy

Multidomestic Marketing Strategy



FIGURE 7-AFIGURE 7-A Global companies and marketing strategies


Global Consumers


• Emergence of a Networked Global Marketspace



McDonald’s WebsiteWhat is a networked global marketspace?


Concept Check

1. What is protectionism?

A: Protectionism is the practice of shielding one or more industries within a country’s economy from foreign competition, using through the use of tariffs or quotas.


Concept Check

2. What is the difference between a multidomestic marketing strategy and a global marketing strategy?

A: A multidomestic marketing strategy means that firms have as many different product variations, brand names, and advertising programs as countries in which they do business. A global marketing strategy standardizes marketing activities when there are cultural similarities and adapts them when cultures differ.


A GLOBAL ENVIRONMENTAL SCAN

• Cultural Diversity

• Foreign Corrupt Practices Act (1977)

Cultural Symbols

Cross-Cultural Analysis

Values

Customs

• Back Translation

Language


FIGURE 7-B FIGURE 7-B Cultural appreciation


Eiffel Tower (Paris) and Parthenon (Athens) What cultural lesson did Coca-Cola learn?



• Economic Considerations

Economic Infrastructure

Consumer Income and Purchasing Power

Currency Exchange Rates


Coca-Cola (Russia)How do marketers adapt toa country’s infrastructure?



• Political-Regulatory Climate

Political Stability

Trade Regulations


Concept Check

1. Cross-cultural analysis involves a study of _______.

A: similarities and differences among consumers in two or more nations or societies


Concept Check

2. When foreign currencies can buy more U.S. dollars, are U.S. products more or less expensive for a foreign consumer?

A: less expensive


GLOBAL MARKET-ENTRY STRATEGIES

Indirect Exporting

Direct Exporting

• Exporting

• Licensing

Franchising

• Joint Venture

• Direct Investment


FIGURE 7-3FIGURE 7-3 How purchasing power differs around the world


Nestle in ChinaWhat global market-entry strategy and why?


Concept Check

1. What mode of entry could a company follow if it has no previous experience in global marketing?

A: indirect exporting through intermediaries


Concept Check

A: In licensing, the firm offers the right to a trademark, patent, or trade secret in return for a royalty or fee. In a joint venture, a foreign and a local firm invest together to produce some product or service. The two companies share ownership, control, and profits of the new entity.

2. How does licensing differ from a joint venture?


CRAFTING A WORLDWIDE MARKETING PROGRAM

Product Adaptation

Product Invention

• Product and Promotion Strategies

Product Extension


FIGURE 7-4FIGURE 7-4 Five product and promotion strategies for global marketing


Gillette For Women Venus Why use an identical global message for

Greece, Germany, and the U.S.?


CRAFTING A WORLDWIDE MARKETING PROGRAM

Dumping

• Distribution Strategy

• Pricing Strategy

Gray Market or Parallel Importing


FIGURE 7-5FIGURE 7-5 Channels of distribution in global marketing


Concept Check

A: (1) in the same form as in its home market (product extension); (2) with some changes (product adaptation); and (3) as a totally new product (product invention).

1. Products may be sold globally in three ways. What are they?


Concept Check

2. What is dumping?

A: Dumping is when a firm sells a product in a foreign country below its domestic price or below its actual cost.


GETTING TO KNOW THE WTO

GOING ONLINE


1. Countries are constantly seeking WTO membership. How many countries are now members of this organization? Which country is the newest member?

Going Online


2. What are the 10 most common misunderstandings about the WTO identified by this organization?

Going Online


CNS BREATHE RIGHT STRIPS:GOING GLOBAL

VIDEO CASE 7


VIDEO CASE 7CNS Breathe Right


FIGURE 1FIGURE 1 CNS three- stage approach to penetrate and develop new markets



1. What are the advantages and disadvantages for CNS taking Breathe Right strips into international markets?



2. What are the advantages to CNSof (a) using its three-stage processto enter new global markets and(b) having specific criteria to move through the stages?



3. Using the CNS criteria, with what you know, which countries should have the highest priority for CNS?



4. Which single segment of potential Breathe Right strip users would you target to enter new markets?



5. Which marketing mix variables should CNS emphasize the most to succeed in a global arena? Why?



EXAMPLES OF VALUES, CUSTOMS, CULTURAL

SYMBOLS, AND LANGUAGE

SUPPLEMENTALLECTURE NOTE 7-1


REINTRODUCING THEMINI® BRANDTO THE U.S.

IN-CLASS ACTIVITY 7-1


History of the Classic Mini


MINI Brand Launch at the 2002 NAIAS


MINI Cooper Convertible andMINI Cooper S Convertible


MINI Cooper Convertible


MINI Cooper Convertible Brochure


MINI Cooper Convertible Billboard


Protectionism

Protectionism is the practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quotas.

Protectionism is the practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quotas.


Tariff

A tariff is a government tax on goods or services entering a country, primarily serving to raise prices on imports.

A tariff is a government tax on goods or services entering a country, primarily serving to raise prices on imports.


Quota

A quota is a restriction placed on the amount of of a product allowed to enter or leave a country.

A quota is a restriction placed on the amount of of a product allowed to enter or leave a country.


World Trade Organization

The World Trade Organization (WTO) is a permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions.

The World Trade Organization (WTO) is a permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions.


Global Competition

Global competition exists when firms originate, produce, and market their products and services worldwide.

Global competition exists when firms originate, produce, and market their products and services worldwide.


Multidomestic Marketing Strategy

A multidomestic marketing strategy is used by multinational firms that have as many different product variations, brand names, and advertising programs as countries in which they do business.

A multidomestic marketing strategy is used by multinational firms that have as many different product variations, brand names, and advertising programs as countries in which they do business.


Global Marketing Strategy

A global marketing strategy is used by transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.

A global marketing strategy is used by transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.


Global Brand

A global brand is a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs.

A global brand is a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs.


Global Consumers

Global consumers consist of customer groups living in many different countries or regions of the world who have similar needs or seek similar features and benefits from products or services.

Global consumers consist of customer groups living in many different countries or regions of the world who have similar needs or seek similar features and benefits from products or services.


Cross-Cultural Analysis

Cross-cultural analysis involves the study of similarities and differences among consumers in two or more nations or societies.

Cross-cultural analysis involves the study of similarities and differences among consumers in two or more nations or societies.


Values

Values is a society’s personally or socially preferable modes of conduct or states of existence that tend to persist over time.

Values is a society’s personally or socially preferable modes of conduct or states of existence that tend to persist over time.


Customs

Customs are what is considered normal and expected about the way people do things in a specific country.

Customs are what is considered normal and expected about the way people do things in a specific country.


The Foreign Corrupt Practices Act (1977) is a law, amended by the International Anti-Dumping and Fair Competition Act (1998), that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain businessin a foreign country.

The Foreign Corrupt Practices Act (1977) is a law, amended by the International Anti-Dumping and Fair Competition Act (1998), that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain businessin a foreign country.

Foreign Corrupt PracticesAct (1977)


Cultural symbols are things that represent ideas or concepts.Cultural symbols are things that represent ideas or concepts.

Cultural Symbols


Back translation is when a translated word or phrase is retranslated into the original language by a different interpreter to catch errors.

Back translation is when a translated word or phrase is retranslated into the original language by a different interpreter to catch errors.

Back Translation


A currency exchange rate is the price of one country’s currency expressed in terms of another country’s currency.

A currency exchange rate is the price of one country’s currency expressed in terms of another country’s currency.

Currency Exchange Rate


Exporting is producing goods in one country and selling them in another country.

Exporting is producing goods in one country and selling them in another country.

Exporting


A joint venture is when a foreign country and a local firm invest together to create a local business.

A joint venture is when a foreign country and a local firm invest together to create a local business.

Joint Venture


Direct investment entails a domestic firm actually investing in and owning a foreign subsidiary or division.

Direct investment entails a domestic firm actually investing in and owning a foreign subsidiary or division.

Direct Investment


Dumping is when a firm sells aproduct in a foreign country belowits domestic price or below its actual cost.

Dumping is when a firm sells aproduct in a foreign country belowits domestic price or below its actual cost.

Dumping


A gray market is a situation where products are sold through unauthorized channels of distribution. Also called parallel importing.

A gray market is a situation where products are sold through unauthorized channels of distribution. Also called parallel importing.

Gray Market

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