Chapter 13: Marketing Strategies for the Global Marketplace

Major problems weighing on managers mind when they think of going abroad:

Unstable Governments
Exchange Instability
Foreign governments entry requirements
Tariffs and other trade barriers
Corruption
Technological pirating
High cost of product and communication adaptation

*The reason why domestic company must pay attention to foreign markets lies in the
phenomenon of the International product life cycle.

APPRAISING THE INTERNATIONAL MARKETING ENVIRONMENT

The International trade system
Tarif- Tax levied by the foreign government against designated imported products.
Quota- which sets limits on the amount of goods that the importing country will accept in
certain product categories.
Embargo- is the ultimate form of quota in that imports in prescribed categories are totally
banned.
Exchange control -which regulates the amount of available foreign exchange and its
exchange rate against other currencies
Economic Environment
3 characteristic:
1. Countrys Population
2. Industrial structure
Subsistence economies
Raw material exporting companies
Industrializing company
Industrial economies
3. Income distribution
Political-legal environment
4 factors in deciding whether to do business in a particular country

Attitudes toward international buying

Political Stability
Monetary Regulation
Government Bureaucracy
Cultural Environment
Business Environment

DECIDING WHETHER TO GO ABROAD

Companies become involved in international marketing in one of two ways
1. Someone solicits the company to sell abroad
2. Company starts to think on its own about going abroad
International Marketing objectives and policies

What proportion of foreign to total sales it will seek

Few countries or many countries
Types of country to consider

DECIDING WHICH MARKETS TO ENTER THE MARKET

FIVE MODES OF ENTRY INTO FOREIGN MARKETS

1. Indirect Exporting
Four types of middlemen
Domestic-based export merchant
Domestic-based export agent
Cooperative organization
Export-management company
2. Direct exporting
The company carry on direct exporting in several ways:
Domestic-based export department or division
Overseas sales branch or subsidiary
Traveling export sales representatives
Foreign-based distributors or agents
3. Licensing
Management contracting is a low risk method of getting into a foreign market and
it yields income from the beginning.
Contract manufacturing the firms engages local manufactures to produce product.

4. Joint ventures
5. Direct investment
DECIDING ON THE MARKET PROGRAM
Two extremes:

Standardized marketing mix worldwide

Customized marketing mix

1. Products
Three product strategies:

Straight extension introducing the product in foreign market without any change.
Product adaptation involves altering the product to meet local conditions or
preference.
Production invention creating something new.
Two forms of production invention:
Backward invention
Forward invention

2. Promotion
3. Price
Three choices by the companies in setting a global pricing policy:
Setting a uniform price everywhere
Setting a market-based price in each country
Setting a cost-based price in each country

4. Distribution channels

DECIDING ON THE MARKETING ORGANIZATION

Three ways to manage the international marketing activities of the companies:

Export Department
International Division
Global organization

REPORTED BY:
PINEDA, CHARI JOYCE
CASTILLO, NORELIE D.