The Global Marketplace

Objectives
Understand how the U d t dh th international trade system, economic, political-legal, and politicalcultural environments affect a lt l i t ff t companys international p y marketing decisions. L th k h t Learn three key approaches to entering international markets.
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Chapter 19 Ch t

Objectives
Understand how companies U d t dh i adapt their marketing mixes for international markets. Learn how to identify the three major forms of international marketing organizations.

Definition
Global Firm
A firm that, by operating in more than one country, gains y, g R&D, production, marketing, and financial advantages in fi i l d t i its costs and reputation that are not available to purely domestic competitors.
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Global Marketing in the th 21st C t Century

International trade is booming g Many U.S. firms are successful international marketers Global competition is intensifying Global companies face several G f p problems Companies face six major decisions in international marketing
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Figure 19 1 Fig re 19-1:

Major Decisions in e a o a a e g International Marketing

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Looking at the Global Marketing Environment M k ti E i t

The International Trade System
Tariffs, quotas, embargos, exchange controls, controls nontariff trade barriers World Trade Organization and GATT Regional free trade zones
European Union p North American Free Trade Agreement Other free trade areas
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Looking at the Global Marketing Environment M k ti E i t

Economic Environment
Industrial structure
Subsistence economies Raw material exporting economies Industrializing economies Industrial economies

Income distribution
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Looking at the Global Marketing Environment M k ti E i t

Political- g Political-Legal Environment
Attitudes toward international buying Government bureaucracy G tb Political stability Monetary regulations M t l ti
Countertrade
Barter Compensation Counterpurchase

Looking at the Global Marketing Environment M k ti E i t

Cultural Environment
Impact of Culture on Marketing Strategy g gy
Cultural traditions, p preferences, behavior

Impact of Marketing Strategy on Cultures gy

Globalization vs. Americanization
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Overlooking cultural differences can result in embarrassing b i mistakes. Nike found that this y stylized Air logo resembled Allah Allah in Arabic script
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Deciding Whether to Go International G I t ti l

Not all companies p need an international presence Globalization may be gg y triggered by several factors Risk and the ability to operate globally must be carefully assessed y
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Deciding Which Markets t E t M k t to Enter

Define international marketing polices and objectives, and sales j , volume goals Decide how many countries to target Decide D id on the types of th t f countries to enter
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Deciding Which Markets t E t M k t to Enter

Screen and rank each of the possible international markets using several criteria
Market size, market growth, cost of doing business, competitive advantage, risk level
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Figure 19 2 Fig re 19-2:

Market Entry S a eg es Strategies

Tokyo T k Disneyland is owned and ope ated operated by a Japanese development company under license from Walt Disney Company

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Deciding How to E t th M k t t Enter the Market

Exporting g
Direct vs. indirect

Figure 19 3 Fig re 19-3:

Five International Product a d o o o Strategies and Promotion S a eg es

Joint Venturing g
Licensing, contract manufacturing, management contracting, joint p ownership

Direct Investment
Assembly facilities, manufacturing facilities
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Deciding on the Global Marketing Program M k ti P

Standardized Marketing Mix
Same basic product product, advertising, distribution, and other elements of the marketing mix are used in all international sed markets.
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Deciding on the Global Marketing Program M k ti P

Adapted Marketing Mix
The marketing mix elements i l t are adjusted j for each international target market.
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Deciding on the Global Marketing Program M k ti P

Global Market Product Strategies g
Straight product expansion
Marketing the product with no changes

Deciding on the Global Marketing Program M k ti P

Global Promotion Strategies
Standardized global communication
Advertising themes are standardized Ad ti i th t d di d from country to country with slight modifications

Product adaptation
Altering the product to meet local conditions or the wants of the foreign market

Communication adaptation
Advertising messages are fully adapted to local markets
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Product invention
Creating new products or services for foreign markets
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Guy Laroche standardizes global advertising but adapts to meet cultural differences. The differences Arabian version is less sensual.

Deciding on the Global Marketing Program M k ti P

Global Pricing g Strategies
Companies face many problems bl
Price escalation Pricing to foreign subsidiaries Recent economic and technological forces The Internet

European

Arabian
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Figure 19 4 Fig re 19-4:

Whole Channel Whole-Channel Concept for e a o a a e g International Marketing

Deciding on the Global Marketing Program M k ti P

Global Distribution Channels
WholeWhole-channel view
Sellers headquarters headq arters organization Channels between nations Channels within nations Numbers & types of i t f intermediaries di i

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Deciding on the Global Marketing Organization M k ti O i ti

Managing International Marketing Activities
Step 1: Organize export department Step 2: Create an international division Step 3: Become a global organization g
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