Global

Global Marketing
Marketing
Strategies
Strategies
for
for Entrepreneurs
Entrepreneurs

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 1
 Why “Go Global?”
 Offset sales declines in the domestic market
 Increase sales and profits
 Extend products’ life cycles
 Lower manufacturing costs
 Improve competitive position
 Raise quality levels
 Become more customer-oriented

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 2
 Strategies For "Going
Global"
 Launching a World Wide Web site

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 3
Internet Users by World Region 1999 and 2005

45.0%
40.0%
35.0%
30.0%
Percent

25.0% 1999
20.0%
15.0% 2005
10.0%
5.0%
0.0%
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 Strategies For "Going
Global"
 Launching a World Wide Web site
 Relying on trade intermediaries

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 5
 Trade Intermediaries
 Export Management Companies (EMCs)
 Export Trading Companies (ETCs)
 Manufacturer’s Export Agents (MEAs)
 Export merchants
 Resident buying offices
 Foreign distributors

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 6
 Strategies For "Going
Global"
 Launching a World Wide Web site
 Relying on trade intermediaries
 Joint ventures

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 7
 Joint Ventures
 Domestic joint venture – two or more U.S.
companies form an alliance for the purpose of
exporting their goods and services abroad.
 Foreign joint venture – a domestic firm forms an
alliance with a company in the target nation.
 Most foreign joint ventures fail; average success rate is
just 43%.
 Most important ingredient: choosing the right partner.

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 8
 Strategies For "Going
Global"
 Launching a World Wide Web site
 Relying on trade intermediaries
 Joint ventures
 Foreign licensing
 International franchising
 Countertrading and bartering
 Exporting

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 9
 Exporting

 Small companies account for 97% of all

companies involved in exporting, but
they generate just 31% of the dollar
value of the nation’s exports.
 More than 100,000 U.S. companies
export.
 Only 1% of all small and medium-sized
businesses export.

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 10
 Number of Countries to Which Small Businesses Export

10 or more countries
5.6%

5 to 9 countries
7.7%

2 to 4 countries
23.7% 1 country
63.0%

Source: Exporter Data Base, U.S. Dept of Commerce, Office of Trade and
Economic Analysis, Trade Development/International Trade Agency.
 Steps to Successful Exporting
1. Recognize that even the tiniest companies
and least experienced entrepreneurs have
the potential to export.
2. Analyze your product or service.
3. Analyze your commitment to developing
export markets.
4. Research potential markets and pick your
target.

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 12
 Steps to Successful Exporting
(Continued)

5. Develop a distribution strategy.

6. Find your customer.
 U.S. Department of Commerce
 International Trade Administration
7. Find financing for export sales.
8. Ship your goods.
9. Collect your money.

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 13
 How a Letter of Credit Works.
Seller Buyer

Foreign buyer agrees to buy products; Seller ships goods to buyer

seller agrees to ship goods if buyer according to letter of credit’s
arranges a letter of credit. terms and submits shipping
documents to bank issuing
letter of credit.

Seller’s Bank Buyer's Bank

$ Letter
$ $
of Credit

Buyer requests that his bank grant a
letter of credit, which assures exporter
payment if she presents documents
proving goods were actually shipped.
Bank makes out letter of credit to seller
and sends it to seller’s bank (called the
confirming bank).
Buyer’s bank makes payment
to seller’s (confirming) bank.
Confirming bank then pays
seller amount specified in
letter of credit.
 Strategies For "Going
Global"
 Launching a World Wide Web site
 Relying on trade intermediaries
 Joint ventures
 Foreign licensing
 International franchising
 Countertrading and bartering
 Exporting
 Establishing international locations

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 15
 Barriers To International Trade
Domestic Barriers:

 Attitude - "My company is too small to

export."
 Lack of information about how to get
started.
 Lack of export financing.

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 Barriers To International Trade
International Barriers:

 Tariffs - Taxes a government imposes on

goods and services imported into that country.
 Quotas - Limits on the amount of a product
imported into a country.
 Embargoes - Total bans on imports of certain
products.

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 17
 Barriers To International Trade
International Barriers:

 Dumping - Selling large quantities of a

product in a foreign country below cost to
gain market share.
 Political barriers - rules, regulations and risks.
 Business barriers – business practices and
laws.
 Cultural barriers - Differing languages,
philosophies, traditions, and accepted
business practices.

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 18
 International Trade Agreements

Major Agreements:
 General Agreement on Tariffs and Trade
(GATT)
 World Trade Organization (WTO)
 North American Free Trade Agreement
(NAFTA)

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 19
 Guidelines For Success In
International Markets
 Make yourself at home in all three of the world's key
markets - North America, Europe, and Asia.
 Develop new products for the world market.
 Familiarize yourself with foreign customs and
languages.
 "Glocalize" - make global decisions about products,
markets, and management, but allow local employees
to make tactical decisions about packaging,
advertising, and service.

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 Guidelines For Success In
International Markets
 Train employees to think globally, send them on
international trips, and equip them with state-of-the-
art communication technology.
 Hire local managers to staff foreign offices and
branches.
 Do whatever seems best wherever it seems best, even
if people at home lose jobs or responsibilities.
 Consider using partners and joint ventures to break
into foreign markets you cannot penetrate on your
own.

Chapter 12: Global Marketing Strategies Copyright 2003 Prentice Hall Publishing Company 21