8

Global
Marketing

2014

2013byby
McGraw-Hill
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Assessing Global Markets

General
economic
environment
Market size and
population
growth
Real income

Power distance
Uncertainty
avoidance
Individualism
Masculinity
Time
orientation

Transportation
Channels
Communication
Commerce
Economic
analysis
using metrics

Infrastructure
and
technology

Sociocultural
analysis

Government
actions

Tarif
Quota
Exchange
control
Trade
agreement
country,
requires

Any entry into a new market, especially into a new

careful
2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
planning.
A formal market assessment prevents firms from making costly mistakes
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Economic Analysis
General Economic Environment
Gross
domestic
product
(GDP)

Gross
national
income
(GNI)

Purchasing
power
parity

Human
developmen
t index
NationMaster Website

Each of these standardized measures allow for comparisons across

countries. The use of each depends on specific circumstances. Many
reports now feature GNI rather than GDP, because it includes the economic
impact of firms that earn income from their global operations
GDP-which dramatically undercounts the impact of those activities on the
economy of the firms home markets.
2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

GNI vs. GDP

Many reports now feature GNI rather than GDP,
because it includes the economic impact of firms
that earn income from their global operations,
unlike GDP-which dramatically undercounts the
impact of those activities on the economy of the
firms home markets.

2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Quality of Life
An indicator of quality of life in the country
It includes
life expectancy at birth
educational attainment
whether average incomes are sufficient to meet the
basic needs of life in that country.

2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Purchasing Power Parity

The concept of purchasing power parity
allows one to estimate what the
exchange ratebetween two
currencies would have to be in order
for the exchange to be at par with
purchasing powerof the 2
countries' currencies.

2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Population Growth Rate

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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Population Growth Rate

(1) India
(2) Nigeria
(3) Pakistan
(4) Tanzania

467 million projected population increase

231 million
101 million
93 million

(5) United States 93 million

(6) DR Congo
83 million
(7) Ethiopia
62 million
(8) Philippines
62 million
(9) Uganda
61 million
(10)

Kenya

56 million

2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

United States
The U.S. stands out in this top 10
list for many reasons:
its wealth
age distribution
immigration rates
fertility rates

2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

United States
The U.S. is the only wealthy country
on this top 10 list and, in fact, is the
only wealthy country in the top 25.
The U.S. is the only country in the top
10 with a total fertility rate (defined
the expected number of children born
per woman in her child-bearing years)
near the replacement rate.
2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Age Distribution
The U.S., with a median age of 37
years, is the only country in the top
10 list with a median age of over 30
years.
No other country in the top 25 has a
median age over 30.

2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Immigration
Another key diference between the
countries in this top 10 list is
immigration.
Nearly 40 million Americans were
foreign born or about 13% of the
American population.
No other country in the top 25 has
more than 6% of its population
2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

United States Summary

The US population is wealthier,

older, less fertile and more

influenced by immigration
than the other countries projected to
experience major population growth.

2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Evaluating Real Income

Firms can make adjustments to an existing
product or change the price to meet the
unique needs of a particular country
market.

Real incomeis theincomeof

individuals or nations after adjusting
for inflation.
It is calculated by subtracting inflation
from the nominalincome.
2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Stockdisc

MIXA/PunchStock

Infrastructure

Communication

Royalty-Free/CORBIS

PhotoLink/Getty Images

Transportation

Distribution Channel

A firms

Commerce

ability to conduct business in a particular country is

in large measure determined by that countrys infrastructure.

2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Analyzing Government Actions

Quota

Tarif

Governme
nt actions

Excha
nge
contro
l

Trade
agree
ment
this category includes not just the impact of governmental actions but also

those of non-governmental organizations (NGOs).

2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Tariff and Quotas

Tarifs

Quotas

Tax
Maximum limit
Artificially
Reduces
raises prices
availability of
imported
Lowers
goods
demand
Both benefit domestically made products
because they reduce foreign competition
Trade negotiations often revolve around reducing or
eliminating tariffs, quotas, or similar impediments to trade.
Discuss the recent trade battles between the United States and
foreign agriculture producers (e.g., sugar, corn). Many foreign
producers accuse the United States of limiting market access
2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Boycott

Ethical Consumer Website

Both governments

and independent groups call boycotts.

What would prompt you to participate or organize a boycott? Consumers are likely to
call a boycott if they believe that a marketing practice is unethical or unfair to group of
individuals. For example many students demanded that their Universities boycott Nike
their
sports
teams
protest
Nikes
practices.
products
2014 by McGraw-Hillfor
Education.
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proprietary material
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authorized
instructor of
use. Not
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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Boycotts List
Boycotts List
Animal Rights
ASDA / Wal-Mart
Coca Cola
Israel
L'Oreal
Mars
Nestle
Procter & Gamble
Tesco
Unilever
2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Analyzing Sociocultural Factors

Individualis
m
Uncertainty
avoidance

Power
distance

Masculinity

Cultur
e

Time
orientation

Perhaps no other aspect of globalization has posed more difficulties to

marketers than culture. Outsiders often have trouble understanding the

detailed meanings associated with proper communication in a foreign
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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Country Clusters

Hofstedes cultural dimensions offer an effective

understanding of the subtle elements of a culture. Taken
together, these dimensions enable marketers to group countries

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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Choosing a Global Entry Strategy

Direct
Direct
Investment
Investment

Control

Joint
Joint
Venture
Venture
Strategic
Strategic
Alliance
Alliance
Franchising
Franchising
Export
Export

Risk
Why do you think most firms try exporting first? In each strategy, risks and rewards

change. As risk increases, so do the potential rewards.

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Exporting represents the lowest risk level for the firm

Choosing a Global Marketing Strategy:

Target Market (STP)

Courtesy Ford India Pvt. Ltd.

Adjusting the marketing mix and positioning strategy to meet the needs of a new
may
represent
the
most
complex
for global
marketing.
market
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Education.
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material
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instructor topic
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in any manner.
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The Global Marketing Mix:

Product or Service Strategies

What products are the easiest to standardize? What makes these products easy to
standardize?
Products at the extreme ends of high tech (electronics, computers, software versus
paper and pencil) or high touch (luxury goods, jewelry versus staple products)
continuums are easy to standardize, but those in the middle generally require

varying levels of adaptation to local markets.

2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Global Marketing Mix:

Pricing Strategies
Antidumping
Policies
Economic
Conditions

Quotas

Tarifs

Pric
e

Competitiv
e
factors

In addition to competitive, cost, and other considerations, global

pricing
involves additional dimensions that increase its complexity

2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Global Marketing Mix: Global

Communication Strategies

Photo by Jeff Kravitz/FilmMagic/Getty Images

How do firms market their products in countries with very low literacy levels?
Imagine you are promoting a new soft drink. How would you do it without written
2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This
document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
communication?