13_307_Global - 1. Model. Global Marketing involves...

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USC Marketing 307 • #13 Global Marketing © 2006 Ira S. Kalb. All rights reserved. 1 1. Model . Global Marketing involves Domestic, Pipeline, and Foreign issues. Domestic marketing issues are what have been covered in this course so far. 2. Enormous Market. EU 457 million and growing, EFTA 12.7 million, Former Soviet Bloc 400 million, Japan 127 million, China+India = 2.3 billion, SE and other Asia, Africa, South America, Other North America, Australia/New Zealand, Middle-East. 1. Pipeline Issues. 3-1. Time zones and jet lag. One day for every hour of time difference. 3-2. Special packaging. For shipment over sea or via air freight. 3-3. Shipping costs and delivery times. Much larger and longer. 3-4. Currency fluctuations. Can make a profitable transaction unprofitable. 3-5. Travel times and expenses. Longer and larger. 3-6. Communications charges. More expensive for non-Internet or VoIP. 3-7. Weather interference. Can delay or prohibit delivery. 3-8. Customs, duties, tariffs, work permits. Can make price non-competitive. 3-9. Intermediaries. Freight forwarders, Customs house brokers, Banks, Insurance companies, Customs officials. 3-10. Paperwork. Whereas a domestic transaction typically involves a sales order and invoice, the average oversees transaction has 35 documents and 360 pages . Pipeline Foreign Domestic If the difficulty of doing  business in the domestic market  is d, doing business in foreign  markets is d 3 . Businesses often get into  trouble  because they  forget the pipeline  issues, which end up  killing them. The difficulty comes from  the part of the foreign +  pipeline “iceberg” that is  beneath the surface and not  easy to see. USA 295 million.
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USC Marketing 307 • #13 Global Marketing © 2006 Ira S. Kalb. All rights reserved. 2 4. Foreign Issues. 4-1. Cultural. Language, time frames, customs, conversational distances and volumes, directional orientations, histories and hatreds, religion, body language, verbal and non-verbal communications, names and numbers, time frames, and meals. 4-2. Political. Transparency, risk assessment, nationalization record, civil/human rights, stability, climate. 4-3. Legal. Contracts; jurisdiction; language; court; patent, trademark, and ©; payment methods and terms; binding arbitration. 4-4. Financial. Protecting assets, Irrevocable LC, Paid in hard currency, currency fluctuation protection, inflation, accounting practices, banking relationships. 4-5. Infrastructure. Utilities, Banking, Security, Legal, Government, Taxation.
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This note was uploaded on 03/31/2009 for the course BUAD 307 taught by Professor Morristowns during the Fall '07 term at USC.

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13_307_Global - 1. Model. Global Marketing involves...

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