Unformatted text preview: The Global Marketplace Chapter 15 Road Map: Previewing the Concepts
Discuss • Discuss how the international trade system, economic, political-legal, and cultural environments affect a company’s international marketing decisions. decisions. Describe • Describe three key approaches to entering international markets. entering
15 - 2 Road Map: Previewing the Concepts
Explain • Explain how companies adapt their marketing mixes for international markets. markets. Identify • Identify the three major forms of international marketing organization. international 15 - 3 Global Marketing in the 21st Century
• The world is shrinking rapidly with the The advent of faster communication, transportation, and financial flows. transportation, International trade is booming and International accounts for 25% of U.S. GDP. accounts Global competition is intensifying. Higher risks with globalization.
15 - 4 • • • Looking at the Global Marketing Environment
• The International Trade System: Restrictions—tariffs, quotas, embargos, exchange controls, and non-tariff trade barriers. The World Trade Organization and GATT: Helps Trade—reduces tariffs and other international trade barriers. Regional Free Trade Zones: Groups of nations organized to work toward common goals in the regulation of international trade.
15 - 5 • • Industrial Structure
• Shapes a country’s product and Shapes service needs, income levels, and employment levels. and
Subsistence economies Raw material exporting economies Industrializing economies Industrial economies
15 - 6 Political-Legal Environment
• • • • Attitudes toward international Attitudes buying buying Government bureaucracy Political stability Monetary regulations 15 - 7 Cultural Environment
• Sellers must examine the ways Sellers consumers in different countries think about and use products before planning a marketing program. planning Business norms vary from country to Business country. country. Companies that understand cultural Companies nuances can use them to advantage when positioning products internationally. internationally.
15 - 8 • • Deciding Whether to Go Global
• Reason to consider going global: Foreign attacks on domestic markets Foreign markets with higher profit Foreign opportunities opportunities Stagnant or shrinking domestic markets Need larger customer base to achieve Need economies of scale economies Reduce dependency on single market Follow customers who are expanding
15 - 9 Deciding Which Markets to Enter
• Before going abroad, the company should Before try to define its international marketing objectives and policies. objectives
What volume of foreign sales is desired? How many countries to market in? What types of countries to enter? • Choose possible countries and rank based on market size, market growth, cost of doing business, competitive advantage, and risk level
15 - 10 Market Entry Strategies
Indirect: working through independent international marketing intermediaries. marketing Direct: company handles its own exports. exports. 15 - 11 Market Entry Strategies
• Joint Venturing:
Joining with foreign companies to Joining produce or market products or services. produce • Approaches:
Licensing Contract manufacturing Management contracting Joint ownership
15 - 12 Market Entry Strategies
• Direct Investment:
The development of foreign-based The assembly or manufacturing facilities. facilities. This approach has both This advantages and disadvantages. advantages 15 - 13 Deciding on the Global Marketing Program
• Standardized Marketing Mix:
Selling largely the same products and Selling using the same marketing approaches worldwide. worldwide. • Adapted Marketing Mix:
Producer adjusts the marketing mix Producer elements to each target market, bearing more costs but hoping for a larger market share and return. market
15 - 14 Global Product Strategies
• • • Straight Product Extension: Marketing a product in a foreign market Marketing without any change. without Product Adaptation: Adapting a product to meet local Adapting conditions or wants in foreign markets. conditions Product Invention: Creating new products or services for Creating foreign markets. foreign
15 - 15 Global Promotion Strategies
• Can use a standardized theme Can globally, but may have to make adjustments for language or cultural differences. differences. Communication Adaptation: Fully adapting an advertising message Fully for local markets. for • • Changes may have to be made due Changes to media availability. to
15 - 16 Global Pricing Strategies
• • Companies face many problems in setting Companies their international prices. their Possible approaches include:
Charge a uniform price all around the world. Charge what consumers in each country will Charge pay. pay. Use a standard markup of costs everywhere. • • International prices tend to be higher than International domestic prices because of price escalation. escalation Companies may become guilty of dumping Companies dumping –a foreign subsidiary charges less than its costs or less than it charges in its home market. market.
15 - 17 Deciding on the Global Marketing Organization
• • Organize an export department Create international divisions
Geographical organizations World product groups International subsidiaries • Become a global organization
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