marketing chapter 21

marketing chapter 21 - Chapter 15 The Global Marketplace...

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Chapter 15 The Global Marketplace Previewing the Concepts: Chapter Objectives 1. Discuss how the international trade system, economic, political-legal, and cultural environments affect a company’s international marketing decisions. 2. Describe three key approaches to entering international markets. 3. Explain how companies adapt their marketing mixes for international markets. 4. Identify the three major forms of international marketing organizations. J UST THE B ASICS Chapter Overview This chapter looks at the special considerations that companies face when they market their brands globally. Advances in communication, transportation, and other technologies have made the world a much smaller place. Almost every firm, large or small, faces international marketing issues. International trade is booming. Since 1969, the number of multinational corporations in the world’s 14 richest countries has more than tripled, from 7,000 to 24,000. Global competition is intensifying. Foreign firms are expanding aggressively into new international markets, and home markets are no longer as rich in opportunity. If companies delay taking steps toward internationalizing, they risk being shut out of growing markets. Before deciding to operate internationally, a company must thoroughly understand the international marketing environment. There are many issues to understand regarding the international trade system, such as tariffs, quotas, embargoes, and other barriers to entry. The World Trade Organization (WTO) was established in the latest round of the General Agreement on Trade in Services (GATT) negotiations. The WTO acts as an umbrella organization, overseeing GATT, and a similar agreement governing intellectual property. In addition, the WTO mediates global disputes and imposes trade sanctions. Two factors reflect a country’s attractiveness as a market—the country’s industrial structure and its income distribution. There are also several factors to contend with in the political-legal environment, as well as the cultural environment. There are several factors that draw a company into the international arena. Global competitors might attack the company’s domestic market by offering better products or lower prices. The company might want to counterattack these competitors in their home markets to tie up their resources. Or the company might discover foreign markets that 89
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present higher profit opportunities than the domestic market does. Before going abroad, the company must weigh several risks and answer many questions about its ability to operate globally. The company should try to define its international marketing objectives and policies. The company needs to choose how many countries it wants to market in, and it needs to decide on the types of countries to enter. Once the decision has been made to sell in a foreign country, the company must determine the best mode of entry. Most companies start with exporting, using either indirect or direct exporting, or they
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marketing chapter 21 - Chapter 15 The Global Marketplace...

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