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The Global Marketplace. Chapter 19. Objectives. Understand how the international trade system, economic, political-legal, and cultural environments affect a company’s international marketing decisions. Learn three key approaches to entering international markets. Objectives.

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objectives
Objectives
  • Understand how the international trade system, economic, political-legal, and cultural environments affect a company’s international marketing decisions.
  • Learn three key approaches to entering international markets.
objectives1
Objectives
  • Understand how companies adapt their marketing mixes for international markets.
  • Learn how to identify the three major forms of international marketing organizations.
slide4
1900: Coca-Cola was available in foreign countries

Early branding efforts placed logo prominently abroad

1971: “I’d like to buy the world a Coke” TV ad

Coca-cola has recently entered India, China and Indonesia

Consistent positioning and taste worldwide

Ads and promotions are adapted to local markets

Sprite: a global success

c

Coca-Cola

definition
Definition
  • Global Firm
    • A firm that, by operating in more than one country, gains R&D, production, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors.
global marketing in the 21 st century
Global Marketing in the 21st Century
  • International trade is booming
  • Many U.S. firms are successful international marketers
  • Global competition is intensifying
  • Global companies face several problems
  • Companies face six major decisions in international marketing
slide7

Figure 19-1:

Major Decisions in International Marketing

looking at the global marketing environment
Looking at the Global Marketing Environment
  • The International Trade System
    • Tariffs, quotas, embargos, exchange controls, nontariff trade barriers
    • World Trade Organization and GATT
    • Regional free trade zones
      • European Union
      • North American Free Trade Agreement
      • Other free trade areas
looking at the global marketing environment1
Looking at the Global Marketing Environment
  • Economic Environment
    • Industrial structure
      • Subsistence economies
      • Raw material exporting economies
      • Industrializing economies
      • Industrial economies
    • Income distribution
looking at the global marketing environment2
Looking at the Global Marketing Environment
  • Political-Legal Environment
    • Attitudes toward international buying
    • Government bureaucracy
    • Political stability
    • Monetary regulations
      • Countertrade
        • Barter
        • Compensation
        • Counterpurchase
looking at the global marketing environment3
Looking at the Global Marketing Environment
  • Cultural Environment
    • Impact of Culture on Marketing Strategy
      • Cultural traditions, preferences, behavior
    • Impact of Marketing Strategy on Cultures
      • Globalization vs. Americanization
slide13

Overlooking cultural differences can result in embarrassing mistakes. Nike found that this stylized “Air” logo resembled “Allah” in Arabic script

deciding whether to go international
Deciding Whether to Go International
  • Not all companies need an international presence
  • Globalization may be triggered by several factors
  • Risk and the ability to operate globally must be carefully assessed
deciding which markets to enter
Deciding Which Markets to Enter
  • Define international marketing polices and objectives, and sales volume goals
  • Decide how many countries to target
  • Decide on the types of countries to enter
deciding which markets to enter1
Deciding Which Markets to Enter
  • Screen and rank each of the possible international markets using several criteria
    • Market size, market growth, cost of doing business, competitive advantage, risk level
slide17

Discussion Question

Consider beauty products such as anti-aging creams, cosmetics, and hair dyes.

What International markets would offer an attractive target. What particular markets should your company avoid?

slide18

Figure 19-2:

Market Entry Strategies

slide19

Tokyo Disneyland is owned and operated by a Japanese development company under license from Walt Disney Company

deciding how to enter the market
Deciding How to Enter the Market
  • Exporting
    • Direct vs. indirect
  • Joint Venturing
    • Licensing, contract manufacturing, management contracting, joint ownership
  • Direct Investment
    • Assembly facilities, manufacturing facilities
slide21

Figure 19-3:

Five International Product

and Promotion Strategies

deciding on the global marketing program
Deciding on the Global Marketing Program
  • Standardized Marketing Mix
    • Same basic product, advertising, distribution, and other elements of the marketing mix are used in all international markets.
deciding on the global marketing program1
Deciding on the Global Marketing Program
  • Adapted Marketing Mix
    • The marketing mix elements are adjusted for each international target market.
deciding on the global marketing program2
Deciding on the Global Marketing Program
  • Global Market Product Strategies
    • Straight product expansion
      • Marketing the product with no changes
    • Product adaptation
      • Altering the product to meet local conditions or the wants of the foreign market
    • Product invention
      • Creating new products or services for foreign markets
deciding on the global marketing program3
Deciding on the Global Marketing Program
  • Global Promotion Strategies
    • Standardized global communication
      • Advertising themes are standardized from country to country with slight modifications
    • Communication adaptation
      • Advertising messages are fully adapted to local markets
slide26

Guy Laroche standardizes global advertising but adapts to meet cultural differences. The Arabian version is less sensual.

European

Arabian

deciding on the global marketing program4
Deciding on the Global Marketing Program
  • Global Pricing Strategies
    • Companies face many problems
      • Price escalation
      • Pricing to foreign subsidiaries
      • Recent economic and technological forces
      • The Internet
slide28

Discussion Question

What adjustments might need to be made to the pricing, promotion, or product itself if Cracker Jack were marketed in Japan, England, and Egypt?

slide29

Figure 19-4:

Whole-Channel Concept for International Marketing

deciding on the global marketing program5
Deciding on the Global Marketing Program
  • Whole-channel view
    • Seller’s headquarters organization
    • Channels between nations
    • Channels within nations
    • Numbers & types of intermediaries
  • Global Distribution Channels
deciding on the global marketing organization
Deciding on the Global Marketing Organization
  • Managing International Marketing Activities
    • Step 1: Organize export department
    • Step 2: Create an international division
    • Step 3: Become a global organization