GLOBAL MARKETING MANAGEMENT

1. GLOBAL MARKETING MANAGEMENT by MASAAKI KOTABE and KRISTIAAN HELSEN John Wiley & Sons, Inc. 1998

2. GLOBALIZATION IMPERATIVEChapter One John Wiley & Sons, c 1998

3. Globalization ImperativeChapter One • Overview • 1. Why Global Marketing is Imperative • 2. Globalization of Markets and Competition • 3. Evolution of Global Marketing • 4. Appendix John Wiley & Sons, c 1998

4. Overview of Globalization Imperative John Wiley & Sons, c 1998

5. 1. Why Global Marketing is Imperative • Exhibit 1-1 “Change in the World’s 100 Largest Companies” • global vs international vs multinational John Wiley & Sons, c 1998

6. 2. Globalization of Markets and Competition • Exhibit 1-2 “ US Balance of Goods, Services and Income over 20 Year Period” • International Trade (IT) and International Business (IB) • IT = exports/imports • IB = includes IT and foreign production • export of products • investment in foreign production • contract or manufacture in foreign country • foreign production is larger than IT John Wiley & Sons, c 1998

7. 2. Globalization of Markets and Competition (cont) • Global Reach • United States • 3:1 ratio of foreign products to exports • 6:1 ration of US/European production to exports • 5:1 ratio of European owned US located subsidiaries • Japan • 2.5:1 ratio of Japanese subsidiaries to Japanese exports John Wiley & Sons, c 1998

8. 2. Globalization of Markets and Competition (cont) • Who Manages International Trade? • intra-firm trade • transfers to affiliates overseas • 30% of US exports • 30% of exports by Japan and Britain John Wiley & Sons, c 1998

9. 3. Evolution Of Global Marketing • What is Marketing? • satisfies customers needs • anticipates and creates their future needs at a profit • reactively and proactively • Domestic Marketing • exhibit 1-3 • ethnocentric John Wiley & Sons, c 1998

10. 3. Evolution of Global Marketing (cont) • Export Marketing • ethnocentric • International Marketing • polycentric • multidomestic marketing • Multinational Marketing • regiocentric John Wiley & Sons, c 1998

11. 3. Evolution of Global Marketing (cont) • Global Marketing • geocentrism • reduction of cost inefficiencies and duplication of efforts • opportunities to transfer products, brands and ideas across subsidiaries • emergence of global customers • improved linkages … leading to global market infrastructure John Wiley & Sons, c 1998

12. 4. APPENDIX • Comparative Advantage Theory • International Product Cycle Theory • Internalization / Transaction Cost Theory John Wiley & Sons, c 1998

13. COMPARATIVE ADVANTAGE THEORY • Exhibit 1-4 “Comparative Advantage at Work” • absolute advantage vs comparative advantage • commodity terms of trade • principles of international trade • 1. countries benefit from international trade • 2. international trade increases worldwide production by specialization • 3. exchange rates are primarily determined by traded goods John Wiley & Sons, c 1998

14. INTERNATIONAL PRODUCT CYCLE THEORY • Exhibit 1-5 “International Product Cycle” • first • economies of scale • economies of scope • second • technological gap • monopoly power • third • preference similarity (consumption power) John Wiley & Sons, c 1998

15. INTERNALIZATION/ TRANSACTION COST THEORY • multinational companies • appropriability regime • dominant design • manufacturing and marketing ability John Wiley & Sons, c 1998