chapter 7 reaching global markets 7 | 3copyright © houghton mifflin company. all rights reserved....

Chapter 7Reaching

Global Markets

7 | 3Copyright © Houghton Mifflin Company. All rights reserved.

Objectives

• Understand global marketing strategy

• Analyze forces affecting international marketing efforts

• Understand important trade agreements

• Identify methods of international market entry

• Examine forms of global organizational structures

• Examine use of marketing mix internationally


The Nature ofGlobal Marketing Strategy

• International Marketing

– Developing and performing marketing activities across national boundaries.


Environmental ForcesIn Global Markets

CompetitiveCompetitive EconomicEconomic

PoliticalPolitical

Legal &Legal &

RegulatoryRegulatoryTechnologicalTechnological

SocioculturalSociocultural


Competitive Forces Internationally

• Attend to competitive forces in target countries

• Identify the interdependence of global competitors

• Be mindful of global customer


The Most Competitive Countries


Economic Forces Internationally

• Import tariff – duty on goods bought outside the country and brought in

• Quota – limit on amount of goods an importing country will accept

• Embargo – government suspension of trade

• Exchange Controls – government restrictions on amount of particular currency


Economic ForcesInternationally cont’d

• Balance of Trade – difference in value between nation’s imports and exports

• Gross Domestic Product (GDP) – measure of overall economic standing based on total output of goods and services


ComparativeEconomic Analysis


Political, Legal and Regulatory Forces Internationally

• Legal and regulatory infrastructure as a direct reflection on the political climate

– CIBERs (Centers for International Business Education and Research)

– International import barriers

– Differing standard of ethics (U.S.’s Foreign Corrupt Practices Act)


Sociocultural Forces Internationally

• Issues – predominant cultural focus of marketing within global market

– Language

– Symbols

– Social norms, values, perceptions

– Negotiations and decision-making


Cross-CulturalBehavioral Differences


TechnologicalForces Internationally

• Advances in technology have advanced international marketing


Global Ethical and Social Responsibility Issues

• Dumping – selling products in domestic markets at higher prices than in foreign markets

• Cultural relativism – defining business practices as right or wrong based on differing moralities within particular cultures


Least And Most Corrupt Countries


Regional Trade Alliances, Markets, And Agreements

• North American Free Trade Agreement (NAFTA) – 1994

• CAFTA-DR – 2005

• European Union (EU) – 1993

• Common Market of the Southern Cone (MERCOSUR) – 1991

• Asia-Pacific Economic Cooperation (APEC) – 1989

• World Trade Organization (WTO) – 1995


Stages OfInternational Entry Modes

1) No regular export activities

2) Export via independent representatives or agents

3) Establish one/more sales subsidiaries internationally

4) Establish international production or manufacturing facilities


Involvement InGlobal Marketing


Importing and Exporting

• Importing – the purchase of products from a foreign source

• Exporting – the sale of products to foreign markets


Trading Company

A company that links buyers and sellers in different countries.


Licensing and Franchising

• Licensing – an alternative to direct investment requiring a license to pay commissions on sales or supplies used in manufacturing

• Franchising – a form of licensing in which a franchiser grants a franchisee the right to market its product in accordance with the franchiser’s standards.


International Franchising-Benefits To Franchiser

Does not have to put up large capital investment

Revenue stream is fairly consistent

Retains control of name and increases global penetration

Agreements ensure standard of behavior from franchisees


Contract Manufacturing

The practice of hiring a foreign firm to produce a designated volume of the domestic firm’s product or a component of it to specification; the final product carries the domestic firm’s name.


Specific Forms ofContract Manufacturing

• Outsourcing

• Offshoring

• Offshore outsourcing


Joint Ventures

• Joint Venture – partnership between domestic and foreign firms

• Strategic Alliances – partnerships formed to create competitive advantage on a worldwide basis


Direct Ownership

Direct ownership – a company owns subsidiaries or other facilities overseas

Multinational enterprise – firm has operations in many countries


Ten LargestGlobal Corporations


Global Organizational Structure

• Organizational Structure – the way in which a firm divides its operations and coordinates its activities.


Organizational Architecture


Global OrganizationalStructures cont’d

• Export Departments

• International Divisions

• Internationally Integrated Structures


International Marketing Mix

• Customization vs. Globalization

– Customization: customizing marketing strategy to meet different marketing mixes

– Globalization: development of marketing strategies that treat the world markets as a single entity


Marketing Mix Issues –Product Element


Marketing Mix Issues – Distribution Element


Marketing Mix Issues – Promotion Element


Marketing Mix Issues –Pricing Element


Business markets allow for customized global marketing solutions

Use of the AT&T print ad is granted uner permission by AT&T Knowledge Ventures

chapter 7 reaching global markets 7 | 3copyright © houghton mifflin company. all rights reserved....

Documents

international marketing

decisionmaking slide

economic forces

particular currency

competitive forces

regulatory forces

sociocultural forces

technological forces