fhbm1124 marketing chapter 15 16-global marketing ethics
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Copyright 2007, Prentice-Hall Inc. 15-5
International Marketing
Many US companies have long been
successful at international marketing:
Coca-Cola, General Electric, IBM,
Colgate, Ford, Boeing, McDonald’s
and etc. But while global trade is growing,
global competition is intensifying.
Foreign firms are expending
aggressively into new international
markets, and home markets are not
longer as rich in opportunity.
http://rds.yahoo.com/_ylt=A0S020lyCDxLl1wBBmCJzbkF;_ylu=X3oDMTBpdnJhMHUzBHBvcwMxBHNlYwNzcgR2dGlkAw--/SIG=1h1nfuc6l/EXP=1262311922/**http%3A//images.search.yahoo.com/images/view%3Fback=http%253A%252F%252Fimages.search.yahoo.com%252Fsearch%252Fimages%253Fp%253Dcolgate%2526ei%253DUTF-8%2526fr%253Dyfp-t-701%26w=803%26h=803%26imgurl=www.bi-locharityclassic.com%252FAssets%252FAssets%252F2008Sponsors%252FBronze%252Fcolgate.jpg%26rurl=http%253A%252F%252Fwww.bi-locharityclassic.com%252Fhistory%252FSponsors%252F2008.htm%26size=96k%26name=colgate%2Bjpg%26p=colgate%26oid=0b8aa594aaa49b24%26fr2=%26no=1%26tt=124508%26sigr=11shqn1au%26sigi=1295p5al9%26sigb=12cdjmfie
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Figure 15-1
Major International Marketing Decisions
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Key Influences in the Global MarketingEnvironment
The International Trade System – The Wor ld Trade Organization and GATT (GeneralAgreement on Tariffs and Trade), Regional Free TradeZones
Economic Environment (industr ial structu re &income distr ibu t ion)
– Subsistence econom ies, Raw material export ingeconom ies, Indus tr ial iz ing econom ies, Indus tr ialeconomies
Political-Legal Environment - Countertrade Cultural Environment
– Impact of cu l ture on market ing strategy and impactof market ing s trategy on cu l tures
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The Impact of Culture on Marketing Strategy
Nike inadvertently offended Chinese
officials when it ran an advertisementfeaturing LeBron James crushing a
number of culturally revered Chinese
figured in a kung-fu themed TV spot
Chinese government found that the
ad violated regulations to uphold
national dignity and respect of the
“motherland culture” and yanked the
multi-million dollar campaign.
With an egg on its face, Nike
released a formal apology.
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The Impact of Marketing Strategy on Cultures
Americanization: Social critics
contend that large Americanmultinationals aren’t just
“globalizing” their brands, they
are “Americanizing” the world’s
cultures. In China, most peoplenever drank coffee before
Starbucks entered the market.
Example: McDonald’s, Coca-
Cola, Nike, Microsoft, Disneyand MTV
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Reason to consider going global:
– Foreign at tacks on domest ic markets.
– Foreign markets w i th higher p rof i topportuni t ies.
– Stagnant or shr ink ing domest ic markets .
– Need larger cus tomer base to achieve
econom ies o f scale. – Reduce dependency on sing le market .
– Fol low cus tomers who are expanding .
Deciding Whether to Go International
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Marketing to China
Many marketers are
attracted to the
Chinese market due
to its substantialpopulation size and
potential for growth.
Colgate’s efforts
have expanded their
market share from7% to 35% in less
than a decade.
Market ing in Act ion
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Figure 15-2Market Entry Strategies
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http://rds.yahoo.com/_ylt=A0S020r6dvNMbggAX9GJzbkF;_ylu=X3oDMTBpc2ozM2gzBHBvcwM0BHNlYwNzcgR2dGlkAw--/SIG=1hmouni8g/EXP=1291110522/**http%3a//images.search.yahoo.com/images/view%3fback=http%253A%252F%252Fimages.search.yahoo.com%252Fsearch%252Fimages%253Fp%253Dsubway%252Bsandwiches%2526ei%253DUTF8%2526fr%253Dyfp-t-317-s%26w=640%26h=480%26imgurl=s0.geograph.org.uk%252Fphotos%252F92%252F37%252F923745_fa98c467.jpg%26rurl=http%253A%252F%252Fwww.geograph.org.uk%252Fphoto%252F923745%26size=65KB%26name=Subway%2bsandwiche...%26p=subway%2bsandwiches%26oid=12f804f8c31d6b3b16aa4888d38c712f%26fr2=%26no=4%26tt=16000%26sigr=117lvo0vq%26sigi=11jnein22%26sigb=12n3ib0qq%26.crumb=/cIJ1ttw99i
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http://rds.yahoo.com/_ylt=A0S020r6dvNMbggAX9GJzbkF;_ylu=X3oDMTBpc2ozM2gzBHBvcwM0BHNlYwNzcgR2dGlkAw--/SIG=1hmouni8g/EXP=1291110522/**http%3a//images.search.yahoo.com/images/view%3fback=http%253A%252F%252Fimages.search.yahoo.com%252Fsearch%252Fimages%253Fp%253Dsubway%252Bsandwiches%2526ei%253DUTF8%2526fr%253Dyfp-t-317-s%26w=640%26h=480%26imgurl=s0.geograph.org.uk%252Fphotos%252F92%252F37%252F923745_fa98c467.jpg%26rurl=http%253A%252F%252Fwww.geograph.org.uk%252Fphoto%252F923745%26size=65KB%26name=Subway%2bsandwiche...%26p=subway%2bsandwiches%26oid=12f804f8c31d6b3b16aa4888d38c712f%26fr2=%26no=4%26tt=16000%26sigr=117lvo0vq%26sigi=11jnein22%26sigb=12n3ib0qq%26.crumb=/cIJ1ttw99i
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Exporting
COMPARING GLOBAL
MARKET-ENTRY STRATEGIESEXPORTING
• Indirect Exporting
• Direct Exporting
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Contract ManufacturingReebok uses Korean
contract manufacturers
COMPARING GLOBAL
MARKET-ENTRY STRATEGIESLICENSING
Contract Assembly
Franchising
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Joint Venture
COMPARING GLOBAL
MARKET-ENTRY STRATEGIESJOINT VENTURE AND DIRECT INVESTMENT
DirectInvestment
7-25
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Can use a standardized
theme globally, but may have
to make adjustments for
language or cultural
differences.
– Communication Adaptat ion:
Fully adapting an advertisingmessage for local markets.
– Changes may have to be made
due to media avai labi l i ty.
Global Promotion Strategies
FARTFULL Work Bench
from IKEA
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Companies face many problems in
setting their international prices.
– Standard pr ic ing methods such asuni form pr ic ing, standard markup of
costs everywhere, or charging what the
market wi l l bear ignores cost
di f ferent ials and local market cond i t ion s.
Global Pricing Strategies
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International prices tend to be higher than
domestic prices because of pr ice escalat ion .
Companies may become guilty of dumping
when a foreign subsidiary charges less thanits costs or less than it charges in its home
market.
The Internet makes global price differencesobvious and the euro has reduced the
amount of price differentiation.
Global Pricing Challenges
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International firms must take a whole-channel view of distributing products tofinal consumers.
Differences in the numbers and types ofintermediaries serving each foreignmarket require time and money to
navigate. Size and character of retail units differ as
well, presenting challenges.
Global Distribution
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Criticisms of Marketing
High prices
- High cos ts o f Distr ibut ion, High Advert is ing and
Promo t ion cos ts, and Excessive Markups Deceptive practices
- Decept ive pricing, Decept ive promotion and
Decept ive packaging .
High-pressure selling
- Persuades people to bu y goods they had no
though t of buy ing.
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Criticisms of Marketing
Shoddy, harmful, or unsafe products
- Poor qual i ty or func t ion , l i t t le benefi t or harm ful, and
increased prod uct complexi ty.
Planned obsolescence- Produc ts become obsolete before the they actual ly
should need replacement.
Poor service to disadvantaged consumers
- The urban poor often must shop in smaller stores
that carry infer ior goods and charge higher pr ices.
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Marketing’s Impact onSociety as a Whole
False wants and too much materialism.
- “greed is good” and “shop till you drop”
- Materialism
Producing too few social goods.- oversell ing p rivate goods at the expense
of publ ic good s
Cultural pollution.- Our sense are being constant ly assaulted
by market ing and advert is ing.
Too much political power.
http://www.gettyimages.com/detail/90436846/The-Image-Bank
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Critics charge that a firm’s marketing
practices can harm other companies
and reduce competition. – Acqu is i tions o f competi tors .
– Market ing pract ices that create barr iers to
entry. – Unfair compet i tive market ing pract ices.
Marketing’s Impact on OtherBusinesses
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The right to . . .1. introdu ce any produc t in any s ize and style,
prov ided i t is not hazardou s to personal health orsafety; o r, i f i t is, to inc lude proper warnings and
contro ls.2. charge any p r ice for the product, prov ided nodiscr imination exis ts among simi lar k inds ofbuyers.
3. spend any amoun t to prom ote the product ,
prov ided i t is not def ined as unfai r compet it ion.4. use any p rodu ct message, prov ided i t is not
m isleading or dishonest in content or execut ion .
5. use any buying incent ive schemes, provided they
are no t un fair or m isleading.
Sellers’ Rights
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The right to:
1. not buy a prod uct that is offered fo r sale.
2. expect the product to be safe.
3. expect the prod uct to perform as c laimed.
4. be wel l informed about impo rtant aspects of th e
product.
5. be protected against q uest ionable prod ucts and
marketing pract ices.
6. inf luence produc ts and market ing p ract ices in
ways that will improve “quality of life.”
Buyers’ Rights
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Consumer desire for more information led topacking labels with useful facts, form ingredients
and nutrition facts to recycling and country of origin
information. Jones Soda even puts customer
submitted photo on its labels
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The End