Global Market StrategiesGlobal Market Strategies

The Internationalization of U.S. Business

Many U.S. Companies are now foreign owned.

Companies with only domestic markets have found it difficult to sustain customary rates of growth.

Many companies are increasingly seeking foreign markets.

“Buy American” Quiz 1

Pontiac LeMans Chevrolet Lumina Mercury Capri Honda Accord Coupe Dodge Stealth Mercury Tracer Plymouth Voyager

“Buy American” Quiz 2

Sak’s Fifth Avenue Burger King Michelin Shell Seagrams Bonwit Teller Hardee’s Firestone BP Jack Daniels Foodline BiLo

Foreign Acquisitions of U.S. Companies

U.S. Company Foreign Owner

J. Walter Thompson (Advertising) Britain

Spiegel (Catalog retailing) Germany

Mack Trucks (Automotive) France

Giant Food Stores (Supermarkets) Netherlands

Pillsbury, Hueblein (Food, Drink) Britain

CBS Records (Music and Entertainment) Japan

Magnavox (Television) Netherlands

Carnation (Coffee-Mate, Friskies pet food) Switzerland

Chesebrough-Pond’s (Vaseline) Netherlands

Vermont American (Garden Tools) Germany

Northwest Airlines (Travel) Netherlands

SOURCE: Adapted from “Soon to Be Extinct: American TV Brands.,” U.S. News & World Report,July 31, 1995, p. 13, and Gustavo Lombo, “Creating American Jobs,” Forbes, July 28, 1997. P.222.

Some of the Big U.S. Players in the Global Game*

Company Foreign Revenues% of Total

Foreign Profits% of Total

Foreign Assets% of Total

Ei du Pont de Nemours 43.1 28.9 40.6

Proctor & Gamble 50.1 36.9 40.5

Coca-Cola 67.1 67.8 37.7

Intel 58.4 38.4 20.2

Motorola 45.0 92.4 37.7

Johnson & Johnson 49.6 46.1 45.3

Sara Lee 39.7 53.8 51.3

Colgate-Palmolive 71.6 83.6 60.4

Gillette 63.1 41.1 62.6

Compaq Computer 46.5 51.7 31.4

McDonald’s 57.0 49.6 55.0

Avon Products 65.3 58.9 59.0

RJR Nabisco 36.2 53.8 20.2

*1996 data. SOURCE: Adapted from Brian Zajac, “Buying American,” July 28, 1997, p218.

International Marketing Defined

International Marketing is the performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit.

Marketing concepts and principles stay the same, but the environment changes.

7

The International Marketing Task

Political/legalforces

Economicforces

1

2

Environmentaluncontrollablescountry market A

Environmentaluncontrollablescountrymarket B

Environmentaluncontrollablescountrymarket C

Competitivestructure Competitive

Forces

Level of Technology

Price Product

Promotion Channels of distribution

Geography and

Infrastructure

Foreign environment(uncontrollable)

Structure ofdistribution

Economic climate

Cultural forces

3

45

6

7Political/

legalforces

Domestic environment(uncontrollable)

(controllable)

Environmental Adaptation

Adjusting to a country’s culture (uncontrollable environment) is critical.

Consider and adjust your frame of reference.

Avoid cultural errors by being aware of cultural relativism--marketing strategies and judgments are based on experience, and experience is interpreted by each marketer in terms of his/her own culture.

Being Globally Aware

To be Globally Aware is to be: Objective

Tolerant of Cultural Differences

Knowledgeable of:CulturesHistoryWorld Market PotentialsGlobal Economic and Social Trends

Entry StrategiesEntry Strategies

Exporting

The Internet

Contractual Agreements

Joint Ventures

Direct Foreign Investment

Strategic International AlliancesStrategic International Alliances

Trends in Global Business

• Internationalization of U.S. Markets

• Internationalization of U.S. Business• Growth of Regional Trade Areas• Move toward free market system by countries in Latin America,

Asia, Eastern Europe• Large Emerging Markets such as Argentina, China, South Korea,

Poland, India• Evolving global middle income households• GATT and World Trade Organization• The TRIAD

Possible Regional Trade Groups in the 21st Century

Western Hemisphere Free Trade Areas (WHFTA) Canada to Argentina

Asia-Pacific Economic Cooperation (APEC) Pacific Rim Countries including U.S.

U.S./Canada/Mexico/Japan

South American Free Trade Area (SAFTA) Andean Pact and Mercosur

Chinese Economic Area (CEA) Hong Kong, Taiwan, Coastal Provinces of So. China

U.S./European Union

Many possibilities of Republics of Russia, Baltic States