global marketing 1716

8/2/2019 Global Marketing 1716

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Global Marketing

By Usman Waheed+923006641921


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Chap 01

Global Marketing


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GLOBAL MARKETING

Overview

Global marketers consider the world

as their market and different countrymarkets as components of this world market


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Defining Global Marketing

AMAs Definition of Marketing:

Marketing is the process of planning and

executing the conception, pricing, promotion, and

distribution of ideas, goods, and services to create

exchanges that satisfy individual andorganizational objectives


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Distinguishing Features of AMAs Definition

1. Includes nonprofit and for profit activities

2. Includes products, ideas, and services3. Includes activities that precede and follow the

production process

4. Includes the four Ps and regards them each asequally important


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Global Marketing Defined:

the coordinated performance of

marketing activities to createexchanges across countries that satisfy

individual, organizational , and societal

objectives


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Global marketing is conducted across

countries (not domestic or foreign)

Global marketing coordinates activitiesacross different country markets

Global marketing should be motivated by

individual, organizational, and societalgoals


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The Global Marketing Environment

Focal Point--Consumer

Use the Four Ps to Satisfy Consumers

Economic, Financial, Political, and CulturalEnvironmental of Each Country Affect

marketing

Regional and Global Environments AffectMarketing


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Why Should Firms Engage in Global

Marketing?

To Survive and Grow

1. Learn to satisfy consumers in diverse conditions

2. Manage marketing tasks more efficiently andeffectively

3. Preempt or counter competitive attacks in more

than one market

4. Expand customer base to include developed anddeveloping nations


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Marketing?

To Diversify Product and Market Portfolios and

Improve competitiveness

1. Effects of seasonal and cyclical fluctuations inone market offset by others

2. Diversification increases market size and

enhances economies of scale


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Marketing?

To Capitalize on the Attractiveness of Additional

Country Markets

1. The U.S. is attractive-but wont accommodate

unlimited growth

2. Expand market size by expanding into other

countries

3. Maurice G. Hardy: Why expand into othercountries? A. Keep competitors in their own countries;

b. Take advantage of growing opportunities in Europe

and the Pacific


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Marketing?

To Operate Within a Global Marketplace

1. Goods, services, capital, technology, and

labor are going global2. Reduced government restrictions are affecting

global marketing

3. Bilateral and multilateral negotiations are

reducing restrictions


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What is Unique about Global Marketing?Country market environments different

Economic Environment ( Purchasing

Power, Competitive Intensity, Economys

Health)1. Fiscal policies - tax rates and spending

programs of government

2. Monetary policies - regulate money supply


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What is Unique about Global Marketing?

Country market environments different

Financial Environment

1. Exchange rate - price of one currency in

relation to another2. Exchange rate fluctuations can adversely

or favorably affect performance of a firm


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Country market environments different

Political Environment

1. Tariff barriers - taxes on imports paid to customs

officials - include

a. Specific - fixed amount per physical unit of import

b. Ad -valorem ( on the value ) - percentage of

estimated value of import

2. Nontariff barriers includea. Import quotas b. Exchange controls

c. Buy-domestic policies

d. administrative red tape


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Country market environments different ?

Cultural Environment

1. Differences encourage marketing adaptations

2. Similarities encourage standardization3. Balancing the two is a key to success


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Marketing Mix Politics - How Do

Government Influence the Four Ps ?

Product - Local Content Law

Price - Government Approval for Price Changes

Promotion - Permissible Budget Determined byLocal Authorities

Place - Mandated Distribution Channel or

Territory


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Why Should We Study Global

Marketing ?

Influences Product Choices of

Consumers

Influences standard of living

Influences Job Opportunities

Influences the society


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Thank You!


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The Global Economic

Environment

Global Marketing


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Whats happening?

Asia Pacific

Western Europe

North America

South America

Why andwhat are the

implications?


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THE ECONOMIC

ENVIRONMENT

Overview

Local, regional, and global economic

environments are interactive. What happenswithin and among them profoundly

influences marketing mix decisions.


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The Local Economy - The CountryWhere Marketing Takes Place

The Consumers

1. Disposable income (after-tax income)

2. What, when, where, and how muchconsumers buy is influenced by disposable

income


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The Local Economy - The Country

Where Marketing Takes Place

The Country

1. Healthy economies facilitate higher

purchasing power for consumers


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2 . Economic variables: GDP; GDP per capita; GDP

growth rates; savings and investments rates;

inflation and unemployment rates; imports and

exports; inflow and outflow of FDI; number ofglobal corporations in the country; structure of

industries; commercial, fiscal, and monetary

policies of the central government

3. These variables reflect the overall country, not

specific groups of consumers--dont generalize


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The Competition - Know Where You

Stand in Relation to the Competition

1. Porters five forces determining the state ofcompetition: rivalry among existing firms,

potential impact of newcomers, power of

suppliers, power of buyers, substitute goods

2. Prominence of each force varies by industry


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The Regional Economy

Agreements Among Nations Include

1. Free-trade areas - no barriers among members, national

barriers against the rest of the would

2. Customs unions - no barriers among members, adopt

common barriers against the rest of the world

3. Common markets - form customs unions with free

movement of labor and capital

4. Economic unions - one economy, one currency, unified

fiscal and monetary policies


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The European Economic Integration

1. 15 Western European countries moving

towards economic union2. EU - to enhance competitive edge of EU

firms in relation to non - EU firms


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The Regional economy

The Asian Pacific Economies

1. The NICs - South Korea, Taiwan, Hong Kong,

Singapore - high-value-added competitors

2. Malaysia, Indonesia, Thailand, Philippines - entering

high-value-added marketers

3. Trade in region has been fueled by

a. Increasing domestic demand

b. Expanding business involvement overseas

c. Growing competitiveness of firms based in region


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The north America Free Trade Agreement

(NAFTA)

1. U.S., Canada, Mexico2. Designed to increase size of north

American market, reduce trade barriers

within, increase competitive edge ofmember firms


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The Global economy

Increasing Trade and Investment

1. Why exports increased

a . Businesses - to improve competitiveness and

performanceb. Governments - to stimulate domestic economic

growth

2. Foreign direct investment growing faster than exports

a . Role in transferring technology, managerialexpertise, financial resources

b. Five major sources: U.S., United Kingdom, Germany,

France, Japan


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The Global Economy

Increasing Interdependence - Our fate is

tied to that of others

Increasing Competition - More players,More intensive competition

Increasing Complexity - Policies

designed for one country affect theperformance of others


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THE GLOBALIZATION OF

THE U.S. ECONOMY

Future Growth Cannot Rely Exclusively on

Domestic Market

Firms with Global Operations can Better1. Develop new products

2. Establish new markets

3. Cross-subsidize products and markets - usefinancial resources from one market to fight in

another


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Thank You!


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Chapter 03

The Financial Environment


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The Financial Environment

Overview

Understanding and managing the key

elements of the financial environment arerequisites for successful global marketing


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Key Features of the global

Financial System

Acceptability and Convertibility of

Currencies from Different countries

Hard Currencies Are Freely Traded inForeign Exchange markets

Soft Currencies Are Not Freely

Traded


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Key Feature of the Global

Financial System

Exchange Rates - The Price of One Currency in

Terms of Another

1. Floating exchange rates are determined by

market conditions alone

2. Managed float is determined by government-

managed demand and supply


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Key Feature of the Global

Financial System

Depreciation and Appreciation of One

currency in Relation to Another

Price

Demand

Profit

Market penetration

M i h Ri k Th h S t


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Managing exchange Risks Through SpotTransactions and Forward Transactions

Four Types of exchange Risks1. Transaction exposure - when converting

currencies at a later date

2. Translation exposure - when exchange ratesupon consolidation differ from those at time of

transaction

3. Tax exposure - when changing exchange rates

result in a different tax liability

4. Economic exposure - long-term exposure and

its affect on present value of future cash flow


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Managing exchange Risks Through Spot

Transactions and Forward Transactions

Three Methods of Protecting against

Exchange Rate Losses

1. Natural hedging - buying and selling in thesame currency

2. Currency forwards - contracts guaranteeing an

exchange rate

3. Options - the rights of a contract without the

obligation to fulfill it


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Financial Institutions and

Their Roles in Business Commercial Banks Facilitate Global Marketing by

1. Providing free consulting services

2. Providing collection, payment, and document preparation

services3. Exchanging currencies and providing financial and

hedging facilities

4. Collecting financial documents

5. Transferring funds and providing credit information onbuyers

6. Providing letters of introduction and letters of credit


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Financial Institutions and Their

Roles in Business

Export-Import Bank ( Eximbnak ) Assists

U.S. Exporters Through

1. Direct loans

2. Guarantees

3. Engineering multiplier program

4. Operation and maintenance service program

5. Working capital guarantees

6. Export credit insurance


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The Global Currency Market

and Its Major Players

Global Wholesale and Retail Market for

Currencies

Eurocurrency Market - Currencies tradedoutside their origin

Asian Dollar Market - Banks in Singapore

and Hong Kong Dealing in Dollars European Monetary System for the

European Union


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Thank You!


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Chapter 04

THE POLITICAL AND

LEGAL ENVIRONMENT

THE POLITICAL AND LEGAL


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THE POLITICAL AND LEGAL

ENVIRONMENT

Overview

After global marketers understand why and

how governments regulate their businessactivities, they can better analyze and

respond to governmental actions

Wh D G


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Why Do Governments

Intervene?

To stay in power

To achieve socioeconomic goals

Macro-systemic concerns identified byBoddewyn and Cracco

1. To protect the national interest

2. To maintain national sovereignty

3. To preserve the national identity


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Types of Interventions

In ownership and Control

1. Confiscation - takeover without

compensation2. Expropriation - takeover with

compensation

3. Domestication - relinquishment ofownership and control to locals


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Types of Interventions

Other Forms of Intervention

1. Exchange controls

2. Export requirement as percentage of localoutput

3. Import restrictions

4. Taxation increases


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Types of Intervention

Some Marketing Mix Regulations

1. Local content law (product)

2. Price ceiling (price)3. Distribution territory specifications (place)

4. Local advertising agency requirement

(promotion)


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Assessing Political Risk - Estimating thelikelihood of Governmental Intervention

Seeking Experts Opinions

1. Current and retired government officials familiar

with the local situation2. Academics specializing in a region and its politics

Conducting In-House Research to Monitor

Political developments


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Assessing Political Risk - Estimating the

likelihood of Governmental Intervention

Utilizing Secondary Sources Who Provide

Risk Indexes

1. BERI (Business Environment Risk Index)2. Business International (BI)

3. Frost & Sullivan

4. PSSI (Political System Stability Index)


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Managing Political Risk Through Lobbying,Proactive Measures, and Insurance

Identify with the country - Dont maintain a

foreign image

Help the host country achieve its societalgoals

1. Improve local management skills

2. Increase local productivity3. Increase local employment


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Promote Vertical Integration by Linking

Corporate Activities Across Countries

Stay Ahead of Intervention by UpgradingBargaining Power

1. Keep introducing new products and technology

2. Increase exports


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Insure Against Political Risk

1. Overseas Private Investment Corporation

(OPIC)2. Foreign Credit Insurance Association

(FCIA)


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Thank you!


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Chapter 05

The Culture Enviroment

THE CULTURAL


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THE CULTURAL

ENVIRONMENT

Overview

Developing marketing activities in

harmony with the local culture can mean thedifference between success and failure in a

market

Ch t i ti f C lt Wh t


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Characteristics of Culture - What

They All Have in Common

Culture Is Prescriptive -Defines What Is

Acceptable

Culture Is Learned - not GeneticCulture is Dynamic - An Interactive

Relationship Between Behavior and Culture

Culture Is Subjective - Meanings Vary byCulture


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Low-Context and High-Context Cultures - Verbal

And Nonverbal Messages Determine meaning

Low-Context Cultures - What Is Said Is More

Important Than How or Where It Is Said

1. U.S.

2. Germany

High-Context cultures - What Is Said and How or

Where It is Said Are Significant

1. Asia

2. Latin America

3. Middle East

Monochronic and Polychronc


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yCultures - Hall and Hall

Monochronic

1. Linear information processing

2. Focus on one thing at a time3. Hold to rigid schedules

Polychronic

1. Work on several tasks at a time

2. Human transactions are important

C l d V b l C i i


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Culture and Verbal Communications -

Understanding Through language

One Language - English -Meaning can Vary

by Country

Using Language to Interpret the WorldWhat Works here May Not Work There


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Culture and Nonverbal Communication -

Can Actions Speak Louder Than Words ?

Perception of Time Affects the Quality of

Marketing Interactions

1. For some, time is linear and fixed

2. For others, time is on a continuum Perception of Space Influences Business

Decisions

1. Product size

2. Retail store layout

3. Office design

4. Feng Shui

C l d N b l C i i


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Culture and Nonverbal Communication -

Can Actions Speak Louder Than Words ?

Symbols Are Communication Shorthand

1. Colors convey symbolic meaning

2. Numbers - lucky or unlucky3. Products - luxury or necessary

Negotiations - Sometimes a Handshake

Seals the Deal

Gift Giving


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Self-Reference Criterion - Unconscious

Reference to Ones Own Cultural Values

Lees Four-Step Process to Avoid Self-Reference Mistakes

1. Define goal in terms of own cultural traits

2. Define goal in terms of foreign cultural traits

3. Isolate SRC influence and anticipate the

complications

4. Redefine problem without SRC influence andfind solution

Multicultural Training Programs to Improve

Cross-Cultural Interactions


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Understanding Cultural Universals Can Help

Marketers Develop effective Product

Strategies


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Thank you!


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Chap 06

Global Product Strategies

GLOBAL PRODUCT


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GLOBAL PRODUCT

STRATEGIES

Overview

Although all four elements of the marketing

mix are essential for success, a productsperformance determines whether consumers

will engage in repeat purchases


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What Is a Product ?

Anything with exchange Value (Objects,

Ideas, Organizations, People)

The Total Product1. Tangible attributes: raw materials, size,

weight, features, design, packaging

2. Intangibles: brand image, styling, otherbenefits (installation, delivery, credit,

warranty, after-sale service, return policy)

The Product Development


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Process

Generating Ideas

1. To tap new or existing markets, complement

product lines, improve products2. From consumers, competitors, employees,

inventors, research organizations, universities

3. Global firms advantage - exposure tonumerous country markets



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Process

Screening Ideas

1. Acceptable versus unacceptable

2. Criteria: compatibility, production fit,philosophical fit, competitive fit, potential

3. Misclassifying or ignoring ideas can be costly

Business Evaluation1. Cost-benefit analysis

2. Commercial viability-existing and prospective

markets



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Process

Product Development

1. Determine tangible and intangible attributes

2. Consider marketing components that enhanceappeal

Test market - Select Representative Markets

to test Consumer's Response1. Adapted products - within each country market

2. Standardized products - representative markets



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Process

Product Introduction

1. Standardization- marketing unmodified

products in multiple countriesa . Premise consumes share some common

values, beliefs, and consumption patterns: a

standardized product will satisfy themb. Advantages: economies of scale, price

competitiveness, uniform image



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Process

2. Adaptation - modifying product to reflect

characteristics of a market

a. premise consumers are not the same;adapted products are needed

b. Advantages: fit between product and

consumer, expanded penetration



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Process

3. Mandatory product adaptations due to

a. Governmental regulations

b. Technological considerations (e.g.,voltage, infrastructure)

c. Cultural imperatives - is it acceptable to

consumersd. measurement standards: volume, length,

weight, quantity


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Product Adoption

Relative Advantage - To satisfy Needs Better

Than the Competition

Compatibility - The Fit of Product to Norms,

Values, and Tastes of Market

Trialability - Ease of Sampling a New Product

Complexity - Easier to Use, More Likely to Be

Adopted

Observability - To What Extent Benefits Can

Be Observed and Understood

Product management (Product-


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Product management (Product

Market Portfolio Matrix)

Competitive Strength: Market Share,

Products Fit to Customer Expectations,

Marketing Ability, Product Positioning,

Channel Cooperation, Profit Potential

Country Attractiveness: Market Size,

Growth Rate, Competitive Environment,

Governmental Regulations, Political

Stability


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The U.S. Economy and the

Product Composition of Its

exports ( Largely High-Value-

Added Products )


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Competitive Product

Developments


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Chap 07

Global Pricing Decision


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Global Pricing Decisions

Overview

Of the four Ps, price alone generates

revenue. Competitive pricing enhancesmarket position and earnings

h d


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Pricing Methods

Cost-Oriented Methods - Focus on Cost,

Not Market Conditions

1. Markup pricing - adding markup to unitcost of product

a. Information needed: fixed cost, variable

cost, expected sales, markupb. Appeal is simplicity

c. Risks: overpricing and underpricing

h d


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Pricing Methods

2. Standard pricing - charging the same price

in all countries

a. Drawbacks: lacks marketing orientation,difficult to implement

b. Advantage: firm wont be blamed for

price discrimination

P i i M h d


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Pricing Methods

3. Target return pricing - setting a target rate

or return

a. Information needed: total investment,desired target return, unit cost, expected

sales

b. Drawbacks: lacks marketing orientation,sales and cost estimates must be accurate

P i i M h d


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Pricing Methods

Market-Oriented Methods - Focus on Both

Market Conditions and Cost

1. Market-based pricing - may attractaccusations of unfair pricing and encourage

the practice of gray marketing

2. Strategic pricing-setting minimumstandard price while giving local managers

freedom to charge more

Strategic Issues in Global


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Pricing

Managing Price Escalation - Increased Cost

Due to international Product transfers

1. Ship components, assemble locally2. Downsize

3. Shorten distribution channel

4. Increase overall productivity



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St ategic ssues in Global

Pricing

Transfer Pricing - Price Charged for Goods

Transferred Intraorganizationally

Exchange Rate Fluctuations - Must Bemanaged to Control Gray Marketing and

Accusations of Dumping



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g

Pricing

Gray marketing or Parallel Imports - Buying in

Low-Price Countries, Selling in High-Price

Countries

1. Causes: market-based pricing and exchange

rate fluctuations

2. Remedial measures: narrow price differential,

differentiate product



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g

Pricing

Dumping - Selling at Price Below Normal

Value in Export Market

1. Sporadic - to reduce surplus inventory2. Predatory - to drive out competitors, to

gain market control

3. Persistent - high prices in protectedmarkets,low in competitive markets

T f P


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Terms of Payment

EXW (Ex Works) - For Goods at Point of

Origin

FAS (Free Alongside Ship) - For GoodsDelivered Alongside Vessel

FOB (Free on Board) - For Goods Aboard

Vessel C&F (Cost and Freight) - For Goods at

Overseas Port

T f P t


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Terms of Payment

CIF (Cost, Insurance, Freight) - For Goods

at Point of Debarkation

CPT (Carriage Paid To) - same as C&F forNonwater Transportation

CIP (Carriage and Insurance Paid To) -

Same as CIF for nonwater Modes


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Modes of Payment

Cash in Advance

Open Account - Payment for Goods at

Future Date


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Modes of Payment

Letter of Credit - Issued by a Bank

1. Revocable - can be altered by buyer after

issuance

2. Irrevocable - cannot be altered without anagreement between the buyer and the seller

3. Confirmed -seller assured of payment by

sellers bank4. Confirmed Irrevocable

M d f P t


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Modes of Payment

Draft or Bill of Exchange - Negotiable

Instrument

1. Sight ---payable upon presentation2. Time ---payable within specified period

3. Date - payable on specific future date

M d f P


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Modes of Payment

Forfating - seller Paid by Bank, Not Buyer Countertrade - Payment in Whole or in Part by

Goods or Services

1. Barter - no money changes hands2. Counterpurchse - goods purchased from each

other with cash

3. Compensation deals - payment in both cashand goods

4. Buyback arrangements


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Chap 08

Global Logistics Channels

GLOBAL LOGISTICS


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CHANNELS

Overview

Moving raw materials and finished

products from one country to anothercreates challenges unique to global

distribution

Features of Global Logistics


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Global Flow of Materials - Components

Moved Elsewhere for Assembly

Global Distribution of Products - FinishedProducts Moved to Final Markets



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Functions of the Global Distribution

Channels Can Include

1. Collect, analyze, and transmit information2. Initiate and maintain contacts with buyers

3. Receive, process, and execute orders

4. Arrange shipping, insurance, and delivery

5. Take title to goods

6. Make the sale



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Channel Intermediaries Include

1. Merchant middlemen - take title and assume

risks

2. Agent middlemen - do not take title

Goals of Channel Management

1. Efficiently move products from home country to

host country

2. Deliver satisfaction t final customers

competitively

The Direct Channel of Global Distribution -

Dealing directly with Overseas Middlemen or


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Consumers

Host Country Distributors Are Merchant

Middlemen

1. Buy from firm, sell to retailers or final consumes

2. Often enjoy exclusive rights for product or

region

3. It is a long-term commitment - choose carefully

4. Robinson listed provisions of what to include inthe contract




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Consumers

Host Country Retailers Are Merchant

Middlemen

1. Buy from firm, sell to final consumes2. Japanese retailers - greater in number,

serve fewer customers than U.S.

counterparts

3. International retail outlets in the rise




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Consumers

Import Jobbers Are Merchant Middlemen

in Host Country

1. Buy from firm, sell to intermediaries orfinal consumers

2. Do not have exclusive territories

3. Firm may employ several in one country




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Consumers

Manufacturers representatives are Agent

Middlemen

1. Do not take title but represent firm2. Choose carefully - often difficult to

terminate relationships

Consumers - No Intermediaries

The Indirect Channel of Global

Distribution Relying on Home Country


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Distribution -Relying on Home-Country

Intermediaries

Export Drop Shippers

1. Take orders from buyer and tell seller to

ship to buyer2. Buyer pays drop shipper who pays firm

3. Do not hold inventories, offer minimal

promotional help




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Intermediaries

Export Merchants

1. Buy from firm, sell abroad

2. Assume risk3. Advantage to firm: easy to establish

marketing presence

Export Trading Companies (ETCs) Can Actas Export Department for Firm or Take

Title to Products




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Intermediaries

Manufacturers Export Agents (MEAs) Are

Agent Middlemen

1. Represent firm and provide sellingservices

2. Use own name, not the firms

3. Services are specified in contract




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Intermediaries

Export Management Companies (EMCs)

Are Agent Middlemen

1. Provide extensive marketing services2. Earn commission, or salary, or work on retainer

The Indirect Channel of GlobalDistribution -Relying on Home-Country


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Intermediaries

3. Advantages

a. Are helpful in markets where firm has

little experienceb. Require less investment (financial and

personnel) in market



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Intermediaries

4. Disadvantages

a. May not make necessary investments

b. May demand startup costsc. May underrepresent firm

d. reduce gross margins, impede customer

communications, hinder market assessment



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Intermediaries

Export Brokers Are Agent Middlemen

1. Work for fee or commission

2. Relationship is sporadic



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Intermediaries

Webb-Pomerence Association

1. U.S. firms can legally combine resources

to expand exports2. Cannot reduce U.S. competition by doing

so

3. Association performs functions formembers

Designing a Distribution ChannelWithin a Host Country - Important


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Within a Host Country Important

Factors

Consumer Characteristics - Know Where ,

When, What, How and Why They Buy

Product Characteristics Influence ChannelDecisions

Market Characteristics

1. Assess strengths of existing distribution structure2. Adapt to local conditions as needed



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Intermediaries

Channel Costs

1. Development costs - initial outlay

2. Maintenance costs - operation expenses3. Level of customer service directly related to

cost

Coverage - Concentrated Within MajorCities or Spanning the Whole Country

Managing Channel Alliances -


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Relationships Evolve

Communicating with Channel Members

1. Communicate goals to them

2. Receive feedback from them3. Employ telecommunications technology

to achieve goals



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Motivating Channel Members

1. Offer training

2. Provide promotional displays3. Participate in cooperative advertising



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Controlling Channel Members

1. Develop performance criteria

2. Evaluate performance against criteria3. Take corrective actions if needed

4. Design system for timely attention to

channel performance



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5. Challenges for effective control

a. Reliable performance data may be

lackingb. cost of gaining data may exceed benefit

c. Changes in environment may outdate

criteria

Evaluating Channel Performance


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- Measurement Criteria

Sales Analysis - Actual Versus Expected

Level of Service - Does It meet Consumer

Needs?

Level of Inventory - Is it Adequate t Meet

Demand?


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Chap 09

Global Promotion Strategies

GLOBAL PROMOTION

A


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STRATEGIES

Overview

Marketing communications include

advertising, sales promotion, personal

selling, and public relations. When

communicating with publics in more than

one country, firms must work within the

limitations of each market to maximize theirpromotional objectives.

Elements of the Communication

P


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Process

Sender

Encoding

Message

Medium of Transmission

Receiver

Decoding

Response

Feedback

Noise

Global Advertising - Any Paid Form ofNonpersonal communication Where the


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p

Sponsor Is Identified

Often Controversial

Benefits Derived from Advertising

1. Economica. Sales increase

b. Production increases

c. Per-unit cost of product goes down -economies of scale

Global Advertising - Any Paid Form ofNonpersonal communication Where the


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p

Sponsor Is Identified

d. Price decreases

e. Sales increase further

f. Competition increases - yielding higherproductivity and better product quality

2. Social

a. Employment is generatedb. Higher standard of living

Planning an Advertising Campaign -

S if Obj i Th D id O


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Specify Objectives; Then Decide On

Advertising Message

1. Standardize when country markets are

similar

2. Adapt when they are different

3. Avoid taboos of target market - dont

offend


S if Obj ti Th D id O


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Budget and Allocation Based on Internal

and External Conditions

1. Internal conditions

a. management orientation

b. Advertising objectives

c. Resources available




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2. External conditions

a. Governmental regulations

b. Competitors advertising strategiesc. Market attractiveness

d. Media restrictions




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Media Options and Country Characteristics

- Effectiveness Versus Economy

1. Television

a. Developed countries (DCs) - countrywide

availability

b. LDCs - concentrated in major cities, per capita

ownership of TVs is lower

c. Limitations: ads may be bunched, broadcasting

times vary, ads regulated




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2. Radio

a. DCs - popularity on the rise, many

program options available

b. LDCs - good medium to reach

uneducated urban and rural customers

3. Magazines




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4. Newspapers

a. Advantages: fast and economical

b. Disadvantages: some LDCs dontcompile demographic data; they have space

limitations and content specifications




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5. Direct mail

a. DCs - more common

b. LDCs - limited opportunities, lack ofreliable lists, undependable delivery, low

literacy rates

6. Catalogs - limited to DCs for samereasons as for direct mail


S if Obj i Th D id O


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7. Facsimile - controversial

8. Videos

a. Time not limited to 30- or 60- second slotsb. DCs - whole video can be an ad

c. LDCs - movie d\videos contain ads

9. Cinema - these ads more common in LDCs10. Billboards - all countries




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Advertising Regulations - Know Them and

Adapt Message Accordingly

Agency Selection

1. Global agency

2. Local agency

3. Combination of both

Global Sales Promotions - Short-

T Eff t t I S l


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Term Efforts to Increase Sales

Consumer Sales Promotion Techniques -

Can Foster Long- Term Objectives

1. Coupons - maintain current customers,

attract new ones

2. Rebates - maintain current customers, attract

new ones

3. Free samples - encourage new users by

eliminating cost

4. Mail-in premiums


T Eff t t I S l


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5. In-pack premiums - promotional benefit

packaged with the product

6. Bonus packs - more product for the same

price

7. Trading stamps - increase store patronage

8. Contests and sweepstakes - enhance namerecognition and stimulate sales




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Trade Sales Promotion Techniques -

Persuade Channel Members to Carry

Products or to Increase Sales

1. Sales contests - increase sales

2. Price-off offers - push new products or

move large quantities

3. Advertising allowances




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4. Display allowances

5. Free goods

6. Push money - money to carry and to pushproducts

Global Personal Selling -Keeping Buyers Happy, the Firm


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p g y ppy

Informed The Personal Selling Process

1. Panning: what, how, when

2. Prospecting: who3. Preparing: what buyers need, competitors

offer




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4. Selling

a. Approaching customer

b. Making presentationc. Answering questions

d. Closing sale

5. Following up - establishing solid link




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Managing the Global Sales Force

Sales Force Compensation

1. Straight salarya. Advantages: sales force security, easy

to administer

b. Disadvantage: lower sales ifunmotivated sales force




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2. Straight commission - fixed percentage or

varying percentage

a. Advantage: encourages performance

b. Disadvantage: salespeople may stop

with quotas

3. Combination salary and commission

Global Public Relations - Tools

for Building a Favorable Image


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for Building a Favorable Image

Employee Relations - Create Favorable

Ambassadors to the Community

Customer Relations - Show Firm Cares

About Customers

Press Relations - Keep Shapers of Public

Opinion on Firms Side

Government Relations - Be a Good Citizen


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Chap 10

Global Business Involvement

GLOBAL BUSINESSINVOLVEMENT: MARKET


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ENTRY STRATEGIES

Overview

Entry strategies vary in terms of theiradvantages, disadvantages, and levels of

involvement. The marketing options open to

firms are in part determined by mode fentry.

Entry Strategies


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Exporting --Historically Most Popular

1. Types

a. Direct - firm handles all tasks to sellwithin host country

b. Indirect - firm delegates the tasks to an

intermediary

Entry Strategies


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2. Advantages

a. Minimizes political risk

b. Useful when market potential is hard toassess

c. Offers channel flexibility

d. Prepares firm for greater involvemente. Offers ease in market withdrawal

Entry Strategies


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3. Disadvantages

a. Exchange rate fluctuations and

governmental intervention can affect

earnings

b. Lack of market presence can affect

response time

c. Loss of marketing control can affect

corporate image

Entry Strategies


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Licensing - Payment of Fee or Royalty for

Use of Anything of Value

1. Advantages

a. To firm, cost effective

b. To importing country, brings technology

and managerial expertise

Entry Strategies


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2. Disadvantages

a. Can restrict firms full realization of

market potential

b. Can create third market competitors

c. Can result in loss of control over

technology and product quality

d. Can result in conflicts between parties

Entry Strategies


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Franchising - Payment of Fee and Royalty

in Exchange for Anything of Value Plus

Operational and Managerial Help

1. Advantages: same as for licensing

2. Disadvantages: same as for licensing

Entry Strategies


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Contract Manufacturing - Contractual

Partner manufactures Parts or Product for

Firm

1. Advantages

a. Firm can focus exclusively on

marketing

b. Economical means of expansion

Entry Strategies


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2. Disadvantages

a. Partner may turn competitor

b. Loss of control over manufacturingc. Products may not always be available on

time

Entry Strategies


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Management Contracting - SellingManagerial or Technical Expertise

1. Advantages

a. Utilizes excess managerial talent

b. Establishes contacts in host country

c. Offers ease of remitting consulting fees

d. Provides resources t its nearby operations

2. Disadvantages: limited duration may

necessitate withdrawal from country

Entry Strategies


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Turnkey Operations - Complete the Project

Before Turning It Over to Owner

1. Advantages: projects are large, long-term,

an profitable

2. Disadvantage: outcome is more uncertain

over longer period of time


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Entry Strategies


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2. Wholly-owned subsidiaries (WOSs)

3. Advantages of both JVs and WOSs

a. Greater control

b. Entry into closed markets

c. Potential for vertical integration

d. Access to supplies

e. Ability to respond to competitive

challenges

Entry Strategies


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4. Disadvantage of JVs: potential for

disagreements among partners

5. Disadvantage of WOSs: greater risk

Entry Strategies


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Strategic Alliances - Cooperation

Between Firms Without creating a New

Entry

1. Advantages

a. market access

b. Shared R&D expenses, resources, andrisks


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Factors Influencing Entry

Strategies


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Strategies

Internal Conditions - Specific to the Firm

1. Objectives - what firm wants to achieve in

relation to the product

2. Management orientation - biases affect entry

strategy decisions

3. Resources - impose constraints that affect entry

strategies4. Type of product - what strategy best fits the

characteristics of the product

Factors Influencing EntryStrategies


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g

External conditions

1. Market potential - which strategy will

maximize market potential

2. Competitive environment - existing and

expected

Factors Influencing Entry

Strategies


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Strategies

3. Home country regulations - affect how

and where firm can sell

4. Host country regulations - affect entry

options

5. Political risk - high risk favors less

involvement; low risk favors more

Stages of Business Involvement


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The International Product Life-Cycle

Hypothesis

1. New-predate stage: manufactured at

home, some exports to developed countries

(DCs), domestic sales dominate, no

competition, high price, patent protection

Stages of Business Involvement


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2. Maturing-product stage: DC demand rises,

increasing exports yield to production in DCs,

domestic exports decline, competition

increases, prices fall, DCs produce for selvesand export

3. Standardized-product stage: fierce price

competition, production shifts to developingcountries, they start exporting to DCs who

become net importers


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Chap 11

Strategic Global

STRATEGIC GLOBAL MARKET

MANAGEMENT


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Overview

The nuts and bolts of strategies deal with

when, where, how, why, and by whom the

necessary actions are performed to achieve

a firms objectives

Strategic Analysis


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Strengths and Weaknesses

1. Identify key success factors specific to a

given business

a. Technology - turning concepts into

products

b. Marketing - ability in product, price,

place, and promotion

Strategic Analysis


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c. Information management - the

acquisition an use f information

d. management skill - decision making and

behavior of managers

2. Rate self on key factors in relation to

competitors

Strategic Analysis


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Opportunities and Threats - Existing and

Potential

1. First identify; then rank order

2. Key areas: customers, special-interest

groups, competitors, governments,

technologies, markets

Strategies


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Product-market Growth matrix - Four Basic

Growth Strategies

1. Market Penetration--use existing products to

penetrate existing markets

2. Product development--sell new or adapted

products in existing markets

3. Market development--sell existing products in

new markets4. Diversification--introduce new or adapted

products into new markets

Strategies


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Strategic Business Unit (SBU) PortfolioStrategy Using the Boston Consulting

Groups Growth-Share Matrix

1. Stars: high-growth market, high market shares

2. Problem children: high-growth market, how

market shares

3. Cash cows: low-growth market, high market

shares

4. Dogs: low-growth market, low market shares

Strategies


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Corporate Competitive Strategy--Six

Alternatives Based on Scope of Operations

and Levels of Market Penetration

1. Global high-share strategy --for high

market share using standardized products

2. Global niche strategies--to gain global

presence with specialized products

Strategies


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3. Regional high-share strategies -- for high

market share within a region

4. Regional niche strategies -- for specialized

markets within a region

5. National high-share strategies--high

market share within a country

6. National niche strategies--for specialized

markets within a country

Strategic Predispositions


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Ethnocentrism--Basing decisions on Home

Country values and Interests

Polycentrism--Basing Decisions on the Values

of Each Country Where Firm Operates

Regiocentrism--Basing Decisions on Values of

a Specific Region

Geocentrism--Basing Decisions on WorldwideOpportunities

Some Global Strategic

Considerations


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Production Location and Souring --Dont

Base Decisions in Cost alone

The Double Squeeze--newly Industrialized

countries Compete with DCs in Low- and

High-Value-Added Products

Some Global Strategic

Considerations


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Business and Politics--Government

Influences Its Firm's Competitive

Advantage

Post-Marketing Concerns--Satisfying

Consumers Within Environmental

Constraints and in Harmony with Special-

Interest Groups


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Chap 12

Ethics and Global Marketing

ETHICS AND GLOBL

MARKETING


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Overview

Ethics is needed for long-term success.

Internal and external forces encourage firms

to become ethical global citizens.

Management strategies, codes of conduct,

ethical philosophies, and decision-making

checklists are some of the tools firms areusing to foster ethical actions

Why Ethics?


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Gellerman: Manages Rationalize Unethical

Actions

1. It is legal (ethical)

2. It is in our interest (mine, companys)

3. We wont get caught

4. The company will back me on this

Why Ethics?


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Cooke: Fourteen Signs of Ethical Risk

Ethics Is Good for Long- Term Survival

Simss Strategies for Promotion Ethical

Behavior

1. CEO should encourage it

2. Develop formal process to reinforce it

3. Managements philosophy should

institutionalize it at all levels

Ethical Philosophies


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Utilitarianism

1. Focuses on consequences of action

2. Strives f r greatest good for greatest

number of people

3. But what constitutes a society?



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Egoism

1. Focuses on consequences of action

2. Strives for greatest good for oneself

3. Inherent weaknesses

a. Would not take stand against blatant

infractions

b. Cannot resolve conflicting interests of two

or more parties



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Deontology

1. Focuses on universal principles of right

and wrong

2. Motives and character of actor more

important than consequences of action



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Relativism

1. Right and wrong are culture specific -- no

universal rules

2. Can be used to defend actions harmful to

customers in other countries

Ethical Codes for Marketing --How SomeFirms Help manages Ask the Right Questions

Before Making Decisions


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Codes of Conduct Range from General to

Specific

Seven- Step Checklist for Ethical Decision

making

1. Recognize and clarify dilemma

2. Get the facts

3. List the options

Ethical Codes for Marketing --How SomeFirms Help manages Ask the Right Questions

Before Making Decisions


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4. Test each: Is it legal? right? beneficial ?

5. Make decision

6. Double check: How would I feel if my

family found out? What if the paper found

out?

7. Take action

Some External Factors Encouraging

Ethical Consideration by Executives


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Information Technology -- Markets Are not

Isolated; What Happens Here Is Reported

There

Visible Destruction of Environment Results

from Unethical Practices

Some External Factors Encouraging

Ethical Consideration by Executives


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Special- Interest Groups Are Gaining Power

to Promote Ethical Corporate Behavior

Market Forces Favor Ethical Companies in

the Long- Run

global marketing 1716

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