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Chapter 19 - slide 1Copyright 2009 Pearson Education, Inc.
Publishing as Prentice Hall
Chapter Twelve
The Global Marketplace
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Chapter 19 - slide 2Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
The Global Marketplace
Global Marketing Today
Looking at the Global Marketing Environment
Deciding Whether to Go Global Deciding Which Markets to Enter
Deciding How to Enter the Market
Deciding on the Global Marketing Program Deciding on the Global Marketing
Organization
Topic Outline
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Chapter 19 - slide 3Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Global Marketing Today
A global firm
Operates in more than one country
Gains marketing, production, R&D, andfinancial advantages not available to purely
domestic competitors
The global firm sees the world as onemarket
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Chapter 19 - slide 4Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Global Marketing Today
Global firms ask a number of basic questions: What market position should we try to
establish in our own country, in oureconomic region, and globally?
Who will our global competitors be, andwhat are their strategies and resources?
Where should we produce or source our
product? What strategic alliances should we form with
other firms around the world?
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Chapter 19 - slide 5Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Looking at the GlobalMarketing Environment
Restrictions on trade between nations
include:
Tariffs
Quotas
Exchange controls
Nontariff trade barriers
The International Trade System
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Chapter 19 - slide 6Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Looking at the GlobalMarketing Environment
Tariffsare taxes on certain importedproducts designed to raise revenue or toprotect domestic firms
Quotasare limits on the amount of foreignimports a country will accept in certain
product categories to conserve on foreignexchange and protect domestic industryand employment
The International Trade System
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Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Looking at the GlobalMarketing Environment
Exchange controlsare a limit on the amount offoreign exchange and the exchange rate against
other currencies
Nontariff trade barriersare biases against bids orrestrictive product standards that go againstAmerican product features
The International Trade System
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Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Looking at the GlobalMarketing Environment
General Agreement on Tariffs and Trade(GATT):
A 61-year-old treaty
Designed to promote world trade
Reduces tariffs and other international tradebarriers
The International Trade SystemThe World Trade Organization and GATT
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Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Looking at the GlobalMarketing Environment
World Trade Organization
Enforces GATT rules
Mediates disputes
Imposes trade sanctions
The International Trade SystemThe World Trade Organization and GATT
http://www.wto.org/5/26/2018 Kotler POM13e Instructor 19
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Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Looking at the Global MarketingEnvironment
Economic communities are
free trade zones
European Union (EU)
North American Free Trade
Agreement (NAFTA)
Central American Free Trade
Association (CAFTA)
The International Trade SystemRegional Free Trade Zones
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Publishing as Prentice Hall
Looking at the GlobalMarketing Environment
Economic factors reflect
a countrys
attractiveness as a
market:
Industrial structure
Income distribution
Economic Environment
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Publishing as Prentice Hall
Looking at the GlobalMarketing Environment
Subsistence economies
Raw material exporting economies Industrializing economies
Industrial economies
Economic EnvironmentIndustrial Structure
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Publishing as Prentice Hall
Looking at the GlobalMarketing Environment
Low-income households
Middle-income households High-income households
Economic EnvironmentIncome Distribution
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14/35Chapter 19 - slide 14Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall
Looking at the GlobalMarketing Environment
Countrys attitude toward international
buying
Government bureaucracy
Political stability
Monetary regulations
Political-Legal Environment
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Chapter 19 - slide 15Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Looking at the GlobalMarketing Environment
Countertradeis non-cash payment
Barteris the exchange of goods or
services Compensation or buybackis the sale of a
plant or equipment and the payment in
resulting products Counterpurchaseis when the seller
receives payment and agrees to spendsome of the money in the other country
Political-Legal Environment
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Chapter 19 - slide 16Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Looking at the GlobalMarketing Environment
Business norms
Cultural preferences, traditions, behaviors
Cultural EnvironmentImpact of Culture on Marketing Strategy
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Chapter 19 - slide 17Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Looking at the Global MarketingEnvironment
The need to adapt to local cultural values and
traditions rather than imposing their own
Cultural EnvironmentImpact of Marketing Strategy on Cultures
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Chapter 19 - slide 18Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding Whether to Go Global
Can the company understand the consumers
Can it offer competitively attractive products
Will it be able to adapt to local culture Can they deal with foreign nationals
Do the companys managers have the experience
Has management considered regulation andpolitical environment of other countries
Factors to consider
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Chapter 19 - slide 19Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Define international marketing objectives
and policies
Foreign sales volume
How many countries to market to
Types of countries to market to based on:
Geography
Income and population
Political climate
Deciding Which Markets to Enter
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Chapter 19 - slide 20Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding Which Markets to Enter
Rank potential global markets based on: Market size
Market growth
Cost of doingbusiness
Competitive
advantage Risk level
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Chapter 19 - slide 21Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding How to Enter the Market
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Chapter 19 - slide 22Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding How to Enter the Market
Exportingis when the company produces its goodsin the home country and sells them in a foreignmarket. It is the simplest means involving the
least change in the companys product lines,organization, investments, or mission.
Indirect exporting
Direct exporting
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Chapter 19 - slide 23Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding How to Enter the Market
Joint venturingis when a firm joins withforeign companies to produce or marketproducts or services
Licensing
Contract manufacturing Management contracting
Joint ownership
Joint venturing differs from exporting in thatthe company joins with a host countrypartner to sell or market abroad
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Chapter 19 - slide 24Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding How to Enter the Market
Licensingis when a firm enters
into an agreement with a
licensee in a foreign market.
For a fee or royalty, the
licensee buys the right to use
the companys process,
trademark, patent, tradesecret, or other item of
value.
Joint Venturing
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Chapter 19 - slide 25Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding How to Enter the Market
Contract manufacturingis when a firmcontracts with manufacturers in theforeign market to produce its product orprovide its service. Benefits include fasterstartup, less risk, and the opportunity to
form a partnership or to buy out the localmanufacturer.
Joint Venturing
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Chapter 19 - slide 26Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding How to Enter the Market
Management contractingis when the domestic firmsupplies management skill to a foreign companythat supplies capital. The domestic firm isexporting management services rather thanproducts.
Joint ownershipis when one company joins forceswith foreign investors to create a local businessin which they share joint ownership and control.Joint ownership is sometimes required foreconomic or political reasons.
Joint Venturing
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Chapter 19 - slide 27Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding How to Enter the Market
Direct investment is the development offoreign-based assembly or manufacturingfacilities and offers a number of
advantages including
Labor
Logistics
Control Government incentives
Lower costs
Raw material
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Chapter 19 - slide 28Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding on the GlobalMarketing Program
Standardized marketing mixinvolves selling the
same products and using the same marketing
approaches worldwide
Adapted marketing mixinvolves adjusting the
marketing mix elements in each target market,
bearing more costs but hoping for a largermarket share and ROI
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Chapter 19 - slide 29Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding on the GlobalMarketing Program
Straight product extension means marketing aproduct in a foreign market without any change
Product adaptation involves changing the productto meet local conditions or wants
Product invention consists of creating somethingnew for a specific country market
Maintain or reintroduce earlier products Create new products
Product
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Chapter 19 - slide 30Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding on theGlobal Marketing Program
Product
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Chapter 19 - slide 31Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding on the GlobalMarketing Program
Companies can either adopt the same
communication strategy they use at home
or change it for each market
Promotion
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Chapter 19 - slide 32Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding on theGlobal Marketing Program
Uniform pricingis the same price in all marketsbut does not consider income or wealth
where the price may be too high in some ornot high enough in other markets
Market-based pricingis the price the market canpay but does not consider actual costs
Standard markup pricingis a price based on apercentage of cost but can cause problems incountries with high costs
Price
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Chapter 19 - slide 33Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding on theGlobal Marketing Program
Sellers headquarters organization
supervises the channel and is also a part
of the channelChannels between nations move the
products to the borders of the foreign
nationsChannels within nations move the products
from their foreign point of entry to thefinal customers
Distribution ChannelsWhole-Channel View
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Chapter 19 - slide 34Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall
Deciding on theGlobal Marketing Organization
Typical management of international
marketing activities include:
Organizing and exporting department with asales manager and staff
Creating an international division organized
by geography, products, or operating units
Becoming a complete global organization
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Chapter 19 slide 35Copyright 2010 Pearson Education Inc
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright 2010 Pearson Education, Inc.
Publishing as Prentice Hall