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McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Cultural Misunderstanding, Political Uncertainty, Import Cultural Misunderstanding, Political Uncertainty, Import Restrictions, Exchange Controls and Ownership Restrictions, Restrictions, Exchange Controls and Ownership Restrictions,
Economic Conditions, Global Company, Multidomestic Economic Conditions, Global Company, Multidomestic Company, Market Factors, Economic Factors, Environmental Company, Market Factors, Economic Factors, Environmental
Factors, Competitive Factors, Structure, Management Factors, Competitive Factors, Structure, Management Processes, Culture, People, Language, Data Content, Processes, Culture, People, Language, Data Content,
Timeliness, Availability, Exporting, Licensing, Franchising, Joint Timeliness, Availability, Exporting, Licensing, Franchising, Joint Ventures, Strategic Alliances, Direct OwnershipVentures, Strategic Alliances, Direct Ownership
Global MarketingGlobal Marketing
Chapter 13Chapter 13
Key TermsKey Terms
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Global Marketing GoalsGlobal Marketing Goals
Offensive goalsOffensive goals Increase long term growth and profit prospectsIncrease long term growth and profit prospects Maximize total sales revenueMaximize total sales revenue Take advantage of economies of scaleTake advantage of economies of scale Improve overall market positionImprove overall market position
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Global Marketing GoalsGlobal Marketing Goals
Defensive goalsDefensive goals To compete with foreign companies on their own turfTo compete with foreign companies on their own turf Gain access to technological innovations in other Gain access to technological innovations in other
countriescountries Take advantage of differences in operating costsTake advantage of differences in operating costs Preempt competitors’ global movesPreempt competitors’ global moves Avoid being locked out of future markets by arriving Avoid being locked out of future markets by arriving
too latetoo late
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
The Competitive Advantage of The Competitive Advantage of NationsNations
Porter's diamond presents four factors that Porter's diamond presents four factors that determine the competitive advantage of determine the competitive advantage of disadvantage of a nationdisadvantage of a nation Factor conditionsFactor conditions Demand conditionsDemand conditions Related and supporting industriesRelated and supporting industries Company strategy, structure, and rivalryCompany strategy, structure, and rivalry
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Porter’s Diamond of National Porter’s Diamond of National AdvantageAdvantage
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Global Marketing IssuesGlobal Marketing Issues
Cultural MisunderstandingCultural Misunderstanding Managers tend to use their own cultural values and Managers tend to use their own cultural values and
priorities as a frame of referencepriorities as a frame of reference Political UncertaintyPolitical Uncertainty
Government instabilityGovernment instability Social unrestSocial unrest Armed conflictArmed conflict
Import RestrictionsImport Restrictions Tariffs, quotas, and other types of restrictions hinder Tariffs, quotas, and other types of restrictions hinder
global businessglobal business
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Global Marketing IssuesGlobal Marketing Issues
Exchange Controls and Ownership RestrictionsExchange Controls and Ownership Restrictions Established by nations experiencing BOP problemsEstablished by nations experiencing BOP problems
Economic ConditionsEconomic Conditions
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Organizing the Multinational Organizing the Multinational CompanyCompany
Multidomestic company – Pursues different strategies Multidomestic company – Pursues different strategies in each of its foreign marketsin each of its foreign markets
The global company – Views the world as one market The global company – Views the world as one market and pits its resources against competition in an and pits its resources against competition in an integrated fashionintegrated fashion Three alternative structuresThree alternative structures
Worldwide product divisions Worldwide product divisions Divisions responsible for all products sold within a Divisions responsible for all products sold within a
geographic regiongeographic region A matrix system – A combination of both these A matrix system – A combination of both these
arrangementsarrangements
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Factors Fostering Global StrategyFactors Fostering Global Strategy
External FactorsExternal Factors Market Factors – Degree of homogeneous market needs, Market Factors – Degree of homogeneous market needs,
transferable brands, and the ability to globalize transferable brands, and the ability to globalize distribution channelsdistribution channels
Economic Factors – Worldwide economies of scale, Economic Factors – Worldwide economies of scale, learning curves, global resourcing, etc.learning curves, global resourcing, etc.
Environmental Factors – Communications ability, Environmental Factors – Communications ability, favorable governmental policies, etc.favorable governmental policies, etc.
Competitive Factors – Global moves by competitors, Competitive Factors – Global moves by competitors, preemptive strikespreemptive strikes
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Factors Fostering Global StrategyFactors Fostering Global Strategy
Internal FactorsInternal Factors Structure – Ease of installing a centralized global Structure – Ease of installing a centralized global
authorityauthority Management processes – Capabilities and resources Management processes – Capabilities and resources
available to perform operational functions on a global available to perform operational functions on a global scalescale
Culture – Ability to project a global identity, increased Culture – Ability to project a global identity, increased tolerancetolerance
People – Availability of foreign nationals, frequent travel, People – Availability of foreign nationals, frequent travel, commitments to multicountry careerscommitments to multicountry careers
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Ten Commandments of Global Ten Commandments of Global BrandingBranding
Understanding similarities and differences in the global Understanding similarities and differences in the global branding landscapebranding landscape
Do not take short cuts in global brandingDo not take short cuts in global branding Establish marketing infrastructureEstablish marketing infrastructure Embrace integrated marketing communicationsEmbrace integrated marketing communications Establish brand partnershipsEstablish brand partnerships Balance standardization and customizationBalance standardization and customization Balance global and local controlBalance global and local control Establish operable guidelinesEstablish operable guidelines Implement a global brand equity measurement systemImplement a global brand equity measurement system Leverage brand elementsLeverage brand elements
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Global Marketing ResearchGlobal Marketing Research
Population characteristics – Managers should be Population characteristics – Managers should be familiar with total population and the regional, urban, familiar with total population and the regional, urban, rural, and interurban distributionrural, and interurban distribution
Ability to buy – Four broad measures to be examinedAbility to buy – Four broad measures to be examined Gross national product or per capita national incomeGross national product or per capita national income Distribution of incomeDistribution of income Rate of growth in buying powerRate of growth in buying power Extent of available financingExtent of available financing
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Global Marketing ResearchGlobal Marketing Research
Willingness to buy – Cultural framework of consumer Willingness to buy – Cultural framework of consumer motives and behavior is integral to the understanding motives and behavior is integral to the understanding of foreign customerof foreign customer
Differences in Research Tasks and ProcessesDifferences in Research Tasks and Processes Language barriersLanguage barriers Data content Data content Timeliness Timeliness Availability in the U.S.Availability in the U.S.
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Global Product StrategyGlobal Product Strategy
Global marketing research can help determine Global marketing research can help determine whether there is an unsatisfied needwhether there is an unsatisfied need For which a new product could be developed to serve For which a new product could be developed to serve
foreign marketforeign market That could be met with an existing domestic product, That could be met with an existing domestic product,
either as is or adapted to foreign marketeither as is or adapted to foreign market
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Global Distribution StrategyGlobal Distribution Strategy
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Global Pricing StrategyGlobal Pricing Strategy
Pricing task is more complicated in foreign markets Pricing task is more complicated in foreign markets because of problems associated with tariffs, laws, etc.because of problems associated with tariffs, laws, etc.
Import duties are major constraints for global Import duties are major constraints for global marketers and are encountered in many marketsmarketers and are encountered in many markets
Rigidity in price structures found in many foreign Rigidity in price structures found in many foreign markets also poses an issuemarkets also poses an issue
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Global Advertising and Sales Global Advertising and Sales Promotion StrategyPromotion Strategy
Language barriersLanguage barriers Media are traditionally used Media are traditionally used
Limited media available – Unable to reach out to target Limited media available – Unable to reach out to target audienceaudience
Deciding on the type of agency – To prepare and Deciding on the type of agency – To prepare and place the firm’s advertisementplace the firm’s advertisement
Sales promotionSales promotion Used as a strategy for bypassing restrictions on Used as a strategy for bypassing restrictions on
advertisements placed by some foreign governmentsadvertisements placed by some foreign governments Effective means for reaching people in rural locations Effective means for reaching people in rural locations
where media support for advertising is virtually where media support for advertising is virtually nonexistentnonexistent
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Growth Strategies for Global Growth Strategies for Global MarketingMarketing
ExportingExporting LicensingLicensing FranchisingFranchising Joint venturesJoint ventures Strategic alliancesStrategic alliances Direct ownershipDirect ownership
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Marketing Mix StandardizationMarketing Mix Standardization
When markets are economically similarWhen markets are economically similar When worldwide customers, not countries, are the When worldwide customers, not countries, are the
basis for segmenting marketsbasis for segmenting markets When customer behavior and lifestyles are similarWhen customer behavior and lifestyles are similar When the product is culturally compatible across the When the product is culturally compatible across the
host countryhost country When a firm’s competitive position is similar in When a firm’s competitive position is similar in
different marketsdifferent markets
McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Marketing Mix StandardizationMarketing Mix Standardization
When competing against the same competitors, with When competing against the same competitors, with similar market shares, in different countries, rather similar market shares, in different countries, rather than competing against purely local companiesthan competing against purely local companies
When the product is an organizational and high-When the product is an organizational and high-technology product rather than a consumer producttechnology product rather than a consumer product
When there are similarities in the physical, political, When there are similarities in the physical, political, and legal environments of home and host countriesand legal environments of home and host countries
When the marketing infrastructure in the home and When the marketing infrastructure in the home and host countries is similarhost countries is similar