Transcript here - Pearson Canada

Chapter 18
The Global
Marketplace
Copyright © 2008 Pearson Education Canada
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Discuss how the international trade system, economic,
political-legal, and cultural environments affect a
company’s international marketing decisions.
2. Describe three key approaches to entering international
markets.
3. Explain how companies adapt their marketing mixes
for international markets.
4. Identify the three major forms of international
marketing organizations.
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Case Study
McCain Foods Limited
• Found in 1956 in
Florenceville, N.B.
• Global leader among food
processors
• Produces about 1/3 of the
french-fried potatoes
produced internationally
• World’s largest french fry
supplier to McDonald’s
preferred by Jollibee and
Burger King
• Employs 20,000 people,
generated $5.71 billion in
revenues in 2005 selling
products in more than 110
countries
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• Winner of Canada’s export
awards two times
• Ships hundreds of millions of
kgs. of frozen product a year
customized for local tastes and
requirements
• Use imports from Canada to
build its Chinese business
• Establish in-country
operations after careful
research and experimentation
• Worked closely with the
Chinese government when
entering into China
• Similar tactics in India.
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Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Discuss how the international trade system, economic,
political-legal, and cultural environments affect a
company’s international marketing decisions.
2. Describe three key approaches to entering international
markets.
3. Explain how companies adapt their marketing mixes
for international markets.
4. Identify the three major forms of international
marketing organizations.
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Global Marketing
in the 21st Century
• The world is shrinking
• International trade is booming
• Cultural diversity is a reality of our major
cities: Montreal, Toronto, Vancouver.
• The scope of every manager is the world
• Global competition is intensifying
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Principles of Marketing, Seventh Canadian Edition
Global Marketing
in the 21st Century
• Many companies have made the world
their market
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Principles of Marketing, Seventh Canadian Edition
Definitions
• Globalization
– The growing integration of economies and
societies around the world
• Global Firm
– A firm that, by operating in more than one
country, gains R&D, production, marketing,
and financial advantages in its costs and
reputation that are not available to purely
domestic competitors.
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Principles of Marketing, Seventh Canadian Edition
Major Decisions in
International Marketing
• A company faces six major decisions in
international marketing
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Principles of Marketing, Seventh Canadian Edition
Looking at the Global
Marketing Environment
• The International Trade System
– Tariffs, quotas, embargos, exchange controls,
nontariff trade barriers
– World Trade Organization and GATT
– Regional economic communities or free trade
zones
• EU - European Union
• NAFTA - North American Free Trade Agreement
• MERCOSUR
• Other free trade areas
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Principles of Marketing, Seventh Canadian Edition
Looking at the Global
Marketing Environment
• Economic Environment
– Industrial structure
•
•
•
•
Subsistence economies
Raw material exporting economies
Industrializing economies
Industrial economies
– Income distribution
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Principles of Marketing, Seventh Canadian Edition
Looking at the Global
Marketing Environment
• Political-Legal Environment
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–
–
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Attitudes toward international buying
Government bureaucracy
Political stability
Monetary regulations
• Exchange rates, exchange controls, etc.
– Countertrade
• Barter, compensation/buyback, counterpurchase
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Principles of Marketing, Seventh Canadian Edition
Looking at the Global
Marketing Environment
• Cultural Environment
– Impact of Culture on Marketing Strategy
• Cultural traditions, preferences, business norms
and behavior vary from country to country.
– Impact of Marketing Strategy on Cultures
• Exposure to foreign products and media cause
changes in values, much to the chagrin of some
within local markets
• “Globalization” or “Americanization”
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Principles of Marketing, Seventh Canadian Edition
Deciding Whether to
Go International
• Not all companies need to venture into
international markets
– The domestic marketplace is easier and safer
• However, companies need to monitor
international businesses
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Principles of Marketing, Seventh Canadian Edition
Deciding Whether to
Go International
• Several factors may drawn a firm into the
international arena
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Growth opportunities outside of domestic markets
As a counterattack against competition at home
Reduce dependence on existing markets
Need a larger customer base to achieve economies of
scale
• The company needs to evaluate its abilities and
the consumer and business environments in
other countries
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Principles of Marketing, Seventh Canadian Edition
Deciding Which
Markets to Enter
• Before going abroad:
– Define international marketing objectives and polices,
and foreign sales volume goals
– Decide how many countries to target
– Evaluate the countries’ attractiveness based on the
product, cultural distance, income and population,
political climate, and other factors such as: market
size, market growth, cost of doing business,
competitive advantage, etc.
– Rank each of the possible international markets
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Principles of Marketing, Seventh Canadian Edition
Deciding Which
Markets to Enter
• Possible global markets should be ranked
on several factors.
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Principles of Marketing, Seventh Canadian Edition
Deciding Which
Markets to Enter
• In 1983 Domino’s opened its first
international store in Canada,
then Australia
• In 1985 Asia and England
• In 1988 Colombia
• Domino’s continues to grow its
international locations with more
than 2000 stores outside the U.S.
• How do you think Domino’s
chooses its countries?
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Discuss how the international trade system, economic,
political-legal, and cultural environments affect a
company’s international marketing decisions.
2. Describe three key approaches to entering international
markets.
3. Explain how companies adapt their marketing mixes
for international markets.
4. Identify the three major forms of international
marketing organizations.
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Market Entry Strategies
• The company must determine the best mode of
entry.
• Each subsequent entry strategy involves more
commitment and risk, but also more control and
potential profits.
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Principles of Marketing, Seventh Canadian Edition
Deciding How to
Enter the Market
• Exporting
– Direct vs. indirect
• Joint Venturing
– Licensing, contract manufacturing,
management contracting, joint ownership
• Direct Investment
– Assembly facilities, manufacturing facilities
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Discuss how the international trade system, economic,
political-legal, and cultural environments affect a
company’s international marketing decisions.
2. Describe three key approaches to entering international
markets.
3. Explain how companies adapt their marketing mixes
for international markets.
4. Identify the three major forms of international
marketing organizations.
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Deciding on the Global
Marketing Program
• The decision on the global marketing
program is a constant search for a balance
between standardization and adaptation.
• Marketers suggest that companies should
“think globally but act locally” and
advocate a “glocal” strategy.
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Principles of Marketing, Seventh Canadian Edition
Deciding on the Global
Marketing Program
• Standardized Marketing Mix
– Same basic product, advertising, distribution,
and other elements of the marketing mix are
used in all international markets.
• Adapted Marketing Mix
– The marketing mix elements are adjusted for
each international target market.
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Principles of Marketing, Seventh Canadian Edition
Deciding on the Global
Marketing Program
• Global Promotion Strategies
– Standardized global communication
• Advertising themes are standardized from
country to country with slight modifications
– Communication adaptation
• Advertising messages are fully adapted to local
markets
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Principles of Marketing, Seventh Canadian Edition
Deciding on the Global
Marketing Program
• Global Pricing Strategies
– Companies face many problems
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•
•
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Price escalation
Pricing to foreign subsidiaries
Recent economic and technological forces
The Internet
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Principles of Marketing, Seventh Canadian Edition
Deciding on the Global
Marketing Program
• Global Distribution Channels
– Whole-channel view
• Seller’s headquarters organization
• Channels between nations
• Channels within nations
• Numbers and types of intermediaries
• Size and character of retail units abroad
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Discuss how the international trade system, economic,
political-legal, and cultural environments affect a
company’s international marketing decisions.
2. Describe three key approaches to entering international
markets.
3. Explain how companies adapt their marketing mixes
for international markets.
4. Identify the three major forms of international
marketing organizations.
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Deciding on the Global
Marketing Organization
• Managing International Marketing
Activities
– Step 1: Organize export department
– Step 2: Create an international division
– Step 3: Become a global organization
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Principles of Marketing, Seventh Canadian Edition
International Marketing
Organizations
• International division organizations
– Geographical organization
– World product groups
– International subsidiaries
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Discuss how the international trade system, economic,
political-legal, and cultural environments affect a
company’s international marketing decisions.
2. Describe three key approaches to entering international
markets.
3. Explain how companies adapt their marketing mixes
for international markets.
4. Identify the three major forms of international
marketing organizations.
Copyright © 2008 Pearson Education Canada
18 - 30
Principles of Marketing, Seventh Canadian Edition