Transcript Chapter 4
Lamb, Hair, McDaniel MKTG2008-2009 4 CHAPTER Designed by Amy McGuire, B-books, Ltd. Chapter 4 Developing a Global Vision Prepared by Deborah Baker, Texas Christian University Copyright ©2009 Cengage Learning Inc. All rights reserved. 1 Learning Outcomes LO1 Discuss the importance of global marketing LO2 Discuss the impact of multinational firms on the world economy LO3 Describe the external environment facing global marketers Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 2 Learning Outcomes LO4 Identify the various ways of entering the global marketplace LO5 List the basic elements involved in developing a global marketing mix LO6 Discover how the Internet is affecting global marketing Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 3 LO1 Rewards of Global Marketing Discuss the importance of global marketing Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 4 Rewards of Global Marketing Global Marketing Marketing that targets markets throughout the world. LO1 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 5 Rewards of Global Marketing Having a global vision means… Recognizing and reacting to international marketing opportunities Using effective global marketing strategies Being aware of threats from foreign competitors LO1 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 6 Beyond the Book LO1 Emerging-Markets Chapter 4 Executives' Five-Year Plans for Emerging Markets 90 80 70 60 Expect to 50 Expand or Locate (%) 40 30 20 10 0 Eastern Europe Latin Southeast America Asia India China All Companies Market $1B+ Companies Source: Deloitte's Global Manufacturing Industry Practice, Deloitte Touche Tohmatsu, May 1, 2007 Copyright ©2009 Cengage Learning Inc. All rights reserved. 7 Importance of Global Marketing to the U. S. U.S. exports a fifth of industrial production. One of every 10 jobs in U.S. is supported by exports. U.S. businesses export over $800 billion in goods. Exports account for 25 percent of U.S. economic growth. U.S. is world’s leading exporter of farm products. LO1 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 8 The Fear of Trade and Globalization Millions of Americans have lost jobs Millions fear losing jobs Threat of outsourcing if workers do not accept pay cuts Vulnerability to operations moving offshore LO1 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 9 Benefits of Globalization Expands economic freedom Spurs competition Raises productivity and living standards Offers access to foreign capital, global export markets, and advanced technology Promotes higher labor and environmental standards Acts as a check on government power LO1 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 10 LO1 REVIEW LEARNING OUTCOME The Importance of Global Marketing Fears Know global marketing is important because of economic interdependencies Identify global marketing opportunities Benefits Compete against foreign competition in domestic markets Globally-minded marketing managers: Understand global distribution networks Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 11 LO2 Multinational Firms Discuss the impact of multinational firms on the world economy Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 12 Stages of Global Business Development 1 Companies operate in one country and sell into others 2 Set up foreign subsidiaries to handle sales 3 Operate an entire line of business in another country 4 Virtual operation LO2 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 13 Global Marketing Standardization Global Marketing Standardization Production of uniform products that can be sold the same way all over the world. LO2 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 14 LO2 REVIEW LEARNING OUTCOME Impact of Multinational Firms • Human Resources • Physical Resources • Financial Resources MNC Chapter 4 Global Marketing Copyright ©2009 Cengage Learning Inc. All rights reserved. 15 LO3 External Environment Facing Global Marketers Describe the external environment facing global marketers Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 16 LO3 External Environment Facing Global Marketers Culture Economic and Technological Development Political Structure Demographic Makeup Natural Resources Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 17 LO3 Culture Culture Chapter 4 The common set of values shared by its citizens that determine what is socially acceptable. Copyright ©2009 Cengage Learning Inc. All rights reserved. 18 Biz Flix LO3 Chapter 4 Lost in Translation Copyright ©2009 Cengage Learning Inc. All rights reserved. 19 LO3 Chapter 4 Economic and Technological Development Developed Country Complex, sophisticated industries Less Developed Country Basic industries Copyright ©2009 Cengage Learning Inc. All rights reserved. 20 LO3 Political Structure and Actions No private ownership Minimal individual freedom Little central government Maximum personal freedom Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 21 LO3 Legal Considerations Chapter 4 Tariff A tax levied on goods entering a country Quota Limit on the amount of a product entering a country Boycott Exclusion of products from a country Exchange Control Foreign exchange must be sold to a control agency Market Grouping Common trade alliance Trade Agreement An agreement to stimulate international trade Copyright ©2009 Cengage Learning Inc. All rights reserved. 22 LO3 Political and Legal Considerations The Uruguay Round made changes in world trading practices Entertainment, pharmaceuticals, integrated circuits, and software Financial, legal, and accounting services Agriculture Textiles and apparel And created a new trade organization: The World Trade Organization Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 23 LO3 Political and Legal Considerations Agreements and Organizations CAFTA European Union NAFTA http://www.wto.org Online Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 24 LO3 Demographic Makeup Marketing Considerations: Chapter 4 Population density Urban or rural Personal income Age Copyright ©2009 Cengage Learning Inc. All rights reserved. 25 LO3 Shortages in Natural Resources Create… International dependencies Shifts of wealth Inflation and recession Export opportunities if resources are abundant Stimulus for military intervention Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 26 LO3 Natural Resources Chapter 4 Petroleum Foodstuffs Precious metal Timber Water Copyright ©2009 Cengage Learning Inc. All rights reserved. 27 LO3 REVIEW LEARNING OUTCOME External Environment Facing Global Marketers Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 28 LO4 Global Marketing by the Individual Firm Identify the various ways of entering the global marketplace Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 29 Global Marketing Questions What are our options in selling abroad? How difficult is global marketing? What are the potential risks and returns? LO4 http://www.cat.com Online Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 30 Why “Go Global”? LO4 Chapter 4 Earn additional profits Leverage a unique product or technological advantage Possess exclusive market information Saturated domestic markets Excess capacity Utilize “economies of scale” Copyright ©2009 by Cengage Learning Inc. All rights reserved 31 Risk Levels for Global Entry Risk Export Licensing Joint Venture Low risk/low return Direct Investment High risk/ high return Return LO4 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 32 Entering the Global Marketplace Sell domestically produced products to buyers in other countries Export Licensing Legal process allowing use of manufacturing/patents/knowledge Contract Manufacturing Private-label manufacturing by a foreign country Joint Venture Domestic firm buys/joins a foreign company to create new entity Direct Investment Active ownership of a foreign company/manufacturing facility LO4 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 33 Export Intermediaries Buyer for Export Assumes all ownership risks and sells globally for its own account. Export Broker Plays the traditional broker’s role by bringing buyer and seller together. Export Agent Acts like a manufacturer’s agent for the exporter in the foreign market. LO4 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 34 LO4 REVIEW LEARNING OUTCOME Entering the Global Marketplace Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 35 LO5 The Global Marketing Mix List the basic elements involved in developing a global marketing mix Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 36 Product and Promotion Same Message Change Message LO5 Same Product Change Product One Product One Message Product Adaptation Message Adaptation Product Invention http://www.disney.go.com Online Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 37 Place (Distribution) Adequate distribution is necessary for success in global markets – Some countries have complicated systems – Lack of distribution infrastructure and cultural differences create problems Innovative distribution systems can create competitive advantage LO5 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 38 Pricing Must consider transportation and insurance costs, taxes and tariffs Determine what customers will spend Ensure that foreign buyers will pay price May need to simplify a product to lower price Don’t assume that low-income countries are willing to accept lower quality LO5 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 39 Exchange Rates Exchange Rates The price of one’s currency in terms of another country’s currency. LO5 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 40 Dumping 1. Trying to increase an overseas market share 2. Temporarily distributing products to overseas markets to offset slack demand at home 3. Lowering unit costs by exploiting large-scale production 4. Attempting to maintain stable prices during periods of exchange rate fluctuations LO5 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 41 Countertrade Countertrade A form of trade in which all or part of the payment for goods or services is in the form of other goods or services. LO5 Chapter 4 Copyright ©2009 by Cengage Learning Inc. All rights reserved 42 Beyond the Book LO5 Chapter 4 Countertrade in Tokyo At Zeniarai Benten shrine south of Tokyo, worshippers visit a tiny cave where they stoop down and wash their coins and bills in trickling spring water. Cleanse your money here, the saying goes, and it will multiply. Copyright ©2009 Cengage Learning Inc. All rights reserved. 43 LO5 REVIEW LEARNING OUTCOME Developing a Global Marketing Mix PROMOTION PLACE One Product, One Message Product Invention Product Adaptation Message Adaptation Chapter 4 PRICE Channel Choice Channel Structure Country Infrastructure Copyright ©2009 Cengage Learning Inc. All rights reserved. Dumping Countertrade Exchange Rates Purchasing Power 44 LO6 The Impact of the Internet Discover how the Internet is affecting global marketing Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 45 LO6 REVIEW LEARNING OUTCOME The Impact of the Internet Chapter 4 Copyright ©2009 Cengage Learning Inc. All rights reserved. 46