Transcript Chapter 7
CHAPTER REACHING GLOBAL MARKETS Global Marketing Marketing that targets customers throughout the world. More customers=more money. Good thing, right? Hurts or Helps Domestically? Protectionism How protectionism affects world trade Tariff World Trade Organization (WTO)“Referee” for global trade Quota Lets Make “Domestic” Bigger! • Economic community – An organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies Examples of Economic Communities OPEC MERCOSUR NAFTA No Borders, New Rules Global Companies • International Firm – each market is identical • Multinational Firm - each market is unique • Transnational Firm –emphasizes similarities,recognize differences Global Companies & Marketing Strategies Global Brand Multi-domestic Marketing Strategy Global Marketing Strategy Things to Consider When Going Global Economic Considerations Economic Infrastructure Communications Power Distribution Monetary systems Consumer Income Level AND buying power Political – Regulatory Climate No private ownership Minimal individual freedom Political Stability Little central government Maximum personal freedom Trade Regulations-Its legal here, but is it legal there? Health Promotional Environmental GLOBAL MARKET-ENTRY STRATEGIES Exporting Licensing & Contract Mfg RISK Joint Venture Direct Investment Product and Promotion Strategies for Global Marketing Same Message Change Message Same Product Change Product One Product One Message Product Adaptation Message Adaptation Product Invention Pricing Strategy Dumping – (companies) Hurts the local businesses Gray Market or Parallel Importing – (individuals) Pricing Strategy Countertrade - a form of trade in which the payment for goods and services is in the form of other goods and services Hurts the local governments Protectionism Protectionism is the practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quotas. Tariff A tariff is a government tax on goods or services entering a country, primarily serving to raise prices on imports. Quota A quota is a restriction placed on the amount of of a product allowed to enter or leave a country. World Trade Organization The World Trade Organization (WTO) is a permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions. Multidomestic Marketing Strategy A multidomestic marketing strategy is used by multinational firms that have as many different product variations, brand names, and advertising programs as countries in which they do business. Global Marketing Strategy A global marketing strategy is used by transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ. Global Brand A global brand is a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs. Exporting Exporting is producing goods in one country and selling them in another country. Joint Venture A joint venture is when a foreign country and a local firm invest together to create a local business. Gray Market A gray market is a situation where products are sold through unauthorized channels of distribution. Also called parallel importing. Direct Investment Direct investment entails a domestic firm actually investing in and owning a foreign subsidiary or division. Licensing Licensing is the legal process allowing the investment patents entails aand/or domestic useDirect of manufacturing, firm actually investing in and owning a knowledge. foreign subsidiary or division. Dumping Dumping is when a firm sells a product in a foreign country below its domestic price or below its actual cost.