Transcript 3-Analyze the Marketing Environment

Marketing
Environment
03
(Global Marketing)
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
Chapter Objectives
 Understand international marketing and decisions
firms make when they consider globalization
 Explain how international organizations such as the
World Trade Organization (WTO), economic
communities, and individual country regulations
impact a firm’s opportunities for globalization
 Understand how factors in a firm’s external business
environment influence marketing strategies and
outcomes in both domestic and global markets
 Explain strategies firms use to enter global markets
Considering
Going Global?
The Global
Marketplace
World Trade:
The flow of goods and
services among different
countries-the value of all
the exports and imports
of the world’s nations
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Countertrade- accounts for between 20
and 25 percent of all world trade.
Is a type of trade in which goods are paid
for with other items instead of with cash.
In some countries, firms “trade” when
cash or credit is not available.
Barter is a common form of countertrade
Countertrade
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Figure 3-1
North American Trade Flows
(in Billions of Dollars)
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Figure 3-2
Steps in the Decision Process for
Entering Global
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Global Means Growth
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1-Deciding to Go Global

Must consider market
conditions and
competitive advantage
when making a decision
• Chinese firms such
as Chery are now
exporting their brands
to other countries,
including the U.S.
• US firms like Costco
have expanded to
Europe and Asia
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2-Understand International,
Regional and Country Regulations
 Initiatives in international regulation
and cooperation help trade
• General Agreement on Tariffs and Trade
(GATT)
• World Trade Organization (WTO)
 Protectionism restricts trade
• Quotas, embargoes, and tariffs
 Economic communities help
to promote trade
World Trade Organization
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3-Analyze the Marketing Environment
C. TECHNOLOGICAL
ENVIRONMENT
A. ECONOMIC
ENVIRONMENT
B. COMPETITIVE
ENVIRONMENT
Global
Marketing
Environment
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D. POLITICAL/LEGAL
ENVIRONMENT
E. SOCIOCULTURAL
ENVIRONMENT
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Figure 3-3
Elements of the External
Environment
The World
Fact book
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A. Economic Environment:
Indicators of Economic Health

Key economic indicators:
• Gross domestic product (GDP):
•
•
Total dollar value of goods/services a country
produces within its borders in a year
Gross national product (GNP):
Value of all goods and services produced by a
country’s citizens or organizations
Economic infrastructure
Quality of country’s distribution, financial,
and communications systems
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A. Economic Environment:
Level of Economic Development



Least developed country (LDC)
• Economic base is often agricultural
Developing countries
• Economy shifts emphasis from agriculture to
industry
Developed countries
• Offer wide range of
opportunities for international
marketers
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A. Economic Environment:
The Business Cycle
 All economies go through periods of:
• Prosperity
• Recession
• Recovery
• Depression
• Inflation
Economy.com
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Do sales of all goods
and services suffer in
a recession?
What are some goods
and services that may in
sell better during a
recession than during
times of prosperity?
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B. Competitive Environment:
Analyzing the Market and Competition
 Competitive intelligence:
Gathering and analyzing publicly
available information about rivals to
develop superior marketing strategies
• Collected from news media, the
Internet, and publicly available
government documents
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B. Competitive Environment:
Competition in the Micro Environment
 Competition in the micro environment
• Competition for consumer’s
discretionary income
• Product competition
• Brand competition
(Can you name some examples of
competition at each level for the iPhone?)
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B. Competitive Environment:
Competition in the Macro Environment
 Competition in the macro environment
(overall structure of industry)
• Monopoly
• Oligopoly
• Monopolistic competition
• Perfect competition
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C. Technological Environment
 Technology:
• Provides firms with important
competitive advantages
• Profoundly affects marketing activities
• Can transform industries
 Patent:
• Legal document giving inventors
exclusive rights to produce/sell a
particular invention in that country
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D. Political and Legal Environment:
Legal Influences on Business
 Local, state, national, and global laws
and regulations affect businesses
 Purpose of American law:
• To make sure businesses compete
fairly with each other
• To make sure that businesses don’t
take advantage of consumers
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D. Political and Legal Environment:
Political Constraints on Business
 Retaliatory actions against American
businesses sometimes occur as a
result of political activity or war
 Political constraints on trade are
commonly imposed:
• Economic sanctions
• Nationalization
• Expropriation
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D. Political and Legal Environment:
Regulatory Constraints on Business

Regulatory constraints on
trade often restrict the
marketing of goods
• Local content rules

Human rights issues may
limit foreign countries’
business opportunities
• U.S. Generalized System
of Preferences (GSP)
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E. Sociocultural Environment
 Key sociocultural considerations:
• Demographics
• Cultural values
Individualism
Collectivism
• Social norms
and customs
• Language
• Ethnocentrism
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4-Market Entry Strategies
Exporting
Contractual
Agreements
Strategic
Alliances
Direct
investment
COMMITMENT - RISK
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4-Market Entry Strategies

Exporting: a firm sells its products in global markets
to offset downturns in its domestic market.

Contractual Agreements: with a company in the
foreign country to conduct some or all of its
business there.
 Strategic Alliance/Joint Venture: made with one or
more firms in the target country. Allows firms easy
access to new markets, because they may receive
preferential treatment in the partner’s home country.
 Direct Investment: A firm expands internationally
through ownership, usually by buying a business in
the host country outright.
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Table 3.6
Market Entry Strategies
country
risk.com
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How “Global” Should a Global
Marketing Strategy Be?
 Product-level decisions: the marketingmix strategy:
• Standardization vs. localization
Standardization:
Offer the same products in all markets
Localization:
Offer a customized marketing mix for
each country
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How “Global” Should a Global
Marketing Strategy Be?
 Tweaking the marketing mix
• Product decisions:
Straight
extension strategy
Product adaptation strategy
Product invention strategy
Backward invention
• Promotion decisions:
Whether
or not to modify
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How “Global” Should a Global
Marketing Strategy Be?
 Tweaking the marketing mix
• Price decisions:
Products
are often more expensive to
produce for foreign markets
– Free trade zones
– Gray market goods
– Dumping
• Distribution decisions:
Getting
the product to remote
locations is often difficult
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