Chapter 15

The Global Marketplace

15-1

Road Map:Previewing the Concepts

Discuss how the international trade system, economic, political-legal, and cultural environments affect a companys international marketing decisions. Describe three key approaches to entering international markets. Explain how companies adapt their marketing mixes for international markets. Identify the three major forms of international marketing organization.
15-2

Global Marketing into the Twenty-First Century

The world is shrinking rapidly with the advent of faster communication, transportation, and financial flows. International trade is booming and now accounts for a quarter of the United States GDP. Between 1996 and 2006, U.S. exports are expected to increase 51%. Global competition is intensifying and few U.S. industries are now safe from foreign competition.
15-3

Global Marketing into the Twenty-First Century

To compete, many U.S. companies are continuously improving their products, expanding into foreign markets, and becoming global firms. Global firms face several major problems:
High debt, inflation, and unemployment have resulted in highly unstable governments & currencies, Governments placing more regulations on foreign firms, Protectionist tariffs and trade barriers, Corruption.
15-4

McDonalds in Beijing
Many U.S. companies have long been successful, including McDonalds, at international marketing. http://www.mcdonalds. com/

15-5

Major International Marketing Decisions (Fig. 15-1)

15-6

Looking at the Global Marketing Environment

i.e. Tariff, Quota, Embargo, Exchange Control, and Nontariff Trade Barriers

The International Trade System

Treaty designed to promote world trade by reducing tariffs and other international trade barriers

The World Trade Organization and GATT

Group of nations organized to work toward common goals in the regulation of international trade
15-7

Regional Free Trade Zones

When exporting goods to a foreign country, a marketer may be faced with trade restrictions. Discuss the effects that a tariff might have on an exporters marketing mix.

15-8

Economic Environment
Subsistence Economies

Industrial Economies

Types of Industrial Structure

Raw Material Exporting Economies

Industrializing Economies
15-9

Political-Legal Environment
At Least Four Political-Legal Factors Should be Considered in Deciding Whether to do Business in a Given Country:
Attitudes Toward International Buying Government Bureaucracy Monetary Regulations

Political Stability
15-10

Cultural Environment
Sellers Must Examine the Following Before Planning a Marketing Program Within a Given Country.
How Customers Think About and Use Products Cultural Traditions, Preferences, and Behaviors

Business Norms and Behavior

15-11

Deciding Whether to Go International

Reasons companies might consider international expansion:

Global competitors attacking the domestic market, Foreign markets might offer higher profit opportunities, Domestic markets might be shrinking, Need an enlarged customer base to achieve economies of scale, Reduce dependency on any one market, Customers might be expanding abroad.

Most companies do not act until some situation or event thrusts them into the global arena.
15-12

Deciding Which Markets to Enter

Define Organizations Marketing Objectives and Policies
What Volume of Foreign Sales is Desired?

How Many Countries Should the Firm Go Into?

What Types of Countries Should be Entered?
Rank by Market Size & Growth, Cost of Doing Business, Competitive Advantage, & Risk Level.
15-13

Deciding How to Enter the Market (Fig. 15-2)

15-14

Pair with the student on your left to discuss the following situation. Once a company has decided to sell in a foreign country, it must determine the best mode of entry. Assume that you were the marketing manager for Mountain Dew and devise a plan and pick a mode of entry for marketing your product in China.
15-15

Deciding on the Global Marketing Program

Adjusts the Marketing Mix Elements to Each International Target Market. i.e. Japanese Barbie Changes in Product, Advertising, Distribution Channels, & Price

Adapted Marketing Mix

Standardized Marketing Mix

Selling Largely the Same Products and Using the same Marketing Approaches Worldwide . i.e Coca-Cola
15-16

Five Global Product and Promotion Strategies (Fig. 15-3)

15-17

International Pricing
Companies face many problems in setting their international prices. Possibilities in setting prices include:
Charge a uniform price all around the world. Charge what consumers in each country could pay. Use a standard markup of its costs everywhere.

International prices tend to be higher than domestic prices because of price escalation. Companies may become guilty of dumping when a foreign subsidiary charges less than its costs or less than it charges in its home market. 15-18

Whole-Channel Concept for International Marketing (Fig. 15-4)

15-19

Deciding on the Global Marketing Organization

1. Organize an Export Department 2. Create an International Division 3. Become a Global Organization Degree of Involvement in International Marketing Activities
15-20

Rest Stop: Reviewing the Concepts

Discuss how the international trade system, economic, political-legal, and cultural environments affect a companys international marketing decisions. Describe three key approaches to entering international markets. Explain how companies adapt their marketing mixes for international markets. Identify the three major forms of international marketing organization.
15-21