The Global Marketplace

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Chapter 15

• The Global Marketplace

2
Road MapPreviewing 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.

3
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.

4
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.

5
McDonalds in Beijing

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

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Major International Marketing Decisions (Fig.
15-1)
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Looking at the Global Marketing Environment
The International Trade System i.e. Tariff,
Quota, Embargo, Exchange Control, and Nontariff
Trade Barriers
The World Trade Organization and GATT Treaty
designed to promote world trade by reducing
tariffs and other international trade barriers
Regional Free Trade Zones Group of nations
organized to work toward common goals in the
regulation of international trade
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Discussion Question

• 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.

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Economic Environment
Subsistence Economies
Industrial Structure
Types of Industrial Structure
Raw Material Exporting Economies
Industrial Economies
Industrializing Economies
Income Distribution
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Political-Legal Environment
At Least Four Political-Legal Factors Should be
Considered in Deciding Whether to do Business in
a Given Country
Monetary Regulations
Attitudes Toward International Buying
Government Bureaucracy
Political Stability
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Cultural Environment
Sellers Must Examine the Following Before
Planning a Marketing Program Within a
Given Country.
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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.

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

• 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.

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Deciding on the Global Marketing Program
Adapted Marketing Mix Adjusts the Marketing Mix
Elements to Each International Target Market.
i.e. Japanese Barbie
Standardized Marketing Mix Selling Largely the
Same Products and Using the same Marketing
Approaches Worldwide . i.e Coca-Cola
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Five Global Product and Promotion Strategies
(Fig. 15-3)
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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.

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Whole-Channel Concept for International Marketing
(Fig. 15-4)
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Deciding on the Global Marketing Organization
1. Organize an Export Department
2. Create an International Division
3. Become a Global Organization
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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.