Marketing 4 Global Marketing

4.1 Developing a Global Vision - 4 Importance of global marketing Importance of global marketing Impact of multinational firms Impact of multinational firms The International Environment The International Environment Level of involvement in International Markets Level of involvement in International Markets Developing a Global Marketing Mix Developing a Global Marketing Mix

4.2 Global Marketing I Global Vision Global Vision Recognize/React to global opportunities & threatsRecognize/React to global opportunities & threats Use global distribution networks effectivelyUse global distribution networks effectively

4.2 Global Marketing II Importance of Global Markets Importance of Global Markets World Trade $7 TRILLIONWorld Trade $7 TRILLION 12% of US GDP12% of US GDP 20% of US industrial production exported20% of US industrial production exported 1/3 of US farm products exported1/3 of US farm products exported $731 Billion/Year US to World$731 Billion/Year US to World International trade and foreign investments account for nearly 1/3 of US corporate profitsInternational trade and foreign investments account for nearly 1/3 of US corporate profits

4.2 Global Marketing III Globalization Globalization Negative effectsNegative effects Lost jobs Lost jobs Fear of losing job Fear of losing job Leverage against employees’ salary expectations Leverage against employees’ salary expectations Positive effectsPositive effects ↑ Economic freedom ↑ Economic freedom ↑ Competition ↑ Competition ↑ Productivity ↑ Productivity ↑ Standard of living ↑ Standard of living

4.2 Global Marketing IV Impact of Terrorism Impact of Terrorism ↑ insurance costs ↑ insurance costs ↑ security costs ↑ security costs Tougher border inspectionsTougher border inspections slower cargo movement slower cargo movement more paperwork/red tape more paperwork/red tape Tighter immigrationTighter immigration

4.6 Levels of Globalization Export : marketing products to customers in other countries Export : marketing products to customers in other countries Licensing : License another firm to use forms of proprietary knowledge Licensing : License another firm to use forms of proprietary knowledge Joint Venture : buy or partner with a company to form a new entity Joint Venture : buy or partner with a company to form a new entity Multinational Corporation : company with operations and activities in more than one country Multinational Corporation : company with operations and activities in more than one country Global Corporation : organization that has markets worldwide Global Corporation : organization that has markets worldwide

MNC: Four Stages to Global Business Development 1. Operate in one country/sell in another. 2. Establish foreign subsidiaries to sell in another country. 3. Operate an entire line of business in another country. 4. Virtual corporation/structure not limited by geography

4.7 Global vs. Customized Strategies Product Price Promotion Distribution Single Marketing Mix World as One Market Product Price Promotion Distribution Tailored Marketing Mixes World as Many Markets Product Price Promotion Distribution Standard Global Strategy Customized Strategies

4.8 Strategic Decisions Based on: Target Market Target Market Firm Capabilities Firm Capabilities Market Potential Market Potential

4.3 External Environment for Global Marketing Culture Culture PreferencesPreferences What is AcceptableWhat is Acceptable LanguageLanguage Translation NOVA Translation NOVANOVA Images Images Political/LegalPolitical/Legal Government Policies  (In) Efficiencies Government Policies  (In) Efficiencies Tariff; Quota; Boycott; Exchange Control; Trade Alliance; Trade Agreement Tariff; Quota; Boycott; Exchange Control; Trade Alliance; Trade Agreement

4.4 External Environment for Global Marketing Economic Development Economic Development Technology Development Technology Development Political Political WTO (Formerly GATT)WTO (Formerly GATT) Dropping Trade BarriersDropping Trade Barriers NAFTA; Mercosur; FTAA NAFTA; Mercosur; FTAA EU (USE?)EU (USE?) World Bank & IMFWorld Bank & IMF

4.5 External Environment for Global Marketing Demographic Makeup Demographic Makeup PopulationPopulation Urban/Rural (Belgium vs. Kenya) Urban/Rural (Belgium vs. Kenya) Age Age Education Education Standard of LivingStandard of Living Natural Resources Natural Resources Export ExcessExport Excess Import DeficienciesImport Deficiencies

Five Methods for Entering Global Marketplace Export (Low Risk/Low Return) Export (Low Risk/Low Return) Licensing Licensing Contract Manufacturing Contract Manufacturing Joint Venture Joint Venture Direct Investment (High Risk/High Return) Direct Investment (High Risk/High Return)

The Global Marketing Mix Product and Promotion Product and Promotion One product, one messageOne product, one message Product innovationProduct innovation Product adaptationProduct adaptation Message adaptationMessage adaptation

The Global Marketing Mix Distribution Distribution Pricing Pricing Exchange ratesExchange rates Purchasing powerPurchasing power DumpingDumping