Third Edition Roger A. Kerin Lau Geok Theng Steven W. Hartley William Rudelius Copyright © 2015 by McGraw-Hill Education. All rights reserved.

Copyright © 2015 by McGraw-Hill Education. All Rights Reserved.

LEARNING OBJECTIVES (LO) After reading Chapter 7, you should be able to: Describe the nature and scope of world trade from a global perspective and identify the major trends that have influenced world trade and global marketing. LO7-1 Identify the environmental forces that shape global marketing efforts. LO7-2 Name and describe the alternative approaches companies use to enter global markets. LO7-3 Explain the distinction between standardization and customization when companies craft worldwide marketing programs. LO7-4 7-2 Understanding and Reaching Global Consumers & Markets

Building a Billion Dollar Business in India THE DELL WAY Building a Billion Dollar Business in India 7-3 Opening Story – DELL in India

Dynamics of World Trade World Trade Flows Global perspective Countertrade Trade Feedback Effect Asian perspective Gross domestic product (GDP) Balance of trade LO7-1 7-4 World Trade: A Global Perspective

Leading countries in global merchandise trade in terms of imports and exports 7-5 World Trade: A Global Perspective

Dynamics of World Trade Dynamic & Trade Flows Competitive advantage of nations Factor conditions Demand conditions Related and supporting industries Company strategy, structure, and rivalry Dark side of global competitive advantage LO7-1 7-6 World Trade: A Global Perspective

Porter’s diamond of national competitive advantage: 4 key elements on why some countries become world leaders LO7-1 7-7 World Trade: A Global Perspective

Sony Bravia 3D HDTV & Bruno Magli Shoes What Elements of Porter’s Diamond of National Competitive Advantage? LO7-1 7-8 World Trade: A Global Perspective

Marketing in a Borderless Economic World Trend: Decline of Economic Protectionism Protectionism Tariffs Quota World Trade Organization (WTO) LO7-1 7-9 Major Trends in Global Marketing

Protectionism hinders world trade through tariffs and quotas policies of countries, raising prices and limiting supply LO7-1 7-10 Major Trends in Global Marketing

Making Responsible Decisions Global Ethics and Economic: The Case of Protectionism LO7-1 7-11 Major Trends in Global Marketing

Marketing in a Borderless Economic World Trend: Rise of Economic Integration European Union (EU) North American Free Trade Agreement (NAFTA) Asian Free Trade Agreements (AFTA) LO7-1 7-12 Major Trends in Global Marketing

The European Union in late-2013 consists of 28 countries with more than 500 million consumers LO7-1 7-13 Major Trends in Global Marketing

Marketing in a Borderless Economic World Trend: Global Competition Strategic alliances LO7-1 7-14 Major Trends in Global Marketing

Marketing in a Borderless Economic World Trend: Global Companies International firms Multinational firms Multidomestic marketing strategy Transnational firms Global marketing strategy Global brand LO7-1 7-15 Major Trends in Global Marketing

Marketing in a Borderless Economic World Trend: Global Consumers 7-16 Major Trends in Global Marketing

A Market of 2 Billion Voracious Consumers with US$250 Billion to Spend Marketing Matters The Global Teenager A Market of 2 Billion Voracious Consumers with US$250 Billion to Spend LO7-1 7-17 Major Trends in Global Marketing

Marketing in a Borderless Economic World Trend: Networked Global Marketspace LO7-1 7-18 Major Trends in Global Marketing

A Global Environmental Scan Cultural Diversity Cross-cultural analysis Values Customs How people do things? Bribes, kickbacks and payoffs Non-verbal behaviors LO7-2 7-19 Environmental Factors Affecting Global Marketing Efforts

A Global Environmental Scan Cultural Diversity Cultural symbols #13 Semiotics LO7-2 7-20 Environmental Factors Affecting Global Marketing Efforts

A Global Environmental Scan Cultural Diversity Language Unintended meanings Back translation Consumer ethnocentricity LO7-2 7-21 Environmental Factors Affecting Global Marketing Efforts

A Global Environmental Scan Economic Considerations Stage of economic development Developed countries: Japan Developing countries Made the move: Brazil Remain locked: Sri Lanka Bottom of the pyramid LO7-2 7-22 Environmental Factors Affecting Global Marketing Efforts

A Global Environmental Scan Economic Considerations Economic infrastructure Communication Transportation Finance Distribution systems LO7-2 7-23 Environmental Factors Affecting Global Marketing Efforts

A Global Environmental Scan Economic Considerations Consumer income and purchasing power Microfinance: India Currency exchange rate LO7-2 7-24 Environmental Factors Affecting Global Marketing Efforts

A Global Environmental Scan Political-Regulatory Climate Political stability Trade regulations LO7-2 7-25 Environmental Factors Affecting Global Marketing Efforts

Checking a Country’s Political Risk Rating Web Link Checking a Country’s Political Risk Rating Guess – which country is riskiest? China, India or Indonesia? Check ratings at www.prsgroup.com – which country is riskiest? China, India or Indonesia? LO7-2 7-26 Environmental Factors Affecting Global Marketing Efforts

Alternative Approaches to Global Market Entry 7-27 Entering Global Markets: Alternative Approaches

Global Market-Entry Strategies Exporting Exporting Indirect exporting Direct exporting LO7-3 7-28 Entering Global Markets: Alternative Approaches

Creative Exporting Marketing in Japan Marketing Matters Creative Exporting Marketing in Japan LO7-3 7-29 Entering Global Markets: Alternative Approaches

Global Market-Entry Strategies Licensing Contract manufacturing Contract assembly Franchising LO7-3 7-30 Entering Global Markets: Alternative Approaches

Comparing Global Market-Entry Strategies Joint Ventures & Direct Investments Joint venture Direct investment LO7-3 7-31 Entering Global Markets: Alternative Approaches

Crafting a Worldwide Marketing Program Product Strategies Product extension Product adaptation Product invention LO7-4 7-32 Standardization vs Customization

Five product and promotion strategies for global marketing 7-33 Standardization vs Customization

Crafting a Worldwide Marketing Program Promotion Strategies Identical message Communication adaptation Dual adaptation LO7-4 7-34 Standardization vs Customization

Crafting a Worldwide Marketing Program Distribution (Place) & Pricing Strategies Channels can be long or short Countries impose pricing constraints Prices may be too high or too low Dumping Gray market LO7-4 7-35 Standardization vs Customization

Five Product and Promotion Strategies for Global Marketing 7-36 Standardization vs Customization