Global Market Strategies

The Internationalization of U.S. Business ä ä Many U.S. Companies are now foreign owned. ä ä Companies with only domestic markets have found it difficult to sustain customary rates of growth. ä ä Many companies are increasingly seeking foreign markets.

“Buy American” Quiz 1 ä ä Pontiac LeMans ä ä Chevrolet Lumina ä ä Mercury Capri ä ä Honda Accord Coupe ä ä Dodge Stealth ä ä Mercury Tracer ä ä Plymouth Voyager

“Buy American” Quiz 2 ä ä Sak’s Fifth Avenue ä ä Burger King ä ä Michelin ä ä Shell ä ä Seagrams ä ä Bonwit Teller ä ä Hardee’s ä ä Firestone ä ä BP ä ä Jack Daniels ä ä Foodline ä ä BiLo

Foreign Acquisitions of U.S. Companies U.S. CompanyForeign Owner J. Walter Thompson (Advertising)Britain Spiegel (Catalog retailing)Germany Mack Trucks (Automotive)France Giant Food Stores (Supermarkets)Netherlands Pillsbury, Hueblein (Food, Drink)Britain CBS Records (Music and Entertainment)Japan Magnavox (Television)Netherlands Carnation (Coffee-Mate, Friskies pet food)Switzerland Chesebrough-Pond’s (Vaseline)Netherlands Vermont American (Garden Tools)Germany Northwest Airlines (Travel)Netherlands SOURCE: Adapted from “Soon to Be Extinct: American TV Brands.,” U.S. News & World Report, July 31, 1995, p. 13, and Gustavo Lombo, “Creating American Jobs,” Forbes, July 28, P.222.

Some of the Big U.S. Players in the Global Game* Company Foreign Revenues % of Total Foreign Profits % of Total Foreign Assets % of Total Ei du Pont de Nemours Proctor & Gamble Coca-Cola Intel Motorola Johnson & Johnson Sara Lee Colgate-Palmolive Gillette Compaq Computer McDonald’s Avon Products RJR Nabisco *1996 data. SOURCE: Adapted from Brian Zajac, “Buying American,” July 28, 1997, p218.

International Marketing Defined ä ä International Marketing is the performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit. ä ä Marketing concepts and principles stay the same, but the environment changes.

7 The International Marketing Task Political/legal forces Economic forces 1 2 Environmental uncontrollables country market A Environmental uncontrollables country market B Environmental uncontrollables country market C Competitive structure Competitive Forces Level of Technology PriceProduct Promotion Channels of distribution Geography and Infrastructure Foreign environment (uncontrollable) Structure of distribution Economic climate Cultural forces Political/ legal forces Domestic environment (uncontrollable) (controllable)

Environmental Adaptation ä ä Adjusting to a country’s culture (uncontrollable environment) is critical. ä ä Consider and adjust your frame of reference. ä ä Avoid cultural errors by being aware of cultural relativism--marketing strategies and judgments are based on experience, and experience is interpreted by each marketer in terms of his/her own culture.

Being Globally Aware  To be Globally Aware is to be: Objective Tolerant of Cultural Differences Knowledgeable of: Cultures History World Market Potentials Global Economic and Social Trends

Entry Strategies ä ä Exporting ä ä The Internet ä ä Contractual Agreements ä ä Joint Ventures ä ä Direct Foreign Investment ä Strategic International Alliances

Trends in Global Business Internationalization of U.S. Markets Internationalization of U.S. Business Growth of Regional Trade Areas Move toward free market system by countries in Latin America, Asia, Eastern Europe Large Emerging Markets such as Argentina, China, South Korea, Poland, India Evolving global middle income households GATT and World Trade Organization The TRIAD

Possible Regional Trade Groups in the 21st Century Western Hemisphere Free Trade Areas (WHFTA) Canada to Argentina Asia-Pacific Economic Cooperation (APEC) Pacific Rim Countries including U.S. U.S./Canada/Mexico/Japan South American Free Trade Area (SAFTA) Andean Pact and Mercosur Chinese Economic Area (CEA) Hong Kong, Taiwan, Coastal Provinces of So. China U.S./European Union Many possibilities of Republics of Russia, Baltic States