MKTG 504 – Global Marketing Dr. Dennis Pitta University of Baltimore

Questions zWhat factors should a company review before deciding to go abroad? zHow can companies evaluate and select specific foreign markets to enter? zWhat are the major ways of entering a foreign market? zTo what extent must the company adapt its products and marketing program to each foreign country? zHow should the company manage and organize its international activities?

Global Firm A firm that operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors.

Major Decisions in International Marketing Deciding whether to go Deciding which markets to enter Deciding how to enter Deciding on the marketing program Deciding on the marketing organization

Four Stages of Internationalization No regular export activities Export via independent agents Establish sales subsidiaries Establish production facilities abroad

Regional Free Trade Zones z European Union z NAFTA z MERCOSUL z APEC

Figure 21.2 Five Modes of Entry into Foreign Markets Indirect exporting Direct exporting Licensing Joint ventures Direct investment Commitment, Risk, Control, Profit Potential

Direct Exporting Methods zDomestic-based export department zOverseas sales branch or subsidiary zTraveling export sales representatives zForeign-based distributors or agents

Table 21.1 Global Marketing Advantages zEconomies of scale zLower marketing costs zPower and scope zConsistency in brand image zAbility to leverage zUniformity of marketing practices Disadvantages z Differences in consumer needs, wants, usage patterns z Differences in consumer response to marketing mix z Differences in brand development process z Differences in environment

Cultural Dimensions Individualism vs. Collectivism Weak vs. Strong Uncertainty Avoidance High vs. Low Power Distance Masculine vs. Feminine

International Product and Communication Strategies

Communications Communications adaptation Dual adaptation

Price Choices Set a uniform price everywhere Set a market-based price in each country Set a cost-based price in each country

Whole-Channel Concept for International Marketing Seller International headquarters Channels between nations Channels within nations Final buyers

Country of Origin Effects

EU’s PDO and PGI Listings

Global Organization Strategies World as Single Market Multinational “Glocal”