Tapping Into Global Markets 21 Tapping Into Global Markets Marketing Management, 13th ed

Chapter Questions What factors should a company review before deciding to go abroad? How can companies evaluate and select specific foreign markets to enter? What are the major ways of entering a foreign market? To what extent must the company adapt its products and marketing program to each foreign country? How should the company manage and organize its international activities? Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-2

Nokia Nseries Sold Globally Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-3

What is a Global Firm? A global firm is one 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. Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-4

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 Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-5

Four Stages of Internationalization No regular export activities Export via independent agents Establish sales subsidiaries Establish production facilities abroad Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-6

Fiat Markets Palio in Latin American Markets Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-7

Top Global Firms Based in Developing Markets America Movil Cemex China Mobile CNOOC Embraer Gazprom Haier Hisense Huawei Technologies Infosys Technologies Koc Holding Lenovo Group MMC Norilsk Nickel Mahindra & Mahindra Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-8

Regional Free Trade Zones European Union NAFTA MERCOSUL APEC ASEAN Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-9

Key Developing Markets Brazil Russia India China South Africa Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-10

Desired Country Characteristics for Market Entry Rank high on market attractiveness Rank low in market risk Possess a competitive advantage Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-11

Figure 21.2 Five Modes of Entry into Foreign Markets Indirect exporting Direct exporting Licensing Joint ventures Direct investment Commitment, Risk, Control, Profit Potential Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-12

Direct Exporting Methods Domestic-based export department Overseas sales branch or subsidiary Traveling export sales representatives Foreign-based distributors or agents Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-13

McDonald’s Franchises Are Sold Worldwide Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-14

Table 21.2 Global Marketing Advantages Economies of scale Lower marketing costs Power and scope Consistency in brand image Ability to leverage Uniformity of marketing practices Disadvantages Differences in consumer needs, wants, usage patterns Differences in consumer response to marketing mix Differences in brand development process Differences in environment Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-15

Red Bull Has 70% of Worldwide Energy Drink Market Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-16

What Marketing Aspects Might Be Adapted for International Marketing? Product features Labeling Colors Materials Sales promotion Advertising media Brand name Packaging Advertising execution Prices Advertising themes Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-17

Cultural Dimensions Individualism vs. Collectivism High vs. Low Power Distance Masculine vs. Feminine Weak vs. Strong Uncertainty Avoidance Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-18

Commandments of Global Branding Understand similarities and differences in the global branding landscape Do not take shortcuts in brand building Establish a marketing infrastructure Embrace integrated marketing communications Establish brand partnerships Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-19

Commandments of Global Branding (cont.) Balance standardization and customization Balance global and local control Establish operable guidelines Implement a global brand-equity measurement system Leverage brand elements Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-20

Figure 21.3 International Product and Communication Strategies Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-21

Levels of Product Adaptation Production of regional product versions Production of country versions Production of city versions Production of retailer versions Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-22

Haagen Dazs Developed a Dulce de Leche Ice Cream for Its Argentina Market Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-23

Communications Communications adaptation Dual adaptation Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-24

Price Choices Set a uniform price everywhere Set a market-based price in each country Set a cost-based price in each country Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-25

What is a Gray Market? A gray market consists of branded products diverted from normal or authorized distributions channels in the country of product origin or cross international borders; dealers in lower priced countries sell products in higher priced countries. Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-26

Figure 21.4 Whole-Channel Concept for International Marketing Seller International headquarters Channels between nations Channels within nations Final buyers Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-27

Country of Origin Effects Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-28

Global Organization Strategies World as Single Market Multinational “Glocal” Click on the video icon to launch a video snippet about Nivea’s philosophy on international marketing. Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-29

Marketing Debate Is the world coming closer together? Take a position: People are becoming more and more similar. or 2. The differences between people of different cultures far outweigh their similarities. Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-30

Marketing Discussion Think of some of your favorite brands. Do you know where they come from? Where and how they are made or provided? Would knowing affect your perceptions of quality or satisfaction? Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 21-31