MKTG 376 INTRODUCTION Lars Perner, Instructor 1 Welcome to MKGT 376:Global Marketing Strategy!  Introduction to the course –Overview of course issues –Approach –Projects

MKTG 376 INTRODUCTION Lars Perner, Instructor 2 Instructor: Lars Perner  Education: –Ph.D. in marketing, University of Southern California, 1998 –M.B.A., B.A. (political science and psychology), Cal Poly, San Luis Obispo  Research interests: consumer behavior, consumer bargain hunting, pricing, branding, measurement individual differences, cross cultural marketing issues  Teaching interests: consumer behavior, international, principles, distribution, retailing, research methods  Country of birth: Denmark—immigrated at age 14  Previous teaching experience: USC, Cal State L.A., Loyola Marymount, U of Maryland, George Washington University, U.C. Riverside

MKTG 376 INTRODUCTION Lars Perner, Instructor 3 Course philosophy  Why take this course?  DO “stop and think about tomorrow. Yesterday’s gone!”  Business problems are usually not neatly structured!  Expectations: –Hard work –Individual analysis, evaluation, innovation, and application  Evaluating quality of work

MKTG 376 INTRODUCTION Lars Perner, Instructor 4 SCOPE AND CHALLENGES OF INTERNATIONAL MARKETING  Marketing decision factors  The marketing environment –Domestic –Foreign  Trade policy

MKTG 376 INTRODUCTION Lars Perner, Instructor 5 Internationalization of Marketing  Global products  Global brands  Leading markets  The Product Life Cycle

MKTG 376 INTRODUCTION Lars Perner, Instructor 6 The International Product Life Cycle  Product categories will tend to spread first in developed countries  Resale of capital products  Country of origin effects over time

MKTG 376 INTRODUCTION Lars Perner, Instructor 7 The International Marketing Task  Marketing Decision Factors –Price –Promotion –Product –Distribution  The Domestic Environment  The Foreign Environment

MKTG 376 INTRODUCTION Lars Perner, Instructor 8 Environments  Domestic –Political/legal forces –Competitive structure –Economic climate  Foreign –Political/legal –Economic –Culture –Geography/ infrastructure –Distribution –Competition –Technology

MKTG 376 INTRODUCTION Lars Perner, Instructor 9 Obstacles to Trade: Protectionism  Differing interests of consumers and manufacturers  Benefits of trade tend to be more diffused than benefits to specific groups of protectionism

MKTG 376 INTRODUCTION Lars Perner, Instructor 10 Approaches to Protectionism  Tariffs  Quotas  “Voluntary” export restrictions  Subsidies to domestic producers/exporters  Non-tariff barriers –legal obstacles –differential treatment

MKTG 376 INTRODUCTION Lars Perner, Instructor 11 U.S. Protectionism--justified or not...  Defense industry  Agricultural products--e.g., beef, sugar  Textiles  Automobiles (“voluntary” import restrictions)  Steel

MKTG 376 INTRODUCTION Lars Perner, Instructor 12 Justifications for Protectionism  Protect infant industry  Resist “unfair” or inappropriate competition  Protect home market (ensure that product can be produced domestically)--defense  Intervene into temporary imbalance  Maintain domestic living standards  Preserve jobs  Bargaining power/retaliation (Super-301 provision in U.S.)

MKTG 376 INTRODUCTION Lars Perner, Instructor 13 Effects of Protectionism  Reduced competition ---> inflation  More tariffs  Weaken balance of payments (have to pay more in own currency)  Reduce choice to consumers  May induce global trade wars (vicious cycle)

MKTG 376 INTRODUCTION Lars Perner, Instructor 14 Stages in Globalization  Across country economies  For the individual firm –Customers –Competition –Suppliers

MKTG 376 INTRODUCTION Lars Perner, Instructor 15 Drivers of Globalization  Market Drivers –Global Customers and needs –Global channels –Opportunities for marketing transfer  Competitive Drivers  Cost Drivers –Economies of  Scale  Scope –Sourcing –Labor costs –Environmental regulations

MKTG 376 INTRODUCTION Lars Perner, Instructor 16 More Drivers  Technology –Increasing speed of Product Life Cycles –Internet –Lower costs of entry into some markets –Improved transportation and communication  Governmental –Trade agreements  WTO  NAFTA  Regional agreements

MKTG 376 INTRODUCTION Lars Perner, Instructor 17 Essential Global Marketing Assets  Products –Existing –New  Models of existing product lines  Extensions  Advertising/Promotion  Distribution

MKTG 376 INTRODUCTION Lars Perner, Instructor 18 Perspectives on International Trade  Traditional economic perspective—based mostly on labor costs –Absolute advantage –Relative advantage  Country Specific Advantages –Labor costs –Labor skill –Infrastructure –Legal and political stability –Government policy and regulations –Natural resources

MKTG 376 INTRODUCTION Lars Perner, Instructor 19 Firm Specific Advantages (FSAs)  Knowledge-Based  Marketing –Brand image –Distribution –Knowledge of markets  Transferability of FSAs  The value chain