Global Marketing

Coordinated performance of marketing activities to create exchanges across countries that satisfy individual, organizational, and societal objectives.

What is Unique about Global Marketing? Economic Environment –Fiscal policies - tax and government expenditures –Monetary policies - regulate money supply Financial Environment –Exchange rates and fluctuations –Foreign exchange reserves

What is Unique about Global Marketing? Political Environment –Tariff barriers –Nontariff barriers –Regulations Cultural Environment –Values –Beliefs –Attitudes

Global Marketing Environment Global Regional Local Marketing Mix Environment

Global Marketing Evolution Domestic Marketing (domestic focus; home country customers; ethnocentric orientation). Export Marketing (ethnocentric orientation; products developed for home country customers). International Marketing (markets in many countries; polycentric orientation; use of multidomestic marketing when customer needs are different across national markets).

Global Marketing Evolution Multinational Marketing (many markets; consolidation on regional basis; regiocentric orientation; standardization within regions). Global Marketing (international, multinational & geocentric orientation; company’s willingness to adopt a global perspective; global products with local variations).

Global Marketing Standardization Efforts--product offerings, promotional mix, price, and channel structure. Coordination Across Markets—reducing cost inefficiencies. Global Integration—participating in many major world markets to gain competitive leverage, subsidize operations in some markets.

Global Marketing Decisions Internationalize Business ? Global Marketing Decisions Market Entry Selection Country Market Selection

Why Global Marketing? Exploiting Firm-Specific Capabilities –Technological innovations –Strong Trade Names Lowering Cost Structure –Outsourcing

Why Global Marketing? Diversification and competitiveness –Product/market portfolio –Cross-subsidization Country market attractiveness –Income –Consumer preference Technology and market globalization

Why Global Marketing Saturation of domestic markets: Domestic market saturation in the industrialized countries and growing marketing opportunities overseas. Global competition: Competition around the world and proliferation of the Internet. Need for global cooperation: Global competition brings global cooperation.

GLOBAL INTEGRATION Restraining Forces Technology Culture Market Needs Cost Free Markets Economic Integration Peace Management Vision Strategic Intent Global Strategy and Action Culture Market Differences Costs National Controls Nationalism War Management Myopia Organization History Domestic Focus Driving Forces

Global Trade Importance World trade has grown from $200 billion to more than $7 trillion in the past three decades. The Iron Curtain is gone and capitalism is the new economic order. Firms invest on a global scale. Increasingly more difficult to define “where” products come from. New trading blocs are emerging.

Domestic and Global Trade Growth Source: International Financial Statistics Yearbook 2000, International Monetary Fund, Washington D. C.

The Changing Face of Exporting Source: The World Bank, World Development Report, 1999.

Domestic Policy Repercussions in the US 1 out of every 3 U.S. farm acres is producing for export 1 of every 6 U.S. manufacturing jobs produces for export $1 of every $7 of U.S. sales goes abroad 1 of every 3 cars, 9 out of 10 TVs, 2 out of 3 suits, and every VCR sold in the U.S. is imported. Travel and tourism is the #1 source of U.S. foreign exchange. $1 of every $4 of U.S. bonds & notes is issued to foreigners.

“If we distributed pictures only in the United States, we’d lose money. It takes the whole world now to make the economics of movie-making work.” - William Mechanic President, 20th Century Fox

“Half the people in the world have yet to take their first picture. The opportunity is huge, and it’s nothing fancy. We just have to sell yellow boxes of film.” - George M.C. Fisher CEO, Eastman Kodak Company