Global Marketing Global Marketing Issues Global Marketing Mix Formulation

Entering Global Markets Exporting And Importing Contractual Agreements Franchising Foreign Licensing Subcontracting International Direct Investment Acquisitions Joint Ventures Overseas Divisions Low High Degree of Risk Degree of Control

Global Marketing Strategies Target market selection –Preliminary screening of all countries –Estimation of market potentials of prospective target countries –Estimation of sales potentials in high market potential countries –Identification of most attractive target segments in country with highest sales potential

Global Expansion Diversification vs. concentration

FactorDiversificationConcentration Market growth rateLowHigh Sales stabilityLowHigh Sales response functionConcaveS curve Competitive lead timeShortLong Spillover effectsHighLow Need for product adaptation LowHigh Need for communication adaptation LowHigh Economies of scale in distribution LowHigh Extent of constraintsLowHigh Program control requirements LowHigh

Marketing Mix Formulation Standardization vs. adaptation –Choose target markets that match existing marketing mix with no modification –Adapt marketing mix to each and every target market –Incorporate marketing mix differences into a regional or global strategy that will allow for local differences in implementation

Factors Favoring Standardization Economies in R & D Economies in production Economies in marketing Control of marketing programs “Shrinking” of world marketplace

Factors Favoring Adaptation Differing use conditions Government & regulatory influences Differing buyer behavior patterns Local initiative & motivation in implementation Adherence to the marketing concept

Product Considerations Product composition Brand name Packaging Positioning Usage characteristics Maintenance, after-sales service Country-of-origin

Pricing Considerations Standard worldwide pricing Market-differentiated pricing Price escalation Dumping Gray markets

Distribution Considerations Expect extensive distribution problems Use existing distribution systems when possible May have to establish distribution systems

Communications Considerations Culture and buying habits of target market Media regulations Global media campaigns