Chapter 17 Global Marketing Copyright © 2013 Pearson Canada Inc.

What is the population of Canada? A) 3 million B) 3.4 Million C) 35 Million D) 340 Million USA? A) 30 million B) 300 Million C) 310 Million D) 319 Million Mexico? 1 Million 10 Million 100 Million 122 Million

What is the population of The European Union? It has 27 member countries A) 503 Million B) 50 Million C) 100 Million D) 5 Million

Totals Canada 35 M USA319 M Mexico122 M Total476M EU 503 M Total979 M The West – Less than 1 Billion

World Population? 3 Billion? 4 Billion? 5 Billion? 6 Billion? 7 Billion? 7.2 Billion?

How fast is it growing? 75,000,000 people were added to the earth this year. 350,000 people will be born today 151,600 people will die today In Canada – there were 377,636 births in Canada, ,213 were born ,863 births.

What is the population of China? A) 1.3 Million B) 130 Million C) 1.36 Billion D) 333 gazillion

What is the population of Latin America? Everything south of Mexico A) 4 million B) 40 Million C) 44 Million D) 440 Million E) 588 Million

What is the population of African Nations? A continent with 57 countries A) 1 million B) 10 Million C) 100 Million D) 1.1 Billion

What is the population of India? A) 300 million B) 900 million C) 1 Billion D) 1.4 Billion

Last one… What is the population of Russia? A) 4 million B) 40 Million C) 100 Million D) 142 Million

Top 20 Largest Countries by Population 1China1,388,931,13211Mexico122,932,758 2India1,258,388,49812Philippin es 99,090,766 3USA321,087,46613Ethiopia95,085,862 4Indonesi a 251,071,51414Vietnam92,034,784 5Brazil201,046,20615Germany82,695,640 6Pakistan183,366,55216Egypt82,601,220 7Nigeria175,621,70717Iran77,865,483 8Banglad esh 157,379,94818Turkey75,303,185 9Russia142,683,92219Congo68,270, Japan127,084,18720Thailand67,097,005

Where is the worlds biggest business opportunity? A) China B) EU C) Latin America D) Russia E) India F) Anywhere other than North America

Canadian International Trade Copyright © 2013 Pearson Canada Inc.17-14

Analyzing Global Market Opportunities Copyright © 2013 Pearson Canada Inc The external environments of foreign markets must be analyzed before deciding to enter. Economic Consumers Political Legal/Regulatory Technical Competition ___________ ______

Economic Environment Copyright © 2013 Pearson Canada Inc Economic variables such as natural resources, population, income distribution, employment and education are evaluated. Growth rates are varying broadly across the world There are three broad classifications of economies: 1.Government-Controlled Economy 2.Market-Controlled Economy 3.Mixed Economy

Government-Controlled Economy Strong central government Makes economic decisions Less product choice for consumers Government controls industries and companies Difficult market to enter

Market-Controlled Economy Market operates by voluntary exchange Range of products for consumer choice Law of supply and demand prevail Effective marketing essential for company growth

Mixed Economy Simultaneous operations of publicly and privately owned companies Some government control to protect local industries and workers Laws of supply and demand prevail Possible barriers to entry for foreign companies

Consumer Environment Copyright © 2013 Pearson Canada Inc Variations is culture and language creates a need for diverse marketing strategies in foreign markets. Even within foreign countries a marketer should examine differences in : Culture Language Needs and Motivation

Political Environment Copyright © 2013 Pearson Canada Inc Government policies, laws and regulations must be abided by. New governments can change the rules. Example: In the 1970s the government of India ordered Coca-Cola to dilute its investment there and to turn over its secret formula; Coca-Cola had no choice but to pull out completely. Coca-Cola did not return until 1993, when a more liberalized government was in power.

Trade Barriers Copyright © 2013 Pearson Canada Inc To protect local industries a country may resort to any number of tactics. Tariff Quota Local Content Law Embargo Boycott

Legal and Regulatory Environment Copyright © 2013 Pearson Canada Inc Marketers must know what they can and cannot do with a product in a foreign country. Awareness of local laws for packaging and advertising are essential. Examples: Contract and corporate law vary from country to country. Enforcement of transactions can be difficult. Canadian food companies must have separate packaging for the U.S. market due to differences in food labeling laws and nutritional guidelines.

Technology Environment Copyright © 2013 Pearson Canada Inc Technology presents opportunities for developing new products and how marketing activities are performed. An organization must ensure that a foreign country has the technology and skill required to make and market its products. Examples: Car Manufacturing When Japanese and South Korean auto companies began producing in Canada the skills existed but Canadian employees had to be educated in their management style and way of doing business; these are non-union companies in a unionized industry.

Technology Internet Penetration –Canada % –China – 42.3% –Sweden - 94% Cell Phone Penetration –Canada - 75% –Hong Kong - 236% –

Technology and Standardization

Competitive Environment Copyright © 2013 Pearson Canada Inc A company must be aware of certain developments that affect the global economy. Cartel Firms or countries band together to conduct trade in a manner of a monopoly (Milk Marketing Board). Orderly Market Agreement Barriers eliminated among partner countries; others face barriers (NAFTA). Common Market Trade agreement among a geographical group of countries (EU).

Market Entry Strategies Copyright © 2013 Pearson Canada Inc Several alternatives are available: Export Joint Venture Direct Investment Export directly by own means or via distributors. Licensing, International franchising, and contract manufacturing. Start own operation or acquire existing operation.

Entry Strategy: Applied Copyright © 2013 Pearson Canada Inc To enter China, International franchising is a popular strategy among North- American-based quick serve restaurants. The Think Marketing box on p. 361 examines a different entry strategy for another Canadian company.

Marketing Strategy for Global Markets Copyright © 2013 Pearson Canada Inc The assessment of the external environment leads to a marketing strategy decision. Global Strategy Country- Centered Strategy Same marketing strategy in all foreign markets Unique marketing strategy for each foreign market

Product Strategy Copyright © 2013 Pearson Canada Inc There are three commonly used product strategies: Standardized Product Adapted Product Local Product Same product offered in all foreign markets. Product altered to local tastes; common in fast food industry. Evaluate local tastes and develop accordingly.

Price Strategy Copyright © 2013 Pearson Canada Inc Foreign market conditions influence price strategy. Local competition Value of currency Trade restrictions in place Dumping: selling goods at a much lower price in a foreign market; dumping is often an issue among local competitors.

Marketing Communications Strategy Copyright © 2013 Pearson Canada Inc A common marketing communications strategy is difficult to implement globally, though some companies do have success. When devising a communications strategy a marketer must assess: Cultural Differences Language Differences KFC has a famous slogan: “Finger-lickin good.” The Chinese translation is: “So good you will eat your fingers off.”

Distribution Strategy Copyright © 2013 Pearson Canada Inc An organization can use existing channels or develop new ones.

Visual Model Copyright © 2013 Pearson Canada Inc.17-35