1. 1 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Prepared by Deborah Baker Texas Christian University 3 Developing a Global Vision

2. 2 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Learning Objectives 1.Discuss the importance of global marketing 2. Discuss the impact of multinational firms on the world economy 3. Describe the external environment facing global marketers

3. 3 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Learning Objectives 4.Identify the various ways of entering the global marketplace 5. List the basic elements involved in developing a global marketing mix 6. Discover how the Internet is affecting global marketing

4. 4 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Rewards of Global Marketing Recognize and react to international marketing opportunities Be aware of threats from foreign competitors Use international distribution networks 1

5. 5 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Stages of Global Business Development 2 1. Companies operate in one country and sell into others 2. Set up foreign subsidiaries to handle sales 4. Virtual operation 3. Operate an entire line of business in another country

6. 6 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Global Marketing Standardization World markets are becoming more alike Standardized products can be sold the same way worldwide Successful companies may vary products for global markets On Line http://www.cocacola.com http://www.colgate.com 2

7. 7 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 The External Environment Natural Resources Demographic Makeup Economic and Technological Development Culture Environmental Factors Political Structure 3

8. 8 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3Culture  Language  Religion  Superstitions  Etiquette  Customs  Traditions  Notion of time 3

9. 9 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Economic and Technological Development On Line http://www.un.org/esa 3 Developed Country Less Developed Country Complex, sophisticated industries Basic industries

10. 10 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Political Structure Extremes No private ownership Minimal individual freedom Little central government Maximum personal freedom 3

11. 11 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Political and Legal Considerations Tariff Quota Boycott Exchange Control Market Grouping Trade Agreement Legal Structures Encourage or Limit Trade 3 On Line http://www.wto.org

12. 12 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Demographic Makeup Marketing Considerations Population density Urban or rural Personal income Age 3

13. 13 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Differences in Natural Resources 3 Create… International dependencies Shifts of wealth Inflation and recession Export opportunities if resources are abundant Stimulus for military intervention

14. 14 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Risk Levels for Global Entry Lowrisk/lowreturn Highrisk/highreturn Risk Return Export Licensing Contract Manu- facturing Joint Venture Direct Invest- ment On Line http://www.cat.com 4

15. 15 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Export Intermediaries Buyer for Export Export Broker Export Agent Export Intermediaries 4

16. 16 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3 Product and Promotion One Product One Message One Product One Message Product Adaptation Product Adaptation Message Adaptation Message Adaptation Product Invention Product InventionSameProductSameMessage ChangeMessageChangeProduct On Line http://www.mattelscrabble.com http://www.monopoly.com 5

17. 17 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 3Pricing Must consider transportation and insurance costs, taxes and tariffs Determine what customers will spend Ensure that foreign buyers will pay them May need to simplify a product to lower price 5