1. Thrive in the Marketing Environment: The World Is Flat
Chapter 3
Thrive in the Marketing Environment: The World Is Flat

2. Chapter Objectives
Understand the big picture of international marketing
Explain the World Trade Organization, economic communities, and how countries protect local industries
Understand how factors in the external business environment influence marketing strategies and outcomes
Explain the strategies that a firm can use to enter global markets
Understand the arguments for standardization vs. localization of marketing mix strategies in global markets
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

3. Real People, Real Choices: Decision Time at eBay
Which option should eBay undertake?
Option 1: Customize eBay by adding additional categories for artisans’ products, but don’t create a separate brand
Option 2: Create a completely separate, custom branded experience
Option 3: Create a hybrid model using an independent marketplace and licensed brand
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

4. Global Marketing
World trade: The flow of goods and services among different countries—the value of all the exports and imports of the world’s nations
Countertrade: A type of trade in which goods are paid for with other items instead of with cash
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

5. Deciding to Go Global “Go” or “no go”
Is it in the best interest of the firm to remain in home market or to go where foreign business opportunities exist?
Which global markets are most attractive?
Must consider market conditions and competitive advantage when making a decision
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

6. Road Blocks at the Borders
Protectionism
Quotas, embargoes, and tariffs
Initiatives in international regulation and cooperation help trade
General Agreement on Tariffs and Trade (GATT)
World Trade Organization (WTO)
Economic communities help to promote trade
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7. Analyzing the Global Marketing Environment
A company going global must understand local conditions in the targeted country, including the:
Economic environment
Competitive environment
Technological environment
Political/legal environment
Sociocultural environment
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

8. The Economic Environment: Indicators of Economic Health
Key economic indicators:
Gross domestic product (GDP): Total dollar value of goods/services a country produces within its borders in a year
Gross national product (GNP): Value of all goods and services produced by a country’s citizens or organizations
Economic infrastructure Quality of country’s distribution, financial, and communications systems
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9. The Economic Environment: Level of Economic Development
Least developed country (LDC)
Economic base is often agricultural
Developing countries
Economy shifts emphasis from agriculture to industry
Developed countries
Offer wide range of opportunities for international marketers
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10. The Economic Environment: The Business Cycle
All economies go through periods of:
Prosperity
Recession
Recovery
Depression
Inflation
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11. The Competitive Environment: Analyzing the Market and Competition
Competitive intelligence: gathering and analyzing publicly available information about rivals to develop superior marketing strategies
Collected from news media, the Internet, and publicly available government documents
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

12. The Competitive Environment: Competition in the Microenvironment
Competition for consumer’s discretionary income
Competition among products to satisfy the same consumer’s needs/wants
Competition among brands offering similar goods/services on the basis of brand reputation or perceived benefits
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

13. The Competitive Environment: Competition in the Macroenvironment
Competition in the macroenvironment (overall structure of industry)
Monopoly
Oligopoly
Monopolistic competition
Perfect competition
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

14. The Technological Environment
Technology:
Provides firms with important competitive advantages
Profoundly affects marketing activities
Can transform industries
Patent:
Legal document giving inventors exclusive rights to produce/sell a particular invention in that country
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

15. The Political and Legal Environment: Legal Influences on Business
Local, state, national, and global laws and regulations affect businesses
Purpose of American law:
To make sure businesses compete fairly with each other
To make sure that businesses don’t take advantage of consumers
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

16. The Political and Legal Environment: Political Influences on Business
Retaliatory actions against American businesses sometimes occur as a result of political activity or war
Political constraints on trade are commonly imposed:
Economic sanctions
Nationalization
Expropriation
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17. The Political and Legal Environment: Legal Influences on Business
Regulatory constraints on trade often restrict the marketing of goods
Also common—local content rules
a portion of a product must consist of components supplied by industries in the host country or economic community
Human rights issues may limit foreign countries business opportunities
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

18. The Sociocultural Environment
Key Sociocultural considerations:
Demographics
Cultural values
Collectivist vs. individualistic cultures
Norms, customs, mores, and conventions
Language
Ethnocentrism: The tendency to prefer products from one’s own culture
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19. Ethical Issues in Global Business
Truthfulness in business dealings varies by country
Bribery: When someone voluntarily offers payment to get an illegal advantage
Extortion: When someone in authority extracts payment under duress
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

20. How “Global” Should a Global Marketing Strategy Be?
Choosing a market entry strategy:
Exporting
Contractual agreements
Licensing
Franchising
Strategic alliances
Joint venture
Direct investment
Born-global firms
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

21. How “Global” Should a Global Marketing Strategy Be?
Choose a marketing-mix strategy:
Standardization vs. localization
Standardization: Offer the same products in all markets
Localization: Offer a customized marketing mix for each country
Once standardization or localization is chosen, it’s time to tweak the marketing mix
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

22. How “Global” Should a Global Marketing Strategy Be?
Tweaking the marketing mix
Product decisions:
Straight extension strategy: Market existing product in foreign market
Product adaptation strategy Modifies product for foreign market
Product invention strategy Develops new product for foreign market
Promotion decisions: Whether or not to modify
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

23. How “Global” Should a Global Marketing Strategy Be?
Tweaking the marketing mix
Price decisions: Products are often more expensive to produce for foreign markets
Free trade zones
Gray market goods
Dumping
Distribution decisions: Getting the product to remote locations is often difficult
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

24. Real People, Real Choices: Decision Made at eBay
Robert chose option 3
Implementation: eBay licensed the brand “WorldofGood.com” and launched project with both community and commerce platforms using search engine, banner, affiliate, and viral marketing, as well as PR/event marketing.
Measuring success: Used metrics to measure operational business and co-branding strategy success
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

25. Keeping It Real: Fast-Forward to Decision Time at Plan-It Marketing
Meet Cindy Tungate, president of Plan-It Marketing, a marketing research firm
Plan-It’s client Priceline needs help in planning its business
The decision to be made: What marketing research strategy will maximize results for Priceline?
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

26. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2009 Pearson Education, Inc.  
Publishing as Prentice Hall
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall