1. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 1 Global Marketing Strategies

2. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 2 Why “Go Global?” Offset sales declines in the domestic market Offset sales declines in the domestic market Increase sales and profits Increase sales and profits Extend products’ life cycles Extend products’ life cycles Lower manufacturing costs Lower manufacturing costs Improve competitive position Improve competitive position Raise quality levels Raise quality levels Become more customer-oriented Become more customer-oriented

3. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 3 Questions to Consider Before Going Global 1. Is there a profitable market in which our company has the potential to be successful over the long run? (see Table 12.1) 2. Do we have and are we willing to commit adequate resources of time, people, and capital to a global campaign? 3. Are domestic pressures forcing our company to consider global opportunities?

4. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 4 Questions to Consider Before Going Global 4. Do we understand the cultural differences, history, economics, values, opportunities, and risks of conducting business in the country we are considering? 5. Is there a viable exit strategy for our company if conditions change or the new venture does not succeed? 6. Can we afford not to go global?

5. Eight Strategies for Pursuing Global Markets

6. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 6 Strategies For "Going Global" Launching a World Wide Web site Launching a World Wide Web site

8. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 8 Launching a World Wide Web site Launching a World Wide Web site Relying on trade intermediaries Relying on trade intermediaries Strategies For "Going Global"

9. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 9 Trade Intermediaries Export Management Companies (EMCs) Export Management Companies (EMCs) Export Trading Companies (ETCs) Export Trading Companies (ETCs) Manufacturer’s Export Agents (MEAs) Manufacturer’s Export Agents (MEAs) Export merchants Export merchants Resident buying offices Resident buying offices Foreign distributors Foreign distributors

10. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 10 Joint ventures Joint ventures Launching a World Wide Web site Launching a World Wide Web site Relying on trade intermediaries Relying on trade intermediaries Strategies For "Going Global"

11. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 11 Joint Ventures Domestic joint venture – two or more U.S. companies form an alliance for the purpose of exporting their goods and services abroad. Domestic joint venture – two or more U.S. companies form an alliance for the purpose of exporting their goods and services abroad. Foreign joint venture – a domestic firm forms an alliance with a company in the target nation. Foreign joint venture – a domestic firm forms an alliance with a company in the target nation.  Most important ingredient: Choosing the right partner.  Another key to success: Establishing common objectives.

12. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 12 Foreign licensing Foreign licensing International franchising International franchising Countertrading and bartering Countertrading and bartering Exporting Exporting Launching a World Wide Web site Launching a World Wide Web site Relying on trade intermediaries Relying on trade intermediaries Joint ventures Joint ventures Strategies For "Going Global"

13. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 13 Exporting Small companies account for 97% of all companies involved in exporting, but… Small companies account for 97% of all companies involved in exporting, but… They generate just one-third of the U.S. export sales. They generate just one-third of the U.S. export sales. Only 1% of all small and medium-sized businesses export; twice as many are capable of exporting but are not doing so. Only 1% of all small and medium-sized businesses export; twice as many are capable of exporting but are not doing so.

14. Source: Exporter Data Base, U.S. Dept of Commerce, Office of Trade and Economic Analysis, Trade Development/International Trade Agency.

15. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 15 Steps to Successful Exporting 1. Recognize that even the tiniest companies and least experienced entrepreneurs have the potential to export. 2. Analyze your product or service. 3. Analyze your commitment to developing export markets. 4. Research potential markets and pick your target.

16. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 16 5. Develop a distribution strategy. 6. Find your customer.  U.S. Department of Commerce  International Trade Administration 7. Find financing for export sales.  SBA, EX-IM Bank, OPIC, and others 8. Ship your goods. 9. Collect your money. (Continued) Steps to Successful Exporting

17. How a Letter of Credit Works. How a Letter of Credit Works. $ Foreign buyer agrees to buy products; seller agrees to ship goods if buyer arranges a letter of credit. Buyer requests that his bank grant a letter of credit, which assures exporter payment if she presents documents proving goods were actually shipped. Bank makes out letter of credit to seller and sends it to seller’s bank (called the confirming bank). Seller ships goods to buyer according to letter of credit’s terms and submits shipping documents to bank issuing letter of credit. $ Letter of Credit Seller’s BankBuyer's Bank Buyer’s bank makes payment to seller’s (confirming) bank. Confirming bank then pays seller amount specified in letter of credit. $ BuyerSeller

18. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 18 Establishing international locations Establishing international locations Launching a World Wide Web site Launching a World Wide Web site Relying on trade intermediaries Relying on trade intermediaries Joint ventures Joint ventures Foreign licensing Foreign licensing International franchising International franchising Countertrading and bartering Countertrading and bartering Exporting Exporting Strategies For "Going Global"

19. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 19 Barriers To International Trade Attitude - "My company is too small to export." Attitude - "My company is too small to export." Lack of information about how to get started. Lack of information about how to get started. Lack of export financing. Lack of export financing. Domestic Barriers:

20. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 20 Tariffs - Taxes a government imposes on goods and services imported into that country. Tariffs - Taxes a government imposes on goods and services imported into that country. Quotas - Limits on the amount of a product imported into a country. Quotas - Limits on the amount of a product imported into a country. Embargoes - Total bans on imports of certain products. Embargoes - Total bans on imports of certain products. International Barriers: Barriers To International Trade

21. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 21 Dumping - Selling large quantities of a product in a foreign country below cost to gain market share. Dumping - Selling large quantities of a product in a foreign country below cost to gain market share. Political barriers - rules, regulations and risks. Political barriers - rules, regulations and risks. Business barriers – business practices and laws. Business barriers – business practices and laws. Cultural barriers - Differing languages, philosophies, traditions, and accepted business practices. Cultural barriers - Differing languages, philosophies, traditions, and accepted business practices. International Barriers: Barriers To International Trade

22. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 22 International Trade Agreements General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) North American Free Trade Agreement (NAFTA) North American Free Trade Agreement (NAFTA)

23. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 23 Guidelines For Success In International Markets Make yourself at home in all three of the world's key markets - North America, Europe, and Asia. Make yourself at home in all three of the world's key markets - North America, Europe, and Asia. Appeal to the similarities within the various regions in which you operate but recognize the differences in their particular cultures. Appeal to the similarities within the various regions in which you operate but recognize the differences in their particular cultures. Be willing to commit the necessary resources to make your global efforts successful. Be willing to commit the necessary resources to make your global efforts successful. Develop new products for the world market. Develop new products for the world market.

24. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 24 Guidelines For Success In International Markets Use the many resources available to research potential markets and to determine the ideal target for your products. Use the many resources available to research potential markets and to determine the ideal target for your products. Familiarize yourself with foreign customs and languages. Familiarize yourself with foreign customs and languages. Learn to understand your customers from the perspective of their culture, not your own. Learn to understand your customers from the perspective of their culture, not your own.

25. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 25 "Glocalize" - Make global decisions about products, markets, and management, but allow local employees to make tactical decisions about packaging, advertising, and service. "Glocalize" - Make global decisions about products, markets, and management, but allow local employees to make tactical decisions about packaging, advertising, and service. Make positive and preferably visible contributions to the local community. Make positive and preferably visible contributions to the local community. Guidelines For Success In International Markets

26. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 26 Train employees to think globally, send them on international trips, and equip them with state-of-the-art communication technology. Train employees to think globally, send them on international trips, and equip them with state-of-the-art communication technology. Hire local managers to staff foreign offices and branches. Hire local managers to staff foreign offices and branches. Guidelines For Success In International Markets

27. Chapter 12 Global Marketing Strategies Copyright 2006 Prentice Hall Publishing Company 27 Do whatever seems best wherever it seems best, even if people at home lose jobs or responsibilities. Do whatever seems best wherever it seems best, even if people at home lose jobs or responsibilities. Consider using partners and joint ventures to break into foreign markets you cannot penetrate on your own. Consider using partners and joint ventures to break into foreign markets you cannot penetrate on your own. Guidelines For Success In International Markets