2. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Cultural Misunderstanding, Political Uncertainty, Import Restrictions, Exchange Controls and Ownership Restrictions, Economic Conditions, Global Company, Multidomestic Company, Market Factors, Economic Factors, Environmental Factors, Competitive Factors, Structure, Management Processes, Culture, People, Language, Data Content, Timeliness, Availability, Exporting, Licensing, Franchising, Joint Ventures, Strategic Alliances, Direct Ownership Global Marketing Chapter 13 Key Terms

3. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Global Marketing Goals  Offensive goals  Increase long term growth and profit prospects  Maximize total sales revenue  Take advantage of economies of scale  Improve overall market position

4. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Global Marketing Goals  Defensive goals  To compete with foreign companies on their own turf  Gain access to technological innovations in other countries  Take advantage of differences in operating costs  Preempt competitors’ global moves  Avoid being locked out of future markets by arriving too late

5. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved The Competitive Advantage of Nations  Porter's diamond presents four factors that determine the competitive advantage of disadvantage of a nation  Factor conditions  Demand conditions  Related and supporting industries  Company strategy, structure, and rivalry

6. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Porter’s Diamond of National Advantage

7. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Global Marketing Issues  Cultural Misunderstanding  Managers tend to use their own cultural values and priorities as a frame of reference  Political Uncertainty  Government instability  Social unrest  Armed conflict  Import Restrictions  Tariffs, quotas, and other types of restrictions hinder global business

8. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Global Marketing Issues  Exchange Controls and Ownership Restrictions  Established by nations experiencing BOP problems  Economic Conditions

9. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Organizing the Multinational Company  Multidomestic company – Pursues different strategies in each of its foreign markets  The global company – Views the world as one market and pits its resources against competition in an integrated fashion  Three alternative structures  Worldwide product divisions  Divisions responsible for all products sold within a geographic region  A matrix system – A combination of both these arrangements

10. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Factors Fostering Global Strategy  External Factors  Market Factors – Degree of homogeneous market needs, transferable brands, and the ability to globalize distribution channels  Economic Factors – Worldwide economies of scale, learning curves, global resourcing, etc.  Environmental Factors – Communications ability, favorable governmental policies, etc.  Competitive Factors – Global moves by competitors, preemptive strikes

11. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Factors Fostering Global Strategy  Internal Factors  Structure – Ease of installing a centralized global authority  Management processes – Capabilities and resources available to perform operational functions on a global scale  Culture – Ability to project a global identity, increased tolerance  People – Availability of foreign nationals, frequent travel, commitments to multicountry careers

12. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Ten Commandments of Global Branding  Understanding similarities and differences in the global branding landscape  Do not take short cuts in global branding  Establish marketing infrastructure  Embrace integrated marketing communications  Establish brand partnerships  Balance standardization and customization  Balance global and local control  Establish operable guidelines  Implement a global brand equity measurement system  Leverage brand elements

13. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Global Marketing Research  Population characteristics – Managers should be familiar with total population and the regional, urban, rural, and interurban distribution  Ability to buy – Four broad measures to be examined  Gross national product or per capita national income  Distribution of income  Rate of growth in buying power  Extent of available financing

14. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Global Marketing Research  Willingness to buy – Cultural framework of consumer motives and behavior is integral to the understanding of foreign customer  Differences in Research Tasks and Processes  Language barriers  Data content  Timeliness  Availability in the U.S.

15. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Global Product Strategy  Global marketing research can help determine whether there is an unsatisfied need  For which a new product could be developed to serve foreign market  That could be met with an existing domestic product, either as is or adapted to foreign market

16. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Global Distribution Strategy

17. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Global Pricing Strategy  Pricing task is more complicated in foreign markets because of problems associated with tariffs, laws, etc.  Import duties are major constraints for global marketers and are encountered in many markets  Rigidity in price structures found in many foreign markets also poses an issue

18. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Global Advertising and Sales Promotion Strategy  Language barriers  Media are traditionally used  Limited media available – Unable to reach out to target audience  Deciding on the type of agency – To prepare and place the firm’s advertisement  Sales promotion  Used as a strategy for bypassing restrictions on advertisements placed by some foreign governments  Effective means for reaching people in rural locations where media support for advertising is virtually nonexistent

19. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Growth Strategies for Global Marketing  Exporting  Licensing  Franchising  Joint ventures  Strategic alliances  Direct ownership

20. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Marketing Mix Standardization  When markets are economically similar  When worldwide customers, not countries, are the basis for segmenting markets  When customer behavior and lifestyles are similar  When the product is culturally compatible across the host country  When a firm’s competitive position is similar in different markets

21. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved Marketing Mix Standardization  When competing against the same competitors, with similar market shares, in different countries, rather than competing against purely local companies  When the product is an organizational and high- technology product rather than a consumer product  When there are similarities in the physical, political, and legal environments of home and host countries  When the marketing infrastructure in the home and host countries is similar