1. Dr. Dina Preston-Ortiz

2.  Introductions ◦ Faculty  Academic Background  Small Business Owner  U.S. Small Business Globalization ◦ Definition of Global Business ◦ Major World Markets: Marketing Function ◦ Economic Impact of SME Global Business ◦ Global Environment Considerations ◦ Market Entry Strategy ◦ Global Marketing Mix Strategy ◦ Global Marketing Exercise ◦ Summary

3.  Formal Definition  Integration of world economies  Movement of labor and technology across boarders  Cultural, political, economic and environmental dimensions Top U.S. Trading Partners (U.S. Census Bureau, 2013) RankCountryExportsImportsTotal TradePercent of Total Trade ---Total, All Countries513.1727.91,241.0100.0% ---Total, Top 15 Countries349.4542.4891.771.9% 1 Canada98.5110.6209.116.8% 2 China37.1130.3167.413.5% 3 Mexico73.591.0164.513.3% 4 Japan20.846.367.15.4% 5 Germany15.835.751.64.2%

4.  Economic Level Effects Marketing Strategy  Based on Wealth (Per Capita Income)  High Income Markets: Per Capita Income greater than $11,115  Upper Middle Income Markets: Per Capita Income of $11,115 or less but more than $3,595  Discretionary income (urban population, middle class)  Lower Middle Income Markets: Per Capita Income of $3595 or lower but more than $905  Some urban/ rural requiring a mix of products  Low Income Markets: Per Capita Income greater than $905 or less  Requires basic substance product (sugar, water, coffee) (World Bank as cited in Ebert & Griffin, p.54) ◦ Product Strategy (Demand of Goods) ◦ Distribution & Technology Infrastructures ◦ Pricing Considerations ◦ Promotional Tool Availability ◦ Potential Market Growth  Emerging Markets such as China, India & Brazil support opportunities for small business and overall new growth in world trade. “Emerging economies will grow on average by 4.7 percent a year between 2011 and 2025. Advanced economies, meanwhile, are forecast to grow by 2.3 percent over the same period” (World Bank, 2011, para.2) SMEs Marketing: Major World Markets

5. According to the U.S. Small Business Administration (2012), small firms represent:  99.7% of all employers, generate 60% to 80% of new jobs annually and account for 97% of all U.S. exporters.  The U.S. service exports have grown more than 289% faster than exports of goods and play a major role in fortifying the U.S. economy.  Since 1971, the U.S. service sector has generated a trade surplus that has consistently reduced the U.S. trade deficit. (p.1-8) Examples of U.S. Export Services Accounting Technical Advertising Health Care Business services Financial Consulting Professional Services Engineering Public Relations Entertainment Telecommunications Accounting Technical Advertising Health Care Business services Financial Consulting Professional Services Engineering Public Relations Entertainment Telecommunications

6.  Economic ◦ Standard of living ◦ Population size and growth ◦ Stage of economic development  Business cycles  Supply and demand  Competitive forces  Legal/Political ◦ Political stability ◦ Regulatory issues ◦ Human rights ◦ Trade issues  Cultural ◦ Values ◦ Norms & customs ◦ Language  Technology ◦ Country’s infrastructure ◦ Technology training and access  Market Conditions ◦ Domestic demand ◦ Comparative advantage ◦ Potential abroad

7.  Licensing  Exporting or Importing  Franchising  Joint venture  Strategic alliances  Direct investments  Outsourcing/offshoring

8.  Marketing Mix ◦ Globalize (standardize marketing mix) ◦ Multidomesitc (adaptation marketing mix)

9.  You are a firm that would like to create a strategic alliance with an American Entertainment Company. Complete the following based on your knowledge of Hungary’s Rock-Pop Music Market to share with your American partners: Who is your Target Audience? What is your product positioning? Product: What type of music or entertainment should the American company export? Do you recommend standardization or adaption of the product/service? Why? Price: How much should be charged? Why? Placement: Where would you distribute the music or entertainment? Promotions: How would you promote the music or entertainment? And why? (*Hint: Be sure to consider economic indicators of Hungary; legal/political, cultural, technology and market conditions)

10.  Global Business ◦ Integration of world economies ◦ Movement of labor and technology ◦ Embraces cultural, political, economic and environmental dimensions  Importance of World Markets ◦ Understand that the economic level of a country is the single most important environmental element in a small business adjusting/ creating its global marketing strategy.  Economic Impact of SME Global Business to U.S. Economy ◦ Jobs, innovation with a focus on services as a way to level the U.S. trade deficient and help small business owners keep start-up cost low  SME Global Environment Considerations ◦ Address opportunities and barriers in market planning  SME Market Entry Strategy ◦ Entry choice will depend on a SMEs access to resources and tolerance for risk. The steps are not sequential.  Importance of creating strategic alliances  SME Global Marketing Mix Strategy ◦ Marketing Mix (adaption /standardization)

11.  Ebert & Griffin (2011). Business Essentials. Upper Saddle, New Jersey: Prentice Hall  Small Business Administration. (2012). Export Business Planner for Your Small Business. Retrieved from http://www.sba.gov/sites/default/files/SBA%20Export%20Business%20Planner.pdf http://www.sba.gov/sites/default/files/SBA%20Export%20Business%20Planner.pdf  World Bank (2011). Emerging Market Growth Poles are Redefining Global Economic Structure, Says World Bank Report. Retrieved from http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22915632~pagePK: 64257043~piPK:437376~theSitePK:4607,00.html http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22915632~pagePK: 64257043~piPK:437376~theSitePK:4607,00.html