1. Chapter 5: Developing a Global Vision
Prepared by Amit Shah, Frostburg State University
Designed by Eric Brengle, B-books, Ltd.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved 1 1

2. Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Learning Outcomes
Chapter 5 Developing a Global Vision
Discuss the importance of global marketing
Discuss the impact of multinational firms
on the world economy
Describe the external environment facing
global marketers
LO1
LO2
LO3
Copyright 2010 by Cengage Learning Inc. All Rights Reserved

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Learning Outcomes
Chapter 5 Developing a Global Vision
Identify the various ways of entering the
global marketplace
List the basic elements involved in
developing a global marketing mix
Discover how the Internet is affecting
global marketing
LO4
LO5
LO6
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4. Rewards of Global Marketing
Chapter 5 Developing a Global Vision
Rewards of Global Marketing
Discuss the importance of global marketing.
LO1
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5. Rewards of Global Marketing
Chapter 5 Developing a Global Vision
Rewards of Global Marketing
Global Marketing- Individuals
and organizations using a
global vision to effectively
market goods and services
across national boundaries.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved

6. Rewards of Global Marketing
Chapter 5 Developing a Global Vision
Having a global vision means…
Recognizing and reacting to international marketing opportunities
Using effective global marketing strategies
Being aware of threats from foreign competitors
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7. Importance of Global Marketing to the U. S.
Chapter 5 Developing a Global Vision
Importance of Global Marketing to the U. S.
U.S. exports a fifth of industrial production.
One of every 5 jobs in U.S. is supported by exports.
Every U.S. state has realized net employment gains directly attributed to foreign trade.
U.S. businesses export over $800 billion in goods.
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8. Importance of Global Marketing to the U. S.
Chapter 5 Developing a Global Vision
Importance of Global Marketing to the U. S.
Exports account for 25 percent of U.S. economic growth.
U.S. is world’s leading exporter of farm products.
Chemicals, office machinery and computers, automobiles, aircraft, and electrical and industrial machinery make up almost half of all nonagricultural exports
About half of U.S. merchandise imports are raw materials, capital goods, and industrial products
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9. The Fear of Trade and Globalization
Chapter 5 Developing a Global Vision
The Fear of Trade and Globalization
Millions of Americans have lost jobs
Millions fear losing jobs
Threat of outsourcing if workers do not accept pay cuts
Vulnerability to operations moving offshore
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10. Benefits of Globalization
Chapter 5 Developing a Global Vision
Expands economic freedom
Spurs competition
Raises productivity and living standards
Offers access to foreign capital, global export markets, and advanced technology
Promotes higher labor and environmental standards
Acts as a check on government power
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11. Review Learning Outcome The Importance of Global Marketing
Chapter 5 Developing a Global Vision
Review Learning Outcome The Importance of Global Marketing
Identify global marketing opportunities
Compete against foreign competition in domestic markets
Use effective global
marketing
strategies
Globally-minded marketing managers:
Have a Global Vision
Fears
Benefits
Know global marketing is important because of economic interdependencies
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12. Discuss the impact of multinational firms
Chapter 5 Developing a Global Vision
Multinational Firms
Discuss the impact of multinational firms
on the world economy.
LO2
Copyright 2010 by Cengage Learning Inc. All Rights Reserved

13. Stages of Global Business Development
Chapter 5 Developing a Global Vision 1 2 4 3
Companies operate in one country and sell into others
Set up foreign subsidiaries to handle sales
Virtual operation
Operate an entire line of business in another country
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14. Global Marketing Standardization
Chapter 5 Developing a Global Vision
Production of uniform products
that can be sold the same way
all over the world.
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15. Review Learning Outcome Impact of Multinational Firms
LO2
Chapter 5 Developing a Global Vision
Review Learning Outcome Impact of Multinational Firms
Growth
Revenue
Profits
Global
Marketing
MNC
Human Resources
Physical Resources
Financial Resources
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16. External Environment Facing Global Marketers
Chapter 5 Developing a Global Vision
External Environment Facing Global Marketers
Describe the external environment facing
global marketers.
LO3
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17. External Environment Facing Global Marketers
Chapter 5 Developing a Global Vision
Culture
Economic and Technological Development
Political Structure
Demographic Makeup
Natural Resources
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18. Culture Culture- The common set of values shared by its citizens
Chapter 5 Developing a Global Vision
Culture- The common set of
values shared by its citizens
that determine what is socially
acceptable.
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19. Economic and Technological Development
Chapter 5 Developing a Global Vision
Developed Country
Less Developed Country
Complex, sophisticated industries
Basic industries
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20. Political Structure and Actions
Chapter 5 Developing a Global Vision
No private ownership Minimal individual freedom
Little central government
Maximum personal freedom
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Legal Considerations
Chapter 5 Developing a Global Vision
Tariff
Quota
Boycott
Exchange Control
Market Grouping
Trade Agreement
A tax levied on goods entering a country
Limit on the amount of a product entering a country
Exclusion of products from a country
Foreign exchange must be sold to a control agency
Common trade alliance
An agreement to stimulate international trade
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22. Political and Legal Considerations
Chapter 5 Developing a Global Vision
The Uruguay Round made changes in
world trading practices:
Entertainment, pharmaceuticals, integrated circuits, and software
Financial, legal, and accounting services
Agriculture
Textiles and apparel
Created a new trade organization: The World Trade Organization
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23. Political and Legal Considerations
Chapter 5 Developing a Global Vision
CAFTA
NAFTA
European Union
Agreements and Organizations
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Demographic Makeup
Chapter 5 Developing a Global Vision
Marketing Considerations:
Population density
Urban or rural
Personal income
Age
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25. Shortages in Natural Resources
Chapter 5 Developing a Global Vision
Create…
International dependencies
Shifts of wealth
Inflation and recession
Export opportunities if resources are abundant
Stimulus for military intervention
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Natural Resources
Chapter 5 Developing a Global Vision
Petroleum
Foodstuffs
Precious metal
Timber
Water
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27. Review Learning Outcome External Environment Facing Global Marketers
Chapter 5 Developing a Global Vision
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28. Global Marketing by the Individual Firm
Chapter 5 Developing a Global Vision
Global Marketing by the Individual Firm
Identify the various ways of entering the
global marketplace.
LO4
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29. Global Marketing Questions
Chapter 5 Developing a Global Vision
What are our options in selling abroad?
How difficult is global marketing?
What are the potential risks and returns?
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Why “Go Global”?
Chapter 5 Developing a Global Vision
Earn additional profits
Leverage a unique product or technological advantage
Possess exclusive market information
Saturated domestic markets
Excess capacity
Utilize “economies of scale”
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31. Risk Levels for Global Entry
Chapter 5 Developing a Global Vision
Low
risk/
low
return
High
high
Risk
Return
Export
Licensing
Contract
Manu-
facturing
Joint
Venture
Direct
Invest-
ment
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32. Entering the Global Marketplace
Chapter 5 Developing a Global Vision
Licensing
Legal process allowing use of manufacturing/patents/knowledge
Contract Manufacturing
Private-label manufacturing by a foreign country
Joint Venture
Domestic firm buys/joins a foreign company to create new entity
Export
Sell domestically produced products to buyers in other countries
Direct Investment
Active ownership of a foreign company/manufacturing facility
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33. Export Intermediaries
Chapter 5 Developing a Global Vision
Buyer for Export
Assumes all ownership risks and sells globally for its own account.
Export Broker
Plays the traditional broker’s role by bringing buyer and seller together.
Export Agent
Acts like a manufacturer’s agent for the exporter in the foreign market.
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34. Review Learning Outcome Entering the Global Marketplace
Chapter 5 Developing a Global Vision
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35. The Global Marketing Mix
Chapter 5 Developing a Global Vision
List the basic elements involved in developing a global marketing mix.
LO5
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Product and Promotion
Chapter 5 Developing a Global Vision
One Product
One Message
Product
Adaptation
Promotion
Invention
Same
Message
Change
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Place (Distribution)
Chapter 5 Developing a Global Vision
Adequate distribution is necessary for success in global markets
Some countries have complicated systems
Lack of distribution infrastructure and cultural differences create problems
Innovative distribution systems can create competitive advantage
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Chapter 5 Developing a Global Vision
Pricing
Must consider transportation and insurance costs, taxes, and tariffs
Determine what customers will spend
Ensure that foreign buyers will pay price
May need to simplify a product to lower price
Don’t assume that low-income countries are willing to accept lower quality
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39. Floating Exchange Rates
Chapter 5 Developing a Global Vision
Floating Exchange Rates- Prices
of different currencies move
up and down based on the
demand for and the supply of
each currency.
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Chapter 5 Developing a Global Vision
Dumping
Trying to increase an overseas market share
Temporarily distributing products to overseas markets to offset slack demand at home
Lowering unit costs by exploiting large-scale production
Attempting to maintain stable prices during periods of exchange rate fluctuations
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41. Countertrade Countertrade- A form of trade in
Chapter 5 Developing a Global Vision
Countertrade- A form of trade in
which all or part of the payment
for goods and services is in the
form of other goods or services.
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42. Review Learning Outcome Developing a Global Marketing Mix
Chapter 5 Developing a Global Vision
Review Learning Outcome Developing a Global Marketing Mix
PRODUCT + PROMOTION One Product, One Message Product Invention Product Adaptation Message Adaptation
PLACE
Channel Choice
Channel Structure
Country Infrastructure
PRICE
Dumping
Countertrade
Exchange Rates
Purchasing Power
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43. The Impact of the Internet
Chapter 5 Developing a Global Vision
The Impact of the Internet
Discover how the internet is
affecting global marketing.
LO6
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44. Review Learning Outcome The Impact of the Internet
LO6
Chapter 5 Developing a Global Vision
Review Learning Outcome The Impact of the Internet
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