1. Entrepreneurship and Small Business Management
Chapter 10
Marketing Globally

2. Ch. 10 Performance Objectives
Identify the reasons for ventures to market globally.
Understand the various strategic options for global ventures.
Explore the challenges to international trade.
Learn about the types of support that are available for global ventures.
Describe regional trade agreements that influence global trade.

3. Reasons to Market Globally
Expand market opportunities.
Acquire access to resources that are scarce or more competitive.
Reduce costs for materials, labor, etc.
Utilize advantages in a specific location such as skilled artisans, tax breaks, etc.
Improve product/service quality levels.

4. Importing
The sale of products produced in a foreign country to customers in your home country
Consider importing to…
Sell a product not produced at home
Take advantage of better cost/quality factors
Remain competitive
Some information resources:
Foreign embassies and consulates
National Customs Brokers and Forwarders Association of America

5. Exporting
Selling goods or services produced domestically to foreign customers
Higher growth rates and lower failure rates reported by companies that export, compared to those that do not
Trade intermediaries—serve as contract distributors of products between countries; have extensive trading networks and contacts

6. Reasons to Export Enhance competitiveness Increase sales and profits
Gain global market share
Reduce dependence on existing markets
Exploit corporate technology and know-how
Extend sales potential of existing products
Stabilize seasonal market fluctuations
Enhance potential for corporate expansion
Sell excess production capacity
Gain information about foreign competition

7. Exporting May Require You To:
Subordinate short-term profits to long-term gains
Hire staff to launch the export expansion
Modify products or packaging
Develop new promotional material
Incur added administrative costs
Dedicate personnel for traveling
Wait longer for payments
Apply for additional financing
Obtain special export licenses

8. Strategic Global Alliances
Strategic alliance—partnership between two or more firms in which each one provides a particular set of skills or resources
International strategic alliance—partners from at least two countries; one partner is located in the targeted geographic area
Benefits include:
Reduced risks
Greater potential rewards

9. Other Global Venture Strategies
License products and processes globally to get the greatest benefits from intellectual property.
Sell franchise units on an international scale to enter new, profitable markets.
Operate international facilities to create better supply to regional customers.

10. Economic Risk of Global Trade
Changes in a foreign country’s economy may cause financial or other harm to your business.
Examples:
Failure of payment by foreign customers
Exchange-rate risk

11. Political Risk of Global Trade
Changes in a foreign country’s political structure and policies may negatively impact your business.
Examples:
A ban on imports
Prohibition of foreign direct investment
Government seizure of foreign assets
Regulations which reveal trade secrets

12. Organizational Capacity
Will your firm have enough capacity to participate in international trade?
Factors to consider:
Management’s expectations and objectives
Previous global trade experiences
Personnel requirements (time and talent)
Production capacity
Financial capacity

13. Legal and Regulatory Barriers
Tariffs—taxes or duties on goods and services imported into a country
Quotas—limits on the amounts of specific products that can be imported into a country
Embargo—a ban on the import of all products (or specific ones) from a particular nation
Laws against dumping: When companies price products below cost and sell large quantities in foreign markets, it can harm domestic firms.

14. Cultural and Ethnic Considerations
Culture—the values, perspectives, beliefs, and norms shared by a group of people
An acceptable business practice in one country might be considered rude and inappropriate in another.
Other factors include foreign peoples’…
Language differences
Perceived importance of personal relationships
Expectations of product/service quality

15. Sources of Global Trade Support
U.S. Department of Commerce
International Trade Administration
Export portal (
U.S. and Foreign Commercial Services
Small Business Development Centers
U.S. Export Assistance Centers
District Export Councils
Publications such as International Trade Forum and World Trade Magazine

16. Resources for Trade Leads
The Federation of International Trade Associations has list of no-fee Web sites.
Fee-based services will develop leads.
Trade missions provide travel opportunities to countries of interest.
Trade intermediaries can help with initial marketing and communications.

17. Forms of Financial Assistance
Letters of credit
Working Capital Loan Program (EWCP)
Export Express Loan Program
International Trade Loan Program
Ex-Im Bank’s Export Working Capital Program
Export Medium-Term Delegated Authority Program
Ex-Im Bank’s Loan Guarantee Program

18. Trade Agreements Regional Trade Agreements (RTAs)
Regulate trade between participating countries called Member States
Help facilitate trade on a regional basis by cutting tariffs and reducing border barriers
Regional Free Trade Agreements (RFTAs)
Go beyond RTAs to increase market access
Simplify regulations and reduce tariffs to zero

19. Significant RTAs and RFTAs
European Union (EU or EC)
European Free Trade Association (EFTA)
North American Free Trade Agreement (NAFTA)
Southern Common Market (Mercosur)
Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA)
Common Market of Eastern and Southern Africa (COMESA)