1. 5 Global Markets

2. Learning Objectives List the factors that influence consumers’ abilities to buy and explain how these affect various national markets. Describe Maslow’s hierarchy-of-needs model and apply it to consumers in different cultures. Give examples of how consumer behavior is similar across cultures and examples of how it may differ from one culture to another. Describe segmentation options for consumer markets abroad. Explain why business-to-business markets vary in buyer needs and behavior from one country to another. List the special qualities of national and multinational global buyers. Describe the five “screens” a foreign firm must pass through to win a government contract. Explain the role of bribery in international contracts.

3. Chapter Overview Understanding Markets and Buyers Business Markets Government Markets

4. Income Distribution Government tax policies Wealth concentration –Belgium Top 10% = 20% income –Colombia Top 10% = 46% income

5. The Hidden Economy Informal sector = Income not reported to authorities Peru’s informal sector = –42% construction –45% transportation –16% manufacturing

6. Consumer Needs Is Maslow’s hierarchy of needs applicable cross- culturally? Self-actualization Friendship, Love Safety, Food, Shelter Physiological Needs

7. Consumer Behavior Cultural differences revisited –Insurance in Muslim countries –Who makes the purchase decision? More joint husband-wife decisions in the U.S. than in Venezuela

8. Global Colors The world’s favorite color? –Blue But many colors elicit different responses –Purple = Expensive (in Japan, China, South Korea) –Purple = Cheap in USA

9. Business Buyers’ Needs The cost-performance criterion is a key consideration for business buyers Business buyers in developed countries choose capital intensive technologies Capital is cheaper/ labor is more expensive Business buyers in developing countries usually choose labor intensive technologies Labor is cheaper/ capital is more expensive

10. National global buyers –Search the world for products used in a single market Multinational global buyers –Search the world for products used throughout their global operations Global account management –Marketers assign special executive or teams to address demanding global buyers Global Buyers

11. Government Markets The buying process –Procurement processes vary by country –Some contracts go to the lowest bidder –More sophisticated projects demand more complicated bidding processes

12. Bribery and Government Markets Bribery is giving something of value to an individual in a position of trust to influence judgment or behavior Government employees are trusted to do what’s best for the public good Government corruption is more prevalent in emerging markets