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Chapter 7ReachingGlobal Markets

Objectives : 

Objectives Understand global marketing strategy Analyze forces affecting international marketing efforts Understand important trade agreements Identify methods of international market entry Examine forms of global organizational structures Examine use of marketing mix internationally

The Nature ofGlobal Marketing Strategy : 

The Nature ofGlobal Marketing Strategy International Marketing Developing and performing marketing activities across national boundaries.

Environmental ForcesIn Global Markets : 

Environmental ForcesIn Global Markets Competitive Economic Political Legal & Regulatory Technological Sociocultural

Competitive Forces Internationally : 

Competitive Forces Internationally Attend to competitive forces in target countries Identify the interdependence of global competitors Be mindful of global customer

The Most Competitive Countries : 

The Most Competitive Countries

Economic Forces Internationally : 

Economic Forces Internationally Import tariff – duty on goods bought outside the country and brought in Quota – limit on amount of goods an importing country will accept Embargo – government suspension of trade Exchange Controls – government restrictions on amount of particular currency

Economic ForcesInternationally cont’d : 

Economic ForcesInternationally cont’d Balance of Trade – difference in value between nation’s imports and exports Gross Domestic Product (GDP) – measure of overall economic standing based on total output of goods and services

ComparativeEconomic Analysis : 

ComparativeEconomic Analysis

Political, Legal and Regulatory Forces Internationally : 

Political, Legal and Regulatory Forces Internationally Legal and regulatory infrastructure as a direct reflection on the political climate CIBERs (Centers for International Business Education and Research) International import barriers Differing standard of ethics (U.S.’s Foreign Corrupt Practices Act)

Sociocultural Forces Internationally : 

Sociocultural Forces Internationally Issues – predominant cultural focus of marketing within global market Language Symbols Social norms, values, perceptions Negotiations and decision-making

Cross-CulturalBehavioral Differences : 

Cross-CulturalBehavioral Differences

TechnologicalForces Internationally : 

TechnologicalForces Internationally Advances in technology have advanced international marketing

Global Ethical and Social Responsibility Issues : 

Global Ethical and Social Responsibility Issues Dumping – selling products in domestic markets at higher prices than in foreign markets Cultural relativism – defining business practices as right or wrong based on differing moralities within particular cultures

Least And Most Corrupt Countries : 

Least And Most Corrupt Countries

Regional Trade Alliances, Markets, And Agreements : 

Regional Trade Alliances, Markets, And Agreements North American Free Trade Agreement (NAFTA) – 1994 CAFTA-DR – 2005 European Union (EU) – 1993 Common Market of the Southern Cone (MERCOSUR) – 1991 Asia-Pacific Economic Cooperation (APEC) – 1989 World Trade Organization (WTO) – 1995

Stages OfInternational Entry Modes : 

Stages OfInternational Entry Modes No regular export activities Export via independent representatives or agents Establish one/more sales subsidiaries internationally Establish international production or manufacturing facilities

Involvement InGlobal Marketing : 

Involvement InGlobal Marketing

Importing and Exporting : 

Importing and Exporting Importing – the purchase of products from a foreign source Exporting – the sale of products to foreign markets

Trading Company : 

Trading Company A company that links buyers and sellers in different countries.

Licensing and Franchising : 

Licensing and Franchising Licensing – an alternative to direct investment requiring a license to pay commissions on sales or supplies used in manufacturing Franchising – a form of licensing in which a franchiser grants a franchisee the right to market its product in accordance with the franchiser’s standards.

International Franchising-Benefits To Franchiser : 

International Franchising-Benefits To Franchiser Does not have to put up large capital investment Revenue stream is fairly consistent Retains control of name and increases global penetration Agreements ensure standard of behavior from franchisees

Contract Manufacturing : 

Contract Manufacturing The practice of hiring a foreign firm to produce a designated volume of the domestic firm’s product or a component of it to specification; the final product carries the domestic firm’s name.

Specific Forms ofContract Manufacturing : 

Specific Forms ofContract Manufacturing Outsourcing Offshoring Offshore outsourcing

Joint Ventures : 

Joint Ventures Joint Venture – partnership between domestic and foreign firms Strategic Alliances – partnerships formed to create competitive advantage on a worldwide basis

Direct Ownership : 

Direct Ownership Direct ownership – a company owns subsidiaries or other facilities overseas Multinational enterprise – firm has operations in many countries

Ten LargestGlobal Corporations : 

Ten LargestGlobal Corporations

Global Organizational Structure : 

Global Organizational Structure Organizational Structure – the way in which a firm divides its operations and coordinates its activities.

Organizational Architecture : 

Organizational Architecture

Global OrganizationalStructures cont’d : 

Global OrganizationalStructures cont’d Export Departments International Divisions Internationally Integrated Structures

International Marketing Mix : 

International Marketing Mix Customization vs. Globalization Customization: customizing marketing strategy to meet different marketing mixes Globalization: development of marketing strategies that treat the world markets as a single entity

Marketing Mix Issues –Product Element : 

Marketing Mix Issues –Product Element

Marketing Mix Issues – Distribution Element : 

Marketing Mix Issues – Distribution Element

Marketing Mix Issues – Promotion Element : 

Marketing Mix Issues – Promotion Element

Marketing Mix Issues –Pricing Element : 

Marketing Mix Issues –Pricing Element

Business markets allow for customized global marketing solutions : 

Business markets allow for customized global marketing solutions Use of the AT&T print ad is granted uner permission by AT&T Knowledge Ventures