chapter 5 developing a global vision. global vision identifying and reacting to international...

Chapter 5Developing a Global Vision

Global VisionIdentifying and

reacting to international marketing opportunities

Creating effective global marketing strategies

Being aware of worldwide competition

Global Marketing Influences EconomiesThe U.S. exports a fifth of what it

manufacturesOne in ten jobs in the U.S. is supported by

exportsAlmost one-third of U.S. corporate profits

come from international trade and foreign investment

The U.S. Is the world’s largest exporter of agricultural goods

Benefits Versus Concerns About Global MarketingConcerns:

Jobs going overseas Lower salaries

Foreign products replace “made in America”

Wage cutsService centers

moving offshoreNegative image of

America in some foreign markets

Benefits:Increased competition

May bring prices down May result in more

innovationIncreased standard of

living in other countries More markets for

American productsMay result in more

individual freedom in some countries

Multinational FirmsMove resources,

goods, services and skills across national boundaries regardless of the location of the company headquarters

Why Go Global?Earn additional sales and profitsLeverage a unique product or technological

advantagePossess exclusive marketing informationDomestic market is saturatedExcess capacityGain economies of scale

Global Marketing StrategiesStandardization CustomizationAssumes markets around

the world are similarMarketing mix is as much

the same as possibleGain economies of scale

Recognizes the differences in global markets

Create marketing mixes to suit each market

More costly, but may be worth it

External EnvironmentsAll of the major environments have to be

considered international and domesticallySocio-culturalEconomicTechnologicalDemographicsPhysical/naturalPolitical/legal

Global Legal issuesTariffQuotaBoycottExchange controlTrade alliancesTrade Agreements

Trade AgreementsUruguay RoundWorld Trade

OrganizationNAFTACentral American

Free Trade Agreement

European UnionInternational

Monetary Fund

Common Methods for Entering the Global MarketplaceExportingLicensingFranchisingContract

manufacturingJoint VentureDirect Investment

The Global Marketing Mix: Product / Promotion

The Global Marketing Mix: DistributionAdequate distribution is

necessary for successSome countries have

complicated systemsLack of distribution

infrastructure and cultural differences

The company may gain competitive advantage through innovative distribution strategies

Global Marketing Mix - PriceConsider transportation

costs, taxes and tariffsDetermine what

customers will spendMay need to simplify a

product to lower the price

Don’t assume that lower income countries are willing to accept lower quality

Exchange RatesThe price of one’s

currency in terms of another country’s currency

DumpingThe sale of an

exported product at a price lower than that charged for the same or a like product in the home market.

CountertradeAn alternative to

exchanging currency for goods

A form of trade in which all or part of the payment for goods or services in the form of other goods or services.