Chapter 7 - Global Marketing

WHY EXPAND INTO OVERSEAS MARKETS?

• the world is getting smaller

• expands market share

• new, untapped markets

• some raw materials cheaper/more plentiful

• creates jobs

Differences in Global Marketing

1. MARKET SIZE– world population > 6 billion

www.census.gov

• Factors Affecting Market Potential– income level– stage of country's economic development

2. BUYER BEHAVIOR– differs by country & among market segments

w/in each country– need to consider local customs, tastes & living

conditions• ie: Snapple (sugar, foggy look)

• ie: EuroDisnesy (alcohol, employees look)

– food differences & preferences

5 Considerations Prior to Entering Foreign Market

1. Demand

2. Competition

3. Economic environment

4. Social-cultural environment

5. Political-legal environment

The Environment for International Marketing

1. ECONOMIC FACTORS– nations size, per capital income & stage of

economic develop– need to gear product to income level of country– need to consider unemployment level – infrastructure: transportation, communication and

utilities– exchange rate: how currency converts from one

to another

2. SOCIAL-CULTURAL FACTORS– study nations' culture incl: language, education,

social values, & religious attitudes– be sure about translations!

• ie: Gerbers baby food in India

• ie: Time, Lunch Hours

3. POLITICAL-LEGAL FACTORS– political turmoil– may need to adjust marketing strategy based on

political envir.

• TRADE BARRIERS– Tariffs

revenue tariffs protective tariffs

– IMPORT QUOTAS - limits on imports– EMBARGO - complete ban on import of certain

products (Cuba)– DUMPING - sell goods at lower price than

domestic market price

Strategies for Entering International Markets

1. EXPORTING– indirect exporting – direct exporting

2. Contractual Agreements:– Licensing, Franchise

3. OVERSEAS MARKETING– ie: foreign sales offices

4. FOREIGN PRODUCTION AND MARKETING– subsidiary that is responsible for foreign

production & marketing

2 Types of International Marketing Strategies

1. GLOBAL MARKETING STRATEGY– standardized marketing mix w/ minimal

modifications in all foreign markets

2. MULTIDOMESTIC MARKETING– treats each nation separately

Product & Promotional Strategies: Figure 3.12