copyright © 2004 by south-western, a division of thomson learning, inc. all rights reserved. global...

Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Global Dimensions

of Marketing

Developed by Cool Pictures and MultiMedia Presentations


Chapter 7


Objectives

1. Describe the importance of international marketing from the perspectives of the individual firm and the nation.

2. Identify the major components of the environment for international marketing.

3. Outline the basic functions of GATT, WTO, NAFTA, the proposed FTAA, and the European Union.

4. Compare the alternative strategies for entering international markets.


Objectives

5. Differentiate between a global marketing strategy and a multidomestic marketing strategy.

6. Describe the alternative marketing mix strategies used in international marketing.

7. Explain the attractiveness of the U. S. as a target market for foreign marketers.


The World’s 10 Largest Marketers

Rank Company Country of Origin

1 ExxonMobil United States

2 Wal-Mart Stores United States

3 General Motors United States

4 Ford Motor Co. United States

5 DaimlerChrysler Germany

6 Royal Dutch/Shell Britain/Netherlands

7 British Petroleum Britain

8 General Electric United States

9 Mitsubishi Japan

10 Toyota Motor Japan

Rank Company Country of Origin

1 Wal-Mart Stores United States

2 ExxonMobil United States

3 General Motors United States

4 British Petroleum Britain

5 Ford Motor Co. United States

6 Daimler Chrysler Germany

7 Royal Dutch/Shell Britain/Netherlands

8 General Electric United States

9 Toyota Motor Japan

10 Citicorp United States

2001 2002


Warner Lambert A Global Leader in Pharmaceuticals

The copy reads:“We’re making the world feel better”

http://www.benadryl.com/


To Be Successful Internationally

Marketers must do their homework

Capitalize on similarities

Evaluate all market segments


Investing in Foreign Market Considerations

1. Demand - Do foreign consumers need the company’s good or service?

2. Competitive environment - How do supplies currently reach the market?

3. Economic environment - What is the state of the nation’s economic health?

4. Social-cultural environment - How do cultural factors affect business opportunities

5. Political-legal environment - Do any legal restrictions complicate entering the market?

6. Technological environment - To what degree are technological innovations used by consumers in the market?


The World’s Most Frequently Spoken Languages

• Language plays an important role in international marketing• Marketers must make sure message is translated and conveys the

intended meaning.• Abbreviations and slang words and phrases may also cause

misunderstandings.

Rank Language Number of Speakers

1 Chinese (Mandarin) 1.2 billion

2 English 478 million

3 Hindi 437 million

4 Spanish 392 million

5 Russian 284 million


The Legal Environment for U.S. Firms Operating Abroad

McDonalds, like so many other international firms had to consider the following while making the decision to go international.

International law U.S. law, and Legal requirements of host nations.


Trade Barriers Fall Into Two Major Categories

Tariffs– Revenue tariffs are designed to raise funds for the importing

government. – Protective tariffs, which are usually higher than revenue

tariffs, are designed to raise the retail price of an imported produce to match or exceed that of a similar domestic product.

Administrative Barriers range from special permits and detailed inspections requirements to quotas on foreign-made items.– Import quotas limit the number of units of products in certain

categories– Embargo—a complete ban on the import of a product.– Exchange control means that firms that gain foreign exchange

by exporting must sell foreign currencies to the central bank or other foreign agency and importers must buy foreign currencies from the same organization.


Multinational Economic Integration• General Agreement on Tariffs and Trade (GATT). International

trade accord that has helped reduce world tariffs• World Trade Organization (WTO). Organization that replaces

GATT and oversees agreements and makes binding decisions in mediating disputes, and reducing trade barriers.

• North American Free-Trade Agreement (NAFTA). Accord removing trade barriers among Canada, Mexico, and the United States.

• Free Trade Area of the Americas (FTAA). Proposed free trade area stretching the length of the entire Western hemisphere and designed to extend free trade benefits to additional nations in North, Central, and South America.

• European Union (EU). Customs union that is moving in the direction of an economic union by adopting a common currency, removing trade restrictions, and permitting free flow of goods and workers throughout the member nations.


The European Union

• The treaty of Paris in 1957 created the European Union. At that time there were only six member countries. Today most Western European countries are members.

• In January of 2002 12 of the EU countries converted to the Euro.

• What three countries do you think did not convert to the Euro?

http://www.eurunion.org/profile/home.htm


The best known multinational economic community is the European Union.

Fifteen countries belong to the EU.

The EU has 350 million people and combined gross domestic product of $5 trillion.

European Union (EU)


What Drives GlobalizationWhy Marketers Decide to Go Global

31%

27%8%

8%

10%

16%Globalization of Customers

New customers in Emerging

Markets

Enhanced Customer Responsiveness

Technology Advances

Reduced Trade Barriers

Globalization of Competitors

*Change driven by the customer = 66%

Source: Data from ”Shaping the Value Chain for Outstanding Performance,” PricewaterhouseCoopers survey of 200 leading European businesses, found in Fortune, special advertising section, June 26, 2000, p,58.


Steps in Deciding to Market Globally

1. Secure top management’s support.

2. Research the export process and potential markets.

3. Choose from among three basic strategies for entering international markets:• Importing• Exporting• Contractual agreements


Levels of Involvement in International Marketing


Multinational Corporations to Global Marketers

• A multinational corporation is a firm with significant operations and marketing activities outside its home country.

• International business companies are no longer exclusively U.S. based.

• Multinationals often employee huge foreign workforces relative to their American staffs.

• Multinationals have become global corporations that reflect the interdependence of world economies.


International Marketing Approaches

Two alternative approaches:

1. Global marketing strategy defines a standard marketing mix and implements it with minimal modifications in all foreign markets.

2. Multidomestic marketing strategy assumes that differences between market characteristics and competitive situations in certain nations require firms to customize their marketing decisions to effectively reach individual marketplaces.


Alternative International Product and Promotional Strategies


International Distribution StrategyInvolves Two Steps

1. The firm must decide on a method of entering the foreign market.

2. It must determine how to distribute the product within the foreign market through that entry channel.


The World’s 10 Most Valuable Global Brands

0

10

30

40

50

20

70

60

20

02

Bra

nd

Va

lue

(in

$b

illio

ns)

Source: Data from Interbrand Corp., J.P. Morgan Chase & Co; found in “The Best Global Brands,” Business Week, August 5, 2002, p93.

Coca-Cola Microsoft IBM GE Intel Nokia Disney McDonalds Marlboro Mercedes


Going InternationalMercedes Benz

• Earlier it was established that a multinational corporation is a firm with significant operations and marketing activities outside its home country. In how many countries do you think Mercedes Benz does business?

http://www.mercedesbenz.com/index_ie.htm

copyright © 2004 by south-western, a division of thomson learning, inc. all rights reserved. global...

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