Download - © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin REACHING GLOBAL MARKETS 7 7 C HAPTER
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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
REACHINGGLOBAL
MARKETS77CHAPTER
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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
• Describe the nature and scope of world trade from a global perspective and its implications for the United States
• Explain the effects of economic protectionism and the implications of economic integration for global marketing practices.
AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:
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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
• Understand the importance of environmental factors (cultural, economic, and political) for global marketing efforts
• Describe alternative approaches firms use to enter and compete in global markets
AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:
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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
• Identify specific challenges marketers face when crafting worldwide marketing programs.
AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:
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NOW THE WORLD CAN BREATH EASIER…ONE NOSE AT A TIME
REACHING GLOBAL MARKETS
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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
• World Trade Flows• Global perspective
DYNAMICS OF WORLD TRADE
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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
FIGURE 7-1FIGURE 7-1 Illustrative world trade flows for manufactured goods and commodities (billions of dollars)
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• Global perspective (cont) Countertrade Trade feedback effect
• United States perspective Gross domestic product Balance of trade
• Competitive Advantage of Nations
DYNAMICS OF WORLD TRADE
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• Competitive Advantage of Nations Factor conditions Demand conditions Related supporting industries Company strategy, structure, and rivalry Economic Espionage
DYNAMICS OF WORLD TRADE
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Concept Check
1. What is the trade feedback effect?
A: The phenomenon in which a country’s imports affect its exports and vice versa.
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Concept Check
2. What variables influence why some companies and industries in a country succeed globally while others lose ground or fail?
A: Factor conditions; demand conditions; related and supporting industries; and company strategy, structure, and rivalry.
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• Decline of Economic Protectionism
EMERGENCE OF A BORDERLESS ECONOMIC WORLD
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• Decline of Economic Protectionism (cont)
Tariffs Quota World Trade Organization
• Rise of Economic Integration• European Union
EMERGENCE OF A BORDERLESS ECONOMIC WORLD
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• Rise of Economic Integration (cont)• North American Free Trade Agreement
• Asian Free Trade Agreements
EMERGENCE OF A BORDERLESS ECONOMIC WORLD
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• A New Reality: Global Competition among Global Companies for Global Customers• Global Competition
Strategic alliances
EMERGENCE OF A BORDERLESS ECONOMIC WORLD
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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
• A New Reality: Global Competition(cont)• Global Companies
Multidomestic marketing strategy Global marketing strategy
• Global Consumers
• Emergence of Networked Global Marketplace
EMERGENCE OF A BORDERLESS ECONOMIC WORLD
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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Concept Check
1. What is protectionism?
A: It is the practice of shielding one or more sectors of a country’s economy from foreign competition through the use of tariffs or quotas.
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Concept Check
2. The North American Free Trade Agreement was designed to promote free trade among which countries?
A: United States, Canada, and Mexico
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Concept Check
3. What is the difference between a multidomestic marketing strategy an a global marketing strategy?
A: A multidomestic marketing strategy means that firms have as many different product variations, brand names, and advertising programs as countries in which they do business. A global marketing strategy standardizes marketing activities when there are cultural similarities and adapts them when cultures differ.
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• Cultural Diversity Cross-cultural analysis
• Values
• Customs Foreign Corrupt Practices Act
• Cultural Symbols Semiotics
A GLOBAL ENVIRONMENTAL SCAN
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• Cultural Diversity (cont)• Language
Back translation
• Cultural ethnocentricity Consumer ethnocentrism
A GLOBAL ENVIRONMENTAL SCAN
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• Economic Considerations• Stage of Economic Development
• Economic Infrastructure
• Consumer Income and Purchasing Power
A GLOBAL ENVIRONMENTAL SCAN
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• Economic Considerations (cont)• Currency exchange rates
A GLOBAL ENVIRONMENTAL SCAN
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• Political-Regulatory Climate• Political Stability
• Trade Regulations
A GLOBAL ENVIRONMENTAL SCAN
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1.Semiotics involves the study of ___________________________________________________________________________ .
cultural symbols and their role in the assignment of meaning for people
Concept Check
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Concept Check
2. When foreign currencies can by more U.S. dollars, are U.S. products more or less expensive for a foreign consumer?
A: Less expensive.
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• Exporting
• Licensing
• Joint Venture
• Direct Investment
GLOBAL MARKET-ENTRY STRATEGIES
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Concept Check
1. What mode of entry could a company follow if it has no previous experience in global marketing?
A: Indirect exporting through intermediaries.
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Concept Check
2. How does licensing differ from a joint venture?
A: In licensing, the firm offers the right to a trademark, patent or trade secret, in return for a fee or royalty. In a joint venture, a foreign and a local firm to produce some product or service. The two companies share ownership, control, and profits of the new entity.
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• Product and Promotion Strategies Product extension Product adaptation Product invention
CRAFTING A WORLDWIDE MARKETING EFFORT
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• Distribution Strategy
CRAFTING A WORLDWIDE MARKETING EFFORT
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• Pricing Strategy Dumping Gray market
CRAFTING A WORLDWIDE MARKETING EFFORT
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Concept Check
1. Products may be sold globally in three ways. What are they?
A: Product extension, product adaptation, and product invention.
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Concept Check
2. What is dumping?
A: Dumping is when a firm sells a product in a country below its domestic price or below its actual cost.