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Understanding the Global Marketing Environment

Understanding the Global Marketing Environment. Class 4. “Every American company is international, at least to the extent that its business performance is conditioned in part by events that occur abroad”. Trends in Global Business. Internationalization of U.S. Markets

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Understanding the Global Marketing Environment

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  1. Understanding the Global Marketing Environment Class 4

  2. “Every American company is international, at least to the extent that its business performance is conditioned in part by events that occur abroad”

  3. Trends in Global Business Internationalization of U.S. Markets Internationalization of U.S. Business Growth of Regional Trade Areas EU, NAFTA, AFTA, APEC Move toward free market system by countries in Latin America, Asia, Eastern Europe Large Emerging Markets such as Argentina, China, South Korea, Poland, India Evolving global middle income households GATT and World Trade Organization The TRIAD

  4. Globalization of Business and Markets • Until recently, competition for U.S. markets was only among U.S. businesses with the same relative cost of money, labor and product è U.S market now includes competitors from all over the world

  5. Why internationalization? • Saturation of U.S. markets

  6. Foreign Acquisitions of U.S. Companies U.S. Company Foreign Owner Keebler (Cookies and other foods) Britain J. Walter Thompson (Advertising) Britain Spiegal (Catalog retailing) Germany Mack Trucks (Automotive) France Giant Food Stores (Supermarkets) Netherlands Pillsbury, Burger King, Pearle Vision Britain CBS Records (Music and Entertainment) Japan Carnation (Coffee-Mate, Friskies pet food) Switzerland Chesebrough-Pond’s (Vaseline) Netherlands SOURCE: Adapted from “The 100 Largest Foreign Investments in the U.S.,” Forbes, July 18, 1994, pp. 266-270.

  7. Why internationalization? • Saturation of U.S. markets • Higher ROI in foreign markets

  8. Why internationalization? • Saturation of U.S. markets • Higher ROI in foreign markets • Establish early position in world markets

  9. Invented Here, Made Elsewhere U.S. Invented Technology 9 0% Phonographs 1% 9 0% Color TVs 1 0% 1 9 7 0 4 0% Audiotape Recorders 0% N O W 1 0% Videotape Recorders 1% 9 9% Machine Tools 3 5% Telephones 9 9% 2 5% 8 9% Semiconductors 6 4% 9 8% Computers 7 4% 0 20 40 60 80 100

  10. Definition of International Marketing • The performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than nation for profit.

  11. What’s the difference between international marketing and domestic marketing? • The environment in which marketing strategies have to be implemented

  12. The International Marketing Task 7 Foreign environment (uncontrollable) 1 Economic forces Political/legal forces Domestic environment (uncontrollable) 2 7 Competitive structure Political/ legal forces Competitive Forces (controllable) Cultural forces Environmental uncontrollables country market A Price Product 3 Channels of distribution Promotion Environmental uncontrollables country market B 6 Level of Technology Geography and Infrastructure Economic climate Environmental uncontrollables country market C 4 5 Structure of distribution

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