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GLOBAL MARKETING MANAGEMENT. by MASAAKI KOTABE and KRISTIAAN HELSEN John Wiley & Sons, Inc. 1998. GLOBALIZATION IMPERATIVE Chapter One. Globalization Imperative Chapter One. Overview 1. Why Global Marketing is Imperative 2. Globalization of Markets and Competition
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GLOBAL MARKETING MANAGEMENT by MASAAKI KOTABE and KRISTIAAN HELSEN John Wiley & Sons, Inc. 1998
GLOBALIZATION IMPERATIVEChapter One John Wiley & Sons, c 1998
Globalization ImperativeChapter One • Overview • 1. Why Global Marketing is Imperative • 2. Globalization of Markets and Competition • 3. Evolution of Global Marketing • 4. Appendix John Wiley & Sons, c 1998
Overview of Globalization Imperative John Wiley & Sons, c 1998
1. Why Global Marketing is Imperative • Exhibit 1-1 “Change in the World’s 100 Largest Companies” • global vs international vs multinational John Wiley & Sons, c 1998
2. Globalization of Markets and Competition • Exhibit 1-2 “ US Balance of Goods, Services and Income over 20 Year Period” • International Trade (IT) and International Business (IB) • IT = exports/imports • IB = includes IT and foreign production • export of products • investment in foreign production • contract or manufacture in foreign country • foreign production is larger than IT John Wiley & Sons, c 1998
2. Globalization of Markets and Competition (cont) • Global Reach • United States • 3:1 ratio of foreign products to exports • 6:1 ration of US/European production to exports • 5:1 ratio of European owned US located subsidiaries • Japan • 2.5:1 ratio of Japanese subsidiaries to Japanese exports John Wiley & Sons, c 1998
2. Globalization of Markets and Competition (cont) • Who Manages International Trade? • intra-firm trade • transfers to affiliates overseas • 30% of US exports • 30% of exports by Japan and Britain John Wiley & Sons, c 1998
3. Evolution Of Global Marketing • What is Marketing? • satisfies customers needs • anticipates and creates their future needs at a profit • reactively and proactively • Domestic Marketing • exhibit 1-3 • ethnocentric John Wiley & Sons, c 1998
3. Evolution of Global Marketing (cont) • Export Marketing • ethnocentric • International Marketing • polycentric • multidomestic marketing • Multinational Marketing • regiocentric John Wiley & Sons, c 1998
3. Evolution of Global Marketing (cont) • Global Marketing • geocentrism • reduction of cost inefficiencies and duplication of efforts • opportunities to transfer products, brands and ideas across subsidiaries • emergence of global customers • improved linkages … leading to global market infrastructure John Wiley & Sons, c 1998
4. APPENDIX • Comparative Advantage Theory • International Product Cycle Theory • Internalization / Transaction Cost Theory John Wiley & Sons, c 1998
COMPARATIVE ADVANTAGE THEORY • Exhibit 1-4 “Comparative Advantage at Work” • absolute advantage vs comparative advantage • commodity terms of trade • principles of international trade • 1. countries benefit from international trade • 2. international trade increases worldwide production by specialization • 3. exchange rates are primarily determined by traded goods John Wiley & Sons, c 1998
INTERNATIONAL PRODUCT CYCLE THEORY • Exhibit 1-5 “International Product Cycle” • first • economies of scale • economies of scope • second • technological gap • monopoly power • third • preference similarity (consumption power) John Wiley & Sons, c 1998
INTERNALIZATION/ TRANSACTION COST THEORY • multinational companies • appropriability regime • dominant design • manufacturing and marketing ability John Wiley & Sons, c 1998