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Launch your PollEV session: Text : UWMBUSINESS to 37607

Launch your PollEV session: Text : UWMBUSINESS to 37607. *Text LEAVE at the end of class*. Alternate #: (747) 444-3548. Understanding the Marketplace – Global Marketing. Ref: Text, chapter 8. Tariffs make imported goods costly. Hofstede’s Cultural Dimensions. Cultural Values.

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Launch your PollEV session: Text : UWMBUSINESS to 37607

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  1. Launch your PollEV session: Text: UWMBUSINESS to 37607 *Text LEAVE at the end of class* Alternate #: (747) 444-3548

  2. Understanding the Marketplace – Global Marketing Ref: Text, chapter 8

  3. Tariffs make imported goods costly

  4. Hofstede’s Cultural Dimensions Cultural Values

  5. Your questions • Can trade agreements be altered, changed, or canceled?

  6. The “Tomato Wars” • 1996 – NAFTA eliminates tariffs • Prices dropped • Dumping accusations • Trade agreement signed • 2012 – “Stop the trade agreement!” • Mexico retaliates • Would a trade war erupt?? • 2013 – new agreement

  7. Global Entry Strategy • Many firms begin with less risky strategies and progress to riskier alternatives as they gain confidence

  8. Choosing a Global Entry Strategy

  9. Choosing a Global Entry Strategy

  10. Global Entry Strategies • Exporting • This means producing goods in one country and selling them in another • Least financial risk

  11. United States CAR Exports: $53.8 billion

  12. Global Entry Strategies • Franchising • This is a contractual agreement between a firm, called the franchisor, and another firm, the franchisee • Examples: McDonald’s, Pizza Hut, Starbucks, KFC, Holiday inn • Less risk and less investment required, but the firm has limited control over the market operations.

  13. Choosing a Global Entry Strategy

  14. Global Entry Strategies • Strategic Alliance • This refers to a collaborative relationship between independent firms, though the partnering firms do not create an equity partnership; they do not invest in one another

  15. Global Entry Strategies • Joint Venture • This forms when a firm entering a new market pools its resources with those of the local firm to form a new companyin which ownership, control, and profits are shared. The financial burden is thus shared

  16. TESCO in China

  17. Choosing a Global Entry Strategy

  18. Global Entry Strategies • Direct Investment • This requires a firm to maintain 100% ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries • the highest level of investment and exposes the firm to significant risks; many firms believe that these risks are outweighed by the high potential returns

  19. Choosing a Global Marketing Strategy P1 • Define your Target Market, Segment, Position • 4P’s – the global marketing mix 1st P - Global Product Strategies: • Sell the same product in both the home market and the host country – e.g., Coke • Sell a similar product with minor adaptations • Sell totally new products

  20. Product: P1

  21. 1st P - Global Product Strategies: P1 • Sell the same product in both the home market and the host country • Sell a similar product with minor adaptations – e.g., Heinz • Sell totally new products

  22. Use Principles! In uncertain global markets • Applicability • Affordability • Availability • Affinity

  23. 1st P - Global Product Strategies: P1 • Sell the same product in both the home market and the host country • Sell a similar product with minor adaptations • Sell totally new products – e.g., Campbell’s

  24. s

  25. (US Per Capita = $58,000) Per capita income: $1751 P2 $10 PRICE 838 taka (Bangladesh)

  26. P2 Price

  27. Place P3 • Global Distribution Strategies: • Global distribution networks are often complex value chains involving multiple middlemen, exporters, importers, and different transportation systems • These add cost and increase the final selling price of a product

  28. P3 Grocery shop in Indonesia

  29. Promotion P4 • Global Communication Strategies: • Literacy levels, media availability, and advertising regulations differ widely • Differences in language, customs, and culture • Language is particularly problematic.

  30. KFC in China: “So Good, You Suck Your Fingers”??!

  31. “So good!”

  32. Key concepts/ terms to know • Globalization • Assessing a global market using four dimensions: economic, infrastructure & technology, government actions, and sociocultural analysis • Trade deficit, trade surplus • GDP, PPP • Real income • Infrastructure • Tariffs, quotas, boycotts, exchange control, exchange rate, trade agreements, trading bloc • Artifacts of a culture, underlying values, Hofstede’s Concept • Exporting, franchising (franchisor, franchisee), strategic alliance, joint venture, direct investment • Global STP • Global marketing mix: global product, pricing, distribution, communication strategies

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