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Slide 7-1

Slide 7-1. C HAPTER. REACHING GLOBAL MARKETS. Slide 7-2. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:. Describe the nature and scope of world trade from a global perspective and its implications for the United States.

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Slide 7-1

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  1. Slide 7-1

  2. CHAPTER REACHING GLOBAL MARKETS Slide 7-2

  3. AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO: • Describe the nature and scope of world trade from a global perspective and its implications for the United States. • Identify the major trends that have influenced the landscape of global marketing in the past decade. • Identify the environmental factors that shape global marketing efforts. Slide 7-3

  4. AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO: • Name and describe the alternative approaches companies use to enter global markets. • Explain the distinction between standardization and customization when companies craft worldwide marketing programs. Slide 7-4

  5. DYNAMICS OF WORLD TRADE • World Trade Flows • Global Perspective • Countertrade • Trade Feedback Effect • United States Perspective • Gross Domestic Product (GDP) • Balance of Trade Slide 7-6

  6. FIGURE 7-1Illustrative world trade flows for manufactured goods and commodities (billions of dollars) Slide 7-7

  7. DYNAMICS OF WORLD TRADE • Competitive Advantage of Nations • Porter’s Diamond of National Competitive Advantage • Factor Conditions • Demand Conditions • Related and Supporting Industries • Company Strategy, Structure, and Rivalry • Economic Espionage Act (1996) Slide 7-8

  8. FIGURE 7-2Porter’s diamond of national competitive advantage Slide 7-9

  9. Concept Check 1. What is the trade feedback effect? A: The phenomenon in which a country’s imports affect its exports and vice versa. Slide 7-11

  10. Concept Check 2. What variables influence whysome companies and industriesin a country succeed globallywhile others lose ground or fail? A: (1) factor conditions; (2) demand conditions; (3) related and supporting industries; and (4) company strategy, structure, and rivalry. Slide 7-12

  11. MARKETING IN A BORDERLESS ECONOMIC WORLD • Decline of Economic Protectionism • Protectionism • Tariffs • Quota • World Trade Organization (WTO) Slide 7-13

  12. FIGURE 7-3 How protectionism affects world trade Slide 7-14

  13. MARKETING IN A BORDERLESS ECONOMIC WORLD • Rise of Economic Integration • European Union • Euro • North American Free Trade Agreement (NAFTA) • Asian Free Trade Agreements Slide 7-16

  14. FIGURE 7-4The countries of the European Union in 2005 Slide 7-17

  15. MARKETING IN A BORDERLESS ECONOMIC WORLD • A New Reality: Global Competition among Global Companies for Global Consumers • Global Competition • Global Competition • Strategic Alliances Slide 7-19

  16. MARKETING IN A BORDERLESS ECONOMIC WORLD • A New Reality: Global Competition among Global Companies for Global Consumers • Global Companies • International Firms • Transnational Firms • Multinational Firms • Global Marketing Strategy • Multidomestic Marketing Strategy • Global Brand Slide 7-21

  17. FIGURE 7-AGlobal companies and marketing strategies Slide 7-22

  18. MARKETING IN A BORDERLESS ECONOMIC WORLD • A New Reality: Global Competition among Global Companies for Global Consumers • Global Consumers • Emergence of a Networked Global Marketspace Slide 7-23

  19. Concept Check 1. What is protectionism? A: Protectionism is the practice of shielding one or more industries within a country’s economy from foreign competition, using through the use of tariffs or quotas. Slide 7-26

  20. Concept Check 2. The North American Free Trade Agreement was designed to promote free trade among which countries? A: United States; Canada; and Mexico Slide 7-27

  21. Concept Check 3. What is the difference between a multidomestic and 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. Slide 7-28

  22. A GLOBAL ENVIRONMENTAL SCAN • Cultural Diversity • Cross-Cultural Analysis • Values • Customs • Foreign Corrupt Practices Act (1977) • Cultural Symbols • Semiotics Slide 7-29

  23. FIGURE 7-B Cultural appreciation Slide 7-30

  24. A GLOBAL ENVIRONMENTAL SCAN • Cultural Diversity • Language • Back Translation • Cultural Ethnocentricity • Consumer Ethnocentrism Slide 7-32

  25. A GLOBAL ENVIRONMENTAL SCAN • Economic Considerations • Stage of Economic Development • Developed Countries • Developing Countries • Economic Infrastructure Slide 7-34

  26. A GLOBAL ENVIRONMENTAL SCAN • Economic Considerations • Consumer Income and Purchasing Power • Currency Exchange Rates Slide 7-36

  27. FIGURE 7-5How purchasing power differs around the world Slide 7-37

  28. A GLOBAL ENVIRONMENTAL SCAN • Political-Regulatory Climate • Political Stability • Trade Regulations Slide 7-38

  29. Concept Check 1. Semiotics involves a study of ____. A: the correspondence between symbols and their role in the assignment of meaning to people Slide 7-40

  30. Concept Check 2. When foreign currencies buy more U.S. dollars, are U.S. products more or less expensive for a foreign consumer? A: less expensive Slide 7-41

  31. GLOBAL MARKET-ENTRY STRATEGIES • Exporting • Indirect Exporting • Direct Exporting Slide 7-42

  32. FIGURE 7-6How purchasing power differs around the world Slide 7-43

  33. GLOBAL MARKET-ENTRY STRATEGIES • Licensing • Contract Manufacturing • Contract Assembly • Franchising Slide 7-45

  34. GLOBAL MARKET-ENTRY STRATEGIES • Joint Venture • Direct Investment Slide 7-47

  35. 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 Slide 7-49

  36. 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 royalty or fee. In a joint venture, a foreign and a local firm invest together to produce some product or service. The two companies share ownership, control, and profits of the new entity. Slide 7-50

  37. CRAFTING A WORLDWIDE MARKETING PROGRAM • Product and Promotion Strategies • Product Extension • Product Adaptation • Product Invention Slide 7-51

  38. FIGURE 7-7Five product and promotion strategies for global marketing Slide 7-52

  39. CRAFTING A WORLDWIDE MARKETING PROGRAM • Distribution Strategy • Pricing Strategy • Dumping • Gray Market or Parallel Importing Slide 7-54

  40. FIGURE 7-8Channels of distribution in global marketing Slide 7-55

  41. Concept Check 1. Products may be sold in three ways. What are they? A: (1) in the same form as in its home market (product extension); (2) with some changes (product adaptation); and (3) as a totally new product (product invention). Slide 7-56

  42. Concept Check 2. What is dumping? A: Dumping is when a firm sells a product in a foreign country below its domestic price or below its actual cost. Slide 7-57

  43. GETTING TO KNOW THE WTO GOING ONLINE Slide 7-58

  44. Going Online • 1.Countries are constantly seeking WTO membership. How many countries are now members of this organization? Which country is the newest member? Slide 7-59

  45. Going Online • 2.What are the 10 most common misunderstandings about the WTO identified by this organization? Slide 7-60

  46. THE GLOBAL CONSUMER IN CHINA: DEFINING “COOL” SUPPLEMENTALLECTURE NOTE 7-1 Slide 7-61

  47. ADDITIONAL EXAMPLESOF VALUES, CUSTOMS, CULTURAL SYMBOLS,AND LANGUAGE SUPPLEMENTALLECTURE NOTE 7-2 Slide 7-62

  48. CNS BREATHE RIGHT STRIPS:GOING GLOBAL VIDEO CASE 7 Slide 7-63

  49. VIDEO CASE 7CNS Breathe Right FIGURE 1CNS three- stage approach to penetrate and develop new markets Slide 7-65

  50. VIDEO CASE 7CNS Breathe Right • 1.What are the advantages and disadvantages for CNS taking Breathe Right strips into international markets? Slide 7-66

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