Designed by Eric Brengle B-books, Ltd.

1. 9 MarketingLamb, Hair, McDaniel Designed by Eric Brengle B-books, Ltd. Prepared by Deborah Baker Texas Christian University Developing a Global Vision CHAPTER 4

2. Learning Outcomes Discuss the importance of global marketing Discuss the impact of multinational firms on the world economy Describe the external environment facing global marketers LOI LO2 LO3

3. Learning Outcomes Identify the various ways of entering the global marketplace List the basic elements involved in developing a global marketing mix Discover how the Internet is affecting global marketing LO4 LO5 LO6

4. Rewards of Global Marketing LOI Discuss the importance of global marketing

5. Global Marketing Rewards of Global Marketing LOI Marketing that targets markets throughout the world.

6. Rewards of Global Marketing LOI Having a global vision means… • Recognizing and reacting to international marketing opportunities • Using effective global marketing strategies • Being aware of threats from foreign competitors

7. Emerging-Market Companies LOI Adapted from “Emerging Giants,” Business Week, July 31, 2006.

8. Importance of Global Marketing to the U. S. LOI • U.S. exports a fifth of industrial production. • One of every 10 jobs in U.S. is supported by exports. • U.S. businesses export over $800 billion in goods. • Exports account for 25 percent of U.S. economic growth . • U.S. is world’s leading exporter of farm products.

9. The Fear of Trade and Globalization LOI • Millions of Americans have lost jobs • Millions fear losing jobs • Threat of outsourcing if workers do not accept pay cuts • Vulnerability to operations moving offshore

10. Benefits of Globalization • Expands economic freedom • Spurs competition • Raises productivity and living standards • Offers access to foreign capital, global export markets, and advanced technology • Promotes higher labor and environmental standards • Acts as a check on government power LOI

11. Know global marketing is important because of economic interdependencies Fears Benefits Identifyglobal marketing opportunities Compete againstforeign competitionin domestic markets Have a Global Vision Understandglobal distributionnetworks Globally-minded marketing managers: REVIEW LEARNING OUTCOMEThe Importance of Global Marketing LOI

12. Multinational Firms LO2 Discuss the impact of multinational firms on the world economy

13. 1 Companies operate in one country and sell into others 2 Set up foreign subsidiaries to handle sales 3 Operate an entire line of business in another country 4 Virtual operation Stages of Global Business Development LO2

14. Global MarketingStandardization Production of uniform products that can be sold the same way all over the world. Global Marketing Standardization LO2

15. Growth Revenue Profits • Human Resources • Physical Resources • FinancialResources Global Marketing MNC REVIEW LEARNING OUTCOMEImpact of Multinational Firms LO2

16. External Environment Facing Global Marketers LO3 Describe the external environment facing global marketers

17. External Environment Facing Global Marketers LO3 Culture Economic and Technological Development Political Structure Demographic Makeup Natural Resources

18. Culture The common set of values shared by its citizens that determine what is socially acceptable. Culture LO3

19. Biz Flix LO3 Lost in Translation 19

20. Developed Country Complex, sophisticated industries Basic industries Less DevelopedCountry Economic and Technological Development LO3

21. No private ownershipMinimal individual freedom Little central government Maximum personal freedom Political Structure and Actions LO3

22. Tariff A tax levied on goods entering a country Quota Limit on the amount of a product entering a country Boycott Exclusion of products from a country Exchange Control Foreign exchange must be sold to a control agency Market Grouping Common trade alliance Trade Agreement An agreement to stimulateinternational trade Legal Considerations LO3

23. Entertainment, pharmaceuticals, integrated circuits, and software Financial, legal, and accounting services Agriculture Textiles and apparel And created a new trade organization: The World Trade Organization Political and Legal Considerations The Uruguay Round made changes in world trading practices LO3

24. Agreementsand Organizations CAFTA NAFTA European Union http://www.wto.org Online Political and Legal Considerations LO3

25. Demographic Makeup LO3 Marketing Considerations: • Population density • Urban or rural • Personal income • Age

26. Shortages in Natural Resources LO3 Create… • International dependencies • Shifts of wealth • Inflation and recession • Export opportunities if resources are abundant • Stimulus for military intervention

27. Natural Resources LO3 • Petroleum • Foodstuffs • Precious metal • Timber • Water

28. REVIEW LEARNING OUTCOMEExternal Environment Facing Global Marketers LO3

29. Global Marketing by the Individual Firm LO4 Identify the various ways of entering the global marketplace

30. Global Marketing Questions http://www.cat.com Online LO4 • What are our options in selling abroad? • How difficult is global marketing? • What are the potential risks and returns?

31. Why “Go Global”? LO4 • Earn additional profits • Leverage a unique product or technological advantage • Possess exclusive market information • Saturated domestic markets • Excess capacity • Utilize “economies of scale”

32. High risk/ high return Risk Direct Invest- ment Joint Venture Contract Manu- facturing Licensing Export Low risk/ low return Return Risk Levels for Global Entry LO4

33. Export Sell domestically produced products to buyers in other countries Licensing Legal process allowing use of manufacturing/patents/knowledge ContractManufacturing Private-label manufacturing by a foreign country Joint Venture Domestic firm buys/joins a foreign company to create new entity Direct Investment Active ownership of a foreign company/manufacturing facility Entering the Global Marketplace LO4

34. Assumes all ownership risks and sells globally for its own account. Buyer for Export Export Broker Plays the traditional broker’s role by bringing buyer and seller together. Acts like a manufacturer’s agent for the exporter in the foreignmarket. Export Agent Export Intermediaries LO4

35. REVIEW LEARNING OUTCOMEEntering the Global Marketplace LO4

36. The Global Marketing Mix LO5 List the basic elements involved in developing a global marketing mix

37. Same Product Change Product One Product One Message Product Adaptation Same Message Message Adaptation Product Invention Change Message http://www.disney.go.com Online Product and Promotion LO5

38. Place (Distribution) LO5 • Adequate distribution is necessary for success in global markets • Some countries have complicated systems • Lack of distribution infrastructure and cultural differences create problems • Innovative distribution systems can create competitive advantage

39. Pricing LO5 • Must consider transportation and insurance costs, taxes and tariffs • Determine what customers will spend • Ensure that foreign buyers will pay price • May need to simplify a product to lower price • Don’t assume that low-income countries are willing to accept lower quality

40. Exchange Rates The price of one’s currency in terms of another country’s currency. Exchange Rates LO5

41. Dumping LO5 • Trying to increase an overseas market share • Temporarily distributing products to overseas markets to offset slack demand at home • Lowering unit costs by exploiting large-scale production • Attempting to maintain stable prices during periods of exchange rate fluctuations

42. Countertrade A form of trade in which all or part of the payment for goods or services is in the form of other goods or services. Countertrade LO5

43. PROMOTION One Product, One Message Product Invention Product Adaptation Message Adaptation REVIEW LEARNING OUTCOMEDeveloping a Global Marketing Mix LO5 PLACE Channel Choice Channel Structure Country Infrastructure PRICE Dumping Countertrade Exchange Rates Purchasing Power

44. The Impact of the Internet LO6 Discover how the Internet is affecting global marketing

45. REVIEW LEARNING OUTCOMEThe Impact of the Internet LO6