MKTG 350 1st Edition Lecture 8 Current LectureGlobal Marketing Globalization- the process by which goods, services, capital, people, information, and ideas cross international boarders. - Started in manufacturing—cheaper to make abroad and ship- Now knowledge—banking (financial advice), medicine (take x-ray and send it to anyone in the world to analyze), call centers (India), Factors that aid in globalization- law, educated workforce, changing demographicsGATT- general agreement of tariffs and trade—23 countries and 20% of world trade WTO- world trade organization (1994)—only organization to deal with global rule of trade (160 members), virtually all world trade Assessing Global Markets 1. Economic Analysis using metrics- (surplus)a. GDP- the value of goods and services produced in a country in a year b. Gross national income- GDP + income from American companies that operate abroadc. Purchasing power parity- exchange rate (euro decreasing relative to the dollar) i. Equal purchasing power in different countries ii. Big mac index- look at price of the big mac and compare to other countries d. Human development index- developed by UNi. Measures the relative world economic healthii. Look at life expectancy at birth, educational attainment, and if average income is sufficient enough to meet the basic needs of life 1. Low end- any countries less than .5 – 2. Medium- .5-.83. High- above .8 iii. Population growth – more prosperous countries have a lower birth rate 1. Urban vs. Rural – easier to do business in urban areas 2. India is popular with economic growth because of urbanization, education growth These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.iv. Real income- firms can make adjustments to an existing product or change the prices to meet the unique needs of a particular country markets2. Infrastructure and technology- analyzing infrastructure and technological capabilities- a. Transportation Systems- the highways, railway system, airports, refrigeration systems b. Communication- systematic distribution of information i. Media- television (how many stations and who owns them)ii. How will people be able to find information about our produce c. Distribution channel- the organizations and individuals who are getting the product from the manufacture to the customers (timely and at a reasonable costi. US is very efficient- many logistic carriers that can get product to customers (China takes a lot longer because systems are small and individually owned—they focus more on employment) d. Commerce - legal systems, banking, and regulatory systems i. Foreign owned companies – might have to partner and not have full ownership 3. Government agencies a. Quota- restricting number of goods that come into a country b. Exchange controls- currency regulation (may engage directly in trade –barter- with other countries to offset the regulations) i. If US dollar goes up compared to other counties we buy more imports and travel more, export less. c. Trade agreements- agreement between different countries that relaxes some restrictionsi. NAFTA- opened up trade between US, Canada, and Mexico – standardizedtrade d. Tariff- tax on imported goods (to make domestic goods more attractive financially) 4. Sociocultural factorsa. Power distance- how you accept social inequality i. US- low power distance ii. High (caste system) – Russia, Latin countriesiii. Woman cant easily become successful in a high power distance country b. Uncertainty avoidance- rules and laws about how to behave i. High Russia and Germanyii. Low- Singapore, Denmark c. Individualism- the extent where an individual can make his own decisionsi. High- US – its fine when a student stays in, Germany ii. Low- Collectivist – not acceptable to stay home when others go out (dependence on groups) China, Brazil, Latin Americad. Masculinity- dominance vs. equality among gendersi. Male dominant- woman have very little say, cant vote, don’t stand up to husband, cant own a business1. Wife studying- husband staying with her—She would defer to husband because she cant make her own decision e. Time orientation – short time- things should happen immediately and don’t plan for the long terms, while long term is for very far into the future. i. Short- Agriculture societyii. Long- Germany – green countriesChoosing the Global Entry Strategy Control vs. risk 1. Least risky – export 2. A little more control- Franchising (sells the right to own and operate a business in a certain manor) –still not onsite3. Strategic alliances – collaborate with others but not an official partnership 4. Joint venture- pool resources and are both owners (sharing the risk and profits) 5. Ultimate control- direct investment- knowledge and understand and the means to do it –biggest payback – must have capabilities Choosing a Global Marketing Strategy- STP1. Culture nuances2. Subculture3. View of product and consumer role4. Different positioning5. Adaptation6. Single positioning strategy Sell the same product or services in both home country market and host country sell a product or service similar to that sold in home country but include minor adaptations sell totally new product or services Price - Tariffs- cut profits- Quotas- have to spread profit over less product- Anti-dumping policies- take a product into other country and sell below cost (if you cant sell it all) - Economic conditions - Competitive factors- might have to price differently Legal- Price change (Sale) only twice a year (Italy, Belgium, Denmark), must be on market on for 30 days Global DistributionSome global channels are very long and complex, consumer shop local small local stores,Suppliers must be creative in delivering to these outletsMcDonalds- different food in different countries (Macrons in France, Sea food in Japan, alcohol in Spain, Cheese fires in Canada, Gelato in Italy, large servings in United