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UT Knoxville BUAD 332 - Chapter 15 to post

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Slide 1Global Marketing in the 21st CenturyMajor International Marketing DecisionsLooking at the Global Marketing EnvironmentIndustrial StructurePolitical-Legal EnvironmentCultural EnvironmentMajor International Marketing DecisionsDeciding Whether to Go GlobalMajor International Marketing DecisionsDeciding Which Markets to EnterMajor International Marketing DecisionsMarket Entry StrategiesMarket Entry StrategiesMarket Entry StrategiesMarket Entry StrategiesMajor International Marketing DecisionsDeciding on the Global Marketing Program(THE BIG DECISION)Five Global Product and Promotion StrategiesGlobal Product StrategiesMarketing mix adaptationGlobal Promotion StrategiesMajor International Marketing DecisionsDeciding on the Global Marketing OrganizationChapter 15The Global MarketplaceBA 332Global Marketing in the 21st CenturyThe world is shrinking rapidly with the advent of faster communication, transportation, and financial flows.International trade is booming and accounts for 25% of U.S. GDP. global competition is intensifying  higher risk with globalization Ex 120 truckers go on strike at the port of Los Angeles and Long BeachMajor International Marketing DecisionsLooking at the Global Marketing EnvironmentThe International Trade System:Restrictions—tariffs, quotas, embargos, exchange controls, and non-tariff trade barriers.The World Trade Organization and GATT:Helps Trade—reduces tariffs and other international trade barriers.Regional Free Trade Zones:Groups of nations organized to work toward common goals in the regulation of international trade.Industrial StructureShapes a country’s product and service needs, income levels, and employment levels.Subsistence Economies Raw material exporting Industrializing Economies Industrial economicsUS, Canada, China, where the big money isPolitical-Legal EnvironmentAttitudes Toward International Buying Government Bureaucracy Political Stability Monetary RegulationsChile- more stable than counterpart and Argentina – mess cant keep monetary policy togetherCultural EnvironmentSellers must examine the ways consumers in different countries think about and use products before planning a marketing program.Business norms vary from country to country.Companies that understand cultural nuances can use them to advantage when positioning products internationally.Major International Marketing DecisionsDeciding Whether to Go GlobalReasons to consider going global:Foreign attacks on domestic markets auto industry Foreign markets with higher profit opportunitiesPharmaceutical Industry(low regulation) Stagnant or shrinking domestic marketsTobacco Industry Need larger customer base to achieve economies of scaleReduce dependency on single market Follow customers who are expandingMajor International Marketing DecisionsDeciding Which Markets to EnterBefore going abroad, the company should try to define its international marketing objectives and policies.What Volume of Foreign Sales is Desired?How Many Countries to Market In?What Types of Countries to Enter?Choose Possible Countries and Rank Based on Market Size, Market Growth, Cost of Doing Business, Competitive Advantage, and Risk LevelMajor International Marketing DecisionsMarket Entry Strategies LOWHIGH RISKMarket Entry StrategiesExporting:Indirect: working through independent international marketing intermediaries.Work through exporting companies Direct: company handles its own exports.Market Entry StrategiesJoint Venturing:Joining with foreign companies to produce or market products or services.KFC enters Japan through joint venture with Mitsubishi KFC contributes chicken, Mitsubishi contributes knowledge of market Approaches:LicensingContract manufacturingManagement contractingJoint ownershipMarket Entry StrategiesDirect Investment:The development of foreign-based assembly or manufacturing facilities.Company that makes Oreos This approach has both advantages and disadvantages.Major International Marketing DecisionsDeciding on the Global Marketing Program(THE BIG DECISION) Standardized Marketing Mix:Selling largely the same products and using the same marketing approaches worldwide.Adapted Marketing Mix:Producer adjusts the marketing mix elements to each target market, bearing more costs but hoping for a larger market share and return.Five Global Product and Promotion StrategiesGlobal Product StrategiesStraight Product Extension:Marketing a product in a foreign market without any change.Product Adaptation:Adapting a product to meet local conditions or wants in foreign markets.Product Invention:Creating new products or services for foreign markets.Marketing mix adaptation McDonalds adapts food to different markets : crafting different sandwiches to specific marketsGlobal Promotion StrategiesCan use a standardized theme globally, but may have to make adjustments for language or cultural differences.Communication Adaptation:Fully adapting an advertising message for local markets.Changes may have to be made due to media availability.Major International Marketing DecisionsDeciding on the Global Marketing OrganizationOrganize an export departmentCreate international divisionsGeographical organizationsWorld product groupsInternational subsidiariesBecome a global


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