Chapter 5 Rewards of Global Marketing Global Vision recognizing and reacting to international marketing opportunities using effective global marketing strategies and being aware of threats from foreign competitors in all markets Importance of Global Marketing to US o 12 percent of GDP from world trade o 7 percent of US employmet is supported by exports o Smaller companies are aggressively pursuing international markets The Fear of Trade and Globalization o Millions of Americans lost jobs o Threat of outsourcing if workers do not accept pay cuts Benefits of globalization o Expands economic freedom o Spurs competition o Raises productivity and living standards o Offers access to foreign capital o Promotes higher labor and environmental standards Multinational Firms Stages of Global Business Development o Companies operate in one country and sell into others o Set up foreign subsidiaries to handle sales o Operate an entire line of business in another country o Virtual operation Are multinationals beneficial o Pros 19 percent of US private jobs Provide 25 percent private wages o Cons 48 percent ot total exports 74 percent of R and D Technology is capital intensive and doesn t always create employment Supports gov that supports company not country May take away from more wealth then generated Global Marketing Standardization o Production of uniform products that can be sold the same way all over the world o Multidomestic Strategy Subsidiaries of multinational firms are allowed to compete independently in domestic markets o Some multinational corporations are moving toward a degree of global External Environment Factors marketing standardization Culture common set of values shared by its citizens that determine what is socially acceptable o Language o Customs and traditions o Values and expectations of sales Economic Development o More complex ecnomic industries in more developed culture o China and India new market place Political Structure o Less regulated and most efficient economies o Uruguay round made changes made WTO Demographic Makeup o Population density o Urban or rural o Age National Resources o Shortages in national resources International dependencies Shitfs of wealth Export opportunities Stimulus for military intervention Inflation and recession Global Marketing by Individual Firm Go global to o Earn additional profits o Leverage unique product or technological advantage o Possess exclusive market info o Saturated domestic markets o Utilize economies of scale Exporting selling domestically produced products abroad o Buyer for Export assumes all risks and sells internationally for its own account o Export broker brings the buyer and seller together o Export agents are foreign sales agents who live in foreign country Licensing and Franchising o Licensing a licensor allows another firm to manufacture its product overseas for a royalty o Franchising form of licensing Contract Maunufacturing private label manufacturing by a foreign country Joint Venture o Domestic firm buys part of foreign compay or joins with foreigin company to create new entitity o Can be risk many fail Direct Investment Active ownership of foreign company and manufacturing facility Global Marketing Mix Product and Promotion o Same Message Same product One product one message o Change Message same product Promotion Adaption o Same Message change product product Adaption o Change Message change product Product invention Place Distribution o Adequate distribution is necessary for success o Logistics and shipping costs are challenges for US companies overseas o Global trade has added to strains and charges for all forms of transporation Pricing o Must consider transportation costs o Determine what customer will spend o Ensure foreign buyers will pay price May need to simplify product to lower price
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