Chapter 5 Global Marketing Rewards of Global marketing o Recognizing and reacting to international marketing opportunities o Using effective global marketing strategies o Being aware of threats from foreign competitors Importance of Global Marketing o US exports 1 5 of industrial production o 1 of every 10 jobs in US is supported by exports o US business export over 800B in goods o Exports account for 25 of US economic growth Fear of Trade Globalization o Millions of American have lost jobs o Millions fear losing jobs o Threat of outsourcing if workers don t accept pay cuts o Vulnerability to operations moving offshore External Environment Facing Global Marketers o Common set of values shared by its citizens that determine what is socially o Petroleum Foodstuffs Precious metals Timber Water o Culture acceptable o Natural Resources o Economic Technological o Political o Demographic Make up Legal Considerations o Marketing Considerations Population density Urban rural o Tariff tax levied on good entering a country o Quota limit on amt of product entering a country o Boycott exclusion of products from a country o Exchange Control foreign exchange must be sold to a control agency o Marketing Grouping common trade alliance o Trade Agreement an agreement to stimulate international trade Doha Round o Began in 2001 o Highly contentious since the beginning o Failed in summer 2008 o First multilateral free trade act failure since WW11 o Cost of failure 100 Billion Political Legal Considerations o Agreements Organizations o NAFTA North American Free Trade Agreement o CAFTA o European Union Global Marketing Mix o Cultural o Economic Development o Technological Development o Political Structure o Demography o Values languages customs traditions o Urban v rural young v old purchasing power o Natural Resources o Dependence independences Global Marketing Questions o What are our options in selling abroad o How difficult is global marketing o What are the potential risks and returns Entering the Global Marketplace o Tariffs quotas boycotts exchange controls marketing controls trade agreements o Export sell domestically produced products to buyers in other countries o Licensing legal processes allowing use of manufacturing patents knowledge o Contract Manufacturing private label manufacturing by a foreign country o Joint Venture domestic firms buys joins a foreign company to create a new entity o Direct Investment Active ownership of a foreign company manufacturing facility Same product Change product Same message Change message 1 message 1 product Message adaptation Product adaptation Product invention Global Marketing Standardization o Production of uniform products that can be sold the same way all over the world o Ex NOT Coca Cola Diet Coke Coke Light Place Distribution o Adequate distribution is necessary for success in global markets o Some countries have complicated system o Lack of distribution infrastructure cultural differences create problems Export Intermediaries o Dumping o Trying to increase and overseas market share o Temporarily distributing product to overseas markets to offset slack demand at home o Lowering unit costs by exploiting large scale products o Pricing o Must consider transportation insurance costs taxes and tariffs o Determine what customers will spend o Ensure that foreign buyers will pay price o May need to simplify a product at lower price
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