Chapter 5 –Global MarketingRewards of Global marketingo Recognizing and reacting to international marketing opportunitieso Using effective global marketing strategieso Being aware of threats from foreign competitorsImportance of Global Marketingo US exports 1/5 of industrial productiono 1 of every 10 jobs in US is supported by exportso US business export over $800B in goodso Exports account for 25% of US economic growthFear of Trade & Globalizationo Millions of American have lost jobso Millions fear losing jobso Threat of outsourcing if workers don’t accept pay cutso Vulnerability to operations moving offshoreExternal Environment Facing Global Marketerso Cultureo Common set of values shared by its citizens that determine what is socially acceptableo Natural Resourceso Petroleum, Foodstuffs, Precious metals, Timber, Watero Economic & Technologicalo Politicalo Demographic Make-upo Marketing Considerations: Population density; Urban/ruralLegal Considerationso Tariff- tax levied on good entering a countryo Quota- limit on amt of product entering a countryo Boycott- exclusion of products from a countryo Exchange Control- foreign exchange must be sold to a control agencyo Marketing Grouping- common trade allianceo Trade Agreement- an agreement to stimulate international tradeDoha Roundo Began in 2001o Highly contentious since the beginningo Failed in summer 2008o First multilateral free trade act failure since WW11o Cost of failure= $100 BillionPolitical & Legal Considerationso Agreements & Organizationso NAFTA- North American Free Trade Agreemento CAFTAo European UnionGlobal Marketing Mixo Culturalo Values, languages, customs, traditionso Economic Developmento Technological Developmento Political Structureo Tariffs, quotas, boycotts, exchange controls, marketing controls, trade agreementso Demographyo Urban v. rural, young v. old, purchasing powero Natural Resourceso Dependence, independencesGlobal Marketing Questionso What are our options in selling abroad?o How difficult is global marketing?o What are the potential risks and returns?Entering the Global Marketplaceo Export: sell domestically produced products to buyers in other countrieso Licensing: legal processes allowing use of manufacturing/patents/knowledgeo Contract Manufacturing: private label manufacturing by a foreign countryo Joint Venture: domestic firms buys/joins a foreign company to create a new entityo Direct Investment: Active ownership of a foreign company/manufacturing facilitySame product Change productSamemessage1 message 1productProductadaptationChangemessageMessageadaptationProductinventionGlobal Marketing Standardizationo Production of uniform products that can be sold the same way all over the worldo Ex: NOT Coca-Cola (Diet Coke=Coke Light)Place (Distribution)o Adequate distribution is necessary for success in global marketso Some countries have complicated systemo Lack of distribution infrastructure & cultural differences create problemsExport Intermediarieso Dumpingo Trying to increase and overseas market shareo Temporarily distributing product to overseas markets to offset slack demand at homeo Lowering unit costs by exploiting large-scale productso Pricingo Must consider transportation & insurance costs, taxes, and tariffso Determine what customers will spendo Ensure that foreign buyers will pay priceo May need to simplify a product at lower
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