Rachel Lissak BMGT350 D Whitney Fall 2011 Ch 5 1 5 1 Rewards of Global Marketing o Global Marketing marketing that target markets throughout the world o A US firm s toughest domestic competition comes from foreign companies Foreign competition is present in the domestic market of almost all of today s industries o Global Vision recognizing and reacting to international marketing opportunities using effective global marketing strategies and being aware of threats from foreign competition in all markets Small businesses are very slow and hesitant in their involvement in global markets Importance of Global Marketing to the United Stated Many countries depend on international commerce more than the US does trade Most small and medium sized firms are nonparticipants in global Only the large multinational companies have attempted to compete worldwide o The Fear of Trade and Globalization Negatives of world trade Millions of Americans have lost jobs due to imports product shifts abroad or outsourcing of tech jobs Employers often threaten to outsource jobs if employees Service and white collar jobs are increasingly vulnerable to don t accept pay cuts operations moving offshore o Job Outsourcing Job Outsourcing sending US jobs abroad It is about corporate growth efficiency productivity and revenue growth Cost savings is a key driver of outsourcing o Benefits of Globalization Traditional economic theory Globalization relies on competition to drive down prices and increase product and service quality Globalization expands economic freedom spurs competition and raises the productivity and living standards of people in countries that open themselves to the global marketplace For less developed countries it also offers Access to foreign capital Global export markets Advanced technology while breaking the monopoly of inefficient and protected domestic producers Created a middle class that has raised the standard of living for millions of people Rachel Lissak BMGT350 D Whitney Fall 2011 Ch 5 2 5 2 Multinational Firms Makes it harder for governments to abuse their citizens freedom and property Faster growth reduces poverty encourages democratization promotes higher labor and environmental standards o Multinational Corporation a company that is heavily engaged in international trade beyond exporting and importing Moves resources goods services and skills to different countries Many US Multinational corporation earn a large part of their revenue abroad o Often develop their global business in stages 1 Companies operate in one country and sell to others 2 Multinationals set up subsidiaries to handle sales on one country 3 Multinationals operate an entire line of business in another country 4 Executive virtual suite A multinational company that has several worldwide headquarters Evolved because of the internet Controversial issue Involves mostly high tech companies o Capital Intensive using more capital than labor in the production process Blocking Foreign Investment o Governments from China to Canada are placing restrictions on foreign purchases of factories land and companies in their countries The US firms that work abroad serve customers through foreign affiliates and not by exports China s new regulations let government officials block a local purchase if it is a danger to economic security o US is also placing restrictions on foreign investment Congress passed legislation to screen foreign purchases of US assets with national security implications or threatens US based companies employment o If more countries begin blocking investment by multinationals it will have a negative impact on global trade Global Marketing Standardization o Marketing oriented multinational organizations have operated differently from country to country depending on culture o Global Marketing Standardization production of uniform products that can be sold the same way all over the world Assumes that markets throughout the world are becoming more and more alike o Should enable companies to Lower production and marketing costs Increase profits Rachel Lissak BMGT350 D Whitney Fall 2011 Ch 5 3 5 3 External Environment Facing Global Markets o Many of the same environmental factors operate in the domestic market also exist internationally Culture Economic and Technological Development Demographic Makeup Natural Resources Political Structure and Actions Culture o People s values have a huge impact on their preferences o Cultural blunders lead to misunderstandings and often perceptions of rudeness or incompetence o Language can also create problems for marketers Must take care in translating product names slogans instructions and promotional messages so that they do not deliver the wrong message o Each country has its own customs and traditions that determine business practices and influence negotiations with foreign customers Successful sales presentation abroad requires a thorough understanding of the country s culture Economic and Technological Development o Level of economic development in the countries where it operates o In general Complex and sophisticated industries are found in developed countries More basic industries are found in less developed nations Doing Business in China and India o Both have a lot of economic potential High growth rates and emerging as megamarkets World s two largest populations geographical areas Linguistic and sociocultural diversity o Among the highest levels of income disparity in the world No average Indian or Chinese consumer o Market success is rarely possibly without segmenting the local markets o US relations with China are strained China doesn t enforce US patents Restricts the exchange rate of the yen Maintains policies that encourage Chinese products over American ones Political Structure and Actions The least regulated and most efficient economies are concentrated among countries with well established common law traditions o Legal Considerations political environment Legal considerations are closely related to and often involve the Rachel Lissak BMGT350 D Whitney Fall 2011 Ch 5 4 Tariff a tax levied on the goods entering a country Quota a limit on the amount of a specific product that can enter Boycott the exclusion of all products from certain countries or a country companies Exchange Control law compelling a company earning foreign exchange from its exports to sell it to a control agency usually a central bank Market Grouping several countries agree to work together to form a
View Full Document
Unlocking...