DATE 04 0615 Course Title Introduction to Marketing Course MKTG 2201 CRN 34372 The Global Marketplace Chapter 17 Previewing the Concepts Discuss how the international trade system ad the economic political legal and cultural environments affect a company s internal marketing decisions Describe three key approaches to entering international markets Explain how companies adapt their marketing campaigns for international markets Identify the three major forms of international marketing Google in China Global Firm By early 2006 Google received Chinese governments approval to launch Google cn Despite its success it started growing increasingly uncomfortable with China s censorship restrictions In 2010 the company removed all technical operations from mainland china A firm that by operating in more than one country gains R D production marketing and financial advantages in its costs and reputation that are not available to purely domestic competitors Economic opportunity o Ex Marketing in Cuba Major international Marketing Decisions Figure 17 1 1 Looking a the global marketing environment 2 Deciding whether to go global 3 Deciding which markets to enter 4 Deciding how to enter the market 5 Deciding on the global marketing program 6 Deciding on the global marketing organization Page 1 of 4 Trade barriers Tariffs DATE 04 0615 o Taxes on certain imported products designed to raise revenue or protect domestic firms Quotas categories s Exchange controls countries Nontariff trade barriers o Limits on the amount of foreign imports that they will accept in certain product o Limit the amount of foreign exchange and the exchange rate against other o Biases against a company s bid restrictive product standards or excessive host country regulations Ex The Chinese government has set up a great firewall of China electronic and censorship barriers that limit or keep out foreign websites such as Google and YouTube while creating safe havens within which Chinese copycat websites such as Baidu and Youku can thrive The World Trade organization Promotes trade by reducing trade barriers Regional free trade zones Group of nations organized to work toward common goals in the regulation of international trade European union EU countries o Reduces barriers to free flow of products services and labor among member o Develops policies on trade with nonmember nations North American Free Trade Agreement o Established free trade zone among the USA Mexico and Canada Central American Free Trade Agreement Page 2 of 4 Economic Environment DATE 04 0615 Factors that reflect a country s attractiveness as a market o Industrial structure Subsistence economies Vast majority of people engage in simple agriculture Consumer most of their output and barter the rest for simple goods and services Raw material exporting economies Rich in 1 natural resources but poor in other ways o Ex Diamonds in Africa Much of the revenue comes from exporting these resources Industrialized nations many have low medium and high income households Ex In India Ford s 7 700 Figo targets low to middle income consumers who are now able to afford their first car Subsistence economies consist mostly of households with very low family incomes o Income distribution Industrial structure shapes its product and service needs income levels and employment levels In considering whether to do business in a given country companies should consider Political Legal Environment o Country s attitude toward international buying o Government bureaucracy o Political stability o Monetary regulations The Impact of Culture on Marketing Strategy Consumers in different countries think about and use certain products differently Ex McDonalds in India have a different menu Business norms and behaviors also vary from country to country Companies that understand cultural nuances can o Avoid expensive and embarrassing mistakes o Take advantage of cross cultural opportunities Page 3 of 4 DATE 04 0615 o Can use them to their advantage in the global markets Ex IKEA customers in China want a lot more from its stores than just affordable Scandinavian design furniture Many iconic American brands are prospering globally even in some of the most unlikely places o Ex At this Tehran restaurant American colas are the drink of choice Coke and Pepsi have grabbed about half the national soft drink sales in Iran Page 4 of 4
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