Ch 5 Developing a Global Vision 10 30 2014 5 1 Rewards of Global Marketing Global boundless mobility and competition in social business and intellectual areas Global Marketing marketing that targets markets throughout the world 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 A Importance of Global Marketing in the United States GDP total market value of all final goods services in a country for a given time period B The Impact of Trade and Globalization Negatives of Global Trade Americans loss jobs due to imports production shifts abroad or outsourcing of tech jobs Some find new jobs but often pay less Americans fear losing their jobs Employers often threaten to outsource jobs if workers do not accept pay cuts Service and white collar jobs are increasingly vulnerable to operations moving offshore 1 Job Outsourcing sending U S jobs abroad Ch 5 Developing a Global Vision 2 Benefits of Globalization Economic theory says that globalization relies on competition to drive down prices and increase product and service quality Business go to countries that operate most efficiently and or have the technology to produce what they need Globalization expands economic freedom spurs competition and raises the productivity and living standards of people in countries that open themselves to the global market place For less developed countries globalization offers access to foreign capital global export makers and advanced technology while breaking the monopoly of inefficient and protected domestic producers Faster growth reduces poverty encourages democratization and promotes higher labor and environmental standards Globalization acts as a check on govt power making it more difficult for govts to abuse the freedom and property of their citizens 5 2 Multinational Firms Multi National Corporation a company that is heavily engaged in international trade beyond exporting and importing moves resources goods services and skills across national boundaries w o regard to the country in which its headquarters are located Multinationals develop global businesses in stages 1 Companies operate in one country and sell to others 2 Multinationals set up foreign subsidiaries to handle sales in one country 3 Multinationals operate an entire line of business in another country 4 Mostly high tech companies the executive site is virtual their top execs and core corporate functions are in different countries wherever the firms can gain a competitive edge through the availability of talent or capital low costs or proximity to their most important customers A Are Multinationals Beneficial Multinationals in developing countries is controversial Multinationals can transfer the most up to date technology Ch 5 Developing a Global Vision Critics however say that multinationals often transfer the wrong technology to developing countries Usually the technology is Capital Intensive using more capital than labor in the production process and therefore does not substantially increase employment Multinationals sometimes support reactionary and oppressive Others say firms take more wealth out of developing nations than regimes they bring in Global Marketing Standardization B The emergence of global markets for standardized consumer products on a huge scale opposed to segmented foreign markets with different products be sold the same way all over the world production of uniform products that can Global Market Standardization Presumes markets all over the world are becoming more alike Multidomestic Strategy subsidiaries to compete independently in domestic markets when multinational firms enable individual 5 3 External Environments Faced by Global Markets Environment Factors culture economic and technological development political structure and actions and natural resources A Culture The common set of values shared by its citizens that determines what is socially acceptable Language creates problem for marketers B Economic Factors Level of economic development in country Larger incomes mean greater purchasing power and demand not only for consumer goods services but also for machinery and workers required to produce consumer goods Gross National Income GNI measure of the ability of countries citizens to buy various goods services C Global Economy Forecasting global demand and economic growth requires an understanding of what is happening economically in countries around the globe Ch 5 Developing a Global Vision D Dong Business in China and India E Political Structure and Actions 1 Legal Considerations o Tariff a tax levied on the goods entering a country Will either reduce the profits of a firm paying the tariff or raise prices to buyers or both Normally raises prices of the imported goods and makes it easier for domestic firms to compete a limit on the amount of a specific product that can enter Means of protection from foreign competition the exclusion of all products from a certain country or o Quota a country o Boycott company Government Use boycotts to exclude countries that they have a political dispute with o Exchange Control a law compelling a company earning foreign exchange from its exports to sell it to a control agency usually a central bank A company wishing to buy goods abroad must first obtain a foreign currency exchange from the control agency o Marketing Grouping several countries agree to work together to form a common trade area that enhances trade opportunities aka common trade alliance occurs when Ex European Union EU o Trade Agreement an agreement to stimulate international trade the largest Latin American trade agreement 2 The Uruguay Round the Failed Dohu Round and Bilateral Mercosur Agreements o Uruguay Round barriers worldwide created the World Trade Organization a trade agreement to dramatically lower trade o Uruguay Round made several changes in world trading practices Entertainment Pharmaceuticals Integrated Circuits and Software 20 years Rules protect patents copyrights and trademarks for Computer programs receive 50 years of protection Ch 5 Developing a Global Vision Semiconductor chips receive 10 Financial Legal and Accounting Services Easier for managers and key personnel to me admitted into a country Licensing standards for professionals such as doctors cannot discriminate against foreign applicants Agriculture Europe reducing farm subsidies New
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