Chapter 4Chapter 4Developing a Global VisionDeveloping a Global Vision

Global VisionGlobal Vision

• Recognize and react to internationalmarketing opportunities

• Be aware of threats from foreign competitors

• Use international distribution networks

Importance of Global Marketing Importance of Global Marketing

• U.S. exports a fifth of industrial production and one-third of its farm products

• One of every sixteen jobs in U.S. is supported by exports

The Negatives of Global TradeThe Negatives of Global Trade

• Millions of Americans have lost jobs

• Millions fear losing jobs

• Workers face pay-cut demands

• Service and white-collar jobs are vulnerable to operations move

The Advantages of Global TradeThe Advantages of Global Trade

• Rise from poverty for foreign nations

• Per capita income increases

• Productivity and living standard increase

• Inflation not as threatening

• Open economy spurs innovation

• Export jobs may pay more

Multinational AdvantageMultinational Advantage

• Overcome trade problems

• Sidestep regulatory problems

• Shift production from one plant to another

• Tap new technology from around the world

• Save in labor costs

Global Marketing Standardization

• World markets are becoming more alike

• Standardized products can be sold the same way worldwide

• Successful companies may vary products for global markets

The External EnvironmentThe External Environment

Natural Resources

Natural Resources

Demographic Makeup

Demographic Makeup

Economic and Technological Development

Economic and Technological Development

CultureCulture

Environmental Factors

Environmental Factors

Political StructurePolitical Structure

CultureCulture

Language Religion Superstitions Etiquette Customs

Traditions Notion of time

Economic and Economic and Technological DevelopmentTechnological Development

Type of Type of SocietySociety

Type of Type of SocietySociety DescriptionDescriptionDescriptionDescription

TraditionalTraditional

Pre-IndustrialPre-Industrial

TakeoffTakeoff

IndustrializingIndustrializing

Agricultural, Little Upward MobilityAgricultural, Little Upward Mobility

Social and Economic ChangeSocial and Economic Change

New IndustriesNew Industries

Spread of TechnologySpread of Technology

FullyIndustrial

FullyIndustrial

Exporter, Technology as Driverof New Innovation

Exporter, Technology as Driverof New Innovation

Legal ConsiderationsLegal Considerations

Tariff

Quota

Boycott

Exchange Control

Market Grouping

Trade Agreement

A tax levied on goods entering a country

Limit on the amount of a productthat can enter a country

Exclusion of products from a country

Foreign exchange must be sold to a control agency

Common trade alliance

An agreement to stimulateinternational trade

Political and Legal Political and Legal ConsiderationsConsiderations

MercosurMercosur

NAFTANAFTA

European UnionEuropean Union

Examples Examples

Risk Levels for Global EntryRisk Levels for Global Entry

LowLowrisk/risk/lowlowreturnreturn

HighHighrisk/risk/highhighreturnreturn

RiskRisk

ReturnReturn

Export Licensing

ContractManu-

facturing

JointVenture

DirectInvest-ment

Entering the Global MarketplaceEntering the Global Marketplace

LicensingLicensing Legal process allowing use of manufacturing/patents/knowledge.

Legal process allowing use of manufacturing/patents/knowledge.

ContractManufacturing

ContractManufacturing

Private-label manufacturing by a foreign country

Private-label manufacturing by a foreign country

Joint VentureJoint Venture Domestic firm buys/joins a foreign company to create new entity.

Domestic firm buys/joins a foreign company to create new entity.

ExportExport Sell domestically produced products to buyers in other countries.

Sell domestically produced products to buyers in other countries.

Direct Investment

Direct Investment

Active ownership of a foreign company/manufacturing facility.Active ownership of a foreign

company/manufacturing facility.

Company Strategy, Structure and Rivalry

Intensity of Competition

Factor Conditions Demand Conditions

Natural Resources Size of Market Education Consumer Sophistication

Related and Supporting industries

Suppler Clusters

Porter’s ‘Diamond’ of National Competitive Advantage