Global Marketing Spring 2003 Some Abouts About me About this course About the project About the examination About grading

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<ul><li> Slide 1 </li> <li> Slide 2 </li> <li> Global Marketing Spring 2003 </li> <li> Slide 3 </li> <li> Some Abouts About me About this course About the project About the examination About grading </li> <li> Slide 4 </li> <li> Text Structure Introduction to global marketing The global marketing environment Global market opportunities Global marketing strategy Global marketing program Global marketing management </li> <li> Slide 5 </li> <li> List of Questions What is global marketing? Do we have to go global? Why? Where shall we go? What shall we know before plunging ourselves into the storming sea? How can we survive and thrive in a foreign market? </li> <li> Slide 6 </li> <li> Global Marketing -- Introduction </li> <li> Slide 7 </li> <li> What is Global Marketing? </li> <li> Slide 8 </li> <li> What is marketing? The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, organizations, and events to create and maintain relationships that will satisfy individual and organizational objectives. </li> <li> Slide 9 </li> <li> The Three Principles of Marketing Customer Value Value Equation: V=B/P Differential Advantage Focus </li> <li> Slide 10 </li> <li> What is global marketing? Practicing marketing in the global environment. An organization that engages in global marketing focuses its resources on global market opportunities and threats </li> <li> Slide 11 </li> <li> Globalization An open economic system Non-discrimination Global brands Global structures </li> <li> Slide 12 </li> <li> Exports % share of world production </li> <li> Slide 13 </li> <li> Annual % Growth of trade and GDP 1959 96 GDP </li> <li> Slide 14 </li> <li> Effects of globalization on business Cheap offshore production Reduced transport costs Virtual communication Standardization of logistics Global marketing </li> <li> Slide 15 </li> <li> Export &amp; Import By Regions 2002/01-10 </li> <li> Slide 16 </li> <li> Corporate Globalization -Chinas Case Walmart World Women Basket Ball Games Haier in USA Tsingdao Beer </li> <li> Slide 17 </li> <li> Global Marketing VS Domestic Marketing More difficult: language, law, culture, trade and non-trade barriers, market research, and communication; More complicated: currency, measures and weights, customs, monetary exchange, transportation, insurance, and counter-claim More risky: credibility, currency exchange, political risk, transportation, and pricing More opportunities and more profitable, hopefully. </li> <li> Slide 18 </li> <li> Should we go global? Internal analysis Resources, managerial mindset, strengths, weaknesses,etc. External analysis Competition, opportunities, threats, benefits, risks, etc. Cost VS Income </li> <li> Slide 19 </li> <li> Management Orientation Managements assumptions or beliefs-both conscious and unconscious-about the nature of the world Ethnocentric Polycentric Regiocentric Geocentric </li> <li> Slide 20 </li> <li> Ethnocentric Home country is superior. Domestic Company: No opportunities outside the home country; International Company Products and practices that succeed in the home country will be successful anywhere; Foreign operations are secondary or subordinate Nissan </li> <li> Slide 21 </li> <li> Polycentric Each country is unique. Multinational Company: Each subsidiary should develop its own business and marketing strategies according to the specific situation in that country. Problem: Cost, control, headquarter out of game </li> <li> Slide 22 </li> <li> Regiocentric &amp; Geocentric Regiocentric: Each region is unique and an integrated regional strategy is to be developed to serve that region. Geocentric: The entire world is a potential market and integrated world market strategies should be developed. Global or transnational company. Global Localization: Think globally, act locally. </li> <li> Slide 23 </li> <li> Philips VS Matsushita Philips Electronics Polycentric: 7 models of TV based on 4 chassis, Variety Matsushita Geocentric: global strategy, 2 models of TV based on a single chassis, low price </li> <li> Slide 24 </li> <li> Driving and Restraining Forces Affecting Global Integration and Global Marketing </li> <li> Slide 25 </li> <li> Driving Forces Technology Internet, Satellite Dish, Globe Spanning TV Regional Economic Agreements NAFTA, EU, ASEAN, GCC, APEC Market Needs and Wants Converging, Global Brand, Transportation and Communication Improvements Jet Plane, Large Cargo Ship, email, fax, videoconferencing, cost deduction </li> <li> Slide 26 </li> <li> Driving Forces Cont. Product development costs Quality World Economic Trends More opportunities Less resistance World-wide deregulation and privatization </li> <li> Slide 27 </li> <li> Driving Forces Cont. Leverage Experience transfers Scale economies Resource utilization Global strategy The Global/Transnational Corporation </li> <li> Slide 28 </li> <li> Restraining Forces Management Myopia Organization Culture Integrate global vision and perspective with local market initiative and input Mutual respect National controls and barriers Tariff barriers and non-tariff barriers </li> <li> Slide 29 </li> <li> The Global Economic Environment </li> <li> Slide 30 </li> <li> Changes in The World Economy Emergence of global markets Economic integration Global companies, global brands Capital movements far exceed the volume of global merchandise and services trade $4 trillion VS. London Eurodollar Market, $100 trillion, VS. Foreign exchange $250 trillion </li> <li> Slide 31 </li> <li> Changes in The World Economy Productivity VS. Employment Application of new technologies Increase in production efficiency Plant emigration Internal reforms </li> <li> Slide 32 </li> <li> Changes in The World Economy World economy becomes the dominant economic unit The end of the cold war Collapse of USSR, ISC, E. European China, Vietnam, Cuba, North Korea </li> <li> Slide 33 </li> <li> Economic Systems Market Allocation Market economy Role of the state Command Allocation Planned economy Role of the state Mixed System Which plays the leading role? </li> <li> Slide 34 </li> <li> Stages of Market Development Based on GNP Per Capita Lower-Income Countries $2000 Upper-Middle-Income Countries $3036-$9386 High-Income Countries &gt;$9386 </li> <li> Slide 35 </li> <li> Low-Income Countries Preindustrial countries, less than $766 Limited industrialization, high percentage of population in agriculture and farming High birth rates Low literacy rates Heavy reliance on foreign aid Political instability and unrest Africa, south of Sahara </li> <li> Slide 36 </li> <li> Lower-Middle-Income Countries Less developed countries (LDC) Early stage of industrialization Consumer markets expanding Low labor cost Labor-intensive products manufacturing </li> <li> Slide 37 </li> <li> Upper-Middle-Income Countries Industrializing countries Percentage of people in agriculture dropping sharply Degree of urbanization increasing High literacy Relatively low wage costs </li> <li> Slide 38 </li> <li> High-Income Countries Industrialized Countries Sustained economic growth Knowledge-based Service sector New products and innovations </li> <li> Slide 39 </li> <li> Income and PPP Purchasing Power Parity Real Income Standard of Living The concentration of income Regional, nationally, and within nations Triad: US, Canada, EU, and Japan Income inequality in developing countries </li> <li> Slide 40 </li> <li> Implication for Marketers Profitability Chances and challenges Marketings Role Market potential evaluation </li> <li> Slide 41 </li> <li> Emerging Markets Evaluation </li> <li> Slide 42 </li> <li> Social and Cultural Environments Differences Similarities Marketers two-folded task. Recognize difference Find similarities </li> <li> Slide 43 </li> <li> Culture Culture includes both conscious and unconscious values, ideas, attitudes, and symbols that shape human behavior and that are transmitted from one generation to the next. Culture is learned, not born with. Culture can be changed. </li> <li> Slide 44 </li> <li> Implications for Global Markers Food, drink preferences KFC, Colgate, Coco-cola, Green Giant Foods, and soy sauce Color, flower, and other preferences White, green, chrysanthemum, Corbie, dog, Converging global attitudes Cultural universals Be culturally sensitive! </li> <li> Slide 45 </li> <li> High and Low-Context Cultures Low-context: messages are explicit, words carry most of the information in a communication. I mean what I say. High-context: much more information resides in the context of communication, including background, associations, and basic values of the communications rather in the verbal message. Guess what I really mean. </li> <li> Slide 46 </li> <li> High and Low Context Cultures FactorHigh ContextLow Context LawyerLess importantVery important SpacePeople breath on each other Bubble of private space, no intrusion TimePolychronic, things dealt simultaneously Monochronic, linear Negotiati ons Lengthy, get to know each other Quick, get things done CountriesJapan, Middle East,US, Northern Europe </li> <li> Slide 47 </li> <li> Communication and Negotiation Language barriers Its a yes or no? You are invited to take advantage of the chambermaid. Ease your bosoms. This coffee has carefully selected high quality beans and roasted by our all the experience. The lift is being fixed for the next day. During that time we regret you will be unbearable. Nonverbal communication Verbal VS. Nonverbal </li> <li> Slide 48 </li> <li> Social Behavior Sneeze, belch, sharing food Saudi: Dont ask the host about the health of his spouse. Dont show the soles of your shoes. Dont touch or deliver with the left hand. Japan, Korea, China, India Venezuela, Indonesia Africa Madam or maam </li> <li> Slide 49 </li> <li> Analytical Approaches to Cultural Factors Dont assume you know everything. Dont judge others by the culture you are from. There are no perfect cultures in this world, or there is no such culture superior than another. Try to understand the beliefs, values, and motives of another culture Be open, be understanding. </li> <li> Slide 50 </li> <li> Maslows Hierarchy of Needs Physiological Safety Social Esteem Self-actualization </li> <li> Slide 51 </li> <li> Hofstedes Cultural Typology Power distance Individualism or Collectivism Masculinity or Femininity Uncertainty avoidance </li> <li> Slide 52 </li> <li> Power Distance The extent to which the less powerful members of a society accept or expect that power to be distributed unequally. High power distance Low power distance </li> <li> Slide 53 </li> <li> Individualism or Collectivism Individualistic culture: Each member of society is primarily concerned with his or her own interest and those of the immediate family. Collectivist culture: All of societys members are integrated into cohesive in-groups </li> <li> Slide 54 </li> <li> Masculinity of Femininity Masculinity A society in which men are expected to be assertive, competitive, and concerned with material success while women fulfill the role of nurturer and take care of the family Femininity A society in which the social roles of men and women overlap, with neither gender exhibiting overly ambitious or competitive behavior </li> <li> Slide 55 </li> <li> Uncertainty Avoidance The extent to which the members of a society are uncomfortable with unclear, ambiguous, or unstructured situations. </li> <li> Slide 56 </li> <li> Environmental Sensitivity The extent to which products must be adapted to the culture-specific needs of different national markets. Product Adaptation High Low Environmental Sensitivity Low High Integrated Circuit Computer Food </li> <li> Slide 57 </li> <li> Impact on Marketing Consumer behavior Campbell in US VS in Italy Instant coffee in UK VS. in Sweden Cake in US VS. in UK Personal aspect of international business </li> <li> Slide 58 </li> <li> Suggested Solutions Stake: expatriate failure averages $75,000, loss of business: $2.5 billion Research Training in cross-cultural competency Boot camp International exposure Workshop </li> <li> Slide 59 </li> <li> The Political, Legal, and Regulatory Environments of Global Marketing </li> <li> Slide 60 </li> <li> The Political Environment Sovereignty Political risk Taxes Dilution of Equity Control Expropriation </li> <li> Slide 61 </li> <li> Sovereignty The supreme and independent political authority. Control the flow of goods across borders Stage of development The political and economical system Protectionism: Agriculture Privatization dilutes the command portion of a mixed economy Global market integration erodes national economic sovereignty. </li> <li> Slide 62 </li> <li> Political Risk The risk of a change in government policy that would adversely impact a companys ability to operate effectively and profitably. HK, Argentina, Venezuela, </li> <li> Slide 63 </li> <li> Taxes Diverse geographic activities of MNC Host country tax avoidance Bilateral tax treaties </li> <li> Slide 64 </li> <li> Dilution of Equity Control Control ownership of foreign-owned companies. Equity percentage in local projects or joint ventures Become an insider </li> <li> Slide 65 </li> <li> Expropriation Governmental action to dispossess a company or investor. Compensation Nationalization: Ownership of the property or assets in question is transferred to the host government. Confiscation </li> <li> Slide 66 </li> <li> Expropriation Creeping expropriation: limitations on repatriation of profits, dividends, royalties, or technical assistance fees from local investments or technology arrangements. Tariff and non-tariff barriers Intellectual property restrictions Remedies: buy insurance, follow the law </li> <li> Slide 67 </li> <li> International Law Rules and principles that nation-states consider binding upon themselves. Public law, international commercial law Common law VS code law </li> <li> Slide 68 </li> <li> Which Law Applies? Be explicit in the contract The place of the domicile or principal place of business of one of the parties The place where the contract was entered The place of performance of the contract </li> <li> Slide 69 </li> <li> Intellectual Property Patents and Trademarks Registration Protection Counterfeiting: The unauthorized copying and product of a product. Imitation: Use of a product name that differs slightly from a well-known brand Piracy: The unauthorized publication or reproduction of copyrighted work. </li> <li> Slide 70 </li> <li> Intellectual Property Protection The Paris Union: International Convention for the Protection of Industrial Property. The Patent Cooperation Treaty European Patent Convention TRIPs: Trade Related Intellectual Property Rights </li> <li> Slide 71 </li> <li> Antitrust To combat restrictive business practices and to encourage competition. Constens case, Grundig Ruling: Territorial protection proved to be particularly damaging to the realization of the common market. IBM and Microsoft in Europe </li> <li> Slide 72 </li> <li> Licensing Licensing is a contractual agreement in which a licensor allows a licen...</li></ul>