Kotler POM13e Student 19

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Chapter 19 - slide 1Copyright 2009 Pearson Education, Inc.

Publishing as Prentice Hall

Chapter Nineteen

The Global Marketplace


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The Global Marketplace

Global Marketing Today

Looking at the Global Marketing

Environment Deciding Whether to Go Global

Deciding Which Markets to Enter

Deciding How to Enter the Market

Deciding on the Global Marketing Program

Deciding on the Global MarketingOrganization

Topic Outline


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A global firm

Operates in more than one country Gains marketing, production, R&D, and

financial advantages not available to purely

domestic competitors

The global firm sees the world as one

market


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Global firms ask a number of basic questions:

What market position should we try to

establish in our own country, in oureconomic region, and globally?

Who will our global competitors be, andwhat are their strategies and resources?

Where should we produce or source ourproduct?

What strategic alliances should we form withother firms around the world?


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Looking at the GlobalMarketing Environment

Restrictions on trade between nations include:

Tariffs Quotas

Exchange controls

Nontariff trade barriers

The International Trade System


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Tariffs are taxes on certain imported productsdesigned to raise revenue or to protect

domestic firms

Quotas are limits on the amount of foreignimports a country will accept in certainproduct categories to conserve on foreignexchange and protect domestic industry andemployment



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Copyright 2010 Pearson Education, Inc.



Exchange controls are a limit on the amountof foreign exchange and the exchange rate

against other currencies

Nontariff trade barriers are biases againstbids or restrictive product standards that goagainst American product features



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General Agreement on Tariffs and Trade

(GATT): A 61-year-old treaty

Designed to promote world trade

Reduces tariffs and other international trade

barriers

The International Trade SystemThe World Trade Organization and GATT


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Chapter 19 - slide 9Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall


World Trade Organization

Enforces GATT rules

Mediates disputes

Imposes trade sanctions

The International Trade SystemThe World Trade Organization and GATT


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Economic communities are free trade

zones

European Union (EU)

North American Free Trade Agreement

(NAFTA)

Central American Free Trade Agreement(CAFTA)

The International Trade SystemRegional Free Trade Zones


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Economic factors reflect a countrys

attractiveness as a market: Industrial structure

Income distribution

Economic Environment


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Subsistence economies

Raw material exporting economies

Industrializing economies

Industrial economies

Economic EnvironmentIndustrial Structure


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Low-income households

Middle-income households

High-income households

Economic EnvironmentIncome Distribution


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Countrys attitude toward international

buying

Government bureaucracy

Political stability

Monetary regulations

Political-Legal Environment


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Countertrade is non-cash payment

Barter is the exchange of goods or services

Compensation orbuyback is the sale of aplant or equipment and the payment inresulting products

Counterpurchase is when the sellerreceives payment and agrees to spendsome of the money in the other country

Political-Legal Environment


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Business norms Cultural preferences, traditions,

behaviors

Cultural EnvironmentImpact of Culture on Marketing Strategy


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Deciding Whether to Go Global

Can the company understand the

consumers

Can it offer competitively attractive products Will it be able to adapt to local culture

Can they deal with foreign nationals

Do the companys managers have theexperience

Has management considered regulation and

political environment of other countries

Factors to Consider


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Define international marketing objectives andpolicies

Foreign sales volume

How many countries to market to

Types of countries to market to based on:

Geography

Income and population Political climate


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Rank potential global markets based on:

Market size

Market growth Cost of doing business

Competitive advantage

Risk level


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Ways to enter global markets include:

Exporting

Joint venturing Direct investment


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Exporting is when the company produces itsgoods in the home country and sells them in

a foreign market. It is the simplest meansinvolving the least change in the companysproduct lines, organization, investments, ormission.

Indirect exporting Direct exporting


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Joint venturing is when a firm joins withforeign companies to produce or marketproducts or services

Licensing Contract manufacturing Management contracting Joint ownership

Joint venturing differs from exporting in that thecompany joins with a host country partner tosell or market abroad


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Licensing is when a firm enters into an

agreement with a licensee in a foreign

market. For a fee or royalty, thelicensee buys the right to use the

companys process, trademark, patent,

trade secret, or other item of value.

Joint Venturing


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Contract manufacturing is when a firm

contracts with manufacturers in theforeign market to produce its product or

provide its service. Benefits include

faster startup, less risk, and theopportunity to form a partnership or to

buy out the local manufacturer.

Joint Venturing


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Direct investment is the development offoreign-based assembly or manufacturingfacilities and offers a number of advantages

Lower costs

Raw material

Labor Government incentives

Logistics

Control


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Deciding on the GlobalMarketing Program

Standardized marketing mix involves sellingthe same products and using the same

marketing approaches worldwide

Adapted marketing mix involves adjusting the

marketing mix elements in each targetmarket, bearing more costs but hoping for a

larger market share and ROI


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Straight product extension means marketinga product in a foreign market without anychange

Product adaptation involves changing theproduct to meet local conditions or wants

Product invention consists of creatingsomething new for a specific country market

Maintain or reintroduce earlier products

Create new products

Product


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Companies can either adopt the same

communication strategy they use athome or change it for each market

Promotion


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Deciding on theGlobal Marketing Program

Uniform pricing is the same price in allmarkets but does not consider income orwealth where the price may be too high in

some or not high enough in other markets

Market-based pricing is the price the marketcan pay but does not consider actual costs

Standard markup pricing is a price based ona percentage of cost but can causeproblems in countries with high costs

Price


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Deciding on theGlobal Marketing Program

Sellers headquarters organizationsupervises the channel and is also a part ofthe channel

Channels between nations move the productsto the borders of the foreign nations

Channels within nations move the productsfrom their foreign point of entry to the finalcustomers

Distribution ChannelsWhole-Channel View


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Deciding on theGlobal Marketing Organization

Typical management of international marketing

activities include:

Organizing and exporting department with asales manager and staff

Creating an international division organized

by geography, products, or operating units

Becoming a complete global organization


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Chapter 19 slide 34Copyright 2010 Pearson Education Inc

All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written

permission of the publisher. Printed in the United States of America.

Copyright 2010 Pearson Education, Inc.


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Kotler POM13e Student 19