LHM 12e ch05 - PPT - IE

Chapter 5: Developing a Global Vision
Prepared & Designed by Laura Rush, B-books, Ltd.
Copyright Cengage Learning 2012 All Rights Reserved
Learning Outcomes
LO1 Discuss the importance of global marketing
LO2
Discuss the impact of multinational firms on the world economy Describe the external environment facing global marketers
LO3
Learning Outcomes
LO4 Identify the various ways of entering the global marketplace List the basic elements involved in developing a global marketing mix Discover how the Internet is affecting global marketing
LO5
LO6
Rewards of Global Marketing
Discuss the importance of global marketing.
LO1
Rewards of Global Marketing

Having a global vision means
Recognizing and reacting to international marketing opportunities
Using effective global marketing strategies

Being aware of threats from foreign competitors
LO1
Importance of Global Marketing to the U. S.

U.S. exports a fifth of industrial production.
Exports create jobs for 10 million Americans.
Exports represent 13 percent of U.S. GDP.

The United States exports over $1.7 trillion in goods.
LO1
The Fear of Trade and Globalization

Millions of Americans have lost jobs
Millions fear losing jobs Threat of outsourcing if workers do not accept pay cuts
Vulnerability to operations moving offshore

LO1
Copyright Cengage Learning 2012 All Rights Reserved 7
Benefits of Globalization
Expands economic freedom
Spurs competition
Raises productivity and living standards Offers access to foreign capital, global export markets, and advanced technology Promotes higher labor and environmental standards Acts as a check on government power
LO1
Review Learning Outcome

The Importance of Global Marketing
Know global marketing is important because of economic interdependencies
Fears
Benefits
Identify global marketing opportunities
Compete against foreign competition in domestic markets
Use effective global marketing strategies
LO1
Multinational Firms
Discuss the impact of multinational firms on the world economy.
LO2
10
Stages of Global Business Development

1
2 3 4
LO2
Companies operate in one country and sell into others
Set up foreign subsidiaries to handle sales Operate an entire line of business in another country Virtual operation
11
Global Marketing Standardization

1. Operate somewhat differently in each country
Different product features, packaging, and advertising.
2. Communication and technology have made the world smaller

Eliminated segmented foreign markets with different products.
3. Success is based on variation, not on offering the same product everywhere.

LO2

Impact of Multinational Firms
Human Resources Physical Resources Financial Resources
MNC
Global Marketing
LO2
13
External Environment Facing Global Marketers
Describe the external environment facing global marketers.
LO3
14

Culture Economic and Technological Development Political Structure Natural Resources Demographic Makeup
LO3
15
Culture
1. Underlies family, education, religion, and social class 2. Influences product preferences and the marketing mix 3. Country specific customs and traditions
Language Business Practices
LO3
16
Economic and Technological Development

Developed Country
Complex, sophisticated industries
Less Developed Country
Basic industries
LO3
17
Political Structure and Actions

No private ownership Minimal individual freedom
Little central government Maximum personal freedom

LO3
Legal Considerations
Tariff
Quota Boycott
A tax levied on goods entering a country Limit on the amount of a product entering a country Exclusion of products from a country Foreign exchange must be sold to a control agency Common trade alliance An agreement to stimulate international trade
19
Exchange Control Market Grouping

Trade Agreement
The Uruguay Round

Entertainment, pharmaceuticals, integrated circuits, and software Financial, legal, and accounting services Agriculture Textiles and Apparel Created the World Trade Organization (WTO)
LO3
Political and Legal Considerations

Agreements and Organizations
CAFTA
NAFTA
European Union
International Monetary Fund
World Bank
LO3
21
Demographic Makeup
Marketing Considerations:
Population density
Urban or rural
Personal income
Age
LO3
22
Shortages in Natural Resources

Create
International dependencies Shifts of wealth Inflation and recession Export opportunities if resources are abundant Stimulus for military intervention
LO3

LO3
24
Global Marketing by the Individual Firm
Identify the various ways of entering the global marketplace.
LO4
25
Global Marketing Questions

What are our options in selling abroad? How difficult is global marketing? What are the potential risks and returns?
LO4
26
Why Go Global?
Earn additional profits
Leverage a unique product or technological advantage Possess exclusive market information

Saturated domestic markets Excess capacity Utilize economies of scale
LO4
Risk Levels for Global Entry

Risk
Contract Manufacturing Joint Venture Direct Investment
High risk/ high return
Export
Licensing
Low risk/low return
Return
LO4
Entering the Global Marketplace

Export Sell domestically produced products to buyers in other countries Legal process allowing use of manufacturing/patents/knowledge Private-label manufacturing by a foreign country Domestic firm buys/joins a foreign company to create new entity
Licensing
Contract Manufacturing
Joint Venture
Direct Investment
Active ownership of a foreign company/manufacturing facility
Export Intermediaries
Buyer for Export
Assumes all ownership risks and sells globally for its own account.
Export Broker
Plays the traditional brokers role by bringing buyer and seller together.
Acts like a manufacturers agent for the exporter in the foreign market.
30
Export Agent LO4

Entering the Global Marketplace
LO4
31
The Global Marketing Mix
List the basic elements involved in developing a global marketing mix.
LO5
32
Product and Promotion

Same Product Same Message One Product One Message Change Product
Product Adaptation
Change Message
Promotion Adaptation
Product Invention
LO5
33
Place (Distribution)
Adequate distribution is necessary for success in global markets
Some countries have complicated systems Lack of distribution infrastructure and cultural differences create problems
Innovative distribution systems can create competitive advantage

LO5
Pricing
Must consider transportation and insurance costs, taxes, and tariffs Determine what customers will spend Ensure that foreign buyers will pay price May need to simplify a product to lower price Dont assume that low-income countries are willing to accept lower quality
LO5
Floating Exchange Rates
Floating Exchange Rates- Prices of different currencies move up and down based on the demand for and the supply of each currency.
LO5
36
Dumping
1. Trying to increase an overseas market share 2. Temporarily distributing products to overseas markets to offset slack demand at home 3. Lowering unit costs by exploiting large-scale production 4. Attempting to maintain stable prices during periods of exchange rate fluctuations
LO5
37
Countertrade
Countertrade- A form of trade in which all or part of the payment for goods and services is in the form of other goods or services.
LO5
38

Developing a Global Marketing Mix
PRODUCT + PROMOTION One Product, One Message Product Invention Product Adaptation Message Adaptation
PLACE Channel Choice Channel Structure Country Infrastructure
PRICE Dumping Countertrade Exchange Rates Purchasing Power
LO5
39
The Impact of the Internet
Discover how the internet is affecting global marketing.
LO6
40

The Impact of the Internet
LO6
41
Chapter 5 Company Clip

While new companies, such as Method, are forging their way domestically, they may also experience an added layer of challenges from trying to enter global markets at the same time. http://www.cengage.com/marketing/book_con tent/9781111821647_lamb/videos/ch05.html
42
Part 1 Video: The Putting Lot

Recent college graduates create a putt-putt golf course in a vacant lot in Brooklyn to encourage community and engage local artists and volunteers. The Putting Lot was a hit and drew a flurry of media coverage after a single blog post by a Brooklyn blog, demonstrating the power of Internet marketing for social causes. http://www.cengage.com/marketing/book_content/1 439039429_lamb/part_videos/part01.html

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Chapter 5: Developing a Global Vision

Prepared & Designed by Laura Rush, B-books, Ltd.

Copyright Cengage Learning 2012 All Rights Reserved

Copyright Cengage Learning 2012 All Rights Reserved

Copyright Cengage Learning 2012 All Rights Reserved

Rewards of Global Marketing

Discuss the importance of global marketing.

Copyright Cengage Learning 2012 All Rights Reserved

Rewards of Global Marketing

Using effective global marketing strategies

Copyright Cengage Learning 2012 All Rights Reserved

Importance of Global Marketing to the U. S.

Exports represent 13 percent of U.S. GDP.

Copyright Cengage Learning 2012 All Rights Reserved

The Fear of Trade and Globalization

Vulnerability to operations moving offshore

Review Learning Outcome

Identify global marketing opportunities

Compete against foreign competition in domestic markets

Use effective global marketing strategies

Discuss the impact of multinational firms on the world economy.

Copyright Cengage Learning 2012 All Rights Reserved

Stages of Global Business Development

Copyright Cengage Learning 2012 All Rights Reserved

Global Marketing Standardization

2. Communication and technology have made the world smaller

3. Success is based on variation, not on offering the same product everywhere.

Review Learning Outcome

Human Resources Physical Resources Financial Resources

Copyright Cengage Learning 2012 All Rights Reserved

External Environment Facing Global Marketers

Describe the external environment facing global marketers.

Copyright Cengage Learning 2012 All Rights Reserved

External Environment Facing Global Marketers

Copyright Cengage Learning 2012 All Rights Reserved

Copyright Cengage Learning 2012 All Rights Reserved

Economic and Technological Development

Less Developed Country

Copyright Cengage Learning 2012 All Rights Reserved

Political Structure and Actions

Little central government Maximum personal freedom

Exchange Control Market Grouping

Copyright Cengage Learning 2012 All Rights Reserved

The Uruguay Round

Political and Legal Considerations

Copyright Cengage Learning 2012 All Rights Reserved

Copyright Cengage Learning 2012 All Rights Reserved

Shortages in Natural Resources

Review Learning Outcome

Global Marketing by the Individual Firm

Identify the various ways of entering the global marketplace.

Copyright Cengage Learning 2012 All Rights Reserved

Global Marketing Questions

Copyright Cengage Learning 2012 All Rights Reserved

Leverage a unique product or technological advantage Possess exclusive market information

Risk Levels for Global Entry

High risk/ high return

Low risk/low return

Entering the Global Marketplace

Active ownership of a foreign company/manufacturing facility

Export Agent LO4

Copyright Cengage Learning 2012 All Rights Reserved

Review Learning Outcome