21 Tapping Into Global Markets Marketing Management 13

21 Tapping Into Global Markets Marketing Management, 13 th ed

Chapter Questions • What factors should a company review before deciding to go abroad? • How can companies evaluate and select specific foreign markets to enter? • What are the major ways of entering a foreign market? • To what extent must the company adapt its products and marketing program to each foreign country? • How should the company manage and organize its international activities? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -2

Nokia Nseries Sold Globally Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -3

What is a Global Firm? A global firm is one that operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -4

Major Decisions in International Marketing Deciding whether to go Deciding which markets to enter Deciding how to enter Deciding on the marketing program Deciding on the marketing organization Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -5

Four Stages of Internationalization No regular export activities Export via independent agents Establish sales subsidiaries Establish production facilities abroad Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -6

Fiat Markets Palio in Latin American Markets Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -7

Top Global Firms Based in Developing Markets • • America Movil Cemex China Mobile CNOOC Embraer Gazprom Haier Hisense • Huawei Technologies • Infosys Technologies • Koc Holding • Lenovo Group • MMC Norilsk Nickel • Mahindra & Mahindra Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -8

Regional Free Trade Zones • • • European Union NAFTA MERCOSUL APEC ASEAN Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -9

Key Developing Markets Brazil Russia India China South Africa Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -10

Desired Country Characteristics for Market Entry • Rank high on market attractiveness • Rank low in market risk • Possess a competitive advantage Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -11

Figure 21. 2 Five Modes of Entry into Foreign Markets Indirect exporting Direct exporting Licensing Joint ventures Direct investment Commitment, Risk, Control, Profit Potential Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -12

Direct Exporting Methods • • Domestic-based export department Overseas sales branch or subsidiary Traveling export sales representatives Foreign-based distributors or agents Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -13

Mc. Donald’s Franchises Are Sold Worldwide Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -14

Table 21. 2 Global Marketing Advantages • Economies of scale • Lower marketing costs • Power and scope • Consistency in brand image • Ability to leverage • Uniformity of marketing practices Disadvantages • Differences in consumer needs, wants, usage patterns • Differences in consumer response to marketing mix • Differences in brand development process • Differences in environment Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -15

Red Bull Has 70% of Worldwide Energy Drink Market Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -16

What Marketing Aspects Might Be Adapted for International Marketing? • • • Product features Labeling Colors Materials Sales promotion Advertising media • Brand name • Packaging • Advertising execution • Prices • Advertising themes Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -17

Cultural Dimensions Individualism vs. Collectivism High vs. Low Power Distance Masculine vs. Feminine Weak vs. Strong Uncertainty Avoidance Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -18

Commandments of Global Branding • Understand similarities and differences in the global branding landscape • Do not take shortcuts in brand building • Establish a marketing infrastructure • Embrace integrated marketing communications • Establish brand partnerships Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -19

Commandments of Global Branding (cont. ) • • Balance standardization and customization Balance global and local control Establish operable guidelines Implement a global brand-equity measurement system • Leverage brand elements Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -20

Figure 21. 3 International Product and Communication Strategies Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -21

Levels of Product Adaptation • • Production of regional product versions Production of country versions Production of city versions Production of retailer versions Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -22

Haagen Dazs Developed a Dulce de Leche Ice Cream for Its Argentina Market Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -23

Communications • Communications adaptation • Dual adaptation Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -24

Price Choices • Set a uniform price everywhere • Set a market-based price in each country • Set a cost-based price in each country Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -25

What is a Gray Market? A gray market consists of branded products diverted from normal or authorized distributions channels in the country of product origin or cross international borders; dealers in lower priced countries sell products in higher priced countries. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -26

Figure 21. 4 Whole-Channel Concept for International Marketing Seller International headquarters Channels between nations Channels within nations Final buyers Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -27

Country of Origin Effects Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -28

Global Organization Strategies World as Single Market Multinational “Glocal” Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -29

Marketing Debate ü Is the world coming closer together? Take a position: 1. People are becoming more and more 2. similar. 3. or 4. 2. The differences between people of 5. different cultures far outweigh their 6. similarities. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -30

Marketing Discussion ü Think of some of your favorite brands. ü Do you know where they come from? ü Where and how they are made or provided? ü Would knowing affect your perceptions of quality or satisfaction? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 -31