Dr Close GLOBAL MARKETING Go Global Target throughout
Dr. Close GLOBAL MARKETING
Go Global Target throughout the world Global vision of multi-national firms Fear? Why?
The Fear of Trade and Globalization u Millions of Americans have lost jobs u Millions fear losing jobs u Threat of outsourcing if workers do not accept pay cuts u Vulnerability to operations moving offshore u Then, why is international marketing so hot?
Rewards of Global Marketing u Recognizing and reacting to international marketing opportunities u Using effective global marketing strategies u Being aware of threats from foreign competitors u Other rewards?
Did you know? … U. S. exports a fifth of industrial production. One of every 10 jobs in U. S. is supported by exports. U. S. businesses export over $800 billion. Exports account for 25 percent of U. S. economic growth. u U. S. is world’s leading exporter of farm products. u u
Global Marketing Goals ù Offensive goals ù Increase long term growth and profit prospects ù Maximize total sales revenue ù Take advantage of economies of scale ù Improve overall market position Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
Global Marketing Goals ù Defensive goals ù To compete with foreign companies on their own turf ù Gain access to technological innovations in other countries ù Take advantage of differences in operating costs ù Preempt competitors’ global moves ù Avoid being locked out of future markets by arriving too late Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
The Competitive Advantage of Nations ù Porter's diamond presents four factors that determine the competitive advantage of disadvantage of a nation ù Factor conditions ù Demand conditions ù Related and supporting industries ù Company strategy, structure, and rivalry Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
Porter’s Diamond of National Advantage Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
Global Marketing Issues ù Cultural Misunderstanding ù Managers tend to use their own cultural values and priorities as a frame of reference ù Political Uncertainty ù Government instability ù Social unrest ù Armed conflict ù Import Restrictions ù Tariffs, quotas, and other types of restrictions hinder global business Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
Global Marketing Issues ù Exchange Controls and Ownership Restrictions ù Established by nations experiencing BOP problems ù Economic Conditions Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
Organizing the Multinational Company ù Multidomestic company – Pursues different strategies in each of its foreign markets ù The global company – Views the world as one market and pits resources against competition in an integrated fashion ù Three alternative structures ù Worldwide product divisions ù Divisions responsible for all products sold within a geographic region ù A matrix system – A combination of both these arrangements Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
Factors Fostering Global Strategy ù External Factors ù Market Factors – Degree of homogeneous market needs, transferable brands, and the ability to globalize distribution channels ù Economic Factors – Worldwide economies of scale, learning curves, global resourcing, etc. ù Environmental Factors – Communications ability, favorable governmental policies, etc. ù Competitive Factors – Global moves by competitors, preemptive strikes Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
External Environments
Factors Fostering Global Strategy ù Internal Factors ù Structure – Ease of installing a centralized global authority ù Management processes – Capabilities and resources available to perform operational functions on a global scale ù Culture – Ability to project a global identity, increased tolerance ù People – Availability of foreign nationals, frequent travel, commitments to multicountry careers Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
Ten Commandments of Global Branding ù Understanding similarities and differences in the global branding landscape ù Do not take short cuts in global branding ù Establish marketing infrastructure ù Embrace integrated marketing communications ù Establish brand partnerships ù Balance standardization and customization ù Balance global and local control ù Establish operable guidelines ù Implement a global brand equity measurement system ù Leverage brand elements Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
Global Marketing Research ù Population characteristics – Managers should be familiar with total population and the regional, urban, rural, and interurban distribution ù Ability to buy – Four broad measures to be examined ù Gross national product or per capita national income ù Distribution of income ù Rate of growth in buying power ù Extent of available financing Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
Global Marketing Research ù Willingness to buy – Cultural framework of consumer motives and behavior is integral to the understanding of foreign customer ù Differences in Research Tasks and Processes ù Language barriers ù Data content ù Timeliness ù Availability in the U. S. Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
Global Product Strategy ù Global marketing research can help determine whethere is an unsatisfied need ù For which a new product could be developed to serve foreign market ù That could be met with an existing domestic product, either as is or adapted to foreign market Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
Product and Promotion Same Message Change Message Same Product Change Product One Message Product Adaptation Message Adaptation Product Invention
Global Distribution Strategy Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
Global Pricing ù Rigidity in price structures found in many foreign markets also poses an issue… u Must consider transportation and insurance costs, taxes and tariffs u Determine what customers will spend u Ensure that foreign buyers will pay price u May need to simplify a product to lower price u Don’t assume that low-income countries accept lower quality are willing to
Global Advertising and Sales Promotion Strategy ù Language barriers ù Media are traditionally used ù Limited media available – Unable to reach out to target audience ù Deciding on the type of agency – To prepare and place the firm’s advertisement ù Sales promotion ù Used as a strategy for bypassing restrictions on advertisements placed by some foreign governments ù Effective means for reaching people in rural locations where media support for advertising is virtually nonexistent Mc. Graw-Hill/Irwin © 2009 The Mc. Graw-Hill Companies, All Rights Reserved
Which are more risky global growth strategies? Export Sell domestically produced products to buyers in other countries Licensing Legal process allowing use of manufacturing/patents/knowledge Contract Manufacturing Private-label manufacturing by a foreign country Joint Venture Domestic firm buys/joins a foreign company to create new entity Direct Investment Active ownership of a foreign company/manufacturing facility
Developing a Global Marketing Mix PROMOTION PLACE Channel Choice One Product, Channel Structure One Message Product Invention Country Product Adaptation Infrastructure Message Adaptation PRICE Dumping Countertrade Exchange Rates Purchasing Power
Your thoughts? u What are your ideas for selling abroad? u How difficult is global marketing? u What are the potential risks and returns?
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