GLOBAL MARKETING MANAGEMENT by MASAAKI KOTABE and KRISTIAAN
GLOBAL MARKETING MANAGEMENT by MASAAKI KOTABE and KRISTIAAN HELSEN John Wiley & Sons, Inc. 1998 1
GLOBALIZATION IMPERATIVE Chapter One John Wiley & Sons, c 1998 2
Globalization Imperative Chapter One • Overview • 1. Why Global Marketing is Imperative • 2. Globalization of Markets and Competition • 3. Evolution of Global Marketing • 4. Appendix John Wiley & Sons, c 1998 3
Overview of Globalization Imperative John Wiley & Sons, c 1998 4
1. Why Global Marketing is Imperative • Exhibit 1 -1 “Change in the World’s 100 Largest Companies” • global vs international vs multinational John Wiley & Sons, c 1998 5
2. Globalization of Markets and Competition • Exhibit 1 -2 “ US Balance of Goods, Services and Income over 20 Year Period” • International Trade (IT) and International Business (IB) – IT = exports/imports – IB = includes IT and foreign production • export of products • investment in foreign production • contract or manufacture in foreign country – foreign production is larger than IT John Wiley & Sons, c 1998 6
2. Globalization of Markets and Competition (cont) • Global Reach • United States – 3: 1 ratio of foreign products to exports – 6: 1 ration of US/European production to exports – 5: 1 ratio of European owned US located subsidiaries • Japan – 2. 5: 1 ratio of Japanese subsidiaries to Japanese exports John Wiley & Sons, c 1998 7
2. Globalization of Markets and Competition (cont) • Who Manages International Trade? – intra-firm trade • transfers to affiliates overseas • 30% of US exports • 30% of exports by Japan and Britain John Wiley & Sons, c 1998 8
3. Evolution Of Global Marketing • What is Marketing? – satisfies customers needs – anticipates and creates their future needs at a profit – reactively and proactively • Domestic Marketing – exhibit 1 -3 – ethnocentric John Wiley & Sons, c 1998 9
3. Evolution of Global Marketing (cont) • Export Marketing – ethnocentric • International Marketing – polycentric – multidomestic marketing • Multinational Marketing – regiocentric John Wiley & Sons, c 1998 10
3. Evolution of Global Marketing (cont) • Global Marketing – geocentrism – reduction of cost inefficiencies and duplication of efforts – opportunities to transfer products, brands and ideas across subsidiaries – emergence of global customers – improved linkages … leading to global market infrastructure John Wiley & Sons, c 1998 11
4. APPENDIX • Comparative Advantage Theory • International Product Cycle Theory • Internalization / Transaction Cost Theory John Wiley & Sons, c 1998 12
COMPARATIVE ADVANTAGE THEORY • Exhibit 1 -4 “Comparative Advantage at Work” • absolute advantage vs comparative advantage • commodity terms of trade • principles of international trade – 1. countries benefit from international trade – 2. international trade increases worldwide production by specialization – 3. exchange rates are primarily determined by John Wiley & Sons, c 1998 traded goods 13
INTERNATIONAL PRODUCT CYCLE THEORY • Exhibit 1 -5 “International Product Cycle” • first – economies of scale – economies of scope • second – technological gap – monopoly power • third – preference similarity (consumption power) John Wiley & Sons, c 1998 14
INTERNALIZATION/ TRANSACTION COST THEORY • • multinational companies appropriability regime dominant design manufacturing and marketing ability John Wiley & Sons, c 1998 15
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