Developing a Global Vision
chapter
4
Prepared by
Deborah Baker
Texas Christian University
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Learning Objectives
1. Discuss the importance of global
marketing.
chapter
4
2. Discuss the impact of multinational firms
on the world economy.
3. Describe the external environment facing
global marketers.
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Learning Objectives (continued)
4. Identify the various ways of entering the
global marketplace.
chapter
4
5. List the basic elements involved in
developing a global marketing mix.
6. Discover how the Internet is affecting
global marketing.
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Learning Objective
Discuss the importance of
global marketing.
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Global Marketing
Marketing that targets
markets throughout
the world.
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Global Vision
 Recognize and react to international
marketing opportunities
 Be aware of threats from
foreign competitors
 Use international
distribution networks
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Importance of Global Marketing
 U.S. exports a fifth of industrial
production and one-third of its farm
products
 One of every sixteen jobs in U.S. is
supported by exports
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Importance of Global Marketing
 A third of U.S. corporate profits is
from international trade and investment
 Exports accounted for 20% of
growth in economic activity (1999)
 U.S. is world’s leading exporter
of grain
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The Negatives of Global Trade
 Millions of Americans have lost jobs
 Millions fear losing jobs
 Workers face pay-cut demands
 Service and white-collar jobs are
vulnerable to operations move
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The Advantages of Global Trade
 Rise from poverty for foreign nations
 Per capita income increases
 Productivity and living standard increase
 Inflation not as threatening
 Open economy spurs innovation
 Export jobs may pay more
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Learning Objective
Discuss the impact of
multinational firms
on the world economy.
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Multinational Corporation
A company that is heavily
engaged in international
trade, beyond exporting
and importing.
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Multinational Advantage
 Overcome trade problems
 Sidestep regulatory problems
 Shift production from one plant to
another
 Tap new technology from around
the world
 Save in labor costs
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Global Marketing Standardization
Production of uniform
products that can be
sold the same way
all over the world.
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Global Marketing Standardization
 World markets are
becoming more alike
 Standardized products can
be sold the same way worldwide
 Successful companies may vary
products for global markets
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Learning Objective
Describe the external environment
facing global marketers.
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The External Environment
Culture
Environmental
Factors
Economic and
Technological
Development
Political Structure
Demographic
Makeup
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Natural
Resources
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Culture
The common set of values
shared by its citizens
that determine what is
socially acceptable.
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Culture
 Language
 Religion
 Superstitions
 Etiquette
 Customs
 Traditions
 Notion of time
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Lessons About the Notion of Time
1. Know appropriate arrival time.
2. Understand the line between work time
and social time.
3. Study the rules of the waiting game.
4. Learn to reinterpret “doing nothing.”
5. Ask about accepted sequences.
6. Are people on clock time or
event time?
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Economic and
Technological Development
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Type of
Society
Description
Traditional
Agricultural, Little Upward Mobility
Pre-Industrial
Social and Economic Change
Takeoff
New Industries
Industrializing
Spread of Technology
Fully
Industrial
Exporter, Technology as Driver
of New Innovation
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Political Structure Extremes
No private ownership
Minimal individual freedom
Little central government
Maximum personal freedom
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Legal Considerations
Tariff
Quota
Boycott
Exchange Control
Legal Structures
Encourage or
Limit Trade
Market Grouping
Trade Agreement
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Legal Considerations
Exchange Control
A tax levied on goods entering
a country
Limit on the amount of a product
that can enter a country
Exclusion of products from
a country
Foreign exchange must be
sold to a control agency
Market Grouping
Common trade alliance
Trade Agreement
An agreement to stimulate
international trade
Tariff
Quota
Boycott
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Trade Agreements: Uruguay Round
 Reduces tariffs by one-third worldwide
 Patent/copyright protection
 Services under international rules
 Reduction of farm subsidies
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Political and Legal Considerations
Examples
Mercosur
European Union
NAFTA
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Demographic Makeup
Marketing
Considerations
 Population density
 Urban or rural
 Personal income
 Rise of global middle
class
 Supply of professionals
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Natural Resources
Differences in natural resources create:
 International dependencies
 Shifts of wealth
 Inflation and recession
 Export opportunities if resources
are abundant
 Stimulus for military intervention
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4
Learning Objective
Identify the various ways of entering
the global marketplace.
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Global Marketplace Questions
 What are our options in selling
abroad?
 How difficult is global marketing?
 What are the potential risks
and returns?
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Why “Go Global”?
 Earn additional profits
 Leverage a unique product or
technological advantage
 Possess exclusive market
information
 Utilize “economies of scale”
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Risk Levels for Global Entry
Risk
Joint
Contract Venture
Manufacturing
Licensing
Export
Low
risk/
low
return
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Direct
Investment
High
risk/
high
return
Return
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Entering the Global Marketplace
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.
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Export Intermediaries
Buyer for Export
Assumes all ownership risks and
sells globally for its own account.
Export Broker
Plays the traditional broker’s role
by bringing buyer and seller together.
Export Agent
Acts like a manufacturer’s agent for
the exporter in the foreign market.
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Learning Objective
List the basic elements involved in
developing a global marketing mix.
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Product and Promotion
Same
Message
Change
Message
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Same
Product
Change
Product
One Product
One Message
Product
Adaptation
Message
Adaptation
Product
Invention
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Pricing
 Must consider transportation and
insurance costs, taxes and tariffs
 Determine what customers will spend
 Ensure that foreign buyers will
pay them
 May need to simplify a product
to lower price
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Dumping
The sale of an exported
product at a price lower
than that charged for the
same or a like product
in the exporter’s
“home” market.
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Countertrade
A form of trade in which
all or part of the payment
for goods or services
is in the form of other
goods or services.
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Distribution Challenges
 Japanese distribution system is the
most complicated in the world
 Retail institutions may
differ from company’s
domestic market
 Distribution channels and physical
infrastructure may be inadequate
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6
Learning Objective
Discover how the Internet is
affecting global marketing.
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Going Global
 Internet e-commerce sites
 Language translation software
 Global shippers
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