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Lamb, Hair, McDaniel
2014-2015
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• Discuss the importance of global marketing
• Discuss the impact of multinational firms on the world economy
• Describe the external environment facing global marketers
• 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
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• Defining globalization, opportunities and threats of globalization
• Why companies 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”
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• The United States derives 14 percent of gross domestic product (GDP) from world trade
• More than 10 million Americans hold jobs that are supported by exports
• U.S. businesses export over $2.1 trillion in goods and services annually
• Every U.S. state has realized net employment gains directly attributed to foreign trade
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• 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
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• 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
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The Marketing Environment-Thinking Globally
Product
Price
Promotion
Place

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Who is a multinational company?
What is their impact in global economy?
What role do they play in marketing?
Are they beneficial to the world economy?
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Pros Cons
•
•
• Account for 19 percent of U.S. private
• Technology is capital intensive and does not
Jobs necessarily increase
• Provide 25 percent of private wages employment.
• Support governments
74 percent of R&D spending
48 percent of total exports that benefit the company, not necessarily the country and its people
• May take away more wealth than they generate
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Global
Marketing
Standardization
Production of uniform products that can be sold the same way all over the world.
Multidomestic strategy
Subsidiaries of multinational firms are allowed to compete independently in domestic markets.
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Standardization Adaptation Debate and Continuum
Standardization______________Adaptation
Product
Price
5______4______3______2______1
5______4______3______2______1
Promotion 5______4______3______2______1
Distribution 5______4______3______2______1
Planning 5______4______3______2______1
 Factors favoring Standardization or Adaptation
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• Politics/Peace- United Nations
• Trade- World Trade Organization
(WTO)
• Money/Finance- International
Monetary Fund (IMF)
• Development- World Bank
• Overall- G8 Nations (USA, Canada,
UK, France, Germany, Italy, Japan, and Russia)
• Other international organizations and bodies
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• China and India have two of the highest growth rates in the world
• Have the world’s two largest populations, but among highest levels of income disparity
• Both India and China have exploded in spending power, particularly in the upper classes
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• Legal Considerations
• Cultural Considerations
• Economic Considerations
• Product Line/Mix-width and depth of product lines
• Product Life Cycle Considerations
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• Domestic vs. international pricing
• Governmental Intervention
• Price controls
• Legal and Tax consideration
• Diversity of Markets: skimming vs. penetration
• Price Escalation
• Currency Value and Inflation
• Gray market
• Fixed vs. Variable Pricing
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• International Promotion Mix: personal selling, advertising, sales promotion activities and publicity/public relations
• Push vs. Pull Mix
• Branding challenges include:
• language factors
• brand acquisitions
• country-of-origin (COO) images
• generic and near-generic names
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• Factor affecting the designing of channel
• Distribution intensity: intensive, selective and exclusive distribution
• Choosing Distributors and Channels
• Hidden costs in foreign distribution
• Internet and electronic commerce
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Tariff
Quota
Boycott
Exchange Control
Market Grouping
Trade Agreement
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
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The Uruguay Round made changes in world trading practices
Entertainment, pharmaceuticals, integrated circuits, and software
Financial, legal, and accounting services
Agriculture
Textiles and apparel
And created a new trade organization:
The World Trade Organization
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• Began in 2001
• Highly contentious from the beginning
• Stalemate over lowering tariffs on industrial goods in exchange for cutting U.S. farm subsidies.
• More protectionism has made talks increasingly difficult.
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Exhibit 5.2
Members of G-20
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Export
Licensing and
Franchising
Contract
Manufacturing
Joint Venture
Direct Investment
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
Active ownership of a foreign company/manufacturing facility
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Same
Product
Same
Message
One Product,
One Message
Change
Product
Product
Adaptation
5
Change
Message
Promotion
Adaptation
Product
Invention
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The sale of an exported product at a price lower than that charged for the same or a like product in the “home” market of the exporter.
Dumping may occur as a result of exporter business strategies that include:
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
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1.
What is global marketing? How does it differ from domestic marketing?
2.
What is globalization? What are the costs and benefits of globalization?
3.
Discuss the role played by different international institutions in Global
Governance.
4.
Discuss the five entry strategies we studied in class.
5.
Discuss the product policy considerations in global marketing. I can ask about other P’s in marketing.
6.
What is a multinational company? Discuss the role of the multinationals in global marketing.