Introduction to Global
Marketing
Chapter 1
Global Marketing
Go, Canada Go
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Canada is the third best country in the world to
live in (UN)
In terms of competitiveness
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1st in technological innovativeness
3rd in environmental sustainability
7th in the networked economy (e-commerce)
9th in information infrastructure
11th in overall competitiveness of the economy
Source: http://www.weforum.org
Why should Canada care?
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45% of everything that Canadians produce is
exported
Canada exports about $500 billion in goods & services,
that is more than $15,000 for every Canadian
Balance of Trade: + $58 billion (in 2002)
Source: http://www.dfait-maeci.gc.ca/tna-nac/
Global Trends
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World trade has grown from $200 billion to more
than $7 trillion in the past three decades.
Trade growth has been twice as fast as global
production growth
Visible benefits of free trade: generally increasing
standard of living
Nations vs. multinationals (MNCs)
Where are products made in (cars in Canada?)
New trading blocs are emerging (NAFTA)
Definitions
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Marketing is delivering customer satisfaction at a profit
Marketing is the process of planning and executing the
conception, pricing, promotion, and distribution of goods,
ideas, and services to create exchanges that satisfy
individual and organizational goals.
Global marketing focuses on global market opportunities
and threats:
Why go international / global?
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Growth
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Access to new markets: USA, Mexico, Japan, EU
Access to resources: natural, human, $$$
Survival
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Compete with lower costs due to increased
access to resources and economies of scale
Isolation is impossible, multinationals enter into
practically all markets
Why go international / global?
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For US-based companies, 75% of sales
potential is outside the US
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90% of Coca-Cola’s operating income is
generated outside the US.
For Japanese companies, 85% of potential is
outside Japan
For German companies, 94% of potential is
outside Germany
For Canada? About 97%
Global Industries
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An industry is global to the extent that a company’s
industry position in one country is interdependent
with its industry position in another country
Indicators of globalization:
 Ratio of cross-border trade to total worldwide
production
 Ratio of cross-border investment to total capital
investment
 Proportion of industry revenue generated by
companies that compete in key world regions
Global Firms =
Multinational Companies (MNCs)
Transnationality Index Rankings:
1. Nestle (Switzerland)
2. Thomson Corp (Canada, information systems)
3. Holderbank Financiere (Switzerland)
4. Seagram Company (Canada)
5. Solvay (Belgium)
6. ABB Asa Brown Beveri (Switzerland)
7. Electrolux (Sweden)
12. Northern Telecom (Canada)
Global Management
How a company values its foreign employees
and foreign customers
1. Ethnocentric
2. Polycentric
3. Regiocentric
4. Geocentric
Ethnocentric Management
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Assumes home country is superior to the rest
of the world; associated with attitudes of
national arrogance and supremacy
Management focus is to do in host countries
what is done in the home country
Polycentric Management
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Management operates under the assumption
that every country is different; the company
develops country-specific strategies
Regio-centric Management
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Region becomes the relevant geographic unit
(rather than by country)
Management orientation is geared to
developing an integrated regional strategy
Geocentric Management
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Entire world is a potential market
Managerial goal is to develop integrated
world market strategies
Driving Forces behind
Globalization
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Global economic trends, regional trade agreements
Consumers: similarity of market needs and wants
Competition: technology, transportation and
communication improvements, R&D and
manufacturing costs, leverage (learning through
operating abroad)
Governments: competing for FDI (foreign direct
investment)
Globalization - Pros
• Lower prices for goods and services
Globalization - Cons
• Destroying manufacturing jobs in wealthy,
advanced countries (like Canada)