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PRINCIPLES OF MARKETING
Eighth Edition
Philip Kotler and Gary Armstrong
Chapter 19
The Global
Marketplace
 Copyright 1999 Prentice Hall
Global Marketing Into the TwentyFirst Century
19-2
• Global competition is intensifying and few U.S.
industries are now safe from foreign competition.
• To compete, many U.S. companies are continuously
improving their products, expanding into foreign
markets and becoming Global Firms.
• Global firms face several major problems:
–
–
–
–
Variable exchange rates,
Unstable governments,
Protectionist tariffs and trade barriers,
Corruption.
 Copyright 1999 Prentice Hall
Decisions in International Marketing
Looking at the Global
Marketing Environment
Deciding Whether to
Go International
Deciding Which Markets
to Enter
Deciding How to Enter
the Market
Deciding on the Global
Marketing Program
Deciding on the Global
Marketing Organization
 Copyright 1999 Prentice Hall
19-3
Looking at the Global Marketing
Environment
The International Trade System
The World Trade Organization and GATT
Regional Free Trade Zones
 Copyright 1999 Prentice Hall
19-4
Economic Environmental Factors
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Subsistence
Economies
Industrial
Economies
Country’s
Industrial
Structure
Industrializing
Economies
Income Distribution
 Copyright 1999 Prentice Hall
Raw Material
Exporting
Economies
Political-Legal Environmental Factors
Attitudes Toward
International
Buying
Government
Bureaucracy
Monetary
Regulations
Political
Stability
 Copyright 1999 Prentice Hall
19-6
Cultural Environmental Factors
How
Customers
Think About
and
Use
Products
Business
Norms and
Behavior
Cultural
Traditions,
Preferences,
and
Behaviors
 Copyright 1999 Prentice Hall
19-7
Deciding Whether to Go
International
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• Reasons companies might consider International
expansion:
– Global competitors attacking the domestic market,
– Foreign markets might offer higher profit
opportunities,
– Domestic markets might be shrinking,
– Need an enlarged customer base to achieve
economies of scale,
– Reduce dependency on any one market,
– Customers might be expanding abroad.
• Most companies do not act until some situation or
event thrusts them into the international market.
 Copyright 1999 Prentice Hall
Deciding Which Markets to Enter
Marketer’s Checklist for Identifying
Potential
Market
1. Demographic Characteristics.
2. Geographic Characteristics.
3. Economic Factors.
4. Technological Factors.
5. Sociocultural Factors.
6. National Goals and Plans.
 Copyright 1999 Prentice Hall
19-9
Deciding How to Enter the Market
Amount of Commitment, Risk, Control,
and Profit Potential
Greater
Direct Investment
Joint Venturing
Exporting
Lesser
 Copyright 1999 Prentice Hall
19-10
Deciding on the Global Marketing
Program
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Five International Product and Promotion Strategies
Promotion
Product
Don’t
Change
Promotion
Adapt
Promotion
Don’t Change
Product
Adapt
Product
Straight
Extension
Product
Adaptation
Communication
Adaptation
Dual
Adaptation
Product Invention
Develop New Product
 Copyright 1999 Prentice Hall
Whole-Channel Concept for Distribution
Seller
Seller’s Headquarters
Channels Between Nations
Channels Within Nations
Final User or Buyer
 Copyright 1999 Prentice Hall
19-12
Degree of Involvement in
International Marketing Activities
Deciding on the Global Marketing
Organization
Export Department
International Division
Global Organization
 Copyright 1999 Prentice Hall
19-13