Thriving in the Marketing
Environment:
The World is Flat
The global
marketplace
Adopting a Global Focus: Consider
•
•
•
•
•
business ethics
various environments
level of economic development
Unique variables & characteristics
Similar variables & characteristics
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Figure 3.1: Linking Ethics to Profits
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Figure 3.4: Decision Model for
Entering Foreign Markets
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Global Marketing
• World Trade:
• the flow of goods/services
• among different countries –
• the value of all exports/imports of the
world’s nations
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Figure 3.3: North America Trade Flows
(in $billions)
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Global Marketing
• Countertrade:
• trading products between countries
 Goods are paid for with other goods
• or
• supplying goods in return for tax breaks
from local government
 (accounts for 25% of all world trade)
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Making the Decision to Go Global
• “Go” or “no go”:
• is it in the best interest of the firm
to remain in home market
to go where opportunities exist
Which global markets are most
attractive?
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Making the Decision to Go Global
• Key to the decisions:
market conditions
creating a competitive advantage
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The Global Marketing Environment
• Understanding the external environment
affecting marketers’ global strategies:
• economic,
• competitive,
• technological,
• Political / legal
• cultural factors
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How “Global” Should a Global
Marketing Strategy Be?
• Market-entry strategy: the level of commitment
to operate in another country
Figure 3.4
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Levels of Entry strategies
• Exporting
 Lowest level of commitment to foreign marketplace
 Selling products to other countries
 Sell own, or intermediaries, or export merchants
• Contractual agreements
 2nd level of commitment
 Licensing agreement (product)
 Franchising (whole business)
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Levels of entry strategies
• Strategic alliances
3rd level of commitment
1 or more domestic firms
JOINT VENTURE
• SA with 2+ firms to create new business
• Direct investment
4th level of commitment
Buying a firm in target company
To expand businesses
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Levels of entry strategies
• Born Global companies
sells products in multiple countries
• from moment they are created
Rather than traditional slow way
Example: Logitech
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Product level decisions:
Marketing mix strategies
• Standardization vs. localization
Standardization:
• offer the same products in all markets
Localization:
• offer a customized marketing mix for each
country
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Product level decisions: Mktg Mix
• Product decisions
Straight extension strategy
• Sell same product in domestic &
foreign markets
Product adaptation strategy
• Offers similar but modified products in
foreign markets.
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Global Marketing: Choosing a
Marketing Mix Strategy (cont’d)
• Product decisions
Product invention strategy
• Firm develops new product for
foreign market
Backward invention
• Simplifies product for foreign market
–Treadle sewing machines
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Global Marketing: Choosing a
Marketing Mix Strategy
• Promotion decisions:
whether or not to modify promotions
How will message be perceived?
• Similar or modified?
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Product level decisions: Mktg Mix
• Price decisions: consider:
Transportation forms
Currency exchange rates
Tariffs & non tariff barriers
Bribes
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Product level decisions: Mktg Mix
• Price decisions
Free trade zones
• Areas to warehouse goods without paying
taxes/duties til goods are moved into
marketplace
Gray market goods
• Mfg’d goods (outside country)
• then imported without consent of trademark
holder
Dumping
• Pricing exported products at lower level than
products are priced at home
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Global Marketing: Choosing a
Marketing Mix Strategy (cont’d)
• Distribution decisions
Methods used re: infrastructure, etc
Ways to package
Ways to refrigerate
Ways to store goods
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The End
• There are so many more variables to
consider
• More than this chapter offers.
• Remember, we offer a whole semester of
International marketing
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At the Borders: issues
• Protectionism:
quotas,
embargoes,
tariffs
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At the Borders
• World Trade Organization (WTO):
 to “help trade flow smoothly, freely, fairly, and
predictably”
• Economic communities promoting trade
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The Global Marketing Environment
• A company going global
• must understand
• local conditions in the targeted country
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