Marketing II
The Chang School-Ryerson University
Continuing Education
CMKT 200 Fall 2005
Instructor: Armand Gervais
Email: agervais@ryerson.ca preferred
Web: www.ryerson.ca/~agervais
Office: Bus 308
Phone: 416-979-5000 Ext 4215
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Lecture 2 Agenda
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Don’t Forget Name Tags
Global Marketing
Video Wal-Mart
Break
Discussion Video
Simulation
To Do’s for next weeks class
Time to work in Groups
REACHING GLOBAL MARKETS
NOW THE WORLD CAN BREATHE
EASIER…ONE NOSE AT A TIME
Breathe Right
Worldwide success
DYNAMICS OF WORLD TRADE
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World Trade Flows
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Global perspective
FIGURE 7-1
Illustrative world
trade flows for
manufactured
goods and
commodities
(billions
of dollars)
DYNAMICS OF WORLD TRADE
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Global perspective (cont)
Countertrade
 Trade feedback effect
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United States perspective
Gross domestic product
 Balance of trade
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Competitive Advantage of Nations
DYNAMICS OF WORLD TRADE
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Competitive Advantage of Nations
Factor conditions
 Demand conditions
 Related supporting industries
 Company strategy, structure, and rivalry
 Economic Espionage
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FIGURE 7-2
Porter’s
“diamond” of
national
competitive
advantage
Concept Check
1. What is the trade feedback effect?
A: The phenomenon in which a
country’s imports affect its exports
and vice versa.
Concept Check
2. What variables influence why some
companies and industries in a country
succeed globally while others lose ground
or fail?
A: Factor conditions; demand
conditions; related and supporting
industries; and company strategy,
structure, and rivalry.
EMERGENCE OF A BORDERLESS
ECONOMIC WORLD
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Decline of Economic Protectionism
FIGURE 7-3 How protectionism affects
world trade
EMERGENCE OF A BORDERLESS
ECONOMIC WORLD
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Decline of Economic Protectionism
(cont)
Tariffs
 Quota
 World Trade Organization
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Rise of Economic Integration
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European Union
FIGURE 7-4 The countries of the
European Union in 2002
Map of Euro Countries
Euro Coins and Currency
1 Euro Coin (Common Side)
5 Euro Bank Note (Common Side)
1 Euro Coin (Greek)
5 Euro Bank Note (French)
EMERGENCE OF A BORDERLESS
ECONOMIC WORLD
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Rise of Economic Integration (cont)
North American Free Trade Agreement
 Asian Free Trade Agreements
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EMERGENCE OF A BORDERLESS
ECONOMIC WORLD
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A New Reality: Global Competition among
Global Companies for Global Customers
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Global Competition
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Strategic alliances
EMERGENCE OF A BORDERLESS
ECONOMIC WORLD
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A New Reality: Global Competition
(cont)
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Global Companies
Multidomestic marketing strategy
 Global marketing strategy
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Global Consumers
Emergence of Networked Global
Marketplace
Diet Pepsi Ad
Brazil
The Global Teenager
500 million consumers
Concept Check
1. What is protectionism?
A: It is the practice of shielding one or
more sectors of a country’s
economy from foreign competition
through the use of tariffs or quotas.
Concept Check
2. The North American Free Trade
Agreement was designed to promote free
trade among which countries?
A: United States, Canada, and Mexico
Concept Check
3. What is the difference between a multidomestic
marketing strategy an a global marketing strategy?
A: A multidomestic marketing strategy means
that firms have as many different product
variations, brand names, and advertising
programs as countries in which they do
business. A global marketing strategy
standardizes marketing activities when there
are cultural similarities and adapts them when
cultures differ.
A GLOBAL
ENVIRONMENTAL SCAN
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Cultural Diversity
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Cross-cultural analysis
Values
 Customs
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Foreign Corrupt Practices Act
Cultural Symbols
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Semiotics
Eiffel Tower
Cultural lessons for Coca-Cola
Parthenon
Cultural lessons for Coca-Cola
A GLOBAL
ENVIRONMENTAL SCAN
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Cultural Diversity (cont)
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Language
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Back translation
Cultural ethnocentricity
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Consumer ethnocentrism
A GLOBAL
ENVIRONMENTAL SCAN
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Economic Considerations
Stage of Economic Development
 Economic Infrastructure
 Consumer Income and Purchasing Power
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Coca-Cola in Russia
Financial investments in bottling and distribution
FIGURE 7-5 How purchasing power
differs around the world
A GLOBAL
ENVIRONMENTAL SCAN
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Economic Considerations (cont)
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Currency exchange rates
A GLOBAL
ENVIRONMENTAL SCAN
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Political-Regulatory Climate
Political Stability
 Trade Regulations
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Checking Political Risk
Ranking favorable business climates
Concept Check
1.Semiotics involves the study of
________________________
cultural
symbols and their
________________________
role
in the assignment of
________.for people
meaning
Concept Check
2. When foreign currencies can buy more
Canadian dollars, are Canadian products
more or less expensive for a foreign
consumer?
A: Less expensive.
GLOBAL MARKET-ENTRY STRATEGIES
FIGURE 7-6 Alternative global marketentry strategies
GLOBAL MARKET-ENTRY
STRATEGIES
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Exporting
Licensing
Joint Venture
Direct Investment
Creative
Cosmetics
in Japan
Creative Export
Marketing
McDonald’s in Moscow, Russia
McDonald’s in Moscow, Russia
Customers Waiting Outside
Customers Eating Inside
Concept Check
1. What mode of entry could a company
follow if it has no previous experience in
global marketing?
A: Indirect exporting through
intermediaries.
Concept Check
2. How does licensing differ from a joint
venture?
A: In licensing, the firm offers the right to a
trademark, patent or trade secret, in
return for a fee or royalty. In a joint
venture, a foreign and a local firm to
produce some product or service. The
two companies share ownership, control,
and profits of the new entity.
CRAFTING A WORLDWIDE
MARKETING EFFORT
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Product and Promotion Strategies
Product extension
 Product adaptation
 Product invention
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FIGURE 7-7 Five product and promotion strategies
for global marketing
CRAFTING A WORLDWIDE
MARKETING EFFORT
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Distribution Strategy
Gillette in
Greece
Same global message
Gillette in
Germany
Same global message
Gillette in
United States
Same global message
FIGURE 7-8 Channels of distribution in global
marketing
CRAFTING A WORLDWIDE
MARKETING EFFORT
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Pricing Strategy
Dumping
 Gray market
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Concept Check
1. Products may be sold globally in three
ways. What are they?
A: Product extension, product
adaptation, and product invention.
Concept Check
2. What is dumping?
A: Dumping is when a firm sells a
product in a country below its
domestic price or below its actual
cost.
Is Wal-Mart Good For
America
http://www.pbs.org/wgbh/pages/frontline/shows/walmart/view/
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Wal-Mart Facts
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100 million: The number of people who shop at Wal-Mart's 3400 American stores every week.
50 million: The amount of square footage Wal-Mart plans to add this year, including 50-55 new Wal-Mart
stores, 220-230 new Supercenters, 35-40 new Sam's Club and 130-140 new international stores. [View a chart
of Wal-Mart locations worldwide, as of Jan. 31, 2004.]
1.2 million: The number of Wal-Mart associates in the U.S. Any full- or part-time Wal-Mart employee, up to
and including the CEO, is considered an "associate," in Wal-Mart parlance. Internationally, Wal-Mart employs
an additional 330,000 associates.
600,000: The number of new employees Wal-Mart hires each year. The company's turnover rate is 44 percent -close to the retail industry average.
1979: The year Wal-Mart's sales first top $1 billion.
$256 billion : Wal-Mart's sales in 2003. In the words of Wal-Mart CFO Tom Schoewe, Wal-Mart's sales are
equal to "one IBM, one Hewlett Packard, one Dell computer, one Microsoft and one Cisco System -- and oh,
by the way, after that we got $2 billion left over."
35: The number of Wal-Mart Supercenters in China.
$15 billion: The amount of Chinese products Wal-Mart estimates it imports each year; others suggest the
number may be higher.
$120 billion: The U.S. trade deficit with China in 2003.
8 percent: The amount of total U.S. retail sales, excluding automobiles, accounted for by Wal-Mart.
$9.98: The average full-time hourly wage for a Wal-Mart employee. The average full-time hourly wage in metro
areas (defined as areas with a population of 50,000 or more) is $10.38. In some urban areas it is higher: $11.03
in Chicago, $11.08 in San Francisco, and $11.20 in Austin.
To Do’s for Next Class
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Before you leave today sign attendance sheet
Email me your contact information Student ID, Email, and
contact number
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Please include a little about yourself:
Program, Major, work experience etc.
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Complete the assigned readings download through library
Form teams and review simulation
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www.marketplace6.com
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© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin