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McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

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Presentation on theme: "McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved."— Presentation transcript:

1 McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 6, YOU SHOULD BE ABLE TO: Identify the major trends that have influenced world trade and global marketing. LO1 Identify the environmental forces that shape global marketing efforts. LO2 6-2

3 LO3 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 6, YOU SHOULD BE ABLE TO: Name and describe the alternative approaches companies use to enter global markets. Explain the distinction between standardization and customization when companies craft worldwide marketing programs. LO4 6-3

4 HOW DELL, INC., BUILT A BILLION DOLLAR BUSINESS IN INDIA 6-4

5 MARKETING IN A BORDERLESS ECONOMIC WORLD TREND 1DECLINE OF ECONOMIC PROTECTIONISM LO1 Protectionism Tariffs Quota World Trade Organization (WTO) 6-5

6 MAKING RESPONSIBLE DECISIONS Global Ethics and Global Economics The Case of Protectionism LO1 6-6

7 FIGURE 6-1 FIGURE 6-1 Protectionism hinders world trade when countries raise prices and limit supply through tariff and quota policies 6-7

8 European Union Euro North American Free Trade Agreement (NAFTA) MARKETING IN A BORDERLESS ECONOMIC WORLD TREND 2RISE OF ECONOMIC INTEGRATION LO1 6-8

9 FIGURE 6-2 FIGURE 6-2 The European Union in mid- 2012 consists of 27 countries with more than 500 million consumers 6-9

10 MARKETING IN A BORDERLESS ECONOMIC WORLD TREND 3AGLOBAL COMPETITION LO1 Global Competition 6-10

11 FIGURE 6-A FIGURE 6-A Global companies and marketing strategy 6-11

12 International Firms Transnational Firms Multinational Firms Multidomestic Marketing Strategy Global Marketing Strategy Global Brand MARKETING IN A BORDERLESS ECONOMIC WORLD TREND 3BGLOBAL COMPANIES LO1 6-12

13 Global Consumers MARKETING IN A BORDERLESS ECONOMIC WORLD TREND 3CGLOBAL CONSUMERS LO1 6-13

14 MARKETING MATTERS The Global TeenagerA Market of 2 Billion Voracious Consumers with $250 Billion to Spend LO1 6-14

15 MARKETING IN A BORDERLESS ECONOMIC WORLD TREND 4A NETWORKED GLOBAL MARKETPLACE LO1 6-15

16 A GLOBAL ENVIRONMENTAL SCAN CULTURAL DIVERSITY LO2 Foreign Corrupt Practices Act (1977) Foreign Corrupt Practices Act (1977) Cross-Cultural Analysis Values Customs 6-16

17 FIGURE 6-B FIGURE 6-B Cultural appreciation 6-17

18 A GLOBAL ENVIRONMENTAL SCAN CULTURAL DIVERSITY LO2 Cultural Symbols #13; #4 6-18

19 A GLOBAL ENVIRONMENTAL SCAN CULTURAL DIVERSITY LO2 Language Unintended Meanings Back Translation Cultural Ethnocentricity Consumer Ethnocentrism Nestlé Ad 6-19

20 A GLOBAL ENVIRONMENTAL SCAN ECONOMIC CONSIDERATIONS LO2 Economic Infrastructure Communications Financial Transportation Distribution Systems 6-20

21 A GLOBAL ENVIRONMENTAL SCAN ECONOMIC CONSIDERATIONS LO2 Consumer Income and Purchasing Power Microfinance: India Microfinance: India Currency Exchange Rate 6-21

22 A GLOBAL ENVIRONMENTAL SCAN ECONOMIC CONSIDERATIONS LO2 Stage of Economic Development Developed Countries: Japan Developing Countries Made the Move: Brazil Remain Locked: Tanzania Bottom of the Pyramid 6-22

23 Political Stability Trade Regulations A GLOBAL ENVIRONMENTAL SCAN POLITICAL-REGULATORY CLIMATE LO2 6-23

24 FIGURE 6-3 FIGURE 6-3 Alternative global market-entry strategies 6-24

25 Exporting Indirect Exporting Direct Exporting GLOBAL MARKET-ENTRY STRATEGIES EXPORTING LO3 6-25

26 MARKETING MATTERS Creative Cosmetics and Creative Export Marketing in Japan LO3 6-26

27 Advantages Disadvantages Franchising GLOBAL MARKET-ENTRY STRATEGIES LICENSING LO3 6-27

28 Joint Venture GLOBAL MARKET-ENTRY STRATEGIES JOINT VENTURE LO3 Advantages Disadvantages 6-28

29 GLOBAL MARKET-ENTRY STRATEGIES DIRECT INVESTMENT LO3 Advantages Disadvantages Direct Investment 6-29

30 FIGURE 6-4 FIGURE 6-4 Five product and promotion strategies for global marketing 6-30

31 Product Extension CRAFTING A WORLDWIDE MARKETING PROGRAM PRODUCT STRATEGIES LO4 Product Adaptation Product Invention 6-31

32 Communication Adaptation CRAFTING A WORLDWIDE MARKETING PROGRAM PROMOTION STRATEGIES LO4 Dual Adaptation Identical Message Nescafé China Video 6-32

33 Countries Impose Pricing Constraints CRAFTING A WORLDWIDE MARKETING PROGRAM DISTRIBUTION AND PRICING STRATEGIES LO4 Channels Can Be Long or Short Prices May Be Too High or Too Low Dumping Gray Market Channels and Economic Development 6-33

34 FIGURE 6-5 FIGURE 6-5 Channels of distribution in global marketing 6-34

35 CNS BREATHE RIGHT STRIPS: GOING GLOBAL VIDEO CASE 6 6-35

36 VIDEO CASE 6 CNS 1. What are the advantages and disadvantages for CNS taking Breathe Right strips into international markets? 6-36

37 VIDEO CASE 6 CNS 2. What are the advantages to CNS of (a) using its three-stage process to enter new global markets and (b) having specific criteria to move through the stages? 6-37

38 VIDEO CASE 6 CNS 6-38

39 VIDEO CASE 6 CNS 3. Using the CNS criteria, with what you know, which countries should have highest priority for CNS? 6-39

40 VIDEO CASE 6 CNS 4. Which single segment of potential Breathe Right strip users would you target to enter new markets? 6-40

41 VIDEO CASE 6 CNS 5. Which marketing mix variables should CNS emphasize the most to succeed in a global arena? Why? 6-41

42 Protectionism Protectionism is the practice of shielding one or more industries within a countrys economy from foreign competition through the use of tariffs or quotas. 6-42

43 Tariffs Tariffs are government taxes on goods or services entering a country that primarily serve to raise prices on imports. 6-43

44 Quota A quota is a restriction placed on the amount of a product allowed to enter or leave a country. 6-44

45 World Trade Organization (WTO) The World Trade Organization (WTO) is a permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions. 6-45

46 Global Competition Global competition exists when firms originate, produce, and market their products and services worldwide. 6-46

47 Multidomestic Marketing Strategy A multidomestic marketing strategy involves multinational firms that have as many different product variations, brand names, and advertising programs as countries in which they do business. 6-47

48 Global Marketing Strategy A global marketing strategy involves transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ. 6-48

49 Global Brand A global brand is a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs. 6-49

50 Global Consumers Global consumers are consumer groups living in many countries or regions of the world who have similar needs or seek similar features and benefits from products or services. 6-50

51 Cross-Cultural Analysis Cross-cultural analysis involves the study of similarities and differences among consumers in two or more nations or societies. 6-51

52 Values Values are a societys personally or socially preferable modes of conduct or states of existence that tend to persist over time. 6-52

53 Customs Customs are what is considered normal and expected about the way people do things in a specific country. 6-53

54 Foreign Corrupt Practices Act (1977) The Foreign Corrupt Practices Act (1977) is a law, amended by the International Anti-Dumping and Fair Competition Act (1998), that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country. 6-54

55 Cultural Symbols Cultural symbols are things that represent ideas and concepts. 6-55

56 Back Translation Back translation is the practice where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors. 6-56

57 Microfinance Microfinance is the practice of offering small, collateral-free loans to individuals who otherwise would not have access to the capital necessary to begin small businesses or other income- generating activities. 6-57

58 Currency Exchange Rate A currency exchange rate is the price of one countrys currency expressed in terms of another countrys currency. 6-58

59 Exporting Exporting is a global market-entry strategy in which a company produces goods in one country and sells them in another country. 6-59

60 Joint Venture Joint venture is a global market- entry strategy in which a foreign company and a local firm invest together to create a local business in order to share ownership, control, and profits of the new company. 6-60


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