1. Understanding the Global Marketing Environment Class 4

2. “Every American company is international, at least to the extent that its business performance is conditioned in part by events that occur abroad”

3. 1-3 Trends in Global Business Internationalization of U.S. Markets Internationalization of U.S. Business Growth of Regional Trade Areas EUEU, NAFTA, AFTA, APEC Move toward free market system by countries in Latin America, Asia, Eastern Europe Large Emerging Markets such as Argentina, China, South Korea, Poland, India Evolving global middle income households GATT and World Trade Organization The TRIAD

4. 1-4 Until recently, competition for U.S. markets was only among U.S. businesses with the same relative cost of money, labor and product è U.S market now includes competitors from all over the world Globalization of Business and Markets

5. 1-5 Why internationalization? Saturation of U.S. markets

6. 1-6 Foreign Acquisitions of U.S. Companies U.S. CompanyForeign Owner Keebler (Cookies and other foods)Britain J. Walter Thompson (Advertising)Britain Spiegal (Catalog retailing)Germany Mack Trucks (Automotive)France Giant Food Stores (Supermarkets)Netherlands Pillsbury, Burger King, Pearle VisionBritain CBS Records (Music and Entertainment)Japan Carnation (Coffee-Mate, Friskies pet food)Switzerland Chesebrough-Pond’s (Vaseline)Netherlands SOURCE: Adapted from “The 100 Largest Foreign Investments in the U.S.,” Forbes, July 18, 1994, pp. 266-270.

7. 1-7 Why internationalization? Saturation of U.S. markets Higher ROI in foreign markets

8. 1-8 Why internationalization? Saturation of U.S. markets Higher ROI in foreign markets Establish early position in world markets

9. 1-9 Invented Here, Made Elsewhere U.S. Invented Technology Phonographs Color TVs Audiotape Recorders Videotape Recorders Machine Tools Telephones Semiconductors Computers 7 4% 9 8% 6 4% 8 9% 2 5% 9 9% 3 5% 9 9% 1% 1 0% 0% 4 0% 1 0% 9 0% 1% 9 0% 020406080100 1 9 7 0 N O W

10. 1-10 Definition of International Marketing The performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than nation for profit.

11. 1-11 What’s the difference between international marketing and domestic marketing? The environment in which marketing strategies have to be implemented

12. 1-12 7 The International Marketing Task Political/legal forces Economic forces 1 2 Environmental uncontrollables country market A Environmental uncontrollables country market B Environmental uncontrollables country market C Competitive structure Competitive Forces Level of Technology PriceProduct Promotion Channels of distribution Geography and Infrastructure Foreign environment (uncontrollable) Structure of distribution Economic climate Cultural forces 3 4 5 6 7 Political/ legal forces Domestic environment (uncontrollable) (controllable)