1. Chapter 1 The Global Marketplace

2. ROAD MAP: Previewing the Concepts
Chapter 1
ROAD MAP: Previewing the Concepts
How does the global marketing environment affect a company’s international marketing decisions?
Key approaches to entering international markets:
How do companies adapt their marketing mixes for international markets?
Three major forms of international marketing organization:
Export department, international divisions, global organization
Professor Takada

3. Global Marketing in the 21st Century
Chapter 1
Global Marketing in the 21st Century
The world is shrinking rapidly with the advent of faster communication, transportation, and financial flows.
International trade is booming.
Global competition is intensifying.
Higher risks with globalization.
Professor Takada

4. Global Firm A firm that operates in more than one
Chapter 1
Global Firm
A firm that operates in more than one
country and captures R&D, production,
logistical, marketing, and
financial advantages in its costs and
reputation that are not available to purely
domestic competitors.
Professor Takada

5. Chapter 1
Professor Takada

6. Major International Marketing Decisions
Chapter 1
Major International Marketing Decisions
Professor Takada

7. Four Stages of Internationalization
No regular export activities
Export via independent agents
Establish sales subsidiaries
Establish production
facilities abroad
Professor Takada

8. Nescafe Markets in Russia
Professor Takada

9. Chapter 1
ROAD MAP:
How does the global marketing environment affect a company’s international marketing decisions?
International trade system
Economic environment
Political-legal environment
Cultural environment
Three key approaches to entering international markets:
Exporting, joint venturing, and direct investment
How do companies adapt their marketing mixes for international markets?
Three major forms of international marketing organization:
Export department, international divisions, global organization
Professor Takada

10. Looking at the Global Marketing Environment
Chapter 1
Looking at the Global Marketing Environment
The International Trade System:
Restrictions—tariffs, quotas, embargos, exchange controls, and non-tariff trade barriers.
The World Trade Organization and GATT:
Helps Trade—reduces tariffs and other international trade barriers.
Regional Free Trade Zones:
Groups of nations organized to work toward common goals in the regulation of international trade.
Professor Takada

11. Regional Free Trade Zones
European Union
NAFTA
MERCOSUL
APEC
Professor Takada

12. Industrial Structure Income Distribution
Chapter 1
Industrial Structure
Shapes a country’s product and service needs, income levels, and employment levels.
Subsistence Economies
Raw Material Exporting Economies
Industrializing Economies
Industrial Economies
Income Distribution
Professor Takada

13. Political-Legal Environment
Chapter 1
Political-Legal Environment
Attitudes Toward International Buying
Government Bureaucracy
Political Stability
Monetary Regulations
Professor Takada

14. Chapter 1
Cultural Environment
Sellers must examine the ways consumers in different countries think about and use products before planning a marketing program.
Business norms vary from country to country.
Companies that understand cultural nuances can use them to advantage when positioning products internationally.
Professor Takada

15. Chapter 1
Cultural Differences
When Nike learned that this stylized “Air” logo resembled “Allah” in Arabic script, it apologized and pulled the shoes from distribution.
Professor Takada

16. Cultural Dimensions Individualism vs. Collectivism High vs. Low
Power Distance
Masculine
vs.
Feminine
Weak vs. Strong
Uncertainty
Avoidance
Professor Takada

17. Deciding Whether to Go Global
Chapter 1
Deciding Whether to Go Global
Reasons to consider going global:
Foreign attacks on domestic markets
Foreign markets with higher profit opportunities
Stagnant or shrinking domestic markets
Need larger customer base to achieve economies of scale
Reduce dependency on single market
Follow customers who are expanding
Professor Takada

18. Deciding Which Markets to Enter
Chapter 1
Deciding Which Markets to Enter
Before going abroad, the company should try to define its international marketing objectives and policies.
What Volume of Foreign Sales is Desired?
How Many Countries to Market In?
What Types of Countries to Enter?
Choose Possible Countries and Rank Based on Market Size, Market Growth, Cost of Doing Business, Competitive Advantage, and Risk Level
Professor Takada

19. Chapter 1
Colgate Goes to China
Using aggressive promotional and educational programs, Colgate has expanded its market share from 7% to 35% in less than a decade.
Professor Takada

20. Chapter 1
ROAD MAP:
How does the global marketing environment affect a company’s international marketing decisions?
Key approaches to entering international markets
How do companies adapt their marketing mixes for international markets?
Three major forms of international marketing organization:
Export department, international divisions, global organization
Professor Takada

21. Five Modes of Entry into Foreign Markets
Indirect
exporting
Direct
exporting
Licensing
Joint
ventures
Direct
investment
Commitment, Risk, Control, Profit Potential
Professor Takada

22. Direct Exporting Methods
Domestic-based export department
Overseas sales branch or subsidiary
Traveling export sales representatives
Foreign-based distributors or agents
Professor Takada

23. McDonald’s Franchises Are Sold Worldwide
Professor Takada

24. Market Entry Strategies
Chapter 1
Market Entry Strategies
Joint Venturing:
Licensing
Budweiser-Kirin in Japan; E*TRADE in Canada, Australia/NZ, and France; Tokyo Disneyland-Oriental Land Co.
Contract manufacturing
Sears in Mexico and Spain
Management contracting
Hilton
Joint ownership
KFC-Mitsubishi
Professor Takada

25. Chapter 1
ROAD MAP:
How does the global marketing environment affect a company’s international marketing decisions?
Three key approaches to entering international markets:
Exporting, joint venturing, and direct investment
How do companies adapt their marketing mixes for international markets?
Standardized-adapted marketing mix:
Product
Promotion
Pricing
Channel
Three major forms of international marketing organization:
Export department, international divisions, global organization
Professor Takada

26. Deciding on the Global Marketing Program
Chapter 1
Deciding on the Global Marketing Program
Standardized Marketing Mix:
Selling largely the same products and using the same marketing approaches worldwide.
Adapted Marketing Mix:
Producer adjusts the marketing mix elements to each target market, bearing more costs but hoping for a larger market share and return.
“Think globally but act locally.”
A balance between standardization and adaptation.
Professor Takada

27. Marketing Mix Adaptation
Chapter 1
Marketing Mix Adaptation
In India, McDonald’s serves chicken, fish, and vegetable burgers, and the Maharaja Mac—two all-mutton patties, special sauce, lettuce, cheese, pickles, onions, on a sesame-seed bun.
Professor Takada

28. Five Global Product and Promotion Strategies
Chapter 1
Five Global Product and Promotion Strategies
Kellogg cereals, Gillette razors, IBM PC, Heineken beer, Nokia cellular phone, Hyatt Hotels, L’Oreal
Professor Takada

29. Global Promotion Strategies
Chapter 1
Global Promotion Strategies
Can use a standardized theme globally, but may have to make adjustments for language or cultural differences.
Communication Adaptation:
Fully adapting an advertising message for local markets.
Changes may have to be made due to media availability.
Professor Takada

30. Communications Communications adaptation Dual adaptation
Professor Takada

31. Global Pricing Strategies
Chapter 1
Global Pricing Strategies
Companies face many problems in setting their international prices.
Possible approaches include:
Charge a uniform price all around the world.
Charge what consumers in each country will pay.
Use a standard markup of costs everywhere.
International prices tend to be higher than domestic prices because of price escalation.
Companies may become guilty of dumping –a foreign subsidiary charges less than its costs or less than it charges in its home market.
Professor Takada

32. International Pricing
Chapter 1
International Pricing
Twelve European Union countries have adopted the euro as a common currency, creating “pricing transparency” and forcing companies to harmonize their prices throughout Europe.
Professor Takada

33. Whole-Channel Concept for International Marketing
Chapter 1
Whole-Channel Concept for International Marketing
Professor Takada

34. Country of Origin Effects
Professor Takada

35. EU’s PDO and PGI Listings
Professor Takada

36. ROAD MAP: Three major forms of international marketing organization:
Chapter 1
ROAD MAP:
How does the global marketing environment affect a company’s international marketing decisions?
Three key approaches to entering international markets:
Exporting, joint venturing, and direct investment
How do companies adapt their marketing mixes for international markets?
Three major forms of international marketing organization:
Export department
International divisions
Global organization
Professor Takada

37. Deciding on the Global Marketing Organization
Chapter 1
Deciding on the Global Marketing Organization
Organize an export department
Create international divisions
Geographical organizations
World product groups
International subsidiaries
Become a global organization
Professor Takada

38. Global Organization Strategies
Chapter 1
Global Organization Strategies
World as Single Market
Multinational
“Glocal”
Click on the video icon to launch a video snippet about Nivea’s philosophy on international marketing.
Professor Takada

39. Rest Stop: Reviewing the Concepts
Chapter 1
Rest Stop: Reviewing the Concepts
Discuss how the international trade system, economic, political-legal, and cultural environments affect a company’s international marketing decisions.
Describe three key approaches to entering international markets.
Explain how companies adapt their marketing mixes for international markets.
Identify the three major forms of international marketing organization.
Professor Takada