1. 4 MKTG CHAPTER Developing a Global Vision

2. Objectives Discuss the importance of global marketing
Discuss the impact of multinational firms on
the world economy
Describe the external environment facing
global marketers
Identify ways of entering the global market
List the elements involved in
developing a global marketing mix

3. Emerging-Market Companies
COMPANY
COUNTRY
INDUSTRY
América Móvil
Mexico
Telecom services
Cemex
Building materials
China Mobile
China
CNOOC
Oil and gas
CVRD
Brazil
Mining
Embraer
Aerospace
Gazprom
Russia
Haier
Home appliances
Hisense
Electronics
Huawei
Telecom equipment
Adapted from “Emerging Giants,” Business Week, July 31, 2006.

4. Go Global Target throughout the world
Global vision of multi-national firms
Fear? Why?

5. The Fear of Trade and Globalization
Millions of Americans have lost jobs
Millions fear losing jobs
Threat of outsourcing if workers do not accept pay cuts
Vulnerability to operations moving offshore
Then, why is international marketing so hot?

6. Did you know?… U.S. exports a fifth of industrial production.
One of every 10 jobs in U.S. is supported by exports.
U.S. businesses export over $800 billion.
Exports account for 25 percent of U.S. economic growth.
U.S. is world’s leading exporter of farm
products.

7. Rewards of Global Marketing
Recognizing and reacting to international marketing opportunities
Using effective global marketing strategies
Being aware of threats from foreign competitors
Other rewards?

8. External Environments

9. Demographics (1) Birthrate Babies born/1000 people in population
In U.S, slower since baby boom (declining; grandparents example)
Japan & Western Europe is also slower
More spending/child (indulged)

10. U.S. Birthrate

11. U.S. Demographics (2) U.S. is a Transient society Regional
16% moves each year (40% of those, out of country)
A nation of strangers leads to chains
Regional
Growth
Fastest in the West
California (most populous; 1/8 Americans)
Density
Most on the East Coast (Why??)
Key for businesses: local area, traffic counts, food

12. Economic Development (1)
What are attractive markets?
GNI (Gross National Income): total market value of goods/services produced in an economy
Higher GNI
Allows more trade
Exchange concept = favors richer countries & people
Criticism here

13. Economic Development (2)
What are attractive markets? (continued)
Lower GNP
Developing world
Growth
Example: U.S. and Canada will take 5x as long to double their population as compared to Nicaragua & Saudi Arabia
Less competition (M&M/Mars: Eastern Europe)
Challenges
Literacy: ¾ world (baby food, U.S. fast food)
Low income: 60% of world makes less than $2/day
Ethics (Nestle and what other company?)

14. International Trade MERCOSUR (Latin America)
URUGUAY ROUND (>148 nations to reduce tariffs)
WTO (replaced GATT)
NAFTA
CAFTA EU
IMF

15. International Options
Exporting/importing (Wal-Mart)
Licensing (Sponge Bob)
Franchising (McDonalds)
Contract manufacturing
Joint venture
Direct foreign investment

16. Which are more risky? Export Licensing Contract Manufacturing
Legal process allowing use of manufacturing/patents/knowledge
Contract Manufacturing
Private-label manufacturing
by a foreign country
Joint Venture
Domestic firm buys/joins a foreign company to create new entity
Export
Sell domestically produced products to buyers in other countries
Direct Investment
Active ownership of a foreign company/manufacturing facility

17. Export Intermediaries
Buyer for Export
Assumes all ownership risks and sells globally for its own account.
Export Broker
Plays the traditional broker’s role by bringing buyer and seller together.
Export Agent
Acts like a manufacturer’s agent for the exporter in the foreign market.

18. Global Marketing Mix Strategies
One product, one message
Change existing product for a new country market (Krispy Crème, anything else?)
Message adaptation
Price changes (exchange rates, dumping)
Barter

19. Product and Promotion Same One Product Product One Message Adaptation
Invention
Same
Change

20. Pricing
Must consider transportation and insurance costs, taxes and tariffs
Determine what customers will spend
Ensure that foreign buyers will pay price
May need to simplify a product to lower price
Don’t assume that low-income countries are willing to accept lower quality

21. Developing a Global Marketing Mix
PROMOTION One Product, One Message Product Invention Product Adaptation Message Adaptation
PLACE
Channel Choice
Channel Structure
Country Infrastructure
PRICE
Dumping
Countertrade
Exchange Rates
Purchasing Power

22. Your thoughts? What are your ideas for selling abroad?
How difficult is global marketing?
What are the potential risks and returns?

23. Summary Demography International trade Economic development
International options
Global marketing mix