DEVELOPING A GLOBAL VISION

AGENDA Deciding whether to enter International Markets Environmental Analysis Issues in Global Markets Ways of entering global marketplace The Global Marketing Mix

External Environment Facing Global Marketers

External Environment: Social Culture: Set of values shared by group that determine what is socially acceptable, including social structure assumptions and attitudes personal beliefs and assumptions interpersonal relationships

Issues from scan of social environment Cultural influences on buying behavior Language differences Population size and distribution Socioeconomic status Ethical issues

Economic Environment Buying Power Currency Gross National Product- Per capita income- Currency Exchange rate-price of currency in terms of another country

Economic Environment (cont.) Stages of Development Traditional Society Pre-Industrial Society Takeoff Economy Industrialising/Developing Fully Industrialised Society

Political and Legal Environment: Questions to ask about Political Systems How much control exerted over private organisations? Attitude toward foreign business? Political Stability

Political and Legal Environment: Laws Tax charged on imported goods/services limit on amount of product that can be bought in limits on amount of money that may be exchanged for other currency Tariff: Quota: Exchange control: Regulating Business operating in host nations General Agreement on Tariffs and Trade

Technological Environment Levels of Technological Development Available Infrastructure

Competitive Environment Degree of government involvement in competition Ownership of competitors local foreign government

Natural Environment Resources Available

Methods of Entry and Risk Levels for Global Marketing High Control/High Risk/ High Return Direct Ownership Joint Ventures Licensing Exporting Little Control/Low Risk/ Low Return

Methods of Entering the Global Marketplace - Export + simple + minimal financial risk - may be less profitable than other mechanisms

Methods of Entering the Global Marketplace: Licensing + minimal capital outlay + useful for serving countries with export restrictions - difficult to control licensee - when licensing agreement ends, licensee may become competitor - may be less profitable than other mechanisms

Methods of Entering the Global Marketplace: Joint Venture Joint Venturing: Domestic firm buys or joins with a foreign company to create a new entity + risk limited to organizations share in venture + foreign partner contributes expertise the organization lacks + useful when host country limits foreign ownership - share control with venture partner - partner may learn technology or secrets

Methods of Entering the Global Marketplace: Direct Ownership + maximum control over foreign operations + are close to customers - expensive to set up - requires extensive knowledge of foreign markets and contacts overseas

Global Marketing Standardisation Some multinational corporations moving toward a degree of global marketing standardisation Based on assumption that markets throughout the world are becoming more alike globally standardised products can be sold the same way all over the world uniform production creates lower production & marketing costs and greater profits

DEVELOPING A GLOBAL MARKETING MIX Product Extension Adaptation Invention Price Dumping Level uniform market based cost based Bribery

Developing a Global Marketing Mix Distribution Promotion