MKT7 - Slide 1 to Global Marketing MKT7

2MKT7 - Slide 1 to 14 Why global marketing? Trade is increasingly global today Because of improved transportation & communications You may have what I want, and I can give you something you may need Yet, Leading to increased competition between countries Steps to promote global trade: General Treaty of Trade and Tariffs (GATT), World Trade organization (WTO), North American free Trade Agreement (NAFTA) and the European Union (EU).

3MKT7 - Slide 1 to 14 Stages in International Development Domestic trade  Some exports  Increased exports  International stage (on ad-hoc basis)  Multi-national stage (more ordered)  Global

4MKT7 - Slide 1 to 14 Forces in International Trade Comparative advantage: countries differ in their relative economic strengths – some have advanced technology, others don’t; others may have lower manpower costs International PLC suggests that countries will differ in timing of the demand for various products

5MKT7 - Slide 1 to 14 Strategies for Global Marketing – Export Strategy Export Strategy – selling portion of what the firm produces, to foreign markets May need to tap the expertise of the local middle-man/intermediary Profits to be made in overseas markets – bigger markets with higher growth rates. But risks. How to gauge the overseas potential? Assess the product’s success in domestic market Need for the company to consider what exporting will entail – do we have the resources to do it? In line with company objectives? Etc.

6MKT7 - Slide 1 to 14 Strategies for Global Marketing – Export Strategy (contd) Approaches to exporting: Passively fill orders from domestic buyers who then export Passively fill orders from domestic buyers who then export Seeking out domestic buyers who represent foreign end users/customers Seeking out domestic buyers who represent foreign end users/customers Exporting indirectly thru intermediaries Exporting indirectly thru intermediaries Exporting directly Exporting directly

7MKT7 - Slide 1 to 14 Strategies for Global Marketing – Technology Licensing Technology Licensing – contractual agreement in which the licensor’s patents, trademarks, copyrights, are made available to local companies What are the drawbacks? Decreases profits and loss of control

8MKT7 - Slide 1 to 14 Strategies for Global Marketing - Contracting Contracting – turning over production to foreign firms while continuing to control marketing process Management contracting – home company provides the management team only; production/operations done by domestic company in the country that you’re going in Management contracting – home company provides the management team only; production/operations done by domestic company in the country that you’re going in

9MKT7 - Slide 1 to 14 Strategic Organizational Structures Joint ventures with domestic company Wholly-owned subsidiaries – firm created by parent company Multinational corporation – direct investment in the country. Foreign markets are usually the most profitable for multinationals SBUs (portfolio management)

10MKT7 - Slide 1 to 14 The Global Marketing Environment - Considerations Economic – need to consider the economic situation in the country that you are going into What is the GDP, inflation rates, interest rates, currency policies, economic trends, etc. What is the GDP, inflation rates, interest rates, currency policies, economic trends, etc. Protectionist measures Protectionist measures Efforts to encourage trade – GATT, WHO, bilateral free trade agreements, intellectual property issues, etc Efforts to encourage trade – GATT, WHO, bilateral free trade agreements, intellectual property issues, etc Conducive for doing business? Conducive for doing business?

11MKT7 - Slide 1 to 14 The Global Marketing Environment - Considerations Political and legal influences: Political Political Legal structure Legal structure Consumer protection Consumer protection

12MKT7 - Slide 1 to 14 The Global Marketing Environment - Considerations Cultural & Social Issues: Sensitivity to cultural & religious issues Sensitivity to cultural & religious issues Hofstede’s dimension Hofstede’s dimension

13MKT7 - Slide 1 to 14 The Global Marketing Environment - Considerations How does one approach segmentation, targeting and postioning issues in the global context?

14MKT7 - Slide 1 to 14 The Global Marketing Environment - Considerations Marketing programme must be flexible enough for the different countries If there are major differences in economic, cultural, social, etc, may need to delegate marketing to local conterparts