REACHING GLOBAL MARKETS C HAPTER

Marketing that targets customers throughout the world. More customers=more money. Good thing, right? Global Marketing

 Protectionism Protectionism Hurts or Helps Domestically?

How protectionism affects world trade Quota Tariff World Trade Organization (WTO)- “Referee” for global trade

Lets Make “Domestic” Bigger! Economic community –An organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies

Examples of Economic Communities MERCOSUR NAFTA OPEC

 Global Companies International Firm – each market is identical Multinational Firm - each market is unique Transnational Firm –emphasizes similarities,recognize differences No Borders, New Rules

Multi-domestic Marketing Strategy Global Brand Global Marketing Strategy Global Companies & Marketing Strategies

Things to Consider When Going Global

Economic Considerations  Economic Infrastructure - Communications Power Distribution Monetary systems  Consumer Income - Level AND buying power

Political – Regulatory Climate  Political Stability  Trade Regulations-Its legal here, but is it legal there? Health Promotional Environmental No private ownership Minimal individual freedom Little central government Maximum personal freedom

GLOBAL MARKET-ENTRY STRATEGIES RISK Exporting Joint Venture Direct Investment Licensing & Contract Mfg

SameProduct One Product One Message One Product One Message Product Adaptation Product Adaptation Message Adaptation Message Adaptation Product Invention Product Invention SameMessage ChangeMessageChangeProduct Product and Promotion Strategies for Global Marketing

Pricing Strategy  Hurts the local businesses Hurts the local businesses  Gray Market or Gray Market or Parallel Importing – (individuals)  Dumping – (companies) Dumping – (companies)

Pricing Strategy Countertrade - a form of trade in which the payment for goods and services is in the form of other goods and services Hurts the local governments

Protectionism Protectionism is the practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quotas.

Tariff A tariff is a government tax on goods or services entering a country, primarily serving to raise prices on imports.

Quota A quota is a restriction placed on the amount of of a product allowed to enter or leave a country.

World Trade Organization The World Trade Organization (WTO) is a permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions.

Multidomestic Marketing Strategy A multidomestic marketing strategy is used by multinational firms that have as many different product variations, brand names, and advertising programs as countries in which they do business.

Global Marketing Strategy A global marketing strategy is used by transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.

Global Brand A global brand is a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs.

Exporting is producing goods in one country and selling them in another country. Exporting

A joint venture is when a foreign country and a local firm invest together to create a local business. Joint Venture

A gray market is a situation where products are sold through unauthorized channels of distribution. Also called parallel importing. Gray Market

Direct investment entails a domestic firm actually investing in and owning a foreign subsidiary or division. Direct Investment

Direct investment entails a domestic firm actually investing in and owning a foreign subsidiary or division. Licensing is the legal process allowing the use of manufacturing, patents and/or knowledge. Licensing

Dumping is when a firm sells a product in a foreign country below its domestic price or below its actual cost. Dumping