 “Marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives.”Marketing

 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.

 Global marketing is not a revolutionary shift, it is an evolutionary process.  While the following does not apply to all companies, it does apply to most companies that begin as domestic-only companies.

Domestic marketingInternational marketing Global marketing

 Marketing restricted to the political boundaries of a country.  Considers and focuses only on domestic competition.  Products and services are developed for customers in the home market without thought of how the product or service could be used in other markets.

 It is the export, franchising, joint venture or full direct entry of a marketing organization into another country.  International marketing meets the needs of selected foreign country or countries where a company's value can be exported.  A firm does not need to export or enter all world markets to be considered an international marketer.

 Global marketing is a firm's ability to market to almost all countries on the planet.  With extensive reach, the need for a firm's product or services is established.  A global marketing system delivers an integrated, comprehensive and focused communication, access and value to the customers, that can be tracked to build loyalty, and further establish the company's global marketing and brand footprint.

 Many American companies have made the world their market.

 Before deciding to operate internationally, a company must understand the international marketing environment since it offers both new opportunities and new problems.

 When selling to another country, a firm may face restrictions on trade between nations.  Types of restrictions:-  Tariffs  Quotas  Embargos  Exchange controls  Non-tariff trade barriers

 GATT- The General Agreement on Tariffs and Trade is a 61 years old treaty designed to promote world trade by reducing tariffs and other international trade barriers.  WTO enforces GATT rules  WTO acts as an umbrella organization to - Oversee GATT - Mediate global disputes -Impose trade sanctions

 Groups of nations organized to work toward common goals in the regulation of international trade.  Ex. – European Union NAFTA APEC ASEAN SAARC European Union

 A nation’s readiness for different product and services and it’s attractiveness as a market to foreign firms depend upon:- Economic environment Political-Legal environment Cultural environment

 Two economic factors affect country’s attractiveness as a market :- Industrial structure and it’s Income Distribution  Industrial structure :- It shapes a country’s product and service needs, income levels and employment levels  Four types are:- Subsistence Economies Raw Material Exporting Economies Industrializing Economies Industrial Economies

 Income distribution:- Industrialized nations may have low, medium, high income households. In contrast countries with subsistence economies may have very low income families. Still other countries may have only low or high income families. However even poor or developing economies may be attractive markets for all kinds of goods including luxury goods.  Example:- China

Attitude towards international buying Government Bureaucracy Monetary Regulations

 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.

 When Nike learned that this stylized “Air” logo resembled “Allah” in Arabic script, it apologized and pulled the shoes from distribution.

 Fast food giant Burger King released this ad with goddess Lakshmi sitting on top on their non veg burger with the tag line “La Merienda Es Sagrada” translating to snack is sacred. It was a clear denigration showing a Hindu goddess patronizing a meat sandwich.  Burger king apologized and quickly removed the posters from all it’s restaurants.

 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

 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 them based on Market Size, Market Growth, Cost of Doing Business, Competitive Advantage, and Risk Level

 P&G decided to launch it’s Crest toothpaste in China where only 20% of rural dwellers brushed. They saw it as a huge potential market and launched it’s product for 50 cents. Within 10 years it now leads all the competitors with 25% market share.

EXPORT Indirect Direct Joint venturing Licensing Contract manufacturing Management contracting Joint ownership Direct investment Assembly facilities Manufacturing facilities Amount of commitment risk control and profit potential

 Exporting:  Indirect: working through independent international marketing intermediaries.  Direct: company handles its own exports.

 Joint Venturing:  Joining with foreign companies to produce or market products or services.  Approaches:  Licensing  Contract manufacturing  Management contracting  Joint ownership

 Hershey’s, an American firm recently formed a joint venture with India-based Godrej beverages and foods to make and distribute chocolates in India.  KFC entered Japan through a joint ownership venture with Japanese conglomerate Mitsubishi

 Direct Investment:  The development of foreign-based assembly or manufacturing facilities.  This approach has both advantages and disadvantages.

 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.

In India, McDonald’s serves chicken, fish, and vegetable burgers, and the Maharaja Mac—two all chicken patties, special sauce, lettuce, cheese, pickles, onions, on a sesame-seed bun. In the predominantly vegetarian state of Gujarat, it even declares its outlets as “pure vegetarian”, not selling any non- veg items in these outlets.

 Straight Product Extension:  Marketing a product in a foreign market without any change.  Product Adaptation:  Adapting a product to meet local conditions or wants in foreign markets.  Product Invention:  Creating new products or services for foreign markets.

 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.

 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.

 Twelve European Union countries have adopted the euro as a common currency, creating “pricing transparency” and forcing companies to harmonize their prices throughout Europe.

Whole-channel view

 Organize an export department  Create international divisions  Geographical organizations  World product groups  International subsidiaries  Become a global organization