1. The Global Marketplace
Chapter 19
The Global Marketplace

2. Global Marketing into the Twenty-First Century
The world is shrinking rapidly with the advent of faster communication, transportation, and financial flows.
International trade is booming and now accounts for a quarter of the United States’ GDP.
Between 1996 and 2006, U.S. exports are expected to increase 51%.
Global competition is intensifying and few U.S. industries are now safe from foreign competition.

3. Global Marketing into the Twenty-First Century
To compete, many U.S. companies are continuously improving their products, expanding into foreign markets, and becoming global firms.
Global firms face several major problems:
High debt, inflation, and unemployment have resulted in highly unstable governments & currencies,
Governments placing more regulations on foreign firms,
Protectionist tariffs and trade barriers,
Corruption.

4. Major Decisions in International Marketing (Fig. 19.1)
Looking at the global marketing environment
Deciding whether to go international
Deciding which markets to enter
Deciding how to enter the market
Deciding on the global marketing program
Deciding on the global marketing organization

5. Looking at the Global Marketing Environment
The International Trade System
i.e. Tariff, Quota, Embargo, Exchange
Control, and Nontariff Trade Barriers
Looking at the Global Marketing Environment
The World Trade Organization and GATT
Treaty designed to promote world trade by reducing
tariffs and other international trade barriers
Regional Free Trade Zones
Group of nations organized to work toward
common goals in the regulation of international trade

6. Economic Environment Subsistence Economies Types of Industrial
Industrial Structure
Types of
Industrial
Structure
Raw Material Exporting
Economies
Industrial Economies
Industrializing Economies
Income Distribution

7. Political-Legal Environment
At Least Four Political-Legal Factors Should be Considered in Deciding Whether to do Business in a Given Country:
Monetary
Regulations
Attitudes Toward
International
Buying
Government
Bureaucracy
Political
Stability

8. Cultural Environment
Sellers Must Examine the Following Before Planning a Marketing Program Within a Given Country.
How Customers
Think About and
Use Products
Cultural Traditions,
Preferences, and
Behaviors
Business
Norms and
Behavior

9. Deciding Whether to Go International
Reasons companies might consider international expansion:
Global competitors attacking the domestic market,
Foreign markets might offer higher profit opportunities,
Domestic markets might be shrinking,
Need an enlarged customer base to achieve economies of scale,
Reduce dependency on any one market,
Customers might be expanding abroad.
Most companies do not act until some situation or event thrusts them into the international market.

10. Deciding Which Markets to Enter
Define Organization’s Marketing Objectives
and Policies
Deciding Which Markets to Enter
What Volume of Foreign Sales is Desired?
How Many Countries Should the Firm Go Into?
What Types of Countries Should be Entered?
Rank by Market Size & Growth, Cost of Doing
Business, Competitive Advantage, & Risk Level.

11. Discussion Connections
Assess China as a market for McDonald’s.
What factors make it attractive?
What factors make it less attractive?
Assess Canada as a market for McDonald’s.
In what ways is Canada more attractive than China?
In what ways is it less attractive?
If McDonald’s could operate in only one of these countries, which one would you choose and why?

12. Deciding How to Enter the Market (Fig. 19.2)
Exporting
Indirect
Direct
Joint venturing
Licensing
Contract manufacturing
Management Contracting
Joint Ownership
Direct investment
Assembly facilities
Manufacturing facilities

13. Deciding on the Global Marketing Program
Adapted Marketing Mix
Adjusts the Elements of the Marketing Mix to Each International Target Market. i.e. Japanese Barbie
Changes in Product, Advertising, Distribution Channels, & Price
Standardized Marketing Mix
Uses Basically the Same Elements of the Marketing Mix in all the Company’s International Markets. i.e Coca-Cola

14. Five International Product and Promotion Strategies (Fig. 19.3)
Don’t Change
Product
Develop New
Product
1. Straight
Extension
Adapt
Product
3. Product
Adaptation
Don’t
Change
Promotion
5. Product
Invention
2. Communication
Adaptation
4. Dual
Adaptation
Promotion
Adapt
Promotion

15. International Pricing
Companies face many problems in setting their international prices.
Possibilities in setting prices include:
Chare a uniform price all around the world.
Charge what consumers in each country could pay.
Use a standard markup of its costs everywhere.
International prices tend to be higher than domestic prices because of price escalation.
Companies may become guilty of dumping – when a foreign subsidiary charges less than its costs or less than in its home market.

16. Whole-Channel Concept for International Marketing (Fig. 19.4)
Seller
Seller’s
headquarters organization for international marketing
Final
user
or buyer
Channels
between
nations
Channels
within
nations

17. Deciding on the Global Marketing Organization
Export Department
Deciding on the Global Marketing Organization
International Division
Global Organization
Degree of Involvement in International Marketing Activities

18. Review of Concept Connections
Discuss how the international trade system, economic, political-legal, and cultural environments affect a company’s international marketing decisions.
Describe three key approaches to entering international markets.
Explain how companies adapt their marketing mixes for international markets.
Identify the three major forms of international marketing organization.