1. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Chapter Eighteen The Future of Global Marketing

2. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 1 Politics and Foreign Entry PROTECTIONISM FREE TRADE AREAS TARIFF BARRIERS TARIFF BARRIERS QUOTAS PROTECTED MARKETS PROTECTED MARKETS ARE REGIONAL IN NATURE EU NAFTA APEC

3. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 2 The Problems of Free Markets in Emerging Countries Free Markets Require: suppliers of productssuppliers of products information about demandinformation about demand a currency of exchangea currency of exchange Emerging Countries: have a limited supply of the above because they are starting at “ground zero” because of the planned economies they are used to.have a limited supply of the above because they are starting at “ground zero” because of the planned economies they are used to.

4. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 3 The Problems of Free Markets in Emerging Countries (Continued) This results in several problems: trouble in creating working marketplacestrouble in creating working marketplaces frustrationfrustration crime and Mafia-style organizationscrime and Mafia-style organizations black marketsblack marketsSolution: economic progress with shard benefitseconomic progress with shard benefits

5. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 4 www.global.marketing The information highwayThe information highway –is helping to further the development of a truly global marketplace. The Internet and World Wide WebThe Internet and World Wide Web –allows firms to “set up shop” electronically. –purchases can be via credit card, but the technology needs to further develop for the sake of security.

6. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 5 Electronic Commerce Electronic commerce refers to buying and selling goods and services on-line, usually on the Internet. It is sometimes also called on-line marketing.Electronic commerce refers to buying and selling goods and services on-line, usually on the Internet. It is sometimes also called on-line marketing. Electronic commerce is naturally global.Electronic commerce is naturally global.

7. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 6 Internet and Global Services Services can often be transmitted electronically to any destination. Some promising high-potential examples:Services can often be transmitted electronically to any destination. Some promising high-potential examples: –Airline tickets - buy on-line, pick up at ticket counter at airport. –Tourist packages - compare prices and features, then order for express delivery of tickets to the home. –Banking services - transfer money, check credit card balances, pay bills. –Brokerage services - buy and sell shares. –Rental cars - reserve a car at airport upon arrival. –Hotel reservations - get lodgings anywhere in the world.

8. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 7 Internet and Global Products Personal computers - Dell’s customized direct sales have been very successful..Personal computers - Dell’s customized direct sales have been very successful.. Books - Amazon.com is perhaps the best example of on-line product marketing.Books - Amazon.com is perhaps the best example of on-line product marketing. Computer software - a natural.Computer software - a natural. Cameras - catalog sales of cameras is a forerunner of on-line selling.Cameras - catalog sales of cameras is a forerunner of on-line selling. Leisure apparel - l.l. Bean’s, Lands End, Eddie Bauer are well- established through catalogs, now on-line as well.Leisure apparel - l.l. Bean’s, Lands End, Eddie Bauer are well- established through catalogs, now on-line as well.

9. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 8 Internet and Global Products Sports equipment - another natural, although the category faces obstacles in the form of stiff tariff barriers and exclusive distributorships in many countries.Sports equipment - another natural, although the category faces obstacles in the form of stiff tariff barriers and exclusive distributorships in many countries. Compact discs - the global internet music business is fighting against old and well established local price cartels in many countries. It is also threatening the music industry itself through new technology (MP3) which allows digital downloading of CDs from the Web.Compact discs - the global internet music business is fighting against old and well established local price cartels in many countries. It is also threatening the music industry itself through new technology (MP3) which allows digital downloading of CDs from the Web.

10. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 9 Electronic Marketing Strengths Makes it easy and convenient for the customer to do business with you.Makes it easy and convenient for the customer to do business with you. Creates a natural one-to-one relationship between buyer and seller, with customization of products and services.Creates a natural one-to-one relationship between buyer and seller, with customization of products and services. Fosters customer loyalty and increases customer retention rates.Fosters customer loyalty and increases customer retention rates. Helps the company focus on providing customer value.Helps the company focus on providing customer value. Lowers costs for buyers and sellers in the whole process from pre-purchase to post-purchase stage.Lowers costs for buyers and sellers in the whole process from pre-purchase to post-purchase stage. Facilitates price comparisons.Facilitates price comparisons.

11. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 10 Electronic Marketing Weaknesses Can only reach a certain segment of the total market.Can only reach a certain segment of the total market. Cannot (yet) provide the full tactile experience with the product or the personal interaction in service.Cannot (yet) provide the full tactile experience with the product or the personal interaction in service. Requires up-to-date electronic communication links.Requires up-to-date electronic communication links. Can’t reach customers who are averse to computers.Can’t reach customers who are averse to computers. Is likely to raise the buyer’s perceived risk.Is likely to raise the buyer’s perceived risk. Credit card purchases are not perceived as being completely safe.Credit card purchases are not perceived as being completely safe.

12. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 11 Web Advertisements Banner ads - the most common. The largest appear as elongated boxes at the bottom of the screen, covering about 2/3 of the screen width, hence the name.Banner ads - the most common. The largest appear as elongated boxes at the bottom of the screen, covering about 2/3 of the screen width, hence the name. Interstitial ads - the ads that flash on the screen during the time your request is being handled.Interstitial ads - the ads that flash on the screen during the time your request is being handled. Pop-up ads - the ads that appear once a site has been loaded, but before you get access. They usually contain messages from the site company, but are increasingly being sold to independent entrepreneurs who want to take advantage of a popular site.Pop-up ads - the ads that appear once a site has been loaded, but before you get access. They usually contain messages from the site company, but are increasingly being sold to independent entrepreneurs who want to take advantage of a popular site. Transactional ads - let you order on request something without leaving the Web-page you are on.Transactional ads - let you order on request something without leaving the Web-page you are on. Rich media ads - ads that move, talk, beep, or flash.Rich media ads - ads that move, talk, beep, or flash.

13. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 12 Global Localization and Local Globalization Execution is the key to success in global marketing: Many failures in global marketing are due to poor execution of a strategy Execution is having the nerve and talent to do the things the strategy intends to have done - ‘doing it.’ Alternatively, implementation is ‘how to do it.’

14. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 13 Global Localization and Local Globalization (Continued) Global Localization is the concept that a marketer needs to be close to the customers locally in order to compete effectively with local firms. The challenge is to make sure that global marketing restraints do not become a disadvantage in the local marketplace (Example: Sony in Germany?

15. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 14 Global Localization and Local Globalization (Continued) Local Globalization involves giving local subsidiaries global mandates. An example of this is ABB (Asea Brown Boveri) where subsidiaries in various markets produce for the global market.

16. Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Irwin/McGraw-Hill ©The McGraw-Hill Companies,, Inc., 2000 Slide 18 - 15 Summing It Up Free markets are stronger than planned economies, even with the upheavals in the process. The information superhighway is the gateway to tremendous potential in development of new markets. Global marketing strategies will require stronger local presence in the future. The future of global marketing is very bright.