1. Developing a Global Vision
CHAPTER
5
Marketing 10
Lamb, Hair, McDaniel
Designed by
Prepared by
Eric Brengle
Amit Shah
B-books, Ltd.
Frostburg State University
Copyright ©2009 by Cengage Learning Inc. All rights reserved 1

2. Learning Outcomes
LOI Discuss the importance of global marketing
Discuss the impact of multinational firms
LO2 on the world economy
Describe the external environment facing
LO3
global marketers
2
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3. Learning Outcomes
LO4 Identify the various ways of entering the
global marketplace
List the basic elements involved in
LO5
developing a global marketing mix
Discover how the Internet is affecting
LO6
global marketing
3
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4. LOI Rewards of Global Marketing
Discuss the importance
of global marketing
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5. LOI
Rewards of Global Marketing
Global Marketing
Global Marketing
Individuals and
organizations using a global
vision to effectively market
goods and services across
national boundaries.
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6. LOI
Rewards of Global Marketing
Having a global vision means…
• Recognizing and reacting to international
marketing opportunities
• Using effective global marketing strategies
• Being aware of threats from foreign competitors
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7. LOI Importance of Global Marketing to the U. S.
• U.S. exports a fifth of industrial
production.
• One of every 5 jobs in U.S. is supported
by exports.
• Every U.S. state has realized net
employment gains directly attributed to
foreign trade.
• U.S. businesses export over $800 billion
in goods.
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8. LOI Importance of Global Marketing to the U. S.
• Exports account for 25 percent of U.S. economic
growth .
• U.S. is world’s leading exporter of farm products.
• Chemicals, office machinery and computers,
automobiles, aircraft, and electrical and industrial
machinery make up almost half of all
nonagricultural exports
• About half of U.S. merchandise imports are raw
materials, capital goods, and industrial products
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9. LOI The Fear of Trade and Globalization
• Millions of Americans
have lost jobs
• Millions fear losing jobs
• Threat of outsourcing if
workers do not accept
pay cuts
• Vulnerability to
operations moving
offshore
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10. Benefits of Globalization
• Expands economic freedom
• Spurs competition
• Raises productivity and living standards
• Offers access to foreign capital, global
export markets, and advanced technology
• Promotes higher labor and environmental
standards
• Acts as a check on government power LOI
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10

11. LOI REVIEW LEARNING OUTCOME
The Importance of Global Marketing
Know global marketing
Know global marketing
is important because
is important because
Fears
Fears of economic
Benefits
Benefits
of economic
interdependencies
interdependencies
Identify
Identify Compete against
Compete against
global marketing
global marketing foreign competition
foreign competition
opportunities
opportunities in domestic markets
in domestic markets
Understand
Understand
global
global
distribution
distribution
networks
networks
Globally-minded
marketing managers:
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12. LO2 Multinational Firms
Discuss the impact of
multinational firms
on the world economy
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13. LO2 Stages of Global Business
Development
Companies operate in one country and
Companies operate in one country and
1
1 sell into others
sell into others
2
2 Set up foreign subsidiaries to handle sales
Set up foreign subsidiaries to handle sales
Operate an entire line of business in
Operate an entire line of business in
3
3 another country
another country
4
4 Virtual operation
Virtual operation
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14. Global Marketing
LO2
Standardization
Global Marketing Production of uniform
Global Marketing
Standardization products that can be sold
Standardization
the same way all over
the world.
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15. LO2 REVIEW LEARNING OUTCOME
Impact of Multinational Firms
th
• Human Resources Grow e
u
• Physical Resources Reven
its
Prof
• Financial Resources
MNC Global
Global
Marketing
Marketing
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16. LO3 External Environment Facing
Global Marketers
Describe the external
environment facing
global marketers
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17. LO3 External Environment Facing
Global Marketers
Culture
Culture Economic and
Economic and
Technological
Technological
Development
Development
Political
Political
Structure
Structure
Demographic
Demographic
Makeup
Makeup
Natural
Natural
Resources
Resources
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18. LO3
Culture
The common set of values
Culture
Culture
shared by its citizens that
determine what is socially
acceptable.
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19. LO3 Economic and
Technological Development
Developed
Developed Complex, sophisticated
Complex, sophisticated
Country
Country industries
industries
Less Developed
Less Developed Basic industries
Basic industries
Country
Country
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20. LO3
Political Structure and Actions
No private ownership
Minimal individual freedom
Little central government
Maximum personal freedom
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21. LO3
Legal Considerations
A tax levied on goods entering
Tariff
a country
Limit on the amount of a
Quota
product entering a country
Exclusion of products from
Boycott
a country
Foreign exchange must be
Exchange Control
sold to a control agency
Market Grouping Common trade alliance
An agreement to stimulate
Trade Agreement
international trade
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22. LO3 Political and Legal
Considerations
The Uruguay Round made changes in
world trading practices:
Entertainment, pharmaceuticals,
integrated circuits, and software
Financial, legal, and accounting services
Agriculture
Textiles and apparel
Created a new trade organization:
The World Trade Organization
22
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23. LO3 Political and Legal
Considerations
Agreements
Agreements
and Organizations
and Organizations
European
European
CAFTA
CAFTA NAFTA
NAFTA Union
Union
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24. LO3
Demographic Makeup
Marketing Considerations:
• Population density
• Urban or rural
• Personal income
• Age
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25. LO3
Shortages in Natural Resources
Create…
• International dependencies
• Shifts of wealth
• Inflation and recession
• Export opportunities if resources
are abundant
• Stimulus for military intervention
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26. LO3
Natural Resources
• Petroleum
• Foodstuffs
• Precious metal
• Timber
• Water
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27. LO3 REVIEW LEARNING OUTCOME
External Environment Facing Global Marketers
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28. LO4 Global Marketing by
the Individual Firm
Identify the various ways
of entering the
global marketplace
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29. LO4
Global Marketing Questions
• What are our options in selling abroad?
• How difficult is global marketing?
• What are the potential risks
and returns?
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30. LO4
Why “Go Global”?
• Earn additional profits
• Leverage a unique product or technological
advantage
• Possess exclusive market information
• Saturated domestic markets
• Excess capacity
• Utilize “economies of scale”
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31. LO4
Risk Levels for Global Entry
High
Risk risk/
Direct high
Joint Invest- return
Contract Venture ment
Manu-
Export Licensing facturing
Low
risk/
low
return Return
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32. LO4
Entering the Global Marketplace
Sell domestically produced
Export
products to buyers in other countries
Legal process allowing use of
Licensing
manufacturing/patents/knowledge
Contract Private-label manufacturing by a
Manufacturing foreign country
Domestic firm buys/joins a foreign
Joint Venture
company to create new entity
Active ownership of a foreign
Direct Investment
company/manufacturing facility
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33. LO4
Export Intermediaries
Assumes all ownership risks and
Assumes all ownership risks and
Buyer for Export
Buyer for Export sells globally for its own account.
sells globally for its own account.
Plays the traditional broker’s role
Plays the traditional broker’s role
Export Broker
Export Broker by bringing buyer and seller
by bringing buyer and seller
together.
together.
Acts like a manufacturer’s agent
Acts like a manufacturer’s agent
Export Agent
Export Agent for the exporter in the foreign
for the exporter in the foreign
market..
market
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34. LO4 REVIEW LEARNING OUTCOME
Entering the Global Marketplace
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35. LO5 The Global Marketing Mix
List the basic elements
involved in developing
a global marketing mix
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36. LO5
Product and Promotion
Same Change
Product Product
Same One Product Product
Message One Message Adaptation
Change Promotion Product
Message Adaptation Invention
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37. LO5
Place (Distribution)
• Adequate distribution is necessary for success
in global markets
– Some countries have complicated systems
– Lack of distribution infrastructure and cultural
differences create problems
• Innovative distribution systems can create
competitive advantage
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38. LO5
Pricing
• Must consider transportation and
insurance costs, taxes, and tariffs
• Determine what customers will spend
• Ensure that foreign buyers will
pay price
• May need to simplify a product
to lower price
• Don’t assume that low-income countries are
willing to accept lower quality
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39. LO5
Exchange Rates
The price of one’s currency
Exchange Rates
Exchange Rates
in terms of another
country’s currency.
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40. LO5
Dumping
1. Trying to increase an overseas market share
2. Temporarily distributing products to overseas
markets to offset slack demand at home
3. Lowering unit costs by exploiting large-scale
production
4. Attempting to maintain stable prices during
periods of exchange rate fluctuations
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41. LO5
Countertrade
A form of trade in which all
Countertrade
Countertrade
or part of the payment for
goods or services is in the
form of other goods or
services.
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42. LO5 REVIEW LEARNING OUTCOME
Developing a Global Marketing Mix
PROMOTION PLACE PRICE
One Product, One Message Channel Choice Dumping
Product Invention Channel Structure Countertrade
Product Adaptation Country Infrastructure Exchange Rates
Message Adaptation Purchasing Power
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43. LO6 The Impact of the Internet
Discover how the Internet
is affecting
global marketing
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44. LO6 REVIEW LEARNING OUTCOME
The Impact of the Internet
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