Lecture Principles of Marketing - Chapter 15: The global marketplace

Chapter 15 discuss how the international trade system, economic, political-legal, and cultural environments affect a company’s international marketing decisions; discuss how the international trade system, economic, political-legal, and cultural environments affect a company’s international marketing decisions; explain how companies adapt their marketing mixes for international markets; identify the three major forms of international marketing organization.

Chapter Fifteen

The Global Marketplace

Roadmap: Previewing the Concepts

1 Discuss how the international trade

system, economic, political-legal, and

cultural environments affect a company’s international marketing decisions.

2 Describe three key approaches to

entering international markets.

3 Explain how companies adapt their

marketing mixes for international

markets.

4 Identify the three major forms of

international marketing organization.

 1940s: built bottling plants

abroad to supply soldiers.

 Growth fueled by strong

marketing: “I’d like to buy

the world a Coke” TV ad.

Coca­Cola – Successfully Going Global

Case Study

How They Did It

 Balances brand building and global standardization with local adaptation.

 Consistent positioning, packaging, and taste.

 Brands, flavors, ads, price, distribution, and

promotions are adapted to local markets.

Global Marketing in the 21st

Century

advent of faster communication,

transportation, and financial flows.

accounts for 20% of GDP worldwide.

Major International Marketing Decisions

 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.

Looking at the Global Marketing Environment

 The International Trade System:

– Restrictions—tariffs, quotas, embargos, exchange controls, and nontariff trade barriers.

 The World Trade Organization and GATT:

– Helps trade—reduces tariffs and other

international trade barriers.

 Regional Free Trade Zones:

– Groups of nations organized to work toward

common goals in the regulation of international trade.

Economic Environment

– Shapes a country’s product and service

needs, income levels, and employment levels

Deciding Whether to Go International

– Foreign attacks on domestic markets.

– Foreign markets with higher profit

Deciding Which Markets to Enter

 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 based

on market size, market growth, cost of doing business, competitive advantage, and risk.

Market Entry Strategies

– Indirect:

• Working through independent

international marketing intermediaries.

– Direct:

• Company handles its own exports.

Market Entry Strategies

– Joining with foreign companies to produce

or market products or services.

Market Entry Strategies

– The development of foreign-based

assembly or manufacturing facilities.

– This approach has both advantages and

disadvantages which must be carefully evaluated before making a decision.

Deciding on the Global Marketing Program

– Selling largely the same products and

using the same marketing approaches

worldwide.

– Producer adjusts the marketing mix

elements to each target market, bearing more costs but hoping for a larger market share and return.

Global Product Strategies

– Marketing a product in a foreign market

without any change.

– Adapting a product to meet local

conditions or wants in foreign markets.

– Creating new products or services for

foreign markets.

Global Promotion Strategies

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.

Global Pricing Strategies

setting their international prices.

– Standard pricing methods such as uniform

pricing, standard markup of costs

everywhere, or charging what the market will bear ignores cost differentials and

local market conditions.

Global Pricing Strategies

 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 it charges in its home market.

 The Internet makes global price differences obvious and the euro has reduced the

amount of price differentiation.

Global Distribution

whole-channel view of distributing products

to final consumers.

of intermediaries serving each foreign market requires time and money to

navigate.

as well, presenting challenges.

Deciding on the Global Marketing Organization

Rest Stop: Reviewing the Concepts

1 Discuss how the international trade

system, economic, political-legal, and

cultural environments affect a

company’s international marketing

decisions.

2 Describe three key approaches to

entering international markets.

3 Explain how companies adapt their

marketing mixes for international

markets.

4 Identify the three major forms of

international marketing organization.