Kotler POM13e Instructor 19

5/26/2018 Kotler POM13e Instructor 19

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Chapter 19 - slide 1Copyright 2009 Pearson Education, Inc.

Publishing as Prentice Hall

Chapter Twelve

The Global Marketplace


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The Global Marketplace

Global Marketing Today

Looking at the Global Marketing Environment

Deciding Whether to Go Global Deciding Which Markets to Enter

Deciding How to Enter the Market

Deciding on the Global Marketing Program Deciding on the Global Marketing

Organization

Topic Outline


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A global firm

Operates in more than one country

Gains marketing, production, R&D, andfinancial advantages not available to purely

domestic competitors

The global firm sees the world as onemarket


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Global firms ask a number of basic questions: What market position should we try to

establish in our own country, in oureconomic region, and globally?

Who will our global competitors be, andwhat are their strategies and resources?

Where should we produce or source our

product? What strategic alliances should we form with

other firms around the world?


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Looking at the GlobalMarketing Environment

Restrictions on trade between nations

include:

Tariffs

Quotas

Exchange controls

Nontariff trade barriers

The International Trade System


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Tariffsare taxes on certain importedproducts designed to raise revenue or toprotect domestic firms

Quotasare limits on the amount of foreignimports a country will accept in certain

product categories to conserve on foreignexchange and protect domestic industryand employment



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Copyright 2010 Pearson Education, Inc.



Exchange controlsare a limit on the amount offoreign exchange and the exchange rate against

other currencies

Nontariff trade barriersare biases against bids orrestrictive product standards that go againstAmerican product features







General Agreement on Tariffs and Trade(GATT):

A 61-year-old treaty

Designed to promote world trade

Reduces tariffs and other international tradebarriers

The International Trade SystemThe World Trade Organization and GATT






World Trade Organization

Enforces GATT rules

Mediates disputes

Imposes trade sanctions

The International Trade SystemThe World Trade Organization and GATT
http://www.wto.org/





Looking at the Global MarketingEnvironment

Economic communities are

free trade zones

European Union (EU)

North American Free Trade

Agreement (NAFTA)

Central American Free Trade

Association (CAFTA)

The International Trade SystemRegional Free Trade Zones


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Economic factors reflect

a countrys

attractiveness as a

market:

Industrial structure

Income distribution

Economic Environment





Subsistence economies

Raw material exporting economies Industrializing economies

Industrial economies

Economic EnvironmentIndustrial Structure





Low-income households

Middle-income households High-income households

Economic EnvironmentIncome Distribution





Countrys attitude toward international

buying

Government bureaucracy

Political stability

Monetary regulations

Political-Legal Environment
http://www.cnn.com/


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Chapter 19 - slide 15Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall


Countertradeis non-cash payment

Barteris the exchange of goods or

services Compensation or buybackis the sale of a

plant or equipment and the payment in

resulting products Counterpurchaseis when the seller

receives payment and agrees to spendsome of the money in the other country

Political-Legal Environment


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Business norms

Cultural preferences, traditions, behaviors

Cultural EnvironmentImpact of Culture on Marketing Strategy


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Looking at the Global MarketingEnvironment

The need to adapt to local cultural values and

traditions rather than imposing their own

Cultural EnvironmentImpact of Marketing Strategy on Cultures
http://www.tokyodisneyresort.co.jp/index_e.html


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Deciding Whether to Go Global

Can the company understand the consumers

Can it offer competitively attractive products

Will it be able to adapt to local culture Can they deal with foreign nationals

Do the companys managers have the experience

Has management considered regulation andpolitical environment of other countries

Factors to consider


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Define international marketing objectives

and policies

Foreign sales volume

How many countries to market to

Types of countries to market to based on:

Geography

Income and population

Political climate

Deciding Which Markets to Enter


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Deciding Which Markets to Enter

Rank potential global markets based on: Market size

Market growth

Cost of doingbusiness

Competitive

advantage Risk level


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http://www.fas.usda.gov/info/agexporter/1999/articles/whoswho.html


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Exportingis when the company produces its goodsin the home country and sells them in a foreignmarket. It is the simplest means involving the

least change in the companys product lines,organization, investments, or mission.

Indirect exporting

Direct exporting


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Joint venturingis when a firm joins withforeign companies to produce or marketproducts or services

Licensing

Contract manufacturing Management contracting

Joint ownership

Joint venturing differs from exporting in thatthe company joins with a host countrypartner to sell or market abroad


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Licensingis when a firm enters

into an agreement with a

licensee in a foreign market.

For a fee or royalty, the

licensee buys the right to use

the companys process,

trademark, patent, tradesecret, or other item of

value.

Joint Venturing


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Contract manufacturingis when a firmcontracts with manufacturers in theforeign market to produce its product orprovide its service. Benefits include fasterstartup, less risk, and the opportunity to

form a partnership or to buy out the localmanufacturer.

Joint Venturing


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Management contractingis when the domestic firmsupplies management skill to a foreign companythat supplies capital. The domestic firm isexporting management services rather thanproducts.

Joint ownershipis when one company joins forceswith foreign investors to create a local businessin which they share joint ownership and control.Joint ownership is sometimes required foreconomic or political reasons.

Joint Venturing


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Direct investment is the development offoreign-based assembly or manufacturingfacilities and offers a number of

advantages including

Labor

Logistics

Control Government incentives

Lower costs

Raw material


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Deciding on the GlobalMarketing Program

Standardized marketing mixinvolves selling the

same products and using the same marketing

approaches worldwide

Adapted marketing mixinvolves adjusting the

marketing mix elements in each target market,

bearing more costs but hoping for a largermarket share and ROI


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Straight product extension means marketing aproduct in a foreign market without any change

Product adaptation involves changing the productto meet local conditions or wants

Product invention consists of creating somethingnew for a specific country market

Maintain or reintroduce earlier products Create new products

Product


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Deciding on theGlobal Marketing Program

Product


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Companies can either adopt the same

communication strategy they use at home

or change it for each market

Promotion
http://www.pg.com/en_US/products/all_products/index.shtml


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Uniform pricingis the same price in all marketsbut does not consider income or wealth

where the price may be too high in some ornot high enough in other markets

Market-based pricingis the price the market canpay but does not consider actual costs

Standard markup pricingis a price based on apercentage of cost but can cause problems incountries with high costs

Price


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Sellers headquarters organization

supervises the channel and is also a part

of the channelChannels between nations move the

products to the borders of the foreign

nationsChannels within nations move the products

from their foreign point of entry to thefinal customers

Distribution ChannelsWhole-Channel View


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Deciding on theGlobal Marketing Organization

Typical management of international

marketing activities include:

Organizing and exporting department with asales manager and staff

Creating an international division organized

by geography, products, or operating units

Becoming a complete global organization


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Chapter 19 slide 35Copyright 2010 Pearson Education Inc

All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written

permission of the publisher. Printed in the United States of America.



Kotler POM13e Instructor 19

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