MKTG CHPT 15

adapted global marketing

Adjusting the marketing strategy and mix elements to each international target market Creates more costs Produces a larger market share and return

global organizations

As foreign companies successfully invade their domestic markets, companies must move more aggressively into foreign markets.

Factors influencing the decision to go global

Attacks on a company's home market by global competitors Expanding customer base in international markets Better opportunities for growth

International trade involves

Cash transactions Bartering many nations have too little hard currency to pay for their purchases from other countries. They may want to pay with other items instead of cash. Barter involves the direct exchange of goods or services.

A company should

Define its international marketing objectives and policies Decide what volume of foreign sales it wants Choose in how many countries it wants to market Determine the types of countries to enter Evaluate each market

global firm problems faced

Highly unstable governments and currencies Restrictive government policies and regulations High trade barriers and corruption

What are the two economic factors that reflect the​ country's attractiveness as a​ market?

Industrial structure and income distribution Your answer is correct.

Factors reflecting a country's market attractiveness:

Industrial structure: Subsistence economies Raw material exporting economies Emerging economies Industrial economies Income distribution: Low-, medium-, and high-income households depending on the industrial structure of the nation

income distribution

Industrialized nations may have low-, medium-, and high-income households. Countries with subsistence economies consist mostly of households with very low family incomes. Still other countries may have households with either very low or very high incomes.

Looking at the Global Marketing Environment

International trade system Economic environment Political-legal environment Cultural environment

WSJ:Apple's Tax Avoidance Illustrates Gap Between Law and Economics

It alleges Ireland cut Apple a special deal that amounts to illegal government aid to a private company. Multinational tax avoidance is growing precisely because aggressive companies can find so many ways, and so many government partners, to avoid paying taxes. the growth of intellectual property such as patents, brands and software as a source of profit, which is easily shifted between foreign jurisdictions. sophistication and boldness with which multinationals exploit gaps between, and loopholes in, different countries' tax systems. government tax collectors may never catch up with the sophistication of corporate tax avoiders.

Global Firm

Operates in more than one country Gains research and development, production, marketing, and financial advantages that are not available to purely domestic competitors

Methods of managing international marketing activities:

Organizing an export department Creating international divisions -Geographical organizations -World product groups -International subsidiaries Becoming a global organization

International Trade System

Trade barriers Tariffs or duties (taxes) Quotas and exchange controls Nontariff trade barriers: -Biases against the bids -Restrictive product standards -Excessive host-country regulations or enforcement

Standardized global marketing

Using the same marketing strategy and mix in all of the company's international markets

The biggest involvement in a foreign market comes through​ ________ of the development of​ foreign-based assembly or manufacturing facilities.

direct investment

management contracting

domestic firm supplies know-how to a foreign company that supplies the capital.

international subsidiaries

each responsible for their own sales and profits.

world product groups,

each responsible for worldwide sales of different product groups.

In​ a(n) __________economy, fast growth in manufacturing results in rapid overall economic growth.

emerging

Direct investment

entering a foreign market by developing foreign-based assembly or manufacturing facilities. If a company has gained experience in exporting and if the foreign market is large enough, foreign production facilities offer many advantages. However, the firm faces many risks, such as restricted or devalued currencies, falling markets, or government changes.

Joint venturing

entering foreign markets by joining with foreign companies to produce or market a product or service. There are four types of joint ventures.

Market Entry Strategies international

exporting joint venturing direct investment

emerging economies

fast growth in manufacturing results in rapid overall economic growth. As manufacturing increases, the country needs more imports of raw materials and fewer imports of finished products

North American Free Trade Agreement (NAFTA)

founded in 1994, established a free trade zone among the United States, Mexico, and Canada.

Communication adaptation

fully adapting advertising messages to local markets. Media also need to be adapted internationally because media availability and regulations vary from country to country.

Many companies get involved in several international markets and ventures. They can be​ __________, with country managers who are responsible for​ salespeople, sales​ branches, distributors, and licensees in their respective countries.

geographical

WSJ: Fast-Food Franchises Get Creative When They Go Abroad

how to tweak traditional favorites for local palates has become a crucial part of the franchise industry. how to tweak traditional favorites for local palates has become a crucial part of the franchise industry. The local adaptations extend beyond core menu items to areas like condiment selections.

Twenty-Four7, a cosmetic firm located in the United​ States, markets its products in Asian and European countries through independent distributors. In this​ case, Twenty-Four7 has entered international markets through​ ________.

indirect exporting

________ economies are major exporters of manufactured​ goods, services, and investment funds.

industrial

Product adaptation

involves adapting a product to meet local conditions or wants in foreign markets.

Licensing

involves entering foreign markets by developing an agreement with a licensee in the foreign market. offering the right to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty.

Indirect exporting

less investment because the firm does not require an overseas marketing organization or network. company enters a foreign market by sending and selling products through international marketing intermediaries

University Boutiques promotes its brand in new international markets by providing rights to local boutiques to use its patented designs and brand name. In this​ case, University​ Boutiques' market-entering strategy is referred to as​ ________.

licensing

Industrial economies

major exporters of manufactured goods, services, and investment funds. They trade goods among themselves and export them to other types of economies for raw materials and semifinished goods.

Straight product extension

marketing a product in a foreign market without making any changes to the product.

Video: globalization starbucks

marketing expresso coffee drinks to north america by one guys idea he remarked the shop from seattle brand identity with logo turned enjoying coffee into a fashionable lifestyle all over worlds ordinary coffee vs the starbucks experience maintains the welcoming, trending, relaxation environment

Video: McDonalds Global Strategy

mcdonalds practices local specialization to cater to its local markets french people want to take their time to eat and hate fast food: mcdonalds made fancy sit down restaurants, french potatoes and french cheeses hindus: culture doesn't eat beef, they changed the whole menu changes games of items to fit local culture culinary styles arches more recognizable than the cross feed 68 million ppl a day

Union of South American Nations (UNASUR)

modeled after the EU, was formed in 2004 and formalized by a constitutional treaty in 2008. UNASUR makes up the largest trading bloc after NAFTA and the EU. Similar to NAFTA and the EU, UNASUR aims to eliminate all tariffs between nations by 2019.

channels between nations

moves company products from points of production to the borders of countries within which they are sold.

channels within nations

moves products from their market entry points to the final user or buyer.

international divisions

or subsidiaries to handle all its international activity. International divisions are organized in a variety of ways.

______ is when a company adds the cost of​ transportation, tariffs, importer​ margin, wholesaler​ margin, and retailer margin to its factory price.

price escalation

The purpose of a tariff is to​ ________.

raise revenue

raw material exporting economies

rich in one or more natural resources but poor in other ways. Much of their revenue comes from exporting these resources.

direct exporting

they handle their own exports. Investment and risk are greater in this strategy, but so is the potential return. company's own department, branch, or sales representatives or agents

subsistence economies

vast majority of people engage in simple agriculture. They consume most of their output and barter the rest for simple goods and services. These economies offer few market opportunities

Contract manufacturing

when a company contracts with manufacturers in a foreign market to produce its product or provide its service.

geographical organizations or international divisions

with country managers who are responsible for salespeople, sales branches, distributors, and licensees in their respective countries.

international marketing decisions

1. Looking at the Global Marketing Environment 2. Deciding Whether to Go Global 3. Deciding Which Markets to Enter 4. Deciding How to Enter the Market 5. Deciding on the Global Marketing Program 6. Deciding on the Global Marketing Organization

Central American Free Trade Agreement (CAFTA-DR)

2005, established a free trade zone between the United States and Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. Other free trade areas have formed in Latin America and South America.

export department

A firm gets into international marketing by simply shipping out its goods. If its international sales expand, the company will establish an export department with a sales manager and a few assistants.

Economic community

Group of nations organized to work toward common goals in the regulation of international trade

Impact of Culture on Marketing Strategy

Companies that understand cultural nuances can -Avoid expensive and embarrassing mistakes -Take advantage of cross-cultural opportunities

Considerations for a company to do business in a country:

Country's attitude toward international buying Government bureaucracy Political stability Monetary regulations

World Trade Organization (WTO)

Established by the General Agreement on Tariffs and Trade (GATT) in 1995 Promotes world trade by reducing tariffs and other international trade barriers Negotiates to reassess trade barriers and establish new rules for international trade Imposes international trade sanctions and mediates global trade disputes

Which of the following are the three ways an international​ division's operating units can be​ organized?

Geographical​ organizations, world product​ groups, or international subsidiaries

Global Price Considerations

Set a uniform price globally Set according to the customers Use a standard markup of the company's costs everywhere many companies make simpler or smaller versions of their products that can be sold at lower prices. Others introduce new, more affordable brands in global markets.

whole-channel view

designing international channels that take into account the entire global supply chain and marketing channel, forging an effective global value delivery network.

_______ involve(s) the direct exchange of goods and services.

barter

_____ is a global communication strategy of fully adapting advertising messages to local markets.

communication adaptation

European Union (EU)

community that was formed in 1957. It was set out to create a single European market by reducing barriers to the free flow of products, services, finances, and labor among member countries and developing policies on trade with nonmember nations. Today, the EU represents one of the world's largest single markets.

joint ownership

cooperative venture in which a company creates a local business with investors in a foreign market, who share ownership and control.

product invention

creating something new to meet the needs of consumers in a given country.

Video: Uber's decision to throw in the towel in China holds lessons for Facebook, Apple and others still craving success in the world's biggest technology market.

deal in which the local champion acquires Uber's China operations in return for a seat on Didi's board and a slice of the Chinese company. it went up against a nimble competitor backed by deep-pocketed internet standard-bearers "All the kowtowing and meeting the leadership maybe won't matter so much if Facebook won't agree to allow some level of censorship, or allow the Chinese government access to data on the site, in exchange for market access,"