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Chap 01
Global Marketing
GLOBAL MARKETING
• Overview
Global marketers consider the world
as their market and different country
markets as components of this world market
Defining Global Marketing
• Focal Point--Consumer
• Use the Four P’s to Satisfy Consumers
• Economic, Financial, Political, and Cultural
Environmental of Each Country Affect
marketing(EFPC)
• Regional and Global Environments Affect
Marketing
Why Should Firms Engage in Global
Marketing?
• To Survive and Grow
1. Learn to satisfy consumers in diverse conditions
2. Manage marketing tasks more efficiently and
effectively
3. Preempt or counter competitive attacks in more
than one market
4. Expand customer base to include developed and
developing nations
Why Should Firms Engage in Global
Marketing?
• To Diversify Product and Market Portfolios and
Improve competitiveness
1. Effects of seasonal and cyclical fluctuations in
one market offset by others
2. Diversification increases market size and
enhances economies of scale
Why Should Firms Engage in Global
Marketing?
• To Capitalize on the Attractiveness of Additional
Country Markets
1. The U.S. is attractive-but won’t accommodate
unlimited growth
2. Expand market size by expanding into other countries
3. Maurice G. Hardy: Why expand into other countries?
A. Keep competitors in their own countries; b. Take
advantage of growing opportunities in Europe and the
Pacific
Why Should Firms Engage in Global
Marketing?
• To Operate Within a Global Marketplace
1. Goods, services, capital, technology, and
labor are going global
2. Reduced government restrictions are affecting
global marketing
3. Bilateral and multilateral negotiations are
reducing restrictions
What is Unique about Global Marketing?
Country market environments different
• Financial Environment
1. Exchange rate - price of one currency in
relation to another
2. Exchange rate fluctuations can adversely
or favorably affect performance of a firm
What is Unique about Global Marketing?
Country market environments different
• Political Environment
1. Tariff barriers - taxes on imports paid to customs officials
- include
a. Specific - fixed amount per physical unit of import
b. Ad -valorem ( on the value ) - percentage of estimated
value of import
2. Nontariff barriers include
a. Import quotas b. Exchange controls
c. Buy-domestic policies
d. administrative red tape
What is Unique about Global Marketing?
Country market environments different ?
• Cultural Environment
1. Differences encourage marketing adaptations
2. Similarities encourage standardization
3. Balancing the two is a key to success
Marketing Mix Politics - How Do
Government Influence the Four P’s ?
• Product - Local Content Law
• Price - Government Approval for Price Changes
• Promotion - Permissible Budget Determined by
Local Authorities
• Place - Mandated Distribution Channel or
Territory
Why Should We Study Global
Marketing ?
• Influences Product Choices of
Consumers
• Influences standard of living
• Influences Job Opportunities
• Influences the society
The Global Economic
Environment
Global Marketing
What’s happening?
• Asia Pacific
• Western Europe
• North America Why and
• South America what are the
implications?
THE ECONOMIC
ENVIRONMENT
• Overview
Local, regional, and global economic
environments are interactive. What happens
within and among them profoundly
influences marketing mix decisions.
The Local Economy - The Country
Where Marketing Takes Place
• The Consumers
1. Disposable income (after-tax income)
2. What, when, where, and how much
consumers buy is influenced by disposable
income
The Local Economy - The Country
Where Marketing Takes Place
• The Country
1. Healthy economies facilitate higher
purchasing power for consumers
The Local Economy - The Country
Where Marketing Takes Place
2 . Economic variables: GDP; GDP per capita; GDP
growth rates; savings and investments rates; inflation
and unemployment rates; imports and exports;
inflow and outflow of FDI; number of global
corporations in the country; structure of industries;
commercial, fiscal, and monetary policies of the
central government
3. These variables reflect the overall country, not
specific groups of consumers--don’t generalize
The Local Economy - The Country
Where Marketing Takes Place
• Overview
Understanding and managing the key
elements of the financial environment are
requisites for successful global marketing
Key Features of the global
Financial System
• Acceptability and Convertibility of
Currencies from Different countries
• Hard Currencies Are Freely Traded in
Foreign Exchange markets
• Soft Currencies Are Not Freely
Traded
Key Feature of the Global
Financial System
• Exchange Rates - The Price of One Currency in
Terms of Another
1. Floating exchange rates are determined by
market conditions alone
2. Managed float is determined by government-
managed demand and supply
Key Feature of the Global
Financial System
• Depreciation and Appreciation of One
currency in Relation to Another
– Price
– Demand
– Profit
– Market penetration
Managing exchange Risks Through Spot
Transactions and Forward Transactions
• Four Types of exchange Risks
1. Transaction exposure - when converting
currencies at a later date
2. Translation exposure - when exchange rates
upon consolidation differ from those at time of
transaction
3. Tax exposure - when changing exchange rates
result in a different tax liability
4. Economic exposure - long-term exposure and
its affect on present value of future cash flow
Managing exchange Risks Through Spot
Transactions and Forward Transactions
Monochronic
1. Linear information processing
2. Focus on one thing at a time
3. Hold to rigid schedules
Polychronic
1. Work on several tasks at a time
2. Human transactions are important
Culture and Verbal Communications -
Understanding Through language
• Overview
Of the four P’s, price alone generates
revenue. Competitive pricing enhances
market position and earnings
Pricing Methods
2. External conditions
a. Governmental regulations
b. Competitors’ advertising strategies
c. Market attractiveness
d. Media restrictions
Planning an Advertising Campaign -
Specify Objectives; Then Decide On
2. Radio
a. DCs - popularity on the rise, many
program options available
b. LDCs - good medium to reach
uneducated urban and rural customers
3. Magazines
Planning an Advertising Campaign -
Specify Objectives; Then Decide On
4. Newspapers
a. Advantages: fast and economical
b. Disadvantages: some LDCs don’t
compile demographic data; they have space
limitations and content specifications
Planning an Advertising Campaign -
Specify Objectives; Then Decide On
5. Direct mail
a. DCs - more common
b. LDCs - limited opportunities, lack of
reliable lists, undependable delivery, low
literacy rates
6. Catalogs - limited to DCs for same reasons as
for direct mail
Planning an Advertising Campaign -
Specify Objectives; Then Decide On
7. Facsimile - controversial
8. Videos
a. Time not limited to 30- or 60- second slots
b. DCs - whole video can be an ad
c. LDCs - movie d\videos contain ads
9. Cinema - these ads more common in LDCs
10. Billboards - all countries
Planning an Advertising Campaign -
Specify Objectives; Then Decide On
• Overview
Entry strategies vary in terms of their
advantages, disadvantages, and levels of
involvement. The marketing options open to
firms are in part determined by mode f
entry.
Entry Strategies
2. Advantages
a. Minimizes political risk
b. Useful when market potential is hard to assess
c. Offers channel flexibility
d. Prepares firm for greater involvement
e. Offers ease in market withdrawal
Entry Strategies
3. Disadvantages
a. Exchange rate fluctuations and
governmental intervention can affect earnings
b. Lack of market presence can affect
response time
c. Loss of marketing control can affect
corporate image
Entry Strategies
2. Disadvantages
a. Can restrict firm’s full realization of
market potential
b. Can create third market competitors
c. Can result in loss of control over
technology and product quality
d. Can result in conflicts between parties
Entry Strategies
2. Disadvantages
a. Partner may turn competitor
b. Loss of control over manufacturing
c. Products may not always be available on
time
Entry Strategies
• Management Contracting - Selling Managerial
or Technical Expertise
1. Advantages
a. Utilizes excess managerial talent
b. Establishes contacts in host country
c. Offers ease of remitting consulting fees
d. Provides resources t its nearby operations
2. Disadvantages: limited duration may necessitate
withdrawal from country
Entry Strategies
2. Disadvantages
a. Potential to lose competitive edge
b. Possible ineffectual communications
among partners from different cultures
Factors Influencing Entry
Strategies
• Internal Conditions - Specific to the Firm
1. Objectives - what firm wants to achieve in relation to
the product
2. Management orientation - biases affect entry strategy
decisions
3. Resources - impose constraints that affect entry
strategies
4. Type of product - what strategy best fits the
characteristics of the product
Factors Influencing Entry
Strategies
• External conditions
1. Market potential - which strategy will
maximize market potential
2. Competitive environment - existing and
expected
Factors Influencing Entry
Strategies
3. Home country regulations - affect how and
where firm can sell
4. Host country regulations - affect entry options
5. Political risk - high risk favors less
involvement; low risk favors more
Stages of Business Involvement
Strategic Global
STRATEGIC GLOBAL MARKET
MANAGEMENT
• Overview
The nuts and bolts of strategies deal with
when, where, how, why, and by whom the
necessary actions are performed to achieve
a firm’s objectives
Strategic Analysis
• Utilitarianism
1. Focuses on consequences of action
2. Strives f r greatest good for greatest
number of people
3. But what constitutes a society?
Ethical Philosophies
• Egoism
1. Focuses on consequences of action
2. Strives for greatest good for oneself
3. Inherent weaknesses
a. Would not take stand against blatant infractions
b. Cannot resolve conflicting interests of two or
more parties
Ethical Philosophies
• Deontology
1. Focuses on universal principles of right
and wrong
2. Motives and character of actor more
important than consequences of action
Ethical Philosophies
• Relativism
1. Right and wrong are culture specific -- no
universal rules
2. Can be used to defend actions harmful to
customers in other countries
Ethical Codes for Marketing --How Some
Firms Help manages Ask the Right Questions
Before Making Decisions
• Codes of Conduct Range from General to
Specific
• Seven- Step Checklist for Ethical Decision
making
1. Recognize and clarify dilemma
2. Get the facts
3. List the options
Ethical Codes for Marketing --How Some
Firms Help manages Ask the Right Questions
Before Making Decisions
4. Test each: Is it legal? right? beneficial ?
5. Make decision
6. Double check: How would I feel if my
family found out? What if the paper found
out?
7. Take action
Some External Factors Encouraging
Ethical Consideration by Executives
• Information Technology -- Markets Are not
Isolated; What Happens Here Is Reported
There
• Visible Destruction of Environment Results
from Unethical Practices
Some External Factors Encouraging
Ethical Consideration by Executives
• Special- Interest Groups Are Gaining Power
to Promote Ethical Corporate Behavior
• Market Forces Favor Ethical Companies in
the Long- Run
HOW IS THAT………………..
THANK YOU
abhay.01icbm@gmail.com