Welcome to MKGT 376:Global Marketing Strategy

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Welcome to MKGT 376Global Marketing Strategy!

• Introduction to the course
• Overview of course issues
• Approach
• Projects

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Instructor Lars Perner

• Education
• Ph.D. in marketing, University of Southern
  California, 1998
• M.B.A., B.A. (political science and psychology),
  Cal Poly, San Luis Obispo
• Research interests consumer behavior, consumer
  bargain hunting, pricing, branding, measurement
  individual differences, cross cultural marketing
  issues
• Teaching interests consumer behavior,
  international, principles, distribution,
  retailing, research methods
• Country of birth Denmarkimmigrated at age 14
• Previous teaching experience USC, Cal State
  L.A., Loyola Marymount, U of Maryland, George
  Washington University, U.C. Riverside

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Course philosophy

• Why take this course?
• DO stop and think about tomorrow. Yesterdays
  gone!
• Business problems are usually not neatly
  structured!
• Expectations
• Hard work
• Individual analysis, evaluation, innovation, and
  application
• Evaluating quality of work

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SCOPE AND CHALLENGES OF INTERNATIONAL MARKETING

• Marketing decision factors
• The marketing environment
• Domestic
• Foreign
• Trade policy

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Internationalization of Marketing

• Global products
• Global brands
• Leading markets
• The Product Life Cycle

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The International Product Life Cycle

• Product categories will tend to spread first in
  developed countries
• Resale of capital products
• Country of origin effects over time

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The International Marketing Task

• Marketing Decision Factors
• Price
• Promotion
• Product
• Distribution
• The Domestic Environment
• The Foreign Environment

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Environments

• Foreign
• Political/legal
• Economic
• Culture
• Geography/ infrastructure
• Distribution
• Competition
• Technology

• Domestic
• Political/legal forces
• Competitive structure
• Economic climate

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Obstacles to Trade Protectionism

• Differing interests of consumers and
  manufacturers
• Benefits of trade tend to be more diffused than
  benefits to specific groups of protectionism

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Approaches to Protectionism

• Tariffs
• Quotas
• Voluntary export restrictions
• Subsidies to domestic producers/exporters
• Non-tariff barriers
• legal obstacles
• differential treatment

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U.S. Protectionism--justified or not...

• Defense industry
• Agricultural products--e.g., beef, sugar
• Textiles
• Automobiles (voluntary import restrictions)
• Steel

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Justifications for Protectionism

• Protect infant industry
• Resist unfair or inappropriate competition
• Protect home market (ensure that product can be
  produced domestically)--defense
• Intervene into temporary imbalance
• Maintain domestic living standards
• Preserve jobs
• Bargaining power/retaliation (Super-301 provision
  in U.S.)

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Effects of Protectionism

• Reduced competition ---gt inflation
• More tariffs
• Weaken balance of payments (have to pay more in
  own currency)
• Reduce choice to consumers
• May induce global trade wars (vicious cycle)

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Stages in Globalization

• Across country economies
• For the individual firm
• Customers
• Competition
• Suppliers

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Drivers of Globalization

• Market Drivers
• Global Customers and needs
• Global channels
• Opportunities for marketing transfer
• Competitive Drivers
• Cost Drivers
• Economies of
• Scale
• Scope
• Sourcing
• Labor costs
• Environmental regulations

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More Drivers

• Technology
• Increasing speed of Product Life Cycles
• Internet
• Lower costs of entry into some markets
• Improved transportation and communication

• Governmental
• Trade agreements
• WTO
• NAFTA
• Regional agreements

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Essential Global Marketing Assets

• Products
• Existing
• New
• Models of existing product lines
• Extensions
• Advertising/Promotion
• Distribution

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Perspectives on International Trade

• Traditional economic perspectivebased mostly on
  labor costs
• Absolute advantage
• Relative advantage

• Country Specific Advantages
• Labor costs
• Labor skill
• Infrastructure
• Legal and political stability
• Government policy and regulations
• Natural resources

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Firm Specific Advantages (FSAs)

• Knowledge-Based
• Marketing
• Brand image
• Distribution
• Knowledge of markets
• Transferability of FSAs
• The value chain