Chapter 4' Developing a Global Vision

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Chapter 4. Developing a Global Vision
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What is Global Marketing?

• Marketing that targets markets throughout the
  world.

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THE IMPORTANCE OF GLOBAL MARKETING

• Global marketing is rapidly becoming a necessity.
  
• 90 of all businesses in the U.S. compete
  directly or indirectly with goods or services
  from overseas.
• Impact of Protectionism. Ghana vs. S Korea.
• The evolution of the Internet. Professionals
  without borders.

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The Fear of Trade and Globalization

• Millions of Americans have lost jobs.
• Threat of outsourcing if workers do not accept
  pay cuts
• Vulnerability to operations moving offshore.

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Benefits of Globalization

• Expands economic freedom.
• Spurs competition raises productivity and living
  standards.
• Offers access to foreign capital, global export
  markets, and advanced technology.
• Promotes higher labor and environmental
  standards.

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Steps in International Marketing

• 1. Examine the international environment(s).
• 2. Should we go international?
• 3. Which markets to enter?
• 4. How to enter?
• 5. Decide on the marketing program.

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THE INTERNATIONAL MARKETING ENVIRONMENT
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International Economic Environment

• A countrys attractiveness as a market
• The countrys industrial structure shapes product
  and service needs, and income levels
• Subsistence Raw material exporting economies
  industrializing industrial
• Income distribution
• Beware of the low-income nation paradox.
• Mexico
• China
• India

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International Social-Cultural Environment

• A nations culture, including language,
  education, religious attitudes, and social
  values, must be considered as they influence the
  costs of doing business in that country.
• Cross-Cultural Literacy to reduce ethnocentrism
  and help adapt operations to local environment.
• Hofstedes model of national culture Differences
  in values and beliefs reg. work goals.

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Hofstedes Dimensions of Culture

• Masculine/ Feminine
• Uncertainty (Risk) Avoidance
• Power Distance
• Individualism/ Collectivism
• Time

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Masculinity versus femininity

• Identification of gender and work roles (Japan -
  M USA M Sweden - F)
• Strong job-gender association more salary
  differences between levels.
• Less time off work.

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Uncertainty avoidance

• Acceptance of ambiguous situations and tolerance
  of uncertainty. (USA Lo Uncertainty avoidance)
• In Hi-Uncertainty avoidance cultures, risk
  averseness is high.

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Power Distance

• Expectations regarding equality in the society
  extent to which society tolerates inequalities of
  intellectual and physical capabilities. (USA Lo
  power distance)
• All societies are unequal, some are more so.
• Higher the distance, lower the trust.

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Individualism versus collectivism

• Relationship between individual and his or her
  fellows. (USA Individualistic).

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International Political-Legal Environment

• Marketers must know the current laws and
  regulations for each country in which they
  operate. RESTRICTIONS.
• Countertrade International Trade involving
  exchange of goods for other goods instead of
  cash.
• Barter. Buyback. Counterpurchase.

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International Political-Legal Environment
Administrative Barriers
TradeBarriers

• Import Quotas limits on the amounts of goods
• Embargos - ban

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International Political-Legal Environment
Administrative Barriers
TradeBarriers

• Exchange Control govt limits on the amount of
  foreign exchange with other countries.
• Tariffs tax against certain imported products
• Dumping

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MULTINATIONAL ECONOMIC INTEGRATION
WTO
MERCOSUR
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How to Enter?
Exporting
Licensing
Risks Control Returns
Joint Venture
Direct Foreign Investment
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Risk Levels for Global Entry
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Deciding on the Global Marketing Program

• Global marketing (Standardization)
• Same marketing mix in all countries.
• Multi-Domestic (Adaptation)
• Tailor the marketing mix to the needs of
  individual countries.

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