Understanding the Global Marketing Environment

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Understanding the Global Marketing Environment

• Class 4

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Every American company is international, at
least to the extent that its business performance
is conditioned in part by events that occur
abroad
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Trends in Global Business
Internationalization of U.S. Markets International
ization of U.S. Business Growth of Regional Trade
Areas EU, NAFTA, AFTA, APEC Move toward free
market system by countries in Latin America,
Asia, Eastern Europe Large Emerging Markets such
as Argentina, China, South Korea, Poland,
India Evolving global middle income
households GATT and World Trade Organization The
TRIAD
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Globalization of Business and Markets

• Until recently, competition for U.S. markets was
  only among U.S. businesses with the same relative
  cost of money, labor and product
• è U.S market now includes competitors from all
  over the world

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Why internationalization?

• Saturation of U.S. markets

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Foreign Acquisitions of U.S. Companies
U.S. Company Foreign Owner Keebler (Cookies and
other foods) Britain J. Walter Thompson
(Advertising) Britain Spiegal (Catalog
retailing) Germany Mack Trucks
(Automotive) France Giant Food Stores
(Supermarkets) Netherlands Pillsbury, Burger
King, Pearle Vision Britain CBS Records (Music
and Entertainment) Japan Carnation (Coffee-Mate,
Friskies pet food) Switzerland Chesebrough-Ponds
(Vaseline) Netherlands
SOURCE Adapted from The 100 Largest Foreign
Investments in the U.S., Forbes, July 18, 1994,
pp. 266-270.
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Why internationalization?

• Saturation of U.S. markets
• Higher ROI in foreign markets

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Why internationalization?

• Saturation of U.S. markets
• Higher ROI in foreign markets
• Establish early position in world markets

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Invented Here, Made Elsewhere
U.S. Invented Technology
9 0
Phonographs
1
9 0
Color TVs
1 0
1 9 7 0
4 0
Audiotape Recorders
0
N O W
1 0
Videotape Recorders
1
9 9
Machine Tools
3 5
Telephones
9 9
2 5
8 9
Semiconductors
6 4
9 8
Computers
7 4
0
20
40
60
80
100
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Definition of International Marketing

• The performance of business activities that
  direct the flow of a companys goods and services
  to consumers or users in more than nation for
  profit.

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Whats the difference between international
marketing and domestic marketing?

• The environment in which marketing strategies
  have to be implemented

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The International Marketing Task
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Foreign environment (uncontrollable)
1
Economic forces
Political/legal forces
Domestic environment (uncontrollable)
2
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Competitive structure
Political/ legal forces
Competitive Forces
(controllable)
Cultural forces
Environmental uncontrollables country market A
Price
Product
3
Channels of distribution
Promotion
Environmental uncontrollables country market B
6
Level of Technology
Geography and Infrastructure
Economic climate
Environmental uncontrollables country market C
4
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Structure of distribution