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TRANSCRIPT
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-1
REACHING GLOBAL
MARKETS
CHAPTER
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-2
AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:
1. Identify the major trends that have influenced the landscape of global marketing in the past decade.
2. Identify the environmental factors that shape global marketing efforts.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-3
AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:
3. Name and describe the alternative approaches companies use to enter global markets.
4. Explain the distinction between standardization and customization when companies craft worldwide marketing programs.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-4
MATTEL’S GLOBAL MARKETING IS MORE THAN CHILD’S PLAY
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• Decline of Economic Protectionism
Protectionism
Tariff
Quota
World Trade Organization (WTO)
DYNAMICS OF WORLD TRADE
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FIGURE 7-1 FIGURE 7-1 How protectionism affects world trade
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• Rise of Economic Integration
European Union
North American Free Trade Agreement (NAFTA)
Asian Free Trade Agreements
• Euro
DYNAMICS OF WORLD TRADE
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FIGURE 7-2FIGURE 7-2 The countries of the European Union in 2006; Bulgaria and Romania are expected to join in 2007
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Euro TV AdWhat are the benefits of economic integration?
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Global Competition
• A New Reality: Global Competition among Global Companies for Global Consumers
DYNAMICS OF WORLD TRADE
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Diet PepsiWhat is global competition?
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Global Companies
• A New Reality: Global Competition among Global Companies for Global Consumers
• International Firm
• Multinational Firm
• Transnational Firm
• Global Brand
Global Marketing Strategy
Multidomestic Marketing Strategy
DYNAMICS OF WORLD TRADE
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FIGURE 7-AFIGURE 7-A Global companies and marketing strategies
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Global Consumers
• A New Reality: Global Competition among Global Companies for Global Consumers
• Emergence of a Networked Global Marketspace
DYNAMICS OF WORLD TRADE
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McDonald’s WebsiteWhat is a networked global marketspace?
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Concept Check
1. What is protectionism?
A: Protectionism is the practice of shielding one or more industries within a country’s economy from foreign competition, using through the use of tariffs or quotas.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-17
Concept Check
2. What is the difference between a multidomestic marketing strategy and a global marketing strategy?
A: A multidomestic marketing strategy means that firms have as many different product variations, brand names, and advertising programs as countries in which they do business. A global marketing strategy standardizes marketing activities when there are cultural similarities and adapts them when cultures differ.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-18
A GLOBAL ENVIRONMENTAL SCAN
• Cultural Diversity
• Foreign Corrupt Practices Act (1977)
Cultural Symbols
Cross-Cultural Analysis
Values
Customs
• Back Translation
Language
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FIGURE 7-B FIGURE 7-B Cultural appreciation
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Eiffel Tower (Paris) and Parthenon (Athens) What cultural lesson did Coca-Cola learn?
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A GLOBAL ENVIRONMENTAL SCAN
• Economic Considerations
Economic Infrastructure
Consumer Income and Purchasing Power
Currency Exchange Rates
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Coca-Cola (Russia)How do marketers adapt toa country’s infrastructure?
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A GLOBAL ENVIRONMENTAL SCAN
• Political-Regulatory Climate
Political Stability
Trade Regulations
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Concept Check
1. Cross-cultural analysis involves a study of _______.
A: similarities and differences among consumers in two or more nations or societies
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Concept Check
2. When foreign currencies can buy more U.S. dollars, are U.S. products more or less expensive for a foreign consumer?
A: less expensive
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GLOBAL MARKET-ENTRY STRATEGIES
Indirect Exporting
Direct Exporting
• Exporting
• Licensing
Franchising
• Joint Venture
• Direct Investment
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FIGURE 7-3FIGURE 7-3 How purchasing power differs around the world
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Nestle in ChinaWhat global market-entry strategy and why?
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Concept Check
1. What mode of entry could a company follow if it has no previous experience in global marketing?
A: indirect exporting through intermediaries
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-30
Concept Check
A: In licensing, the firm offers the right to a trademark, patent, or trade secret in return for a royalty or fee. In a joint venture, a foreign and a local firm invest together to produce some product or service. The two companies share ownership, control, and profits of the new entity.
2. How does licensing differ from a joint venture?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-31
CRAFTING A WORLDWIDE MARKETING PROGRAM
Product Adaptation
Product Invention
• Product and Promotion Strategies
Product Extension
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FIGURE 7-4FIGURE 7-4 Five product and promotion strategies for global marketing
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Gillette For Women Venus Why use an identical global message for
Greece, Germany, and the U.S.?
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CRAFTING A WORLDWIDE MARKETING PROGRAM
Dumping
• Distribution Strategy
• Pricing Strategy
Gray Market or Parallel Importing
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FIGURE 7-5FIGURE 7-5 Channels of distribution in global marketing
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Concept Check
A: (1) in the same form as in its home market (product extension); (2) with some changes (product adaptation); and (3) as a totally new product (product invention).
1. Products may be sold globally in three ways. What are they?
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-37
Concept Check
2. What is dumping?
A: Dumping is when a firm sells a product in a foreign country below its domestic price or below its actual cost.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-38
GETTING TO KNOW THE WTO
GOING ONLINE
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1. Countries are constantly seeking WTO membership. How many countries are now members of this organization? Which country is the newest member?
Going Online
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2. What are the 10 most common misunderstandings about the WTO identified by this organization?
Going Online
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CNS BREATHE RIGHT STRIPS:GOING GLOBAL
VIDEO CASE 7
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VIDEO CASE 7CNS Breathe Right
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FIGURE 1FIGURE 1 CNS three- stage approach to penetrate and develop new markets
VIDEO CASE 7CNS Breathe Right
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1. What are the advantages and disadvantages for CNS taking Breathe Right strips into international markets?
VIDEO CASE 7CNS Breathe Right
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-45
2. What are the advantages to CNSof (a) using its three-stage processto enter new global markets and(b) having specific criteria to move through the stages?
VIDEO CASE 7CNS Breathe Right
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-46
3. Using the CNS criteria, with what you know, which countries should have the highest priority for CNS?
VIDEO CASE 7CNS Breathe Right
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4. Which single segment of potential Breathe Right strip users would you target to enter new markets?
VIDEO CASE 7CNS Breathe Right
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-48
5. Which marketing mix variables should CNS emphasize the most to succeed in a global arena? Why?
VIDEO CASE 7CNS Breathe Right
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-49
EXAMPLES OF VALUES, CUSTOMS, CULTURAL
SYMBOLS, AND LANGUAGE
SUPPLEMENTALLECTURE NOTE 7-1
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REINTRODUCING THEMINI® BRANDTO THE U.S.
IN-CLASS ACTIVITY 7-1
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History of the Classic Mini
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MINI Brand Launch at the 2002 NAIAS
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MINI Cooper Convertible andMINI Cooper S Convertible
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MINI Cooper Convertible
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MINI Cooper Convertible Brochure
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MINI Cooper Convertible Billboard
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-58
Protectionism
Protectionism is the practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quotas.
Protectionism is the practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quotas.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-59
Tariff
A tariff is a government tax on goods or services entering a country, primarily serving to raise prices on imports.
A tariff is a government tax on goods or services entering a country, primarily serving to raise prices on imports.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-60
Quota
A quota is a restriction placed on the amount of of a product allowed to enter or leave a country.
A quota is a restriction placed on the amount of of a product allowed to enter or leave a country.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-61
World Trade Organization
The World Trade Organization (WTO) is a permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions.
The World Trade Organization (WTO) is a permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-62
Global Competition
Global competition exists when firms originate, produce, and market their products and services worldwide.
Global competition exists when firms originate, produce, and market their products and services worldwide.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-63
Multidomestic Marketing Strategy
A multidomestic marketing strategy is used by multinational firms that have as many different product variations, brand names, and advertising programs as countries in which they do business.
A multidomestic marketing strategy is used by multinational firms that have as many different product variations, brand names, and advertising programs as countries in which they do business.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-64
Global Marketing Strategy
A global marketing strategy is used by transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.
A global marketing strategy is used by transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-65
Global Brand
A global brand is a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs.
A global brand is a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-66
Global Consumers
Global consumers consist of customer groups living in many different countries or regions of the world who have similar needs or seek similar features and benefits from products or services.
Global consumers consist of customer groups living in many different countries or regions of the world who have similar needs or seek similar features and benefits from products or services.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-67
Cross-Cultural Analysis
Cross-cultural analysis involves the study of similarities and differences among consumers in two or more nations or societies.
Cross-cultural analysis involves the study of similarities and differences among consumers in two or more nations or societies.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-68
Values
Values is a society’s personally or socially preferable modes of conduct or states of existence that tend to persist over time.
Values is a society’s personally or socially preferable modes of conduct or states of existence that tend to persist over time.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-69
Customs
Customs are what is considered normal and expected about the way people do things in a specific country.
Customs are what is considered normal and expected about the way people do things in a specific country.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-70
The Foreign Corrupt Practices Act (1977) is a law, amended by the International Anti-Dumping and Fair Competition Act (1998), that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain businessin a foreign country.
The Foreign Corrupt Practices Act (1977) is a law, amended by the International Anti-Dumping and Fair Competition Act (1998), that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain businessin a foreign country.
Foreign Corrupt PracticesAct (1977)
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-71
Cultural symbols are things that represent ideas or concepts.Cultural symbols are things that represent ideas or concepts.
Cultural Symbols
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Back translation is when a translated word or phrase is retranslated into the original language by a different interpreter to catch errors.
Back translation is when a translated word or phrase is retranslated into the original language by a different interpreter to catch errors.
Back Translation
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-73
A currency exchange rate is the price of one country’s currency expressed in terms of another country’s currency.
A currency exchange rate is the price of one country’s currency expressed in terms of another country’s currency.
Currency Exchange Rate
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-74
Exporting is producing goods in one country and selling them in another country.
Exporting is producing goods in one country and selling them in another country.
Exporting
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A joint venture is when a foreign country and a local firm invest together to create a local business.
A joint venture is when a foreign country and a local firm invest together to create a local business.
Joint Venture
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-76
Direct investment entails a domestic firm actually investing in and owning a foreign subsidiary or division.
Direct investment entails a domestic firm actually investing in and owning a foreign subsidiary or division.
Direct Investment
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-77
Dumping is when a firm sells aproduct in a foreign country belowits domestic price or below its actual cost.
Dumping is when a firm sells aproduct in a foreign country belowits domestic price or below its actual cost.
Dumping
Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 7-78
A gray market is a situation where products are sold through unauthorized channels of distribution. Also called parallel importing.
A gray market is a situation where products are sold through unauthorized channels of distribution. Also called parallel importing.
Gray Market