irwin/mcgraw-hill © the mcgraw-hill companies, inc., 1998 gilbert a. churchill, jr. j. paul peter...
TRANSCRIPT
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998
Gilbert A. Churchill, Jr. J. Paul PeterGilbert A. Churchill, Jr. J. Paul Peter
Chapter 3
Global Marketing Challenges
Marketing
A Process for Deciding Whether A Process for Deciding Whether to Enter International Marketsto Enter International Markets
Slide3-1
Source: Betty Jane Punnett and David A. Ricks, International Business (Boston: PWS-Kent Publishing Co., 1992) p. 257
Start
Must we?
Can we?
Should we?ConcentrateDomestically
ImproveCapability
Identify Specific Opportunities
Select EntryOption
No No
No
Yes
Yes Yes
Figure3.1
Major Trading Partners of the U.S.Major Trading Partners of the U.S.Slide3-2
Figure3.2
Source: U.S. Department of Commerce, Statistical Abstract of the United States, 115th ed. (Washington Government Printing Office, 1995) pp. 819-822.
Canada
Japan
MexicoEurope
U.K.Exports = $53
Exports = $51
Exports = $114
Exports = $27
Exports = $19
Imports = $32
Imports = $25
Imports = $49
Imports = $129
Imports = $119
Imports and Exports in Billions of Dollars
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Environmental Analysis Issues Environmental Analysis Issues in Global Marketsin Global Markets
Slide3-3a
Table3.1
EnvironmentEnvironment
Economic Environment • Stage of Development
• Buying Power of Consumers
• Type of Currency; exchange rate
Political and Legal Environment
Analysis Issues Analysis Issues
• Political Stability
• Laws limiting international trade
• Laws of host nations
• General Agreement on Tariffs and Trade (GATT)
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Slide3-3b
Table3.1
EnvironmentEnvironmentSocial Environment • Cultural influences on buying
behavior• Language differences• Population sizes and distribution• Socioeconomic status• Impact on marketing on the culture
• Ethical considerations such as bribery and human rights
Natural Environment
Analysis IssuesAnalysis Issues
• Resources available• Impact of resources on natural resources
Technological Environment • Levels of technological development• Available infrastructure
• Degrees of government involvement in competition
• Ownership of competitors-local, foreign or government
Competitive Environment
Environmental Analysis Issues Environmental Analysis Issues in Global Marketsin Global Markets
Examples of Cultural Differences that Examples of Cultural Differences that Could Lead to Marketing ProblemsCould Lead to Marketing Problems
Slide3-4
Table3.2
Body LanguageBody LanguageStanding with your hands on your hips is a gesture of defiance in Indonesia.
Physical ContactPhysical Contact
PromptnessPromptness
Eating and CookingEating and Cooking
Other Social CustomsOther Social Customs
Patting a child on the head is a grave offense in Thailand or Singapore since the head is revered as the location of the soul.
In Latin countries, your host or business associate would be surprised if you arrived at the appointed hour.
It is rude to leave anything on your plate when eating in Norway, Malaysia or Singapore.
In Sweden, nudity and sexual permissiveness are quite all right, but drinking is really frowned on.
Source: William J. Stanton, Michael J. Etzel and Bruce J. Walker, Fundamentals of Marketing, 9th ed.. (New York: McGraw-Hill, 1991), p. 536. ©1991 by the McGraw-Hill Companies, Inc., and reproduced by permission of the publisher.
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998
ExportingExportingSlide3-5
definition: a mode of entry involving production of a product in one country and shipping it to another country for sale.
Risk
High
Low HighControl
Exporting
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998
LicensingLicensingSlide3-6
definition: an agreement in which an organization grants another organization the right to use a trademark, a patented product or a process.
Risk
High
Low HighControl
Exporting
Licensing
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Joint VenturesJoint VenturesSlide3-7
definition: a business agreement in which two or more organizations share management of an enterprise.
Risk
High
Low HighControl
Exporting
Licensing
Joint Ventures
Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998
Direct OwnershipDirect OwnershipSlide3-8
definition: a mode of entry involving an organization setting up new facilities or acquiring a foreign firm in the same line of business.
Risk
High
Low HighControl
Exporting
Licensing
Joint Ventures
Direct Ownership
Mechanisms for Serving Global Mechanisms for Serving Global Markets: Some Pros and ConsMarkets: Some Pros and Cons
Slide3-9
MechanismMechanism
Exporting Simple; minimal financial risk
Licensing
AdvantagesAdvantages DisadvantagesDisadvantages
Joint Venture
Direct Ownership
May be less profitable than other mechanisms
Minimal capital outlay; useful for serving countries with export restrictions
Difficult to control licensee; when licensing agreement ends, licensee may become a competitor; may be less profitable than other mechanisms
Share control with venture partner; partner may learn technology or secrets that it uses to compete with the organization
Risk limited to the organization’s share in the venture; foreign partner contributes expertise the organization lacks; useful when the host country limits foreign ownership
Maximum control over foreign operations; ability to be close to customers
Expensive to set up; requires extensive knowledge of foreign markets and contacts overseas
Source: Based in part on information in Philip R. Cateora, International Marketing, 9th ed. (Burr Ridge, Ill: Irwin, 1996) chapter 10.
Table3.3
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Globalization vs CustomizationGlobalization vs CustomizationSlide3-10
Globalized Product
CustomizedProduct