BUS 3120 Chapter 8 Revised GLOBAL MARKETING.pptx

GLOBAL MARKETS ENTRY STRATEGY STANDARDIZATION ADAPTATION

1. Learning Objectives Describe the components of a country market assessment. Understand the marketing opportunities in foreign countries. Identify the various market entry strategies. Highlight the similarities and differences between a domestic marketing strategy and a global marketing strategy.

2. Globalization The processes by which goods, services, capital, people, information, and ideas flow across national borders.

3. Assessing Global Markets

4. Evaluating Market Size and Population Growth Rate Population growth dispersal: strong demand in BRIC (Brazil, Russia, India, China) nations Distribution of the population within a particular region: rural vs. urban

5. Evaluating Real Income Firms can make adjustments to an existing product or change the price to meet the unique needs of a particular country market. For the Chinese market, Haier sells washing machines that can wash both clothes and vegetables.

6. Analyzing Infrastructure and Technological Capabilities Marketers are especially concerned with four key elements of a country’s infrastructure: Transportation. Distribution Channels. Communications. Commerce.

7. Analyzing Governmental Actions

8. Trade Agreements A trade agreement is an intergovernmental agreement designed to manage and promote trade activities for a specific region, and a trading bloc consists of those countries that have signed a particular trade agreement. There have been recent challenges to long- established regional trade agreements (RTAs), Yet RTAs account for more than half of international trade.

9. The Appeal of the BRIC Countries Great potential for growth in the global community: Brazil. Russia. India. China.

10. What metrics can help analyze the economic environment of a country? What types of governmental actions should we be concerned about as we evaluate a country? What are some important cultural dimensions? Why are each of the BRIC countries viewed as potential candidates for global expansion?

11. Exhibit 8.4: Global Entry Strategies

12. Exporting Exporting means producing goods in one country and selling them in another. This entry strategy requires the least financial risk but also allows for only a limited return to the exporting firm. Rolex exports its watches to countries all over the world from its factory in Switzerland.

13. Franchising A franchising contract allows the franchisee to operate a business—a retail product or service firm or a B2B provider—using the name and business format developed and supported by the franchisor. Many of the best-known retailers in the United States are also successful global franchisors, including McDonald’s, Pizza Hut, Starbucks, Domino’s Pizza, KFC, and Holiday Inn.

14. Strategic Alliance Collaborative relationships between independent firms. The partnering firms do not create an equity partnership.

15. Joint Venture A joint venture is formed when a firm entering a market pools its resources with those of a local firm. Ownership, control, and profits are shared. The local partner offers the foreign entrant greater understanding of the market and access to resources such as vendors and real estate.

16. Direct Investment Direct investment requires a firm to maintain 100 percent ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries. Requires the highest level of investment and exposes the firm to significant risks, including the loss of its operating and/or initial investments. China-based Lenovo purchased U.S.-based IBM’s PC division and Motorola’s handset business unit and has parallel headquarters in both Beijing and North Carolina.

17. Which global entry strategy has the least risk and why? Which global entry strategy has the most risk and why?

18. Choosing a Global Marketing Strategy: Segmentation, Targeting, and Positioning (STP)

19. The Global Marketing Mix: Global Product or Service Strategies

20. The Global Marketing Mix: Global Pricing Strategies

21. The Global Marketing Mix: Global Communication Strategies Literacy levels vary by country. Differences in language and customs affect communication. Cultural and religious differences also matter.