Growth –Access to new markets
–Access to resources
Survival–Against competitors with lower costs (due to increased access to resources)
Global competitors attacking the domestic market,
Foreign markets might offer higher profit opportunities,
Domestic markets might be shrinking,
Need an enlarged customer base to achieve economies of scale,
Reduce dependency on any one market,
Customers might be expanding abroad.
DO WE GET INVOLVED IN
INTERNATINAL MARKETING?
IF YES, WHICH
MARKETS?
HOW MUCH COMMITMENT
IN EACH MARKET?
HOW SHOULD WE
REORGANIZE OUR
OPERATIONS?
IMPACT ON DOMESTIC-
BASED MARKETING?
Global competition is intensifying and few industries are now safe from foreign competition.
To compete, many companies are continuously improving their products, expanding into foreign markets and becoming Global FirmsGlobal Firms.
Global firms face several major problems:
– Variable exchange rates,
– Unstable governments,
– Protectionist tariffs and trade barriers,
– Corruption.
Recognizing and reacting to international marketing opportunities;
Being aware of threats from foreign competitors in all markets;
Effectively using international marketing mix opportunities
Looking at the global marketing environment
Looking at the global marketing environment
Deciding whether to go international
Deciding whether to go international
Deciding which markets to enter
Deciding which markets to enter
Deciding how to enter the market
Deciding how to enter the market
Deciding on the global marketing program
Deciding on the global marketing program
Deciding on the global marketing organizationDeciding on the global marketing organization
The International Trade SystemThe International Trade System
The World Trade Organization and GATTThe World Trade Organization and GATT
Regional Free Trade ZonesRegional Free Trade Zones
The International Trade System
–Tariffs, quotas, embargos, exchange controls, nontariff trade barriers
–World Trade Organization and GATT
–Regional free trade zones
• European Union
• North American Free Trade Agreement
• Other free trade areas
A nation’s basic conditions in transportation networks,
communication systems, ad energy facilities.
Infrastructure
An administrative trade restriction that limits the number
of units of a certain good that can enter a country for resale.
Import Quota
An administrative trade
restriction that imposes a
complete ban on imports
of a specified product.
Embargo
The controversial trade practice
of selling a product in a foreign
market at a lower price than it
commands in the producer’s
domestic market.
Dumping
An international trade accord
that has helped to reduce
worldwide tariffs.
General Agreement on Tariffs and Trade
(GATT)
A 125-member organization that
succeeds GATT in overseeing trade
agreements, mediating disputes, and
reducing trade barriers, unlike GATT
provisions, WTO decisions are
binding.
World Trade Organization (WTO)
An accord to remove trade barriers among Canada, Mexico, and the United
States.
North American Free-Trade Agreement (NAFTA)
Country’sIndustrial Structure
Country’sIndustrial Structure
Subsistence Economies
Subsistence Economies
Raw MaterialExporting
Economies
Raw MaterialExporting
Economies
IndustrializingEconomies
IndustrializingEconomies
IndustrialEconomiesIndustrial
Economies
Income Distribution
GovernmentBureaucracyGovernmentBureaucracy
Attitudes Toward
International Buying
Attitudes Toward
International Buying
Monetary RegulationsMonetary
RegulationsPoliticalStabilityPoliticalStability
How CustomersThink About and
Use Products
Cultural Traditions,Preferences, and
Behaviors
BusinessNorms andBehavior
• Consistent with objectives and culture of firm
• Demographic Characteristics
• Economic Factors
• Sociocultural factors
• Technological factors
Define Organization’s Marketing Objectives and Policies
Define Organization’s Marketing Objectives and Policies
What Volume of Foreign Sales is Desired?What Volume of Foreign Sales is Desired?
How Many Countries Should the Firm Go Into?How Many Countries Should the Firm Go Into?
What Types of Countries Should be Entered?What Types of Countries Should be Entered?
Rank by Market Size & Growth, Cost of Doing Business, Competitive Advantage, & Risk Level.
Rank by Market Size & Growth, Cost of Doing Business, Competitive Advantage, & Risk Level.
Direct InvestmentDirect Investment
Joint VenturingJoint Venturing
ExportingExporting
Am
ou
nt
of
Co
mm
itm
en
t, R
isk,
Co
ntr
ol,
an
d P
rofi
t P
ote
nti
al
GreaterGreater
LesserLesser
• 1st level: Exporting
• 2nd level: Joint Venturing
–Franchising
–Licensing
–Contract manufacturing
–Joint ownership
• 3rd level: Direct Investment
StraightExtension
CommunicationAdaptation
ProductAdaptation
DualAdaptation
Pro
mo
tio
n
Don’t ChangeProduct
AdaptProduct
Product
Don’tChange
Promotion
AdaptPromotion
Product InventionDevelop New Product
Five International Product and Promotion Strategies
Straight product expansion
• Marketing the product with no changes
Product adaptation
• Altering the product to meet local conditions or the wants of the foreign market
Product invention
• Creating new products or services for foreign markets
Companies face many problems
• Price escalation
• Pricing to foreign subsidiaries
• Recent economic and technological forces
• The Internet
Possibilities in setting prices include:
–Charge a uniform price all around the world.
–Charge what consumers in each country could pay.
–Use a standard markup of its costs everywhere.
SellerSeller
Seller’s HeadquartersSeller’s Headquarters
Channels Between NationsChannels Between Nations
Channels Within NationsChannels Within Nations
Final User or BuyerFinal User or Buyer
Standardized global communication
• Advertising themes are standardized from country to country with slight modifications
Communication adaptation
• Advertising messages are fully adapted to local markets
Step 1: Organize export department
Step 2: Create an international division
Step 3: Become a global organization
Looking at the global marketing environment
Looking at the global marketing environment
Deciding whether to go international
Deciding whether to go international
Deciding which markets to enter
Deciding which markets to enter
Deciding how to enter the market
Deciding how to enter the market
Deciding on the global marketing program
Deciding on the global marketing program
Deciding on the global marketing organizationDeciding on the global marketing organization