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DEVELOPING A GLOBAL VISION

DEVELOPING A GLOBAL VISION. Key Concepts. Rewards of Global Marketing. Recognizing and reacting to international marketing opportunities Using effective global marketing strategies Being aware of threats from foreign competitors. Emerging-Market Companies. Beyond the Book.

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DEVELOPING A GLOBAL VISION

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  1. DEVELOPING A GLOBAL VISION Key Concepts

  2. Rewards of Global Marketing • Recognizing and reacting to international marketing opportunities • Using effective global marketing strategies • Being aware of threats from foreign competitors

  3. Emerging-Market Companies Beyond the Book Adapted from “Emerging Giants,” Business Week, July 31, 2006.

  4. Importance of Global Marketing to the U. S. • U.S. exports a fifth of industrial production. • One of every 10 jobs in U.S. is supported by exports. • U.S. businesses export over $800 billion in goods. • Exports account for 25 percent of U.S. economic growth. • U.S. is world’s leading exporter of farm products.

  5. Benefits of Globalization • Expands economic freedom • Spurs competition • Raises productivity and living standards • Offers access to foreign capital, global export markets, and advanced technology • Promotes higher labor and environmental standards • Acts as a check on government power

  6. The Fear of Trade and Globalization • Millions of Americans have lost jobs • Millions fear losing jobs • Threat of outsourcing if workers do not accept pay cuts • Vulnerability to operations moving offshore

  7. Global Vision • The impact of multinational firms on the world economy

  8. 1 Companies operate in one country and sell into others 2 Set up foreign subsidiaries to handle sales 3 Operate an entire line of business in another country 4 Virtual operation Stages of Global Business Development

  9. Production of uniform products that can be sold the same way all over the world. Global Marketing Standardization Global MarketingStandardization

  10. External Environment Facing Global Marketers Culture Economic and Technological Development Political Structure Demographic Makeup Natural Resources

  11. Culture The common set of values shared by its citizens that determine what is socially acceptable. Culture

  12. Developed Country Complex, sophisticated industries Basic industries Less DevelopedCountry Economic and Technological Development

  13. No private ownershipMinimal individual freedom Little central government Maximum personal freedom Political Structure and Actions

  14. Tariff A tax levied on goods entering a country Quota Limit on the amount of a product entering a country Boycott Exclusion of products from a country Exchange Control Foreign exchange must be sold to a control agency Market Grouping Common trade alliance Trade Agreement An agreement to stimulateinternational trade Legal Considerations

  15. Agreementsand Organizations CAFTA NAFTA European Union Political and Legal Considerations

  16. Demographic Makeup Marketing Considerations: • Population density • Urban or rural • Personal income • Age

  17. Natural Resources • Petroleum • Foodstuffs • Precious metal • Timber • Water

  18. Factors shaping global markets External Environment Facing Global Marketers

  19. Global Marketing bythe Individual Firm • Identify the various ways of entering the global marketplace

  20. Why “Go Global”? • Earn additional profits • Leverage a unique product or technological advantage • Possess exclusive market information • Saturated domestic markets • Excess capacity • Utilize “economies of scale”

  21. High risk/ high return Risk Direct Invest- ment Joint Venture Contract Manu- facturing Licensing Export Low risk/low return Return Risk Levels for Global Entry

  22. Export Sell domestically produced products to buyers in other countries Licensing Legal process allowing use of manufacturing/patents/knowledge ContractManufacturing Private-label manufacturing by a foreign country Joint Venture Domestic firm buys/joins a foreign company to create new entity Direct Investment Active ownership of a foreign company/manufacturing facility Entering the Global Marketplace

  23. GOING GLOBAL -- RECAP Entering the Global Marketplace

  24. The Global Marketing Mix The basic elements involved in developing a global marketing mix

  25. Same Product Change Product One Product One Message Product Adaptation Same Message Message Adaptation Product Invention Change Message Product and Promotion Online

  26. Pricing • Must consider transportation and insurance costs, taxes and tariffs • Determine what customers will spend • Ensure that foreign buyers will pay price • May need to simplify a product to lower price • Don’t assume that low-income countries are willing to accept lower quality

  27. Dumping • Trying to increase an overseas market share • Temporarily distributing products to overseas markets to offset slack demand at home • Lowering unit costs by exploiting large-scale production • Attempting to maintain stable prices during periods of exchange rate fluctuations

  28. A form of trade in which all or part of the payment for goods or services is in the form of other goods or services. Countertrade Countertrade

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