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Global Market Strategies

Global Market Strategies. The Internationalization of U.S. Business. Many U.S. Companies are now foreign owned. Companies with only domestic markets have found it difficult to sustain customary rates of growth. Many companies are increasingly seeking foreign markets. “Buy American” Quiz 1 .

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Global Market Strategies

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  1. Global Market Strategies

  2. The Internationalization of U.S. Business • Many U.S. Companies are now foreign owned. • Companies with only domestic markets have found it difficult to sustain customary rates of growth. • Many companies are increasingly seeking foreign markets.

  3. “Buy American” Quiz 1 • Pontiac LeMans • Chevrolet Lumina • Mercury Capri • Honda Accord Coupe • Dodge Stealth • Mercury Tracer • Plymouth Voyager

  4. “Buy American” Quiz 2 • Sak’s Fifth Avenue • Burger King • Michelin • Shell • Seagrams • Bonwit Teller • Hardee’s • Firestone • BP • Jack Daniels • Foodline • BiLo

  5. Foreign Acquisitions of U.S. Companies U.S. Company Foreign Owner J. Walter Thompson (Advertising) Britain Spiegel (Catalog retailing) Germany Mack Trucks (Automotive) France Giant Food Stores (Supermarkets) Netherlands Pillsbury, Hueblein (Food, Drink) Britain CBS Records (Music and Entertainment) Japan Magnavox (Television) Netherlands Carnation (Coffee-Mate, Friskies pet food) Switzerland Chesebrough-Pond’s (Vaseline) Netherlands Vermont American (Garden Tools) Germany Northwest Airlines (Travel) Netherlands SOURCE: Adapted from “Soon to Be Extinct: American TV Brands.,” U.S. News & World Report, July 31, 1995, p. 13, and Gustavo Lombo, “Creating American Jobs,” Forbes, July 28, 1997. P.222.

  6. Some of the Big U.S. Players in the Global Game* Foreign Revenues % of Total Foreign Profits % of Total Foreign Assets % of Total Company 43.1 Ei du Pont de Nemours 28.9 40.6 50.1 Proctor & Gamble 36.9 40.5 67.1 Coca-Cola 67.8 37.7 58.4 Intel 38.4 20.2 45.0 Motorola 92.4 37.7 49.6 Johnson & Johnson 46.1 45.3 39.7 Sara Lee 53.8 51.3 71.6 Colgate-Palmolive 83.6 60.4 63.1 Gillette 41.1 62.6 46.5 Compaq Computer 51.7 31.4 57.0 McDonald’s 49.6 55.0 65.3 Avon Products 58.9 59.0 36.2 20.2 53.8 RJR Nabisco *1996 data. SOURCE: Adapted from Brian Zajac, “Buying American,” July 28, 1997, p218.

  7. International Marketing Defined • International Marketing is the performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit. • Marketing concepts and principles stay the same, but the environment changes.

  8. The International Marketing Task 7 Foreign environment (uncontrollable) 1 Economic forces Political/legal forces Domestic environment (uncontrollable) 2 7 Competitive structure Political/ legal forces Competitive Forces (controllable) Cultural forces Environmental uncontrollables country market A Price Product 3 Channels of distribution Promotion Environmental uncontrollables country market B 6 Level of Technology Geography and Infrastructure Economicclimate Environmental uncontrollables country market C 4 5 Structure of distribution

  9. Environmental Adaptation • Adjusting to a country’s culture (uncontrollable environment) is critical. • Consider and adjust your frame of reference. • Avoid cultural errors by being aware of cultural relativism--marketing strategies and judgments are based on experience, and experience is interpreted by each marketer in terms of his/her own culture.

  10. Being Globally Aware • To be Globally Aware is to be:Objective Tolerant of Cultural Differences Knowledgeable of:CulturesHistoryWorld Market PotentialsGlobal Economic and Social Trends

  11. Entry Strategies • Exporting • The Internet • Contractual Agreements • Joint Ventures • Direct Foreign Investment • Strategic International Alliances

  12. Trends in Global Business • Internationalization of U.S. Markets • Internationalization of U.S. Business • Growth of Regional Trade Areas • Move toward free market system by countries in Latin America, Asia, Eastern Europe • Large Emerging Markets such as Argentina, China, South Korea, Poland, India • Evolving global middle income households • GATT and World Trade Organization • The TRIAD

  13. Possible Regional Trade Groups in the 21st Century  Western Hemisphere Free Trade Areas (WHFTA) Canada to Argentina  Asia-Pacific Economic Cooperation (APEC) Pacific Rim Countries including U.S.  U.S./Canada/Mexico/Japan  South American Free Trade Area (SAFTA) Andean Pact and Mercosur  Chinese Economic Area (CEA) Hong Kong, Taiwan, Coastal Provinces of So. China  U.S./European Union  Many possibilities of Republics of Russia, Baltic States

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