Chapter 7: Global Marketing

Global Trade
Trade Feedback Effect
import affects exports and vice versa
Comparative Advantage
when one nation is able to produce something more effectively
Protectionism
hinders world trade through tariffs and quotas policies of countries, raising prices and limiting supply
Cross Cultural Analysis
to market effectively on a global scale, one must analyze the similarities and differences of consumers across global geographies in 5 key areas:
1. Values – represent personally or socially preferable modes of conduct or states of existence that tend to persist over time
2. Customs – what is considered normal and expected about the way people do things in a specific country
3. Symbols – things that represent ideas and concpets
4. Language – (Back translation – where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors)
5. Ethnocentricity/Ethnocentrism – the belief that regardless of quality, purchasing products from other countries is wrong; it’s unpatriotic
Country of Origin Effects
the belief that a product is superior based on specific attributes and/or rationale (ex. German cars vs. US cars vs. Japanese Cars)
Global Economic Considerations: Stages of Economic Development
1. Economic Infrastructure
a) communications
b) transportation
c) financial
d) exchange rate
e) distribution systems
2. Volatility (Political-Regulatory Climate)
3. Developed vs. Developing countries
4. Consumer Income and Purchasing Power
Marketing to the Bottom of the Pyramid Consumers
1. generally demand is inelastic
2. consist of about 75% of world’s population
3. Affordability
4. Acceptability
5. Availability
6. Awareness
Global Market Entry Strategies
1. Exporting: lower profit potential, least amount of firm’s financial commitment, risk, and marketing control
2. Licensing
3. Joint Venture
4. Direct Investment
countertrade
the practice of using barter rather than money for making global sales
Four Trends in the past decade have significantly influenced the landscape of global marketing
1. gradual decline of economic protectionism by individual countries
2. formal economic integration and free trade among nations (EU, NAFTA, AFTA)
3. global competition among global companies for global customers
4. emergence of a networked global marketspace
Strategic Alliance
agreements among two or more independent firms to cooperate for the purpose of achieving common goals such as a competitive advantage or customer value creation
International Firm
1. engages in trade and marketing in different countries as an extension of the marketing strategy in its home country
2. these firms market their existing products and services in other countries the same way they do in their home country
Multinational Firm
1. views the world as consisting of unique parts and markets to each part differently
2. Multidomestic Marketing Strategy – they have as many different product variations, brand names, and advertising programs as countries in which they do business
Transnational Firm
1. views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants rather than differences
2. Global Marketing Strategy – the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ
Global Brand
a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs
have the same product formulation or service concept, deliver the same benefits to consumers, and use consistent advertising across multiple countries and cultures
Global Consumers
consist of consumer groups living in many countries or regions of the world who have similar needs or seek similar features and benefits from products or services
Indirect Exporting
when a firm sells its domestically produced products in a foreign country through an intermediary
Direct Exporting
firm sells its domestically produced products in a foreign country without intermediaries (more risk and greater profit)
Product Extension
selling virtually the same product in other countries (works best when consumers share the same desires, needs, and uses for the product)
Product Adaptation
changing a product in some way to make it more appropriate for a country’s climate or consumer preferences
Product Invention
companies can invent totally new products designed to satisfy common needs across countries
Global Environmental Scan
1. Cultural Diversity (values, customs, cultural symbols, language, ethnocentrism)
2. Economic Considerations (stage of economic development, economic infrastructure, consumer income and purchasing power, currency exchange rates)
3. Political-Regulatory Climate (political stability, trade regulations)