Marketing Chapter 8: Globalization

Globalization
Refers to the processes by which goods, services, capital, people, information, and ideas flow across national borders.
Country market assessment
-Analyzing infrastructure and technological capabilities
-Analyzing government actions
-Economic analysis using metrics
-Sociocultural analysis
trade deficit
results when a country imports more goods than it exports.
trade surplus
Occurs when a country as a higher level of exports than imports.
gross domestic product
GDP Defined as the market value of the goods and services produced by a country in a year; the most widely used standardized measure of output.
gross national income
GNI Consists of GDP plus the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy).
Purchasing power parity
PPP A theory that states that if the exchange rates of two countries are in equilibrium, a product purchased in one will cost the same in the other, expressed in the same currency.
Human development index
HDI a composite statistic of life expectancy, education, and income per capita indicators, which are used to rank countries into four tiers of human development.
infrastructure
The basic facilities, services, and installations needed for a community or society to function, such as transportation and communications systems, water and power lines, and public institutions like schools, post offices, and prisons.
-transportation
-communication
-commerce
-distribution channel
tariff
A tax levied on a good imported into a country; also called a duty
-benefit domestically made products because they reduce foreign competition
quota
Designates the maximum quantity of a product that may be brought into a country during a specified time period
-benefit domestically made products because they reduce foreign competition
exchange control
Refers to the regulation of a country’s currency exchange rate
exchange rate
the measure of how much one currency is worth in relation to another
trade agreements
intergovernmental agreements designed to manage and promote trade activities for specific regions
-European union
-NAFTA
-CAFTA
-ASEAN
-Mercosur
socialculture factors
-Power distance
-Uncertainty avoidance
-Individualism
-Masculinity
-Time orientation
culture
•The common set of values shared by its citizens that determine what is socially acceptable. (Ford vs. Cadillac)
• Significant differences in values, behaviors across countries, regions
– Language problems
– back translation
• Translation errors, Got Milk example
exporting
Producing goods in one country and selling them in another
Franchising
A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a business using a name and format developed and supported by the franchisor.
Strategic alliances
A collaborative relationship between independent firms, though the partnering firms do not create an equity partnership; that is, they do not incest in one another.
Joint venture
Formed when a firm entering a new market pools its resources with those of a local firm to form a new company in which ownership, control and profits are shared.
Direct invesment
when a firm maintains 100 percent ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries.
The Global Marketing Mix
Marketers must decide what changes to make to
– Product or service strategies
– Pricing Strategies
– Global distribution strategies
– Global communication strategies
Product or service strategies
-Sell the same product or service in both the home country market and host country
-Sell a product or service similar to that sold in home country but include minor adaptations
-Sell totally new products or services
Glocalization
the process of firms standardizing their products globally, by using different promotional campaigns to sell them
reverse innovation
when companies initially develop products for niche or underdeveloped markets, and then expand them into their original or home markets
Global market standardization
production of uniform products that can be sold the same way all over the world using the same message
Product Adaptation
adapting a product to meet local conditions or wants in foreign markets, same message
Pricing Strategies
– Tariffs
– Quotas
– Anti-dumping Policies: A protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.
– Economic Conditions
– Competitive factors
Global distribution strategies
• Some global channels are very long and complex.
• Consumer shop local small local stores.
• Suppliers must be creative in delivering to these outlets.