Chapter 6: Understanding and reaching global consumers and markets. After reading this chapter you should be able to: Identify the major trends that have influenced world trade and global marketing, identify the environmental forces that shape global marketing efforts, name and describe the alternative approaches companies use to enter global markets,...
McGrawHill/Irwin Copyright © 2013 by The McGrawHill Companies, Inc. All rights reserved LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 6, YOU SHOULD BE ABLE TO: LO1 LO2 Identify the major trends that have influenced world trade and global marketing Identify the environmental forces that shape global marketing efforts 62 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 6, YOU SHOULD BE ABLE TO: LO3 LO4 Name and describe the alternative approaches companies use to enter global markets Explain the distinction between standardization and customization when companies craft worldwide marketing programs 63 HOW DELL, INC., BUILT A BILLION DOLLAR BUSINESS IN INDIA 64 MARKETING IN A BORDERLESS ECONOMIC WORLD LO1 TREND 1—DECLINE OF ECONOMIC PROTECTIONISM Protectionism Tariffs Quota World Trade Organization (WTO) 65 LO1 MAKING RESPONSIBLE DECISIONS Global Ethics and Global Economics— The Case of Protectionism 66 FIGURE 6-1 Protectionism hinders world trade when countries raise prices and limit supply through tariff and quota policies 67 MARKETING IN A BORDERLESS ECONOMIC WORLD LO1 TREND 2—RISE OF ECONOMIC INTEGRATION European Union • Euro North American Free Trade Agreement (NAFTA) 68 FIGURE 6-2 The European Union in mid2012 consists of 27 countries with more than 500 million consumers 69 MARKETING IN A BORDERLESS ECONOMIC WORLD LO1 TREND 3A—GLOBAL COMPETITION Global Competition 610 LO2 A GLOBAL ENVIRONMENTAL SCAN ECONOMIC CONSIDERATIONS Economic Infrastructure • Communications • Transportation • Financial • Distribution Systems 620 LO2 A GLOBAL ENVIRONMENTAL SCAN ECONOMIC CONSIDERATIONS Consumer Income and Purchasing Power • Microfinance: India Currency Exchange Rate 621 LO2 A GLOBAL ENVIRONMENTAL SCAN ECONOMIC CONSIDERATIONS Stage of Economic Development • Developed Countries: Japan • Developing Countries Made the Move: Remain Locked: Brazil Tanzania • Bottom of the Pyramid 622 LO2 A GLOBAL ENVIRONMENTAL SCAN POLITICAL-REGULATORY CLIMATE Political Stability Trade Regulations 623 FIGURE 6-3 Alternative global market-entry strategies 624 LO3 GLOBAL MARKET-ENTRY STRATEGIES EXPORTING Exporting • Indirect Exporting • Direct Exporting 625 MARKETING MATTERS LO3 Creative Cosmetics and Creative Export Marketing in Japan 626 LO3 GLOBAL MARKET-ENTRY STRATEGIES LICENSING Advantages Franchising Disadvantages 627 LO3 GLOBAL MARKET-ENTRY STRATEGIES JOINT VENTURE Joint Venture • Advantages • Disadvantages 628 LO3 GLOBAL MARKET-ENTRY STRATEGIES DIRECT INVESTMENT Direct Investment • Advantages • Disadvantages 629 FIGURE 6-4 Five product and promotion strategies for global marketing 630 LO4 CRAFTING A WORLDWIDE MARKETING PROGRAM PRODUCT STRATEGIES Product Extension Product Adaptation Product Invention 631 LO4 CRAFTING A WORLDWIDE MARKETING PROGRAM PROMOTION STRATEGIES Identical Message Communication Adaptation Dual Adaptation Nescafé China Video 632 LO4 CRAFTING A WORLDWIDE MARKETING PROGRAM DISTRIBUTION AND PRICING STRATEGIES Channels and Economic Development Channels Can Be Long or Short Countries Impose Pricing Constraints Prices May Be Too High or Too Low • Dumping • Gray Market 633 FIGURE 6-5 Channels of distribution in global marketing 634 ... efforts 6 2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 6, YOU SHOULD BE ABLE TO: LO3 LO4 Name and describe the alternative approaches companies use to enter global markets Explain the distinction... Quota World Trade Organization (WTO) 6 5 LO1 MAKING RESPONSIBLE DECISIONS Global Ethics and Global Economics— The Case of Protectionism 6 6 FIGURE 6- 1 Protectionism hinders world trade when... Foreign Corrupt Practices Act (1977) 6 16 FIGURE 6- B Cultural appreciation 6 17 LO2 A GLOBAL ENVIRONMENTAL SCAN CULTURAL DIVERSITY Cultural Symbols • #13; #4 6 18 A GLOBAL ENVIRONMENTAL SCAN LO2