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Global Marketing

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...

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Globalization

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refers to the process by which goods, services, capital, people, information, and ideas flow across national borders.

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Assessing Global Markets

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...

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Components of a Country Market Assessment

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Economic Analysis using metrics: General economic environment, market size and population growth, real income. Infrastructure and technology: transportation, channels, communication, commerce. Government actions: tariff, quota, exchange control, trade agreement. Sociocultural analysis: power distance, uncertainty avoidance, masculinity, time orientation, individualism.

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Market Assessment

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they are better able to make informed decisions about a potential country market.

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What do firms assess?

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Infrastructure, technological capabilities, and communication.

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Evaluating the general economic environment

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In general, healthy economies provide better opportunities for global marketing expansions, and there are several ways a firm can use metrics to measure the relative health of a particular country's economy. Each way offers a slightly different view, and some may be more useful for some products and services than for others.

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Trade deficit

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means that the country imports more goods than exports.

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Trade surplus

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higher level of exports than imports, signals a greater opportunity to export products to more markets.

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Gross domestic product (GDP)

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the most widely used of the metrics, is defined as the market value of the goods and services produced by a country in a year.

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Gross national income (GNI)

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consists of GDP pulls the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy).

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Purchasing power parity (PPP)

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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, if expressed in the same currency. BIG MAC INDEX

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China has moved more to market-oriented eco

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ayy lmao

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Evaluating market size and population growth rate

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Today, less developed nations by and large are experiencing rapid population growth, while many developed countries are experiencing either zero or negative population growth. The countries with the highest purchasing power today may become less attractive in the future for many prodcuts and services because of stagnated growth. And the BRIC countries are likely to be the source of most market growth.

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Evaluating real income

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firms can make adjustments to an existing product or change the price to meet the unique needs of a particular country market. Such changes are common for low-priced consumer goods.

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"Bottom of the pyramid"

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in settings in which consumers earn very low wages.

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Infrastructure

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is defined as the basic facilities, services, and installations needed for a community or society to function, such as transportation and communication systems, water and power lines, and public institutions such as schools, post offices, and prisons.

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Four key elements of a country's infrastructure:

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transportation, distribution channels, communications, and commerce.

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Analyzing Governmental Actions

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can significantly influence firms' ability to sell goods and services because they often result in laws or other regulations that either promote the growth of the global market or close off the country and inhibit growth.

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Tariff (duty)

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is a tax levied on a good imported into a country. Government actions: Tariff, quota (limit number of products imported), trade agreement, exchange control. Tariffs artificially raise prices and therefore lower demand, and quotas reduce the availability of imported merchandise.

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Quota

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designates a minimum or maximum quantity of a product that may be brought into a country during a specified time period.

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Exchange Control

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refers to the regulation of a country's currency exchange rate.

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Exchange Rate

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the measure of how much one's currency is worth in relation to another.

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Trade agreements

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which a particular country is a signatory or the trading bloc to which it belongs. (NAFTA, EU, CAFTA, Mercosur, ASEAN) Two types: Trade Union, Trade Monetary

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Examples of currency exchange agencies.

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Federal Reserve and Central Bank.

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Trading Bloc

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is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to trade.

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Analyzing Sociocultural Factors

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Culture, or the shared meanings, belief, morals, values, and customs of a group of people, exists on two levels: visible artifacts (behavior, dress, symbols, physical settings, ceremonies) and underlying values (though processes, beliefs, and assumptions).

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Power distance

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willingness to accept social inequality as natural. respect those in authority positions

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Uncertainty Avoidance

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to extent to which the society relies on orderliness, consistency, structure, and formalized procedures to address situations that arise in daily life.

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Individualism

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perceived obligation to and dependence on groups.

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Masculinity

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the extent to which dominant values are male oriented. A lower masculinity ranking indicates that men and women and treated equally in all aspects of society; a higher masculinity ranking suggests that men dominate the positions of power.

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Time orientation

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short-versus long term orientation. A country that tends to have a long term orientation values long term commitments and is willing to accept a longer time horizon for, say, the success of a new product introduction.

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Indulgence

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the extent to which society allows for the gratification of fun and enjoyment needs or else suppress and regulates such pursuits.

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Exam question:

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Cultural Dimension, match low and high

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BRIC economies

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Brazil, Russia, India, China.

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Choosing A Global Entry Strategy

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... How must risk are you willing to take on and how much control do you want? A firm can choose from many approaches when it decides to enter a new market, which vary according to the level of risk the firm is willing to take. Many firms actually follow a progression in which they begin with less risky strategies to enter their first foreign markets and move to increasingly risky strategies as they gain confidence in their abilities and more control over their operations. Firms face a less risky chance when entering a foreign market for the first time. Less risky to more risky over time

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Exporting

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means producing goods in one country and selling them in another.

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Franchising

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is a contractual agreement between a firm, the franchisor, and other firm or individual, the franchise. LEAST AMOUNT OF CONTROL

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Strategic alliances

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refer to collaborative relationships between independent firms, though the partnering firms DO NOT create an equity partnership; that is, they do not invest in one another.

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Joint venture

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is formed when a firm entering a market pools its resources with those of a local firm. (more control, more risk relate to strategic alliance.) problems with this entry approach can arise when the partners disagree or if the government places restrictions on the firm's ability to move its profits out of the foreign country and back to its home country.

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Direct investment

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requires a firm to maintain 100 percent ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries. this entry strategy requires the highest level of investment and exposes the firm to significant risks, including the loss of its operating and/or initial investments. MOST RISKY

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Choosing A Global Marketing Strategy

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...

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Target market: segmentation, targeting, and positioning

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Global STP is more complicated than domestic STP for several reasons. Difficulty understanding the cultural nuances of other countries. subcultures within each country also must be considered. Consumers often view products and their role as consumers differently in different countries. Global marketing mixes are more complicated than domestic marketing mixes. global marketing strategy invludes two components determining the target markets to pursue and developing a marketing mix that will sustain a competititve advantage over time.

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Three potential global product strategies:

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1. sell the same product or service similar to that sold in the home country market and the host country. 2. sell a product or service similar to that sold in the home country but include minor adaptations 3. sell totally new products or services. The strategy a firm chooses depends on the NEEDS of the target market. The level of economic development, as well as differences in product and technical standards, helps determine the need for and level of product adaptation.

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Reverse innovation

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companies initially develop products for niche or underdeveloped markets and then expand them into their original or home markets.

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Glocalization

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some firms standardize their products globally but use different promotional campaigns to sell them. Example: Pringles changes the flavors of their chips in different countries to adapt to the populations taste.

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Global Distribution Strategies

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The number of firms with which the seller needs to deal to get its merchandise to the consumer determines the complexity of a channel. In most developing countires, manufacturers must go thorugh many types of distribution channels to get their products to end users, who often lack adequate trasnportation to shop at central shopping areas or large malls.

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Global Communication Strategies (IMC)

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The major challenge in developing a global communication strategy is identifying the elements that need to be adapted to be effective in the global marketplace. Differences in language, customs, and culture also complicate marketers' ability to communicate with customers in various countries. Language can be particularly vexing for advertisers.

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What factors have helped Brazil's economy to grow?

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a growing middle class and impositions of social programs.

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Russia economy

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multiple up and downturns they want us goods

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