Marketing Final – Chapter 15: The Global Market Place – Flashcards
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Global firm
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a firm that by operating in more than one country, gains R&D production marketing and financial advantages in its costs and reputation that are not available to purely domestic competitors
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Economic community
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a group of nations organised to work toward common goals in the regulation of international trade: - subsistence econonomies - raw material exporting economies - emerging (BRICS) - industrial
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exporting
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entering foreign markets by selling goods produced in the company's home country, often with little modification
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joint venturing
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entering foreign markets by joining with foreign companies to produce or market a product or service
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liscensing
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entering foreign markets through developing an agreement with a license in the foreign market
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contract manufacturing
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a joint venture in which a company contracts with manufacturers in a foreign market to produce its products or provide its service
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management contracting
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a joint venture in which the domestic firm supplies the management know how to a foreign company that supplies the capital: the domestic firm exports management services rather than products
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joint ownership
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a cooperative venture in which a company creates a local business with investors in a foreign market who share ownerhsip and control
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direct investment
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entering a foreign market by developing foreign based assembly or manufacturing facilities
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standardised global marketing
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an international marketing strategy that basically uses the same marketing strategy and mix in all of the company's international markets
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adapted global marketing
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an international Marketing approach that adjusts the marketing strategy and mix elements to each international target market, which creates more costs but hopefully produces a larger market share and return
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straight production extension
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marketing a product in a foreign market without making any changes to the product
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product adaptation
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adapting a product to meet local conditions or wants in foreign markets
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product invention
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creating new products or services for foreign markets
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communication adaptation
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a global communication strategy of fully adapting advertising messages to local markets
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whole channel view
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designing international channels that take into account the entire global supply chain and marketing channel, forging an effective global value delivery network
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global firm
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- Operates in more than one country - Gains research and development, production, marketing, and financial advantages in its costs and reputation Problems faced >Highly unstable governments and currencies >Restrictive government policies and regulations >High trade barriers and corruption
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Decisions to go global
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Influential factors >Attack on a company's home market by global competitors >Expanding customer base in international markets >one more
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International Trade Systems
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Trade barriers >Tariffs or duties >Quotas and exchange controls >Nontariff trade barriers - Biases against the bids -Restrictive product standards - Excessive host-country regulations or enforcement
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WTO
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- Established by the General Agreement on Tariffs and Trade (GATT) in 1995 - Promotes world trade by reducing tariffs and other international trade barriers - Negotiates to reassess trade barriers and establish new rules for international trade - Imposes international trade sanctions and mediates global trade disputes
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Regional Free Trade Zones
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Economic community: Group of nations organized to work toward common goals in the regulation of international trade >European Union (EU) >North American Free Trade Agreement (NAFTA) >Central American Free Trade Agreement (CAFTA-DR) >Union of South American Nations (UNASUR)
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Economic Environment
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Factors reflecting a country's market attractiveness: Industrial structure: - Subsistence economies - Raw material exporting economies - Emerging economies - Industrial economies Income distribution - Low-, medium-, and/or high-income households depending on the industrial structure of the nation
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Political-Legal Environment
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Considerations for a company to do business in a country: Country's attitude toward international buying Government bureaucracy Political stability Monetary regulations International trade involves: Cash transactions Barter
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Impact of Culture on Marketing Strategy
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Companies that understand cultural nuances can: - Avoid expensive and embarrassing mistakes - Take advantage of cross-cultural opportunities
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Deciding Which Markets to Enter
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A company should: >Define its international marketing objectives and policies >Decide what volume of foreign sales it wants >Choose in how many countries it wants to market >Decide on the types of countries to enter >Evaluate each market
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Indicators of Market Potential
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Demographic characteristics: education, population size and growth, population age composition Geographic characteristics: climate, country size, population density, transportation, market accesabilities Economic factors: GDP size and growth, income distribution, industrial infrastructure, natural resources, financial and HR Social cultural factors: lifestyle, beliefs, values, languages, cultural and social norms Political and legal factors: national priorities, political stability, government attitudes toward global trade, government beauraucracy, monetary and trade regulations
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Market Entry Strategies
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Exporeting: Indirect vs. Direct Joint Venturing: liscencing, contract manufacturing, joint ownership, management contracting Direct investment: assembly facilities, manufacturing facilities ---> amount of commitment risk, control and profit potential (more in direct investment less in exporting)
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Deciding on the global marketing program
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Standardized global marketing: Using the same marketing strategy and mix in all of the company's international markets Adapted global marketing: - Adjusting the marketing strategy and mix elements to each international target market >Creates more costs >Produces a larger market share and return
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Five Global Product and Communications Strategies
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- Straight extension (product don't change - communication don't change) - Communication adaptation (product don't change, communications adapt) - Product adaptation ( products adapt, communications don't change) - Dual adaptation (products adapt, adapt communications) - Product invention (Develop new product)
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- Straight extension
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product don't change communication don't change
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- Communication adaptation
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product don't change communications adapt
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- Product adaptation
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products adapt communications don't change
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- Dual adaptation
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products adapt adapt communications
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- Product invention
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Develop new product
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Global Price Considerations
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set a uniform price globally set according to the customers use a standard markup of the company's costs everywhere
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Whole channel concept for international marketing
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international seller channels between nations channels within nations final user or buyer --> global value delivery network
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Deciding on the global marketing organisation
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Methods of managing international marketing activities: - Organizing an export department - Creating international divisions >>Geographical organizations >>World product groups >>International subsidiaries Becoming a global organization
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Major international marketing decisions
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1. looking at the global marketing environment 2. deciding whether to go global 3. deciding which markets to enter 4. deciding how to enter the market 5. deciding on the global marketing program 6. deciding on the global marketing organisation
