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Having a global vision means…
- Recognizing and reacting to international marketing opportunities
- Using effective global marketing strategies
- Being aware of threats from foreign competitors
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Benefits of Globalization
- Expands economic freedom
- Spurs competition
- Raises productivity and living standards
- Offers access to foreign capital, global export markets, and advanced technology
- Promotes higher labor and environmental standards
- Acts as a check on government power
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Stages of Global Business Development
- Companies operate in one country and sell into others
- Set up foreign subsidiaries to handle sales
- Operate an entire line of business in another country
- Virtual operation
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Global Marketing Standardization
Production of uniform products that can be sold the same way all over the world.
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External Environment Facing Global Marketers
- Culture
- Natural Resources
- Economic and Technological Development
- Political Structure
- Demographic Makeup
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Culture
The common set of values shared by its citizens that determine what is socially acceptable.
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Economic and Technological Development in a Developed Country
Complex, sophisticated industries
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Economic and Technological Development in a Less Developed Country
Basic industries
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Tariff
A tax levied on goods entering a country
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Quota
Limit on the amount of a product entering a country
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Boycott
Exclusion of products from a country
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Exchange Control
Foreign exchange must be sold to a control agency
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Market Grouping
Common trade alliance
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Trade Agreement
An agreement to stimulate international trade
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Doha Round
- Began in 2001
- Highly contentious from the beginning
- Failed in summer, 2008
- First multilateral free trade act failure since WWI
- Cost of Failure: $100 billion annually
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Agreements and Organizations
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Marketing Considerations:
- Population density
- Urban or rural
- Personal income
- Age
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Why “Go Global”?
- Earn additional profits
- Leverage a unique product or technological advantage
- Possess exclusive market information
- Saturated domestic markets
- Excess capacity
- Utilize “economies of scale
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Export
Sell domestically produced products to buyers in other countries
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Licensing
Legal process allowing use of manufacturing/patents /knowledge
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Contract Manufacturing
Private-label manufacturing by a foreign country
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Joint Venture
Domestic firm buys/joins a foreign company to create new entity
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Direct Investment
Active ownership of a foreign company/manufacturing facility
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Buyer for Export
Assumes all ownership risks and sells globally for its own account.
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Export Broker
Plays the traditional broker’s role by bringing buyer and seller together.
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Export Agent
Acts like a manufacturer’s agent for the exporter in the foreign market.
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Exchange Rates
The price of one’s currency in terms of another country’s currency.
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Dumping
- Trying to increase an overseas market share
- Temporarily distributing products to overseas markets to offset slack demand at home
- Lowering unit costs by exploiting large-scale production
- Attempting to maintain stable prices during periods of exchange rate fluctuations
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Countertrade
A form of trade in which all or part of the payment for goods or services is in the form of other goods or services.
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The Impact of the Internet
- Opening an e-commerce site puts a company in the international marketplace
- Internet Economy remains hindered by brick and mortar rules, regulations, and habits
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