Module 6 - Global Marketing

global marketing

A marketing strategy that consciously addresses customers, markets, and competition throughout the world in an effort to sell more products in more markets.

reasons to go global

-grow revenue + sales
-bc you can
-larger markets
-increased profits
-necessity
-demand
-innovation

-foreign incentives
-talented labor pools
-ability to learn new processes
-investment in foreign infrastructure to support growth

higher competition means _________ profit

less

demographic impact on global markets

-some countries don't have a normal census
-new markets/regional differences

economic impact on global markets

-currency fluctuation
-exchance rate
-income distribution

currency fluctuation

how the value of one country's currents changes in relation to the value of another country's

echange rate

price of once country's currency in terms if anothers

-appreciation + depreciation

income distribution

how wealth is allocated across the population of a country

-most relatale picture of purchasing power
-bigger middle class = more purchasing power

sociocultural impact on global markets

-culteral fit
-consumer ethnocentricism

cultural fit

how well marketing efforts are designed to meet the needs of a specific market

consumer ethnocentrism

A belief by residents of a country that it is inappropriate or immoral to purchase foreign-made goods and services.

-rarely rooted in fact
-rising in developed countries

political/legal impact on global markets

-currencry manipulation
-trade agreements
-monetary unions
-organizations

currency manipulation

occurs when the government of a country artificially controls the value of its currency relative to the currencies of other countries

-can lead to an advantage, especially in exports

competitive impact on global markets

adapt to cater to new markets

technological impact on global markets

-helps small businesses
-connects ppl around the world

market entry strategies

different operational ways that firms use to enter the international marketplace, including exporting, licensing, franchising, joint venture, or direct ownership

market entry strategies in order of least to most risky

-exporting
-licensing
-franchising
-joint venture
-direct ownership

exporting

selling domestically produced products to buyers in other countries

-more and more firms are exporting

licensing

the legal process whereby a licensor allows another firm (licensee) to use its manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge

-low cast
-licensee knows about local markets

risks of licensing

-licensee may become competition
-sharing knowledge + technology
-licensee may misuse trademark

franchising

A contractual arrangement in which the franchisor provides a franchisee the right to use its name and marketing and operational support in exchange for a fee and, typically, a share of the profits.

advantages + disadvantages of franchising

-franchise handles capital + human resources cost
-franchisor provides knowledge

-giving name to faraway place where direct oversight is hard

joint venture

domestic firm partners w/ foreign firm to create a new entity which allows the domestic firm to enter into foreign market

-domestic firm teaches foreign firm
-works best when strategic goals align, competitive goals diverge, and they can learn from one another w/o infringing on proprietary skills
-can have culture clashes, mistrust, conflict, and disagreements

direct ownership

domestic firm actively manages a foreign company or overseas facilities

-riskiets
-good strategic decision when firm sees sales potential, little risk, and similarities in culture
-requires more resources + committment, hard to manage from afar
-more control over everything

global product strategy

1 product in all markets

multi-domestic product strategy

few products in large market segments

adaptive product strategy

new products in each markets

consumer willingness to pay

a consumer's ability and attitude toward the price of a product when making a product decision

-must factor in what consumer can afford + think is a fair price

gray market

branded products sold through legal but unauthorized distribution channels

-often occurs when price of a product is significantly higher in one country than in another

tariffs

Taxes on imports or exports between countries

-marketers typically prefer targetting international markets w/ low tariffs

product dumping

when a company sells its exports to another country at a lower price than it sells the same product in its domestic market

-domestic firms either lose companies to foreign companies, or lower their prices

place + global markets

-international transport is more expensive and complicated
-some countries transportation is different so product location is important

promotion + global markets

-brand awareness, alnguage, social media
-language and imagery may be mistranslated

US-Mexico-Canada Agreement (USMCA)

eliminate barriers to trade + investment, maintiain existing zero-tariff treatment, grow North American Economy

Dominican Republic-Central America Free Trade Agreement (CAFTA-DR)

focuses on eliminating tariffs, reducing non-tariff barriers, and facilitated investment among member states

European Union (EU)

single european market formed to reduce barriers to the free trade of goods, services, and finances among member countries

-second largest economy in the world

World Trade Organization (WTO)

regulates trade among participating countries and helps importers and exporters conduct their business

-provides framework for negotiating + formalizing trade agreements + solving disputes
-164 members, HQ in Geneva Switzerland

International Monetary Fund (IMF)

works to foster international monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world

-helps w/ debt (lender of last resort)
-HQ in Washington D.C.

Bribery + Global Business

some countries think bribery and gifts are normal, so we may have to change our policies to do business.