Global Marketing Notes

Global Marketing Overview

  • Definition: Global marketing is marketing that targets consumers in different countries. It is essential for modern businesses.
  • Importance: Recognizing international marketing opportunities and devising strategies to effectively compete with foreign companies.

Global Marketing Learning Outcomes

  • Importance of Global Marketing: Learn about its significance in the modern economy (15-1).
  • Impact of Multinational Companies: Understand how they influence the global economy (15-2).
  • External Environment for Global Marketers: Familiarize with external factors affecting global marketing (15-3).
  • Market Entry: Explore various strategies for entering global markets (15-4).
  • Global Marketing Mix: Identify key components of an effective global marketing mix (15-5).
  • Internet's Role: Discover how the Internet is transforming global marketing (15-6).

Rewards and Challenges of Global Marketing

  • Rewards:
    • Access to larger markets and increased sales potential.
    • Recognition of threats from foreign competitors (i.e., retailers like Zara, H&M).
  • Challenges:
    • External issues such as the COVID-19 pandemic and geopolitical instability pose risks.

Importance of Global Marketing to Canada

  • Economic Shift: Canada's GDP share has decreased, indicating reliance on global markets (32.1% in 2018 to 30.7% in 2021).
  • Trade Position: As of 2023, Canada is the 12th largest exporter and 11th largest importer globally.

Top Import Markets for Canada (2022)

  • Major Partners:
    • United States: 36%
    • China: 7.5%
    • Mexico: 5.2%
    • Other notable countries: Germany (5.1%), Japan (4%), South Korea (2.8%), Vietnam (2.7%).

Who Engages in Global Marketing?

  • Historically dominated by large multinationals, but technology now allows small and medium enterprises to enter this space.
  • Small and medium-sized businesses make up 95% of Canadian firms but only account for 40% of exports.

Outsourcing vs. Inshoring

  • Outsourcing: Leads to job losses as Canadian jobs are transferred abroad for cost savings.
  • Inshoring: Involves bringing jobs back to Canada. Preference for Canadian-made products is high (50% of consumers).

Benefits of Globalization

  • Developing Countries: Economic opportunities and access to foreign investments and technologies.
  • Developed Countries: Enhanced competition, higher productivity, and improved living standards.

Multinational Companies (MNCs)

  • MNCs operate in multiple countries and can leverage foreign subsidiaries.
  • Their presence can foster economic development but can also be controversial in lower-income countries.

Global Marketing Standardization

  • Consumers increasingly desire uniform products. However, some variations based on local preferences are necessary.
  • Example: Coca-Cola has products customized for different markets, with only a few standardized formulas.

External Environment for Global Marketers

  • Cultural Factors: Language barriers can lead to marketing mishaps (e.g., improper translations).
    • Example: A mistranslation of Schweppes Tonic Water in Italy.
  • Economic Factors: Gross National Income (GNI) is a measure of a country's wealth influencing purchasing power.
  • Global Economy: Understanding global dynamics is crucial for forecasting and planning.
  • Political Considerations: Regulatory environments can significantly impact business operations.

Legal Considerations in Global Marketing

  • Tariffs, Quotas, Boycotts, and Market Grouping:
    • Tariffs are taxes on imports; quotas limit quantities; boycotts exclude certain products.
  • Trade Agreements: Such as those by the WTO, CUSMA, and various EU agreements that facilitate international trade.

Demographic Trends

  • Key factors influencing consumer behavior include wealth distribution and age demographics. Urbanization and age gaps shape market demands.

Natural Resources and Global Marketing

  • Scarcity of resources can create dependencies among countries, influencing trade and economic relations.

Individual Firm Strategies

  • Companies pursue global expansion for reasons like profit maximization and leveraging exclusive market information.

Global Marketing Entry Methods

  • Various methods include:
    • Exporting: Low risk/low return strategy.
    • Joint Ventures and Direct Investments: Higher risk and potential rewards.

The Global Marketing Mix

  • Key components:
    • Target Market: Understanding cultural and regional differences.
    • Product Decisions: Includes product adaptation for local markets.
    • Pricing Strategies: Consideration of costs, customer willingness to pay, and external economic factors.
    • Distribution: Variations based on local shopping behaviors.

Pricing Considerations

  • Understanding exchange rates, tariffs, and market conditions is crucial.
    • Countertrade is an emerging concept where payments are made in goods or services.

The Impact of the Internet

  • The Internet simplifies global outreach for businesses but must navigate cultural norms and regulatory frameworks.