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The global marketplace
Transcript of The global marketplace
1.Discuss how the international trade system and the economic, political-legal and cultural environments affect a company´s international marketing decisions.
2.Describe three key approaches to entering international markets.
3.Explain how companies adapt their marketing mixes for international markets.
4.Identify the three major forms of international marketing organization.
Global Market today
A firm that, by operating in more than one country, gains R&D, production, marketing, and financial advantages in its cost and reputation that are not available to purely domestic competitors.
Products that appear to be american but not,are:
Baskin-Robbins Ice Cream, GE and RCA Televisions, Universal Studios, Motel 6, name just a few.
Michelin the Oh Sooo French tire manufacture now does 31% of its business in North America.
Jhonson & Jhonson with products such as BAND-AIDs Baby Shampoo does the 49% of its business abroad.
On the other hand Caterpillar belongs more to the wider world, with 61% of its sales comming from outside the United States.
The world is shrinking rapidly with the advent of faster communication, transportation, and financial flows.
Products developed in one country, Gucci purses, Sony electronics, Mc Donalds, Japanese sushi, German BMWs, have found enthusiastic acceptance in other countries.We would not be surprised to hear about a German businessman wearing an Italian suit meeting an English friend at a Japanese restaurant who later returns home to drink Russian vodka and watch American Idol on TV.
The world´s largest company, has annual revenues greater than the gross domestic product (GDP)of all but the world´s 25 largest-GDP countries.
If companies delay taking steps toward internationalizing , they risk of being shut out of growing markets in western and eastern Europe, China, and the Pacific Rim, Rusia, India and elsewhere.
Firms that stay at home to play it safe might not only lose their chances to enter to other markets but also risk losing their home markets
Although the need of companies to go abroad in greater today than in the past, so are the risks.
Companies that go global might face:
restrictive governments policies and regulations
high trade barriers
Deciding which markets to enter
Deciding how to enter the market
Deciding on the global marketing program
Deciding on the global marketing organization
Looking at the global marketing enviroment
Deciding whether to go global
Major International Marketing decisions
Looking at the Global Market
Before deciding whether to operate internationally, a company must understand the international marketing environment. That environment has changed a great deal in the past two decades, creating both NEW OPPORTUNITIES and NEW PROBLEMS
The international trade system
Companies must start by understanding the international trade system.
When selling to another country, a firm may face restrictions on trade between nations.
Government may change tariffs, taxes on certain imported products designed to raise revenue or to protect domestic firms.
The world trade organization
The General Agreement on Tariff and Trade (GATT)
Is a 61 years old treaty designed to promote world trade by reducing tariffs and other international trade barriers
A group of nations organized to work toward common goals in the regulation of international trade.
Regular free trade Zone
Certain countries have form FREE TRADE ZONES, or ECONOMIC COMMUNITIES. These are groups of nations organized to work toward common goals in the regulation of international trade.
One such community in the European Union, formed in 1957, the EU set out to create a single european market by reducing barriers to the free flow of products, services, finances, and labor among members countries and developing policies on trade with nonmember nations
The international marketer must study each country´s economy.
Two economic factors reflect the country´s attractiveness as a market:
The country´s industrial structure
The country´s income distribution
Nations differ greatly in their political-legal
environment.In considering whether to do business in a given country, a company should consider factors such as the country´s attitudes toward international buying, government bureaucracy, political stability, and monetary regulations.
Each country has its own folkways, norms, and taboos.
When designing global marketing strategies, companies must understand how culture affects consumer reactions in each of its world markets.
The impact of culture on marketing strategy
Nike inadvertently offended Chinese officials when it ran an advertising featuring LeBron James crushing a number of culturally revered Chinese figures in a Kung-Fu Themed Tv Spot.
Deciding whether to go global
Not all the company´s needs to venture into international markets to survive, most local business needs to market well only in local marketplace (operating domestically is easier and safer)
However, companies that operate in global industries, where their strategic positions in specific markets are affected strongly by their overall global positions, must compete on a regional or worldwide basis to succeed
Deciding which markets to enter
Before going abroad, the company should try to define its international marketing objectives and policies.
What volume of foreign sales it wants
how many countries it wants to market
Major International Marketing Decisions
Market Entry Strategies
The simplest way to foreign market is through EXPORTING
Joining with foreign companies to produce or market products or services .
Differs from Exporting in that the company joins with a host county partner to sell or market abroad. It differs from direct investment in that an association is formed with someone in the foreign country
4 types of joint venture
The company enters into an agreement with a license in the foreign market
The company contracts with manufactures in the foreign market to produce its product or provide its service
The domestic firm suplies management Know-How to a foreign company that supplies the capital
Consist in one company joining forces with foreign investors to create a local business in wich they share joint ownership and control
The biggest involvement in foreign market , the development of foreign based assembly or manufacturing facilities.