The Global Marketplace

Chapter Fifteen
 Agenda

 What’s Happening?
 Softwood Lumber Dispute
 Chapter 15: International Marketing
Concepts
 Video: McDonald’s in India
 Next Class

2 07/06/08 Copyright 2004, Pearson Education Cana

 The Global Environment

 Global firm: a firm, that, by operating in more than one country,

gains R&D, production, marketing, and financial advantages that are
not available to purely domestic competitors
 The global company sees the world as one market
 Unstable governments and currencies, increased regulation, and
uncertain economic conditions increase the risk in doing business
globally

3 07/06/08 Copyright 2004, Pearson Education Cana

 Major Decisions in Global Marketing

Looking at the Deciding Deciding

global marketing whether to go which markets
environment international to enter

Deciding on the Deciding on the Deciding how

global marketing global marketing to enter
organization program the market

4 07/06/08
Figure 15-1
Copyright 2004, Pearson Education Cana
 Indicators of Market Potential

 Demographic characteristics
– Size/density of population, rate of growth, degree of urbanization, age
structure and composition
 Geographic characteristics
– Physical size, topography, climate conditions
 Economic factors
– GNP per capita, income distribution, growth, investment
 Technological factors
– Skills, production and consumption technology, education
 Sociocultural factors
– Values, lifestyles, ethnic groups, linguistic fragmentation
 Political factors
– Regulations, government stability
 National goals and plans
– Industry priorities, infrastructure investment plans

5 07/06/08
Table 15-1
Copyright 2004, Pearson Education Cana
 Market Entry Strategies

Exporting Joint venturing Direct investment

Licensing
Indirect Assembly facilities
Contract
Direct manufacturing Manufacturing
facilities
Management
contracting

Joint ownership

Amount of commitment, risk, control, and profit potential

6 07/06/08
Figure 15-2
Copyright 2004, Pearson Education Cana
 Int’l Product & Promotion Strategies

Product

Don’t change Adapt Develop new

product product product
Promotion

Don’t change Straight Product

promotion extension adaptation
Product
invention
Adapt Communication Dual
promotion adaptation adaptation

7 07/06/08
Figure 15-3
Copyright 2004, Pearson Education Cana
 Int’l Marketing Mistakes

 Gerber, the name of the famous baby food maker,

is also the French word for vomiting.
 IKEA sells this workbench as the FARTFULL.
• Pepsi is being sued in a Hyderabad, India city court
in a public interest litigation for glorifying child labor
in a television ad. In the ad, the Indian cricket team
is in a celebratory huddle when a young boy serves
them Pepsi.
 More International Advertising Mistakes

8 07/06/08 Copyright 2004, Pearson Education Cana

 Distribution Channels

Seller’s
headquarters Final
Channels Channels
organization user
Seller for
between within
or
international nations nations
buyer
marketing

Whole-Channel Concept for International Marketing

9 07/06/08
Figure 15-4
Copyright 2004, Pearson Education Cana
 The Global Marketing Organization

 A company’s international marketing organization may evolve

over time as experience and opportunities arise, and their
objectives change
 Stages in development:
– Organize an export department to sell in foreign markets
– Create an international division to expand export
operations and have better accountability
– Becoming a global organization to take advantage of
opportunities in emerging markets
– Top 1200 Global Companies

10 07/06/08 Copyright 2004, Pearson Education Cana

 Video: McDonald’s in India

 What entry strategy is McDonald’s using?

 Does McDonald’s use a standardized or
adapted marketing mix?
 Give an example of a Product Adaptation
that McDonald’s uses.
 Give an example of a Product Invention that
McDonald’s uses.
 Big Mac Index

11 07/06/08 Copyright 2004, Pearson Education Cana

 Next Class

 Presentations

12 07/06/08 Copyright 2004, Pearson Education Cana