Professional Documents
Culture Documents
CHAPTER
Global Marketing
Chapter Objectives
1 Describe the importance of global marketing from the perspectives of the individual firm and the nation. 2 Identify the major components of the environment for global marketing. 3 Identify the basic functions of GATT, WTO, NAFTA, FTAA, CAFTA-DR, and the European Union. 4 Identify the alternative strategies for entering foreign markets. 6 Describe the alternative marketing mix strategies used in global marketing.
Differentiate between a Explain the attractiveness 5 global marketing strategy 7 of the United States as a and a multidomestic target market for foreign marketing strategy. marketers.
Global trade accounts for 27 percent of the U.S. gross domestic product. Exporting Marketing domestically produced goods and services in foreign countries. Importing Purchasing foreign goods and services.
TRADE BARRIERS
Tariff Tax levied against imported goods. Two types: revenue tariffs and protective tariffs. Administrative barrierssuch as quotas, restrictive standards for imports, and export subsidiesand import license controls Import quotas Trade restrictions that limit the number of units of certain goods that can enter a country for resale. Embargo, a complete ban on the import of a product. Other barriers include subsidies, limits on foreign ownership, extensive regulatory barriers, and exchange control.
DUMPING
Practice of selling a product in a foreign market at a price lower than it commands in the producers domestic market.
GOING GLOBAL
Globalization affects everyone in the world in some way. Marketers may go global is their domestic market is saturated or they have strong domestic share. Example: Example: Adidas purchase of Reebok to better compete with Nike worldwide and its sponsorship of the 2008 Olympics in Beijing.
Export-trading companiesbuy products from domestic producers and resell them abroad.
Export-management companiesprovide expertise in reaching foreign buyers, handle necessary paperwork, and ensure goods meet local legal requirements. Offset agreementsmall firm teams with international company and serves as subcontractor on a large foreign project.
CONTRACTUAL AGREEMENTS
Provide flexibility and may be good ways to take services abroad. Franchise Contractual arrangement in which a wholesaler or retailer agrees to meet the operating requirements of a manufacturer or other franchiser. Foreign licensing Agreement that grants foreign marketers the right to distribute a firms merchandise or to use its trademark, patent, or process in a specified geographic area. Subcontractingproduction of goods and services assigned to local companies. Can prevent misunderstanding of local culture and regulations and provide protection from import duties.
PRICING STRATEGY
Competitive, economic, political, and legal factors can limit pricing decisions.
Must adapt to local markets: Hindustan Lever offers penny packets of shampoo to customers in India who cannot afford an entire bottle.
COUNTERTRADE
Countertrade Form of exporting whereby goods and services are bartered rather than sold for cash.
Example: PepsiCo exchanged $3 billion in cola for vodka, a cargo ship, and tankers from the former Soviet Union.