Intro to Global Marketing

							Understanding the Global
 Marketing Environment

         Class 4
“Every American company is
 international, at least to the
    extent that its business
performance is conditioned in
   part by events that occur
            abroad”
Trends in Global Business
      Internationalization of U.S. Markets
     Internationalization of U.S. Business
        Growth of Regional Trade Areas
            EU, NAFTA, AFTA, APEC
Move toward free market system by countries in
     Latin America, Asia, Eastern Europe
       Large Emerging Markets such as
 Argentina, China, South Korea, Poland, India
  Evolving global middle income households
     GATT and World Trade Organization
                  The TRIAD

                                                 1-3
Globalization of Business and
           Markets
   Until recently, competition for U.S.
    markets was only among U.S.
    businesses with the same relative cost
    of money, labor and product

 U.S market now includes competitors
 from all over the world


                                             1-4
     Why internationalization?

   Saturation of U.S. markets




                                 1-5
           Foreign Acquisitions of
              U.S. Companies
 U.S. Company                                               Foreign Owner
 Keebler (Cookies and other foods)                             Britain
 J. Walter Thompson (Advertising)                              Britain
 Spiegal (Catalog retailing)                                   Germany
 Mack Trucks (Automotive)                                      France
 Giant Food Stores (Supermarkets)                              Netherlands
 Pillsbury, Burger King, Pearle Vision                         Britain
 CBS Records (Music and Entertainment)                         Japan
 Carnation (Coffee-Mate, Friskies pet food)                    Switzerland
 Chesebrough-Pond’s (Vaseline)                                 Netherlands

SOURCE: Adapted from “The 100 Largest Foreign Investments
in the U.S.,” Forbes, July 18, 1994, pp. 266-270.
                                                                             1-6
     Why internationalization?

   Saturation of U.S. markets

   Higher ROI in foreign markets




                                    1-7
     Why internationalization?

   Saturation of U.S. markets

   Higher ROI in foreign markets

   Establish early position in world
    markets


                                        1-8
Invented Here, Made Elsewhere
 U.S. Invented Technology
                                                                        9 0%
      Phonographs         1%
                                                                        9 0%
          Color TVs            1 0%
                                             4 0%                            1970
Audiotape Recorders       0%                                                 NOW
                               1 0%
Videotape Recorders       1%
                                                                          9 9%
      Machine Tools
                                         3 5%
        Telephones                                                        9 9%
                                      2 5%
    Semiconductors                                                 8 9%
                                                         6 4%
                                                                        9 8%
         Computers
                                                                7 4%
                      0         20      40          60      80         100
                                                                                 1-9
       Definition of International
               Marketing


   The performance of business activities
    that direct the flow of a company’s
    goods and services to consumers or
    users in more than nation for profit.



                                             1-10
What’s the difference between international
  marketing and domestic marketing?



   The environment in which marketing
    strategies have to be implemented




                                         1-11
The International Marketing Task
                                Foreign environment
                                  (uncontrollable)
       Political/legal                  1                  Economic
          forces                                            forces
                            Domestic environment
                              (uncontrollable)
                                                                2
           7                                           Competitive
               Political/
                 legal             (controllable)       structure Competitive
Cultural                                                            Forces
                forces
forces                                                                          Environmental
                                Price        Product
                                                                                uncontrollables
                                                           7          3         country market A
                                            Channels of
                         Promotion                                                 Environmental
                                            distribution
      6                                                                            uncontrollables
                                                                                   country
                                                                                   market B
 Geography                                                       Level of
                                Economic climate               Technology          Environmental
     and
Infrastructure                                                                     uncontrollables
                                                           4
                            5                                                      country
                                    Structure of                                   market C
                                    distribution
                                                                                                   1-12