Transcript 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
Phonographs
9 0%
1%
9 0%
Color TVs
1 0%
1970
4 0%
Audiotape Recorders
0%
NOW
1 0%
Videotape Recorders
1%
9 9%
Machine Tools
3 5%
Telephones
9 9%
2 5%
8 9%
Semiconductors
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)
1
Political/legal
forces
7
Cultural
forces
Domestic environment
(uncontrollable)
Political/
legal
forces
(controllable)
Price
Promotion
6
Geography
and
Infrastructure
Economic
forces
2
Competitive
structure Competitive
Forces
Product
Channels of
distribution
7
Environmental
uncontrollables
country
market B
Level of
Technology
Economic climate
5
4
Structure of
distribution
3
Environmental
uncontrollables
country market A
Environmental
uncontrollables
country
market C
1-12