Global Marketing

Dr Vishnu P Mishra
 Standarization versus Adaptation

Arabic
Read right to left

Chinese
“delicious/happiness”

1-8
The Faces of Coca-Cola Around the World
 The Importance of
Going Global:Current Scenario
• For U.S. companies, 75% of total world market for
goods and services is outside the country
– Coca-Cola earns 75% of operating income and 2/3 of profit
outside of North America
• For Japanese companies, 85% of world market is
outside the country
• 94% of market potential is outside of Germany for its
companies

1-9
The Fortune Global 500

1-10
 Consumer/Industrial Markets
Product/Service Market Size (Billions)
Cigarettes $295
Luxury Goods 230
Cosmetics 200
Personal Computers 175
Bottled Water 100
Container Shipping 150
Construction Equip. 90
Crop Seeds 30
CRM Services 6
1-11
Transportation and Communication
Improvements
• Time and cost barriers associated with distance
have fallen tremendously over the past 100 years.
• The jet airplane revolutionized communication by
making it possible for people to travel around the
world in less than 48 hours.
• The newest communication technologies, such as
e-mail, video teleconferencing, and Wi-Fi, means
that managers, executives, and customers can link
up electronically from virtually any part of the
globe without traveling at all.
1-12
World economic trends
– 2008 global crisis
– Growing middle class in China, India, Brazil, etc.
– Rapid growth in China pre-2008
– Movement to free markets worldwide
 GLOBALMARKETING
ENVIRONMENT
As in domestic markets, marketers must pay attention to local environmental
factors.

INTERNATIONAL ECONOMIC ENVIRONMENT

• Important factors: nation’s size, per-capita income, stage of economic

development, and infrastructure.
• Exchange rate Price of one nation’s currency in terms of another nation’s
currency.

INTERNATIONAL SOCIAL-CULTURAL ENVIRONMENT

• Marketers must understand a nation’s culture and language.
INTERNATIONAL TECHNOLOGICAL ENVIRONMENT
• Internet technologies connect large and small firms to world
markets.
INTERNATIONAL POLITICAL-LEGAL ENVIRONMENT
• Marketers must be aware of political conditions and legal
environment in each country in which they compete.
• International law regulating international trade.
• Legal requirements of other nations in which a company is
doing business.
• STRATEGIES FOR ENTERING FOREIGN MARKETS
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 firm’s merchandise or to use its
trademark, patent, or process in a specified geographic area.
Subcontracting—production of goods and services assigned
to local companies.
Can prevent misunderstanding of local culture and regulations
and provide protection from import duties.
INTERNATIONAL DIRECT INVESTMENT(FDI)
• U.S. has world’s largest direct investment inflows and
outflows.
• Direct investment in U.S. is led by United Kingdom,
Japan, the Netherlands, and Germany.
• Generally high involvement, high risk.
• Can acquire an existing firm in target country, set up
an independent division, or form joint ventures to share
risks, costs, and management with foreign partners.