Chapter Two - Think Globally and Act Ethically
World Trade
: The flows of goods and services among different countries - the value of all the exports and imports of the world's nations
Market Conditions to Consider
: Domestic market demand : Competitive advantage in foreign markets : Market potential abroad
Going Global (or not)?
: Consider pros and cons of going global Which markets? : What market-entry strategy? : What is the best marketing mix strategies in new market?
International Organisations
: The General Agreement on Tariffs and Trade (GATT): established by the UN : WTO replaced GATT in 1995 : World Bank : International Monetary Fund
Borders and Roadblocks
: Protectionism is a government policy which seeks to provide domestic firms an advantage over foreign companies by implementing trade barriers : Import quotas 0
. Red tape (bureaucratic procedures)
Economic Communities
Countries band together to form an alliance
: Such economic communities coordinate trade policies and ease restrictions on trade across the member borders . EU (European Union) : NAFTA (North American Free Trade Agreement) o ASEAN (Association of Southeast Asian Nations)
Elements of the Marketing Environment PIC
Economic Environment
: Indications of Economic Health o GDP (within its borders) - GNP (whether in or out of country borders) Consumer Price Index (good indicator of inflation) . Producer Price Index . Consumer Confidence Survey Employment Statistics - New Housing construction . Retail trade sales - Manufacturing & Trade Inventories & Sales o S&P 500 Stock Index : Demographic Characteristics - Birth rates - Size of different age groups : Economic Infrastructure o Quality of a country's distribution, financial, and communications systems : Internet Coverage - Percent of population online Competitive Environment - Macro: monopoly, oligopoly, monopolistic competition, perfect competition - Micro: alternative products available, competition is at 3 levels (discretionary income, product choices, brands) : Political & Legal Environment - Political issues: political actions of a government may constrain business : Economic sanctions : nationalisation : expropriation - Regulatory issues: refers to business-related local, state, national, and global laws & regulations and their implementation - Product requirements : Local content rules : Fair competition - Consumer protection : Socio-Cultural Environment: . demographics - Values norms and customs - Symbols and superstitions Language - Ethnocentricity: the tendency to prefer products or people of one'w own culture over others
Market Entry Strategies Form casual to significant (level of commitment & risk)
: Domestic Strategy
Exporting strategy: direct export, export merchants Contractual Agreements: licensing, franchising, subcontracting Strategic Alliances: w/o equity, w/ equity, joint ventures Direct Investment: building, buying
Standardisation vs. Localisation
: Standardisation: suggests that greater efficiencies and economies of scale are generated when all marketing is the same in each country Localisation: customer satisfaction will be highest when the marketing mix is tailored to local needs and wants
How Global Should a Global Marketing Strategy Be?
: Market entry strategies : Product decisions - Straight Extension: Sell the same product in the new market - Product Adaptation: Modify the prod