Principles of Marketing UML Fall 2014: Chapter 8: Global Marketing

Objectives:

Describe the components of a country market assessment,
Understand the marketing opportunities in BRIC countries,
Identify the various market entry strategies,
Highlight the similarities and differences between a domestic marketing strategy and a global marketing strategy.

Globalization: Refers to the process by which goods, services, capital, people, information, and ideas flow across national borders.

I. Assessing Global Markets

Trade Deficit: Results when a country imports more than it exports
Trade Surplus: Results when a country exports more than it imports
Gross Domestic Product: The market value of the goods and services produced by a country in a year; the most widely used standardized measure of output.
Gross National Income: Consists of GDP plus the income earned from investments abroad ( minus any payments made to non residence who contribute to the domestic economy.)
Purchasing Power Parity: A theory that states that if the exchange rates of two countries are in equilibrium, a product purchased in one will cost the same in the other, expressed in the same currency.

Distribution of population is important. Are the areas with great population located in rural areas or urban areas. This defines what opportunities may be available in BRIC countries.

Using the real income of an area or region, firms can redesign or repackage products to fit within the demographic population's real income so they can afford it.

Infrastructure: The basic facilities, services, and installations needed for a community or society to function, such as transportation and communications systems, water and power lines, and public institutions like schools, post offices, and prisons.
Four Key Areas of Concern:

Tariffs: (Duty) A tax levied on a good imported into a country.
Quota: Designates the maximum quantity of a product that may be brought into a country during a specified time.
Exchange Control: Refers to the regulation of a country's currency exchange rate.

Exchange Rate: The measure of how much one currency is worth in relation to another.

Trade Agreements: Intergovernmental agreements designed to manage and promote trade activities for specific regions.

Trade Bloc: Consists of those countries who have signed a particular trade agreement.

Power Distance: Willingness to accept social inequality as natural.
Uncertainty Avoidance: The extent to which a country relies on orderliness, consistency, structure, and formalized procedures to address situations that arise in daily life.
Individualism: Perceived obligation to and dependence on groups.
Masculinity: The extent to which dominant values are male oriented.
Time Orientation: Short versus long term orientation. Does this country make longer term or shorter term relationships?

II. Choosing a Global Entry Strategy

III. Choosing a Global Marketing Strategy

Sell the same product or service in both the home country market and the host country.
Sell a product or service similar to that sold in the home country but include minor adaptations.
Sell totally new products or services.

Glocalization: The process of firms standardizing their products globally, but using different promotional campaigns to sell them.
Reverse Innovation: When companies initially develop products for niche or underdeveloped markets, and then expand them into their original or home markets.

Principles of Marketing UML Fall 2014