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Chapter 8
Global Marketing

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 Learning Objectives

Learning Objective 8.1 Describe the components of a

country market assessment.

Learning Objective 8.2 Understand the marketing

opportunities in BRIC countries.

Learning Objective 8.3 Identify the various market entry

strategies.

Learning Objective 8.4 Highlight the similarities and

differences between a domestic marketing strategy
and a global marketing strategy.

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 Globalization

The processes by
which goods,
services, capital,
people, information,
and ideas flow
across national
borders.

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 Assessing Global Markets
EXHIBIT 8.1 Components of a Country Market Assessment

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 Evaluating the General Economic Environment
Using Economic Metrics

Trade deficit or Gross domestic

surplus product (GDP)

Purchasing
Gross national
power parity
income (GNI)
(PPP)

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 Evaluating Market Size
and Population Growth Rate

Population growth dispersal: strong demand

in BRIC (Brazil, Russia, India, China) nations

Distribution of the population within a

particular region: rural vs. urban

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 Evaluating Real Income

Firms can make

adjustments to an existing
product or change the price
to meet the unique needs of
a particular country market.

For the Chinese market,

Haier sells washing
machines that can wash
both clothes and vegetables.

© McGraw Hill LLC Shutterstock/Africa Studio 9

 Analyzing Infrastructure and
Technological Capabilities
Marketers are especially concerned with four
key elements of a country’s infrastructure:

• Transportation.

• Distribution Channels.

• Communications.

• Commerce.

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 Analyzing Governmental Actions

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 Tariffs and Quotas

Tariffs Quotas

• Tax on Imported • Minimum or

good. maximum limit.

• Artificially raises • Reduces availability

prices. of imported goods.

• Lowers demand.

Both benefit domestically made products because

they reduce foreign competition.

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 Exchange Control
Regulation of a country’s currency
exchange rate: the measure of how
much one currency is worth in relation to
another.

In recent years, the value of the U.S.

dollar has changed significantly
compared with other important world
currencies.

Prices are nearly always lower in the

country of origin because there are no
customs or import duties to pay, and
international transportation expenses are
less than domestic ones.

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 Trade Agreement

A trade agreement is an intergovernmental

agreement designed to manage and promote trade
activities for a specific region, and a trading bloc
consists of those countries that have signed a
particular trade agreement.

There have been recent challenges to long-

established regional trade agreements (RTAs),

• Yet RTAs account for more than half of

international trade.

© McGraw Hill LLC Source: Information about EU members is from http://europa.eu/about-eu/countries/./index_en.htm 14

 Analyzing Sociocultural Factors

Understanding another culture is crucial to the

success of a global marketing initiative.

Exists on two levels:

• Visible artifacts.
• Underlying values.

Participants in a parade during the 23rd International

Mariachi & Charros festival in Guadalajara Mexico

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 Ethical & Societal Dilemma 8.2: Dolce &
Gabbana Faces Public Scrutiny in China

Dolce & Gabbana learned a tough lesson about the

importance of embracing and promoting a local
audience’s culture in a positive way.

An international fashion crisis ensued when designer Dolce & Gabbana released videos
satirizing the Chinese dialect and dining customs. Alibaba and JD.com, China’s two largest e-
commerce sites, retaliated by removing Dolce & Gabbana products from their online stores.

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 Geert Hofstede’s Cultural Dimensions

Individualism Masculinity

Uncertainty Time
avoidance orientation

Power
distance Culture Indulgence

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 Exhibit 8.3: Country Clusters
Power Distance and Individualism

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Source: Geert Hofstede, Gert Jan Hofstede, and Michael Minkov, Cultures and Organizations, Software of the Mind, Third Revised Edition, McGraw-Hill 2010, ISBN: 0-07-
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166418-1. © Geert Hofstede B.V. quoted with permission.
 The Appeal of the BRIC Countries

Great potential for growth in the global community:

• Brazil.

• Russia.

• India.

• China.

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 Exhibit 8.4: Global Entry Strategies

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 Exporting

Exporting means producing

goods in one country and
selling them in another.

This entry strategy requires

the least financial risk but
also allows for only a limited
return to the exporting firm.

Rolex exports its watches to countries all over the

world from its factory in Switzerland.

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 Franchising
A franchising contract allows the
franchisee to operate a business
—a retail product or service firm
or a B2B provider—using the
name and business format
developed and supported by the
franchisor.

Many of the best-known retailers

in the United States are also
successful global franchisors,
including McDonald’s, Pizza Hut,
Starbucks, Domino’s Pizza, KFC,
and Holiday Inn.

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 Strategic Alliance

Collaborative
relationships between
independent firms.

The partnering firms do

not create an equity
partnership.

© McGraw Hill LLC Xinhua/Alamy Stock Photo 24

 Joint Venture

A joint venture is formed

when a firm entering a market
pools its resources with those
of a local firm.

Ownership, control, and

profits are shared.

The local partner offers the

foreign entrant greater
understanding of the market
and access to resources such
as vendors and real estate.

© McGraw Hill LLC Atstock Productions/Shutterstock 25

 Direct Investment
Direct investment requires a
firm to maintain 100 percent
ownership of its plants,
operation facilities, and offices
in a foreign country, often
through the formation of wholly
owned subsidiaries.

Requires the highest level of

investment and exposes the
firm to significant risks,
including the loss of its China-based Lenovo purchased U.S.-based IBM’s PC division
and Motorola’s handset business unit and has parallel
operating and/or initial headquarters in both Beijing and North Carolina.

investments.

© McGraw Hill LLC Source: Lenovo 26

 Choosing a Global Marketing Strategy:
Segmentation, Targeting, and Positioning
(STP)

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 The Global Marketing Mix:
Global Product or Service Strategies

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 The Global Marketing Mix:
Global Pricing Strategies

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 The Global Marketing Mix:
Global Distribution Strategies
Global distribution
networks form complex
value chains.

In developing countries
consumers may shop at
small, family-owned
stores.

Suppliers must be
creative in delivering to
these outlets.

© McGraw Hill LLC Virojt Changyencham/Moment/Getty Images 31

 The Global Marketing Mix:
Global Communication Strategies
Literacy levels vary by country.

Differences in language and customs affect

communication.

Cultural and religious differences also matter.

© McGraw Hill LLC Shutterstock / Pyty 32

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