Global Marketing
Strategies
Chapter 12 Global Marketing Strategies
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
12-1
Globalization



Grant Thornton study: 56% of CEOs at
medium-sized companies see globalization
as an opportunity
Since 1948 the value of world merchandise
exports has risen from $58 billion to $12.5
trillion
Emerging market economies are growing
faster than mature markets

China, India, Russia, Mexico, Brazil
Chapter 12 Global Marketing Strategies
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Why “Go Global?”
Offset sales declines in the domestic
market
 Increase sales and profits
 Extend products’ life cycles
 Lower manufacturing costs
 Lower the cost of products

Chapter 12 Global Marketing Strategies
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Why “Go Global?”
Improve competitive position
 Raise quality levels
 Become more customer-oriented
 Increase chances of success

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Questions to Consider
Before Going Global
1.
2.
3.
Is there a profitable market in which our
company has the potential to be
successful over the long run? (see Table
12.1)
Do we have and are we willing to commit
adequate resources of time, people, and
capital to a global campaign?
Are domestic pressures forcing our
company to consider global opportunities?
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Questions to Consider
Before Going Global
4.
5.
6.
Do we understand the cultural differences,
history, economics, values, opportunities,
and risks of conducting business in the
country we are considering?
Is there a viable exit strategy for our
company if conditions change or the new
venture does not succeed?
Can we afford not to go global?
Chapter 12 Global Marketing Strategies
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Nine Strategies for Going Global
Creating a Web site
Importing and
outsourcing
Relying on trade
intermediaries
Establishing
international
locations
Creating joint
ventures
Exporting
Counter-trading
and bartering
Chapter 12 Global Marketing Strategies
Foreign
licensing
International
franchising
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12-7
Strategies For "Going
Global"

Creating a Web site
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12-8
Internet Users Worldwide
90
80
70
60
East
West
North
50
40
30
20
10
0
Chapter 12 Global Marketing Strategies
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
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12-9
Internet Penetration Rate by World Region
90
80
70
60
East
West
North
50
40
30
20
10
0
Chapter 12 Global Marketing Strategies
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
12-10
Strategies for "Going
Global"

Creating a Web site

Relying on trade intermediaries
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12-11
Trade Intermediaries






Export Management Companies (EMCs)
Export Trading Companies (ETCs)
Manufacturer’s Export Agents (MEAs)
Export merchants
Resident buying offices
Foreign distributors
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12-12
Strategies for "Going
Global"



Creating a Web site
Relying on trade intermediaries
Joint ventures
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Joint Ventures


Domestic joint venture – two or more U.S.
companies form an alliance for the purpose
of exporting their goods and services
abroad
Foreign joint venture – a domestic firm
forms an alliance with a company in the
target nation


Most important ingredient: Choosing the right
partner
Another key to success: Establishing common
objectives
Chapter 12 Global Marketing Strategies
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12-14
Strategies for "Going
Global"





Creating a Web site
Relying on trade intermediaries
Joint ventures
Foreign licensing
International franchising
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12-15
Steps to International
Franchising Success
1.
2.
3.
4.
Identify the country or countries that are
best suited to the business concept
Generate leads for potential franchisee
Select quality candidates
Structure the franchise deal



Direct franchising
Area development
Master franchising
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Strategies for "Going
Global"







Creating a Web site
Relying on trade intermediaries
Joint ventures
Foreign licensing
International franchising
Counter-trading and bartering
Exporting
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Exporting
Small companies account for 90.7% of
all companies involved in exporting,
but…
 They generate just 21% of U.S. export
sales
 More than 250,000 U.S. companies now
export; twice as many are capable of
exporting but are not doing so

Chapter 12 Global Marketing Strategies
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12-18
Small Business Exporting Survey, 2010
90
80
70
60
East
West
North
50
40
30
20
10
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Source: NSBA/SBEA Small Business Exporting Survey, 2010.
Chapter 12 Global Marketing Strategies
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
12-19
Number of Countries to Which Small Businesses Export
90
80
70
60
East
West
North
50
40
30
20
10
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Source: Elizabeth Clark, Small and Medium-Sized Exporting Companies: A Statistical
Handbook, International Trade Administration, Office of Trade and Industry
Information (Washington, DC: 2005), p. 19.
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Steps to Successful
Exporting
1. Recognize that even the tiniest companies
and least experienced entrepreneurs have
the potential to export
2. Analyze your product or service
3. Analyze your commitment
4. Research markets and pick your target
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Steps to Successful
Exporting
(Continued)
5. Develop a distribution strategy
6. Find your customer


7.
U.S. Department of Commerce
International Trade Administration
Find financing for export sales

SBA, EX-IM Bank, OPIC, and others
8. Ship your goods
9. Collect your money
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How a Letter of Credit Works
Seller
Buyer
Foreign buyer agrees to buy products;
seller agrees to ship goods if buyer
arranges a letter of credit.
Seller’s Bank
$
Seller ships goods to buyer
according to letter of credit’s
terms and submits shipping
documents to bank issuing
letter of credit.
Buyer's Bank
Letter
of Credit
$
Buyer requests that his bank grant a
letter of credit, which assures exporter
payment if she presents documents
proving goods were actually shipped.
Bank makes out letter of credit to
seller
and sends it to seller’s bank (called the
confirming bank).
Chapter 12 Global Marketing Strategies
$
Buyer’s bank makes payment
to seller’s (confirming) bank.
Confirming bank then pays
seller amount specified in
letter of credit.
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
12-23
Strategies for "Going
Global"









Creating a Web site
Relying on trade intermediaries
Joint ventures
Foreign licensing
International franchising
Counter-trading and bartering
Exporting
Establishing international locations
Importing and outsourcing
Chapter 12 Global Marketing Strategies
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
12-24
Importing and Outsourcing





Make sure that importing or outsourcing
is right for your business
Establish a cost target for your product
Do your research before you leave home
Be sensitive to cultural differences
Do your groundwork
Chapter 12 Global Marketing Strategies
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12-25
Importing and Outsourcing




Protect your company’s intellectual
property
Select a manufacturer
Provide an exact model of the product
you want manufactured
Stay in constant contact with the
manufacturer and try to build a long-term
relationship
Chapter 12 Global Marketing Strategies
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Barriers to International
Trade
Domestic Barriers:
Attitude - "My company is too small
to export"
 Lack of information about how to
get started
 Lack of export financing

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Barriers to International
Trade
International Barriers:



Tariffs - Taxes a government
imposes on goods and services
imported into that country
Quotas - Limits on the amount of a
product imported into a country
Embargoes - Total bans on imports
of certain products
Chapter 12 Global Marketing Strategies
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Barriers to International
Trade
International Barriers:




Dumping - selling large quantities of a product
in a foreign country below cost to gain market
share
Political barriers - rules, regulations and risks
Business barriers - business practices and laws
Cultural barriers - differing languages,
philosophies, traditions, and accepted business
practices
Chapter 12 Global Marketing Strategies
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International Trade
Agreements

World Trade Organization (WTO)


North American Free Trade Agreement
(NAFTA)


153 member countries that account for
more than 97% of all world trade
Created a single free trade zone with the
U.S., Canada, and Mexico
Central America Free Trade Agreement
(CAFTA)
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Guidelines for Success in
International Markets




Make yourself at home in all three of the
world's key markets - North America, Europe,
and Asia
Appeal to the similarities within the various
regions in which you operate but recognize
the differences in their particular cultures
Be willing to commit the necessary resources
to make your global efforts successful
Develop new products for the world market
Chapter 12 Global Marketing Strategies
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Guidelines for Success in
International Markets



Use the many resources available to
research potential markets and to determine
the ideal target for your products
Familiarize yourself with foreign customs
and languages
Learn to understand your customers from
the perspective of their culture, not your
own
Chapter 12 Global Marketing Strategies
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Guidelines for Success in
International Markets
"Glocalize" - Make global decisions about
products, markets, and management,
but allow local employees to make
tactical decisions about packaging,
advertising, and service
 Make positive and preferably visible
contributions to the local community

Chapter 12 Global Marketing Strategies
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Guidelines for Success in
International Markets
Train employees to think globally,
send them on international trips, and
equip them with state-of-the-art
communication technology
 Hire local managers to staff foreign
offices and branches

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Guidelines for Success in
International Markets
Do whatever seems best wherever it
seems best, even if people at home
lose jobs or responsibilities
 Consider using partners and joint
ventures to break into foreign markets
you cannot penetrate on your own

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reproduced, stored in a retrieval system, or transmitted,
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photocopying, recording, or otherwise, without the prior
written permission of the publisher. Printed in the
United States of America.
Copyright ©2012 Pearson Education,
Inc. Publishing as Prentice Hall
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Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
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