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1、.TAPPING INTO GLOBAL MARKETS21C H A P T E R LEARNING OBJECTIVESAfter reading this chapter, students should:q Know what factors a company should review before deciding to go abroadq Know how companies can evaluate and select specific foreign markets to enterq Know what are the major ways of entering

2、a foreign marketq Know to what extent the company must adapt its products and marketing program to each foreign countryq Know how the company should manage and organize its international activitiesCHAPTER SUMMARY Despite the many challenges in the international arena (shifting borders, unstable gove

3、rnments, foreign-exchange problems, corruption, and technological pirating), companies selling in global industries need to internationalize their operations. Companies cannot simply stay domestic to maintain their markets. In deciding to go abroad, a company needs to define its international market

4、ing objectives and policies. The company must determine whether to market in a few countries or many countries. It must decide which countries to consider. In general, the candidate countries should be rated on three criteria: market attractiveness, risk, and competitive advantage. Developing countr

5、ies offer a unique set of opportunities and risks. Once a company decides on a particular county, it must determine the best mode of entry. Its broad choices are indirect exporting, direct exporting, licensing, joint ventures, and direct investment. Each succeeding strategy involves more commitment,

6、 risk, control, and profit potential. In deciding on the marketing program, a company must decide how much to adapt its marketing program product, communications, distribution, and price to local conditions. At the product level, firms can pursue a strategy of straight expansion, product adaptation,

7、 or product invention. At the communication level, firms may choose communication adaptation or dual adaptation. At the price level, firms may encounter price escalation and gray markets. At the distribution level, firms need to take a whole channel view of the challenge of distributing products to

8、the final users. In creating all elements of the marketing program, firms must be aware of the cultural, social, political, technological, environmental, and legal limitations they face in other countries. Country-of-origin perceptions can affect consumers and businesses alike. Managing those percep

9、tions in the most advantageous way possible is an important marketing priority. Depending on the level of international involvement, companies manage their international marketing activity in three ways: through export departments, international divisions, or a global organization.OPENING THOUGHT In

10、 todays multi-cultural world, students will have been exposed to products marketed across geographic or national boundaries, so the students ability to grasp this concept should be straightforward. What could present a challenge is the extent of marketing planning and detail needed by the firm in ma

11、king their marketing decisions nationally and internationally. The instructor is encouraged to open up the class discussions to students from other nations present in the class, and to ask these students to describe the shopping experiences in their homeland. Students with international business or

12、international marketing experiences should be especially encouraged to present to the class descriptions of what marketing is like away from the United States. TEACHING STRATEGY AND CLASS ORGANIZATIONPROJECTS1. If the project is to be exported to another country, then students submissions regarding

13、how the product is to be distributed should be included here, otherwise this begins the presentation phase of the project, and student groups should begin their presentations to the class. 2. The instructor is encouraged to challenge the students by assigning students to find their favorite products

14、 corporate offices. Examples may include Nestle, Nike, Suzuki, Nokia, Ben & Jerrys and others. Beyond just discovering examples of global or international firms, students should uncover via financial information, the origin of sales by country. Such an exercise will provoke interesting classroom

15、 discussions as the students begin to realize the global nature of business today. 3. Sonic PDA Marketing Plan Global marketing offers a way for companies to grow by expanding the customer base beyond the domestic market. However, the complexities of global marketing demand careful planning and impl

16、ementation. As Jane Melodys assistant, you are researching markets outside the United States for Sonics first PDA product. Review the recommendations you have made for Sonics marketing plan. Then answer these questions about how Sonic can approach global marketing:· Should Sonic use licensing,

17、joint ventures, direct investment, or exporting to enter the Canadian market? To enter other markets?· If Sonic wants to start marketing a PDA in other countries, which of the five international product strategies (straight extension, communication adaptation, product adaptation, dual adaptatio

18、n, product/forward invention), is most appropriate and why?· Identify one international market that seems most promising for Sonic. Why did you select this international market as most promising?Summarize your answers in a written marketing plan or enter the answers in the SWOT, Issue Analysis,

19、 Marketing Strategy, and Marketing Research sections of Marketing Plan Pro.ASSIGNMENTSSmall Group Assignments1. Research the brand Red Bull, as noted in the opening vignette of the chapter. What percentage of the firms sales is in the United States and in foreign countries? Why has Red Bull been suc

20、cessful in other countries around the world? Who are their competitors? Is this product capitalizing on a trend, fad, or fashion? 2. Major marketers are using the power of the Internet to engage in global e-commerce. Visit a foreign Web site for an American company and evaluate the similarities and

21、differences between the U.S. Web site and its foreign Web site. What differences/similarities strike you as significant? Could the differences be readily adapted to other foreign countries? Individual Assignments1. Finding free information about trade and exporting has never been easier. Web sites s

22、uch as , , , and , provide valuable information for marketers. Visit each site and compile a list of information that you, as a marketer, might find valuable in deciding how to market internationally. 2. Read Dana L. Alden, Jan-Benedict E. M. Stee

23、nkamp, and Rajeev Batras, “Brand Positioning Through Advertising in Asia, North America, and Europe: The Role of Global Consumer Culture,” Journal of Marketing, 63 (January), 1999, pp.7587 and write up what you found to be their concepts of global consumer culture positioning. What does the concept

24、of global consumer culture positioning mean to U.S. marketers? How can a through understanding of global consumers enhance marketing strategies? Think-Pair-Share1. Table 21.2 shows some famous “blunders” in international marketing. Students should research these examples (and find others) and provid

25、e insight into why they think such “blunders” were allowed to occur. This can lead to a classroom discussion onto the complexity facing many firms in international and multi-cultural marketing. 2. International companies must decide on how much to adapt their marketing strategy to local conditions.

26、Students should pick an international corporation and in researching the products sold by the firm overseas, see if there are some significant differences in brand characteristics for each country. For example, Pringles, Always, and Toyota, have made some changes in product features, packaging, chan

27、nels, pricing, in different global markets. This assignment is for the students to provide additional examples of products changed to suit the countrys consumers while at the same time, maintaining the international brand name. MARKETING TODAYCLASS DISCUSSION TOPICSThe Harvard case, entitled, Euro D

28、isney the First 100 Days, by Gary Loveman and others, (HBS # 693013) details the experiences of the Disney Corporation as it opened its newest theme park outside of Paris in 1992. After reading the case, in terms of global marketing, can you identify some of the significant errors made by Disney exe

29、cutives in the launching of Euro Disney? Should Disney have anticipated the cultural context of the market? Was Disneys contention that Disney is “Disney” and that changes from country to country would erode the “brand” a valid one? END-OF-CHAPTER SUPPORT MARKETING DEBATEhe World Coming Closer Toget

30、her?Many social commentators maintain that youth and teens are becoming more and more alike as time goes on. Others, while not disputing that fact, point out that the differences between cultures at even younger ages by far exceed the similarities. Take a position: People are becoming more and more

31、similar versus the differences between people of different cultures far outweigh their advantages. Pro: The world is becoming homogeneous. At least the “world” of consumers, that is. The growth of the Internet, the speed of communication, and travel has succeeded in exposing people to differing life

32、styles and preferences that they are finding appealing and desirable. Consumer preferences for products tend to become similar as the economic conditions of the target markets achieve certain levels. Economic affluence and political stability foster increases in consumer affluence and product attrac

33、tiveness. In marketing, we target “markets”defined as groups of people who share similar characteristics, wants, needs, and ability to pay. These “target markets” exist in the aggregate not as belonging to one country or another. There exist numerous examples of products first produced for a nationa

34、l market finding it fully adaptable to foreign sales and vice-versa because consumers in those “target markets” has similar characteristics, needs, and wants that the product meets. The youth and teen markets of the world share almost instant communication of ideas and products from around the world

35、 while at the same time, share similar learning and growing experiences, feelings, and concerns. The audience does not change, we are still human beings after all, and as such the message can connect to the audience or audiences around the world. The difference in marketing is neither the message no

36、r the messenger that influences these similarities, it is the economic situations facing the people involved. Con: Cultural differences, in language, environment, physical, economic, and geographical areas contain key differences that will never be overcome by marketing. Marketers should be very awa

37、re of these differences and excellent marketers will capitalize on these differences in their marketing messages. These differences especially apply to the second and third world markets. Countries are communities and people in their particular country will always insist on their individual identifi

38、cation and nationality. Nationalism is a strong motivator for product purchase and/or how a product is used. Some products extend national boundariesthis is a fact that no marketer can ignore. However, products that extend past national boundaries are just a small part of a persons total product con

39、sumption or usage on a daily basis. Niche marketing and national produced products will continue to exist at the local and national level. Some of these products are due to consumer eating, sleeping, cultural, and religious differences that will remain specific to that country or culture. MARKETING

40、DISCUSSIONThink of some of your favorite brands? Do you know where they come from? Where and how they are made or provided? Do you think it would affect your perceptions of quality or satisfaction? Student answers will differ depending upon their favorite brands.MARKETING SPOTLIGHTStarbucksDiscussio

41、n Questions:1)What have been the key success factors for Starbucks?a. Nichemanship in its strategic concept of a coffeehouse.b. Adherence to the ideals and concepts that first fostered success and the strength to avoid changing the concept to the individual country.c. Correctly identifying the count

42、ries to go into and developing a marketing strategy on how to enter the country (waterfall approach).d. Direct investment in the new countries “hub” strategy; purchasing Seattle Coffee Company.e. Using an adapted marketing mixchoosing what features of the U.S. marketing program to repeat and what fe

43、atures to change.f. Straight product expansion.2)Where is Starbucks vulnerable? a. Overexposure of their trademarked name and locations.b. Being the market leader or market innovator invites competition to challenge their dominance.c. An increase in un-American resentment by the consumers in other c

44、ountries. 3)What should Starbucks watch out for?a. Consumer shifts in usage of their productssomething else replacing the “café.”b. Over domination of the “host” country (predominant market share) thereby inciting nationalism fever by the host countries.4)What recommendations would you make to

45、senior marketing executives going forward?a. Do not rest on past successescontinue your strategic direction of your market niche and limit it to the “café.” b. Invest in your “host” countries by investing in local jobs and local supply of materials. 5)What should the company be sure to do with

46、their marketing? a. Use local marketing agencies to market your product.b. Use local marketing to develop communication programs for the individual countries. DETAILED CHAPTER OUTLINE With faster communication, transportation, and financial flows, the world is rapidly shirking. Products developed in

47、 one country are finding enthusiastic acceptance in others. Although the opportunities for companies to enter and compete in foreign markets are significant, the risks can also be high. Companies selling in global industries, however, really have no choice but to internationalize their operations. C

48、OMPETING ON A GLOBAL BASIS International trade in 2003 accounted for over one-quarter of U.S. GDP, up from 11 percent in 1970.A) Many companies have conducted international marketing for decades.B) Domestic companies who never thought about foreign competitors suddenly find them in their backyards.C

49、) The better way to compete is to continuously improve products at home and expand into foreign markets.D) A global industry is an industry in which the strategic positions of competitors in major geographic or national markets are fundamentally affected by their overall global positions.E) A global

50、 firm is a firm that operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors.F) Global firms plan, operate, and coordinate their activities on a worldwide bas

51、is G) A company doesnt need to be large to sell globally.H) Small and medium-sized firms can practice global nichemanship.I) For a company of any size to go global it must make a series of decisions. Figure 21.1 shows the major decisions in international marketing. Review Key Definitions here: globa

52、l industry and global firmDECIDING WHETHER TO GO ABROAD Most companies would prefer to remain domestic if their domestic market were large enough. Several factors are drawing more and more companies into the international arena:A) The company discovers that some foreign markets present higher profit

53、 opportunities than the domestic market. B) The company needs a larger customer base to achieve economies of scale. C) The company wants to reduce its dependence on any one market.D) Global firms offering better products or lower prices can attack the companys domestic market. The company may want t

54、o counterattack these competitors in their home markets.E) The companys customers are going abroad and require international servicing.F) Before making a decision to go abroad the company must weigh several risks:1) The company might not understand foreign customer preferences and fail to offer a co

55、mpetitively attractive product.2) The company might not understand the foreign countrys business culture or know how to deal effectively with foreign nationals.3) The company might underestimate foreign regulations and incur unexpected costs.4) The company might realize that it lacks managers with i

56、nternational experience.5) The foreign country might change its commercial laws, devalue its currency, or undergo a political revolution and expropriate foreign property.G)Because of the competing advantages and risks, companies often do not act until some event thrusts them into the international a

57、rena.H)Most countries lament that too few of their companies participate in international trade.I)Many countries sponsor aggressive export-promotion programs to get their companies to export.J)The internationalization process has four stages:1) No regular export activities.2) Export via independent

58、representatives (agents).3) Establishment of one or more sales subsidiaries.4) Establishment of production facilities aboard.K)The first task is to get companies to move from stage 1 to stage 2.1) This move is helped by studying how firms make their first export decisions (hire agents).2) A company then engages further agents to enter additional countries.3) Later it establishes an export department to manage its agent relationships.4) Still later, the company replaces its agents with its own sales subsidiaries in its larger

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