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Chapter15TheGlobalMarketplace15-1Chapter15TheGlobalMarkeRoadMap:PreviewingtheConceptsDiscusshowtheinternationaltradesystem,economic,political-legal,andculturalenvironmentsaffectacompany’sinternationalmarketingdecisions.Describethreekeyapproachestoenteringinternationalmarkets.Explainhowcompaniesadapttheirmarketingmixesforinternationalmarkets.Identifythethreemajorformsofinternationalmarketingorganization.2RoadMap:PreviewingtheConcepGlobalMarketingintotheTwenty-FirstCenturyTheworldisshrinkingrapidlywiththeadventoffastercommunication,transportation,andfinancialflows.InternationaltradeisboomingandnowaccountsforaquarteroftheUnitedStates’GDP.Between1996and2006,U.S.exportsareexpectedtoincrease51%.GlobalcompetitionisintensifyingandfewU.S.industriesarenowsafefromforeigncompetition.3GlobalMarketingintotheTwenGlobalMarketingintotheTwenty-FirstCenturyTocompete,manyU.S.companiesarecontinuouslyimprovingtheirproducts,expandingintoforeignmarkets,andbecomingglobalfirms.Globalfirmsfaceseveralmajorproblems:Highdebt,inflation,andunemploymenthaveresultedinhighlyunstablegovernments¤cies,Governmentsplacingmoreregulationsonforeignfirms,Protectionisttariffsandtradebarriers,Corruption.4GlobalMarketingintotheTwenMcDonald’sinBeijingManyU.S.companieshavelongbeensuccessful,includingMcDonald’s,atinternationalmarketing./5McDonald’sinBeijingManyU.S.MajorInternationalMarketingDecisions(Fig.15-1)6MajorInternationalMarketingLookingattheGlobalMarketingEnvironmentTheInternationalTradeSystemi.e.Tariff,Quota,Embargo,ExchangeControl,andNontariffTradeBarriersTheWorldTradeOrganizationandGATTTreatydesignedtopromoteworldtradebyreducingtariffsandotherinternationaltradebarriersRegionalFreeTradeZonesGroupofnationsorganizedtoworktowardcommongoalsintheregulationofinternationaltrade7LookingattheGlobalMarketinWhenexportinggoodstoaforeigncountry,amarketermaybefacedwithtraderestrictions.Discusstheeffectsthatatariffmighthaveonanexporter’smarketingmix.8WhenexportinggoodstoaforeTypesofIndustrialStructureSubsistenceEconomiesRawMaterialExportingEconomiesIndustrializingEconomiesIndustrialEconomiesEconomicEnvironmentIndustrialStructureIncomeDistribution9TypesofSubsistenceEconomiesAttitudesTowardInternationalBuyingGovernmentBureaucracyPoliticalStabilityMonetaryRegulationsAtLeastFourPolitical-LegalFactorsShouldbeConsideredinDecidingWhethertodoBusinessinaGivenCountry:Political-LegalEnvironment10AttitudesTowardGovernmentMoneCulturalEnvironmentHowCustomersThinkAboutandUseProductsCulturalTraditions,Preferences,andBehaviorsBusinessNormsandBehaviorSellersMustExaminetheFollowingBeforePlanningaMarketingProgramWithinaGivenCountry.11CulturalEnvironmentHowCustomDecidingWhethertoGo

InternationalReasonscompaniesmightconsiderinternationalexpansion:Globalcompetitorsattackingthedomesticmarket,Foreignmarketsmightofferhigherprofitopportunities,Domesticmarketsmightbeshrinking,Needanenlargedcustomerbasetoachieveeconomiesofscale,Reducedependencyonanyonemarket,Customersmightbeexpandingabroad.Mostcompaniesdonotactuntilsomesituationoreventthruststhemintotheglobalarena.12DecidingWhethertoGo

InternDecidingWhichMarketstoEnterDefineOrganization’sMarketingObjectivesandPoliciesWhatVolumeofForeignSalesisDesired?HowManyCountriesShouldtheFirmGoInto?WhatTypesofCountriesShouldbeEntered?RankbyMarketSize&Growth,CostofDoingBusiness,CompetitiveAdvantage,&RiskLevel.13DecidingWhichMarketstoEnteDecidingHowtoEntertheMarket(Fig.15-2)14DecidingHowtoEntertheMarkPairwiththestudentonyourlefttodiscussthefollowingsituation.Onceacompanyhasdecidedtosellinaforeigncountry,itmustdeterminethebestmodeofentry.AssumethatyouwerethemarketingmanagerforMountainDewanddeviseaplanandpickamodeofentryformarketingyourproductinChina.15PairwiththestudentonyourChangesinProduct,Advertising,DistributionChannels,&PriceStandardizedMarketingMixSellingLargelytheSameProductsandUsingthesameMarketingApproachesWorldwide.i.eCoca-ColaAdaptedMarketingMixAdjuststheMarketingMixElementstoEachInternationalTargetMarket.i.e.JapaneseBarbieDecidingontheGlobalMarketingProgram16ChangesinProduct,AdvertisinFiveGlobalProductandPromotionStrategies(Fig.15-3)17FiveGlobalProductandPromotInternationalPricingCompaniesfacemanyproblemsinsettingtheirinternationalprices.Possibilitiesinsettingpricesinclude:Chargeauniformpriceallaroundtheworld.Chargewhatconsumersineachcountrycouldpay.Useastandardmarkupofitscostseverywhere.Internationalpricestendtobehigherthandomesticpricesbecauseofpriceescalation.Companiesmaybecomeguiltyofdumping–whenaforeignsubsidiarychargeslessthanitscostsorlessthanitchargesinitshomemarket.18InternationalPricingCompaniesWhole-ChannelConceptforInternationalMarketing(Fig.15-4)19Whole-ChannelConceptforInte1.OrganizeanExportDepartment2.CreateanInternationalDivision3.BecomeaGlobalOrganizationDegreeofInvolvementinInternationalMarketingActivitiesDecidingontheGlobalMarketingOrganization201.OrganizeanExportDepartmRestStop:ReviewingtheConceptsDiscusshowtheinternationaltradesystem,economic,political-legal,andculturalenvironmentsaffectacompany’sinternationalmarketingdecisions.Describethreekeyapproachestoenteringinternationalmarkets.Explainhowcompaniesadapttheirmarketingmixesforinternationalmarkets.Identifythethreemajorformsofinternationalmarketingorganization.21RestStop:ReviewingtheConceChapter15TheGlobalMarketplace15-22Chapter15TheGlobalMarkeRoadMap:PreviewingtheConceptsDiscusshowtheinternationaltradesystem,economic,political-legal,andculturalenvironmentsaffectacompany’sinternationalmarketingdecisions.Describethreekeyapproachestoenteringinternationalmarkets.Explainhowcompaniesadapttheirmarketingmixesforinternationalmarkets.Identifythethreemajorformsofinternationalmarketingorganization.23RoadMap:PreviewingtheConcepGlobalMarketingintotheTwenty-FirstCenturyTheworldisshrinkingrapidlywiththeadventoffastercommunication,transportation,andfinancialflows.InternationaltradeisboomingandnowaccountsforaquarteroftheUnitedStates’GDP.Between1996and2006,U.S.exportsareexpectedtoincrease51%.GlobalcompetitionisintensifyingandfewU.S.industriesarenowsafefromforeigncompetition.24GlobalMarketingintotheTwenGlobalMarketingintotheTwenty-FirstCenturyTocompete,manyU.S.companiesarecontinuouslyimprovingtheirproducts,expandingintoforeignmarkets,andbecomingglobalfirms.Globalfirmsfaceseveralmajorproblems:Highdebt,inflation,andunemploymenthaveresultedinhighlyunstablegovernments¤cies,Governmentsplacingmoreregulationsonforeignfirms,Protectionisttariffsandtradebarriers,Corruption.25GlobalMarketingintotheTwenMcDonald’sinBeijingManyU.S.companieshavelongbeensuccessful,includingMcDonald’s,atinternationalmarketing./26McDonald’sinBeijingManyU.S.MajorInternationalMarketingDecisions(Fig.15-1)27MajorInternationalMarketingLookingattheGlobalMarketingEnvironmentTheInternationalTradeSystemi.e.Tariff,Quota,Embargo,ExchangeControl,andNontariffTradeBarriersTheWorldTradeOrganizationandGATTTreatydesignedtopromoteworldtradebyreducingtariffsandotherinternationaltradebarriersRegionalFreeTradeZonesGroupofnationsorganizedtoworktowardcommongoalsintheregulationofinternationaltrade28LookingattheGlobalMarketinWhenexportinggoodstoaforeigncountry,amarketermaybefacedwithtraderestrictions.Discusstheeffectsthatatariffmighthaveonanexporter’smarketingmix.29WhenexportinggoodstoaforeTypesofIndustrialStructureSubsistenceEconomiesRawMaterialExportingEconomiesIndustrializingEconomiesIndustrialEconomiesEconomicEnvironmentIndustrialStructureIncomeDistribution30TypesofSubsistenceEconomiesAttitudesTowardInternationalBuyingGovernmentBureaucracyPoliticalStabilityMonetaryRegulationsAtLeastFourPolitical-LegalFactorsShouldbeConsideredinDecidingWhethertodoBusinessinaGivenCountry:Political-LegalEnvironment31AttitudesTowardGovernmentMoneCulturalEnvironmentHowCustomersThinkAboutandUseProductsCulturalTraditions,Preferences,andBehaviorsBusinessNormsandBehaviorSellersMustExaminetheFollowingBeforePlanningaMarketingProgramWithinaGivenCountry.32CulturalEnvironmentHowCustomDecidingWhethertoGo

InternationalReasonscompaniesmightconsiderinternationalexpansion:Globalcompetitorsattackingthedomesticmarket,Foreignmarketsmightofferhigherprofitopportunities,Domesticmarketsmightbeshrinking,Needanenlargedcustomerbasetoachieveeconomiesofscale,Reducedependencyonanyonemarket,Customersmightbeexpandingabroad.Mostcompaniesdonotactuntilsomesituationoreventthruststhemintotheglobalarena.33DecidingWhethertoGo

InternDecidingWhichMarketstoEnterDefineOrganization’sMarketingObjectivesandPoliciesWhatVolumeofForeignSalesisDesired?HowManyCountriesShouldtheFirmGoInto?WhatTypesofCountriesShouldbeEntered?RankbyMarketSize&Growth,CostofDoingBusiness,CompetitiveAdvantage,&RiskLevel.34DecidingWhichMarketstoEnteDecidingHowtoEntertheMarket(Fig.15-2)35DecidingHowtoEntertheMarkPairwiththestudentonyourlefttodiscussthefollowingsituation.Onceacompanyhasdecidedtosellinaforeigncountry,itmustdeterminethebestmodeofentry.AssumethatyouwerethemarketingmanagerforMountainDewanddeviseaplanandpickamodeofentryformarketingyourproductinChina.36PairwiththestudentonyourChangesinProduct,Advertising,DistributionChannels,&PriceStandardizedMarketingMixSellingLargelytheSameProductsandUsingthesameMarketingApproachesWorldwide.i.eCoca-ColaAdaptedMarketingMixAdjuststheMarketingMixElementstoEachInternationalTargetMarket.i.e.JapaneseBarbieDecidingontheGlobalMarketingProgram37ChangesinProduct,AdvertisinFiveGlobalProductandPromotionStrategies(Fig.15-3)38FiveGlobalProductandPromotInternationalPricingCompaniesfacemanyproblemsinsettingtheirinternat

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