营销管理（亚洲版 第6版）英文课件 科特勒 Chapter 22 Tapping into Global Markets；Chapter 23 Marketing Organization

CreatingSuccessfulLong-TermGrowth2

TappingintoGlobalMarkets22LearningIssuesforChapterTwentyOneWhatfactorsshouldacompanyreviewbeforedecidingtogoabroad?Howcancompaniesevaluateandselectspecificforeignmarketstoenter?Whatarethedifferencesbetweenmarketinginadevelopingandadevelopedmarket?Whatarethemajorwaysofenteringaforeignmarket?Towhatextentmustthecompanyadaptitsproductsandmarketingprogramtoeachforeigncountry?Howdomarketersinfluencecountry-of-origineffects?3ChapterOutlineTheworldhasdramaticallyshrunkinrecentyears.Countriesareincreasinglymulticultural,andproductsandservicesdevelopedinonecountryarefindingenthusiasticacceptanceinothers.AnIndonesianbusinessmanmaywearanArmanisuittomeetaHongKongfriendataThairestaurant,wholaterdriveshomeinacarmadeinIndiatodrinkJapaneseteaandwatchanAmericansitcomonaKoreanTV.Emergingmarketsthatembracecapitalismandconsumerismareespeciallyattractivetargets.Theyarealsocreatingmarketingpowerhousesalltheirown.4ChapterOutlineAlthoughopportunitiestoenterandcompeteininternationalmarketsaresignificant,theriskscanalsobehigh.Companiessellinginglobalindustries,however,havenochoicebuttointernationalizetheiroperations.Inthischapter,wereviewthemajordecisionsinexpandingintoglobalmarkets.5CompetingonaGlobalBasisManycompanieshaveconductedinternationalmarketingfordecades—Nestlé,Shell,SonyandToshibaarefamiliartoconsumersworldwide.Butglobalcompetitionisintensifying.InChina’sfast-movingmobile-phonemarket,NokiafounditsmarketshareerodingasSamsung,Apple,andAsiancompetitorsmakeinroads.Competitionfromdeveloping-marketfirmsisalsoheatingup.6AnIndiancompanymakinginroadsintheinternationalscene.India’sTataGrouphasawiderangeofglobalbusinesses,includingonethatproducesthelow-pricedTataNanoorthe“People’sCar.”7Chinaanditshomegrownbrandsmakingwavesinternationally.Chinaalsohasitsshareofhomegrownbrandsbecominginternational.GalanzdominatestheChinesemarketformicrowaveovensandisthelargestoriginalequipmentmanufacturer(OEM)exporterintheworld.Lenovo,China’slargestinformationtechnologyenterprise,boughtIBM’spersonalcomputerdivisiontoentertheU.S.market.RefrigeratormakerHaierhasalsomadeinroadsintotheU.S.8GlobalIndustryAlthoughsomebusinessesmaywanttoeliminateforeigncompetitionthroughprotectivelegislation,thebetterwaytocompeteistocontinuouslyimproveproductsathomeandexpandintoforeignmarkets.Aglobalindustryisanindustryinwhichthestrategicpositionsofcompetitorsinmajorgeographicornationalmarketsarefundamentallyaffectedbytheiroverallglobalpositions.9GlobalFirmsAglobalfirmoperatesinmorethanonecountryandcapturesR&D,production,logistical,marketing,andfinancialadvantagesnotavailabletopurelydomesticcompetitors.Globalfirmsplan,operate,andcoordinatetheiractivitiesonaworldwidebasis.Acompanydoesn’tneedtobelargetosellglobally.10GlobalBrandsandGlobalMarketingManysuccessfulglobalbrandshavetappedintouniversalconsumervaluesandneeds—suchasNikewithathleticperformance,MTVwithyouthculture,andCoca-Colawithyouthfuloptimism.Globalmarketingextendsbeyondproducts.Servicesrepresentthefastest-growingsectoroftheglobaleconomyandaccountfortwo-thirdsofglobaloutput,one-thirdofglobalemployment,andnearly20percentofglobaltrade.11Figure22.1:MajorDecisionsinInternationalMarketingForacompanyofanysizetogoglobal,itmustmakeaseriesofdecisions.SeeFigure22.1.12DecidingWhethertoGoAbroadMostcompanieswouldprefertoremaindomesticiftheirdomesticmarketwerelargeenough.Managerswouldnotneedtolearnotherlanguagesandlaws,dealwithvolatilecurrencies,facepoliticalandlegaluncertainties,orredesigntheirproductstosuitdifferentcustomerneedsandexpectations.Businesswouldbeeasierandsafer.Yetseveralfactorsaredrawingmoreandmorecompaniesintotheinternationalarena.13FactorsEncouragingCompaniestoExpandintoInternationalMarketsSomeforeignmarketspresenthigherprofitopportunitiesthanthedomesticmarket.Thecompanyneedsalargercustomerbasetoachieveeconomiesofscale.Thecompanywantstoreduceitsdependenceonanyonemarket.Thecompanydecidestocounterattackglobalcompetitorsintheirhomemarkets.Customersaregoingabroadandrequireinternationalservice.14Butthereareinherentriskstobefacedinglobalmarkets:Thecompanymightnotunderstandforeignpreferencesandcouldfailtoofferacompetitivelyattractiveproduct.Thecompanymightnotunderstandtheforeigncountry’sbusinessculture.Thecompanymightunderestimateforeignregulationsandincurunexpectedcosts.15Butthereareinherentriskstobefacedinglobalmarkets:Thecompanymightlackmanagerswithinternationalexperience.Theforeigncountrymightchangeitscommerciallaws,devalueitscurrency,orundergoapoliticalrevolutionandexpropriateforeignproperty.16InternationalizationProcessSomecompaniesdon’tactuntileventsthrustthemintotheinternationalarena.Theinternationalizationprocesstypicallyhasfourstages:Noregularexportactivities.Exportviaindependentrepresentatives(agents).Establishmentofoneormoresalessubsidiaries.Establishmentofproductionfacilitiesaboard.17InternationalizationProcessThefirsttaskistogetcompaniestomovefromStage1toStage2.Thismoveishelpedbystudyinghowfirmsmaketheirfirstexportdecisions(hireagents)andenteranearbyorsimilarcountry.Acompanythenengagesfurtheragentstoenteradditionalcountries.Lateritestablishesanexportdepartmenttomanageitsagentrelationships.18InternationalizationProcessStilllater,thecompanyreplacesitsagentswithitsownsalessubsidiariesinitslargerexportmarkets.Tomanagethesesubsidiariesthecompanyreplacestheexportdepartmentwithaninternationaldepartment.Ifcertainmarketscontinuetobelargerandstable,thecompanytakesthenextstepinlocatingproductionfacilitiesinthosemarkets.19DecidingWhichMarketstoEnterIndecidingtogoabroad,thecompanyneedstodefineitsmarketingobjectivesandpolicies.Whatproportionofinternationaltototalsaleswillitseek?Mostcompaniesstartsmallwhentheyventureabroad.Someplantostaysmall;othershavebiggerplans.20HowManyMarketstoEnterThecompanymustdecidehowmanycountriestoenterandhowfasttoexpand.Companies’entrystrategytypicallyfollowsoneoftwopossibleapproaches:Awaterfallapproach—countriesaregraduallyenteredsequentially.Asprinklerapproach—manycountriesareenteredsimultaneouslywithinalimitedperiodoftime.21SprinklerApproach—MicrosoftMicrosoftadoptedthesprinklerapproachwhenitintroducedWindows10tocapitalizeonfirstmoveradvantageinthehighlycompetitiveindustry.22HowManyMarketstoEnterIncreasinglycompaniesarebornglobalandmarkettotheentireworldrightfromtheoutset.Whenfirstmoveradvantageiscrucialandahighdegreeofcompetitiveintensityprevails,thesprinklerapproachispreferred.Themainriskisthesubstantialresourcesinvolvedandthedifficultyofplanningentrystrategiesinsomanypotentiallydiversemarkets.Thecompanymustalsodecideonthetypesofcountriestoconsider.Attractivenessisinfluencedbytheproduct,geography,incomeandpopulation,andpoliticalclimate.23HowManyMarketstoEnter24KFCadapteditsmenuinChinatogetafootholdinagrowingmarket.EvaluatingPotentialMarketsHowevermuchnationsandregionsintegratetheirtradingpoliciesandstandards,eachstillhasuniquefeatures.Itsreadinessfordifferentproductsandservicesanditsattractivenessasamarkettoforeignfirmsdependuponcertainenvironments:EconomicPolitical–legalCulturalManycompanieschoosetoselltoneighboringcountriesbecausetheyunderstandthesecountriesbetterandcancontroltheircostsmoreeffectively.25EvaluatingPotentialMarketsAtothertimes,psychicproximitydetermineschoiceCompaniesshouldbecarefulinchoosingmarketsaccordingtoculturaldistance.Ingeneral,acompanypreferstoentercountries:Thatrankhighonmarketattractiveness.Thatarelowinmarketrisk.Inwhichitpossessesacompetitiveadvantage.26EvaluatingPotentialMarketspsychicproximitydetermineschoices.ThispartlyexplainswhycompaniesfromCommonwealthcountriessuchasHongKong,Malaysia,andSingaporeoftenchoosetheUnitedKingdomastheirspringboardintotheEuropeanmarket.InvestinginChinaislikegoingbackhomeforoverseasChinesetycoons.Similarly,ChinesebusinessesmayfindpsychiccomfortinpartneringoverseasChinesecompanieswhentheyinvestabroad.27EvaluatingPotentialMarkets28ThailandandChina—ChinesecompaniestaketheircuefromoverseasChinesecontactswheninvestingoverseas.Thailand,forhistoricalandculturalreasons,presentsafriendlyfacetoChineseenterprisesinaregionlongmarkedbysuspicionofChina.MostofThailand’srichestmenareThaiChineseandtheyareinpolitics.WorldbestTextile,asubsidiaryofaShanghai-basedstate-ownedenterprise,hastwofactoriesineasternThailand.Thailand’slowlaborcostsandefficientfinancialsystemareotherreasonsforChineseinvestments.Thailand’sCharoenPokphand(CP),oneofthefirstforeigninvestorsinChina,alsohelpsattractChineseinvestment.CPisamajorshareholderintheBusinessDevelopmentBank,whichhelpsfinancemedium-sizedenterprisesintheShanghairegion.SucceedinginDevelopingMarketsOneofthesharpestdistinctionsinglobalmarketingisbetweendevelopedanddevelopingorlessmaturemarketssuchasIndia,China,andIndonesia.Theunmetneedsoftheemergingordevelopingworldrepresenthugepotentialmarketsforfood,clothing,shelter,consumerelectronics,appliances,andothergoods.29SucceedinginDevelopingMarketsCoca-Cola,Unilever,Colgate-Palmolive,GroupeDanone,andPepsiCoearn5–15percentoftheirtotalrevenuesfromthethreelargestemergingmarketsinAsia—China,India,andIndonesia.Developingmarketsmakeupover25percentofKraft’stotalbusiness,almost40percentofCadbury’s,andover50percentofTupperware’ssales.1530SucceedinginDevelopingMarketsNestléestimatesabout1billionconsumersinemergingmarketswillincreasetheirincomesenoughtoafforditsproductswithinthenextdecade.Theworld’slargestfoodcompanygetsaboutathirdofitsrevenuefromemergingeconomiesandaimstoliftthatto45percentwithinadecade.31MarketingStrategiesforDevelopingMarkets:IndiaIndia’stransformationoveragenerationhasbeenstaggering.Early1990sloweredtradebarriersandliberalizedcapitalmarkets,bringingboominginvestmentandconsumption.Indiaboastsalivelydemocracyandayouthfulpopulation.1.21billionpeople,itistheworld’ssecondmostpopulousnationbutalsooneoftheyoungestlargeeconomies,withamedianageof25.Infact,one-quarteroftheentireworld’sunder-25populationlivesinIndia.32MarketingStrategiesforDevelopingMarkets:IndiaAstrongeconomyhasbeenmatchedbyprogressinliteracyandaccesstofinancialservicesandmoderntechnology.Indiahasfullyembracedmobiletechnology;mobilephonedensityisapproximately75percentofthepopulation,ofwhomaround15percentusetheirmobiledevicestogoonline.India’sascentopensalargermarketforU.S.andWesterngoods.About16million,or3percent,ofIndianconsumersarehigh-earningtargetsofyouthlifestylebrandsconnotingstatusandaffluence,likeluxurycarsandshinymotorbikes,followedbyclothing,food,entertainment,consumerdurables,andtravel.33MarketingStrategiesforDevelopingMarkets:IndiaAstheseventh-largestcountryinsize,however,Indiahasimportantregionaldifferences.Ithas23officiallanguages,1,500dialects,andamultitudeoffaiths,andits28separatesstateshavetheirownpoliciesandtaxrules.AreasaroundMumbaiandBangalorearericherandmorehighlyliterate,whilepoorer,lesseducatedstateslieintheeast.34MarketingStrategiesforDevelopingMarkets:IndiaSomeIndianfirms—suchasMittal,RelianceGroup,Tata,Wipro,Infosys,andMahindra—haveachievedinternationalsuccess.Reliancetouchesthelifeofonein10Indianseveryday,anditsworldwidecustomerbasenumbers100million.35MarketingStrategiesforDevelopingMarkets:ChinaChina’s1.34billionpeoplehavemarketersscramblingtogainafoothold,andcompetitionhasheatedupbetweendomesticandinternationalfirms.Its2001entryintotheWorldTradeOrganization(WTO)easedChina’smanufacturingandinvestmentrulesandmodernizedretailandlogisticsindustries.Foreignbusinessescomplainaboutsubsidizedcompetition,restrictedaccess,conflictingregulations,opaqueandseeminglyarbitrarybureaucracy,andlackofprotectionforintellectualproperty—90percentofPCsoftwareinChinaisreportedlypirated.36MarketingStrategiesforDevelopingMarkets:ChinaTheChinesegovernmentencouragespartnershipswithforeigncompanies,inpartsothatitsfirmscanlearnenoughtobecomeglobalpowerhousesthemselves.Nevertheless,opportunitiesexist.AlthoughChinaisNestlé’sninth-biggestmarket,thecompanysellshalfwhatitdoesinBrazil,despiteChina’shavingseventimesthepopulation.SellinginChinameansgoingbeyondthebigcitiestothesecond-andthird-tiercitiesaswellastothe700millionpotentialconsumersinsmallcommunitiesintheruralinterior.37MarketingStrategiesforDevelopingMarkets:ChinaRuralconsumerscanbechallenging;theyhavelowerincomes(theincomeratiobetweenChina’scoastalcitiesandruralinteriorissixtoone),arelesssophisticated,andoftenclingtolocalhabits.Chinaisalsoethnicallydiverse—thebanknotefeatureseightlanguages,includingArabic,Mongolian,andTibetan.Chinaisnowtheworld’stopconsumerofluxuryconsumergoods,withmanyChineseconsumersviewingtheseastrophiesofsuccess.38MarketingStrategiesforDevelopingMarkets:ChinaLuxurycarsarethefastest-growingautosegmentthankstotheswellingranksofChinesemillionaires.Burberry’ssalesinChinanowalmostmatchthoseinEuropeasawhole.Westerncompaniesneedtobelocallyrelevant.StarbuckshasalocalizedmenuofbeveragesparticularlytailoredforChineseconsumers—includingaunique“EastmeetsWest”blend—fromwhichlocalstorescanchoose.39MarketingStrategiesforDevelopingMarkets:IndonesiaIndonesia’sreputationasacountryhistoricallystrugglingwithnaturaldisasters,terrorism,andeconomicuncertaintyisquicklybeingreplacedbyacountrycharacterizedbypoliticalstabilityandeconomicgrowth.Indonesiahasbecomethethirdfastest-growingeconomyintheregionbehindIndiaandChinalargelyonthebasisofits240millionconsumers.Foreigndirectinvestmentsaccountforonly25percentofgrossdomesticproduct.40MarketingStrategiesforDevelopingMarkets:IndonesiaIndonesiaisoneofReachInMotion’s(RIM’s)hottestmarkets,andtheBlackBerryhasachievediconicstatusinthecountry.RIMhastakenadvantageofamobile-friendlyenvironment(broadbandserviceispatchyandexpensive)andhasalsocustomizeditsofferingswithdozensofapplicationsdesignedspecificallyfortheIndonesianmarket.Indonesiapresentsotherchallenges.Inanarchipelagowithmorethan14,000islandsinahotandhumidclimate,effective,efficientdistributioniscritical.41MarketingStrategiesforDevelopingMarkets:IndonesiaLargeimportershaveestablishedextensivedistributionnetworksthatallowthemtoextendbeyondtheone-thirdofthepopulationthatlivesinthesixorsevenlargestcities.IndonesiaisL’Oréal’sfastest-growingmarketinAsia-Pacific,leadingthefirmtobuildaplantthere.IKEAhasalsoenteredtheIndonesianmarket,andthecountryisTupperware’slargestmarket,dislodgingGermany.Successfullyenteringdevelopingmarketsrequiresaspecialsetofskillsandplans.42MarketingStrategiesforDevelopingMarkets:IndonesiaConsiderhowthefollowingcompaniesarepioneeringwaystoservethese“invisible”consumers:HindustanUnileverinIndiacreatedProjectShakti,inwhichadirectdistributionnetworkwasestablishedforhard-to-reachlocales.Grameen-Phonemarketsmobilephonesto35,000villagesinBangladeshbyhiringvillagewomenasagentswholeasephonetimetoothervillagers,onecallatatime.Colgate-PalmoliverolledintoIndianvillageswithvideovansthatshowedthebenefitsofbrushingteeth.43MarketingStrategiesforDevelopingMarkets:Indonesia44HindustanLevercreatedProjectShaktitotrainwomenfromvillagestoreachmarketswithlesspurchasingpower.MarketingStrategiesforDevelopingMarkets:Indonesia45InIndia,millionsofconsumersbuytheirfoodfromtheubiquitouskiranaor“mom&pop”shops.DevelopingandDevelopedMarketsCompetitionisalsogrowingfromcompaniesbasedindevelopingmarkets.WiproofIndia,HTCfromTaiwan,andPetronasofMalaysiahaveemergedfromdevelopingmarketstobecomestrongmultinationalssellinginmanycountries.Localfirmsthathavedomesticsuccessoverforeignrivalsareespeciallyspurredtoexpandoverseas.46DevelopingandDevelopedMarkets47TCL—TCLwasfoundedin1981inChina’ssouthernGuangdongprovince.TCLstartedwithhomeappliances,butitsforteprovedtobeinTVsandcellphones.TheTCLbrandisoneofthebestrecognizedinChina,anditisoneofChina’sfastest-growingcompanies.Withitssolidsuccessathome,TCLiseyeingtheinternationalmarket.ItacquiredThomsonElectronicsandformedajointventurewithAlcatel.ToestablishitsnameoutsideChina,itsTVscarriestheTCLbrandinChinaanddevelopingAsiancountriesbuttheRCAbrandinNorthAmericaandtheThomsonbrandinEurope.Similarly,itsmobilephonesusedtheTCLbrandinAsiaandtheAlcatelbrandinEuropeandLatinAmerica.TLCisalsothefirstcompanyinChinatoregisteranEnglishname,becauseitwantedaninternationalimage.Italsochangeditsloganfrom“TodayChinaLion”to“TheCreativeLife.”However,notallitsjointsventuresaresuccessful.ItsAlcatelandThomsonpartnershipsendedinlosses.Disputethesesetbacks,TCLbecamethefirstChinesecompanytoreachthetopfiveintheglobalLCDTVmarketin2012.ItalsoinvestedinR&Dcenters,includingoneinSiliconValley,andmorethan10researchdivisionsoverseas,includingSingapore.DevelopingandDevelopedMarketsChinahasbeenexportingcarstoAfrica,SoutheastAsia,andtheMiddleEast.TataofIndiaandPetronasofMalaysiahaveemergedfromdevelopingmarketstobecomestrongmultinationalssellinginmanycountries.Manyfirmsareusinglessonsgleanedfrommarketingindevelopingmarketstobettercompeteintheirdevelopedmarkets.48DevelopingandDevelopedMarketsJohnDeere’sresearchfacilityinPune,India,developedfourno-frillstractorswhoseaffordabilityandmaneuverabilityalsofoundamarketintheUnitedStatesandelsewhere.Productinnovationhasbecomeatwo-waystreetbetweendevelopinganddevelopedmarkets.Thechallengeistothinkcreativelyabouthowmarketingcanfulfillthedreamsofmostoftheworld’spopulationforabetterstandardofliving.49DevelopingandDevelopedMarkets50Malaysia’sgascompany,Petronas,isbecomingastrongmultinationalcompany.DecidingHowtoEntertheMarketOnceacompanydecidestotargetaparticularcountry,ithastodeterminethebestmodeofentry.Itsbroadchoicesareindirectexporting,directexporting,licensing,jointventures,anddirectinvestment.SeeFigure22.2.Eachsucceedingstrategyinvolvesmorecommitment,risk,control,andprofitpotential.51Figure22.2FiveModesofEntryintoForeignMarkets52IndirectandDirectExportCompaniestypicallystartwithexport,specificallyindirectexporting—thatis,theyworkthroughindependentintermediaries.Domestic-basedexportmerchantsbuythemanufacturer’sproductsandthensellthemabroad.Domestic-basedexportagents,includingtradingcompanies,seekandnegotiateforeignpurchasesforacommission.53IndirectandDirectExportCooperativeorganizationsconductexportingactivitiesforseveralproducers—oftenofprimaryproductssuchasfruitsornuts—andarepartlyundertheiradministrativecontrol.Export-managementcompaniesagreetomanageacompany’sexportactivitiesforafee.Thenormalwaytogetinvolvedinaninternationalmarketisthroughexport.54DirectandIndirectExportIndirectexporthastwoadvantages.First,thereislessinvestment.Thefirmdoesnothavetodevelopanexportdepartment,anoverseassalesforce,orasetofinternationalcontacts.Second,thereislessrisk:becauseinternational-marketingintermediariesbringknow-howandservicestotherelationship,thesellerwillnormallymakefewermistakes.Companieseventuallymaydecidetohandletheirownexports.Theinvestmentandriskaresomewhatgreater,butsoisthepotentialreturn.55Differentwaysinwhichacompanycanconductexportingoperations:Domestic-basedexportdepartmentordivision—Thismightevolveintoaself-containedexportdepartmentoperatingasaprofitcenter.Overseassalesbranchorsubsidiary—Thesalesbranchhandlessalesanddistributionandmighthandlewarehousingandpromotionaswell.Itoftenservesasadisplayandcustomerservicecenter.Travelingexportsalesrepresentatives—Home-basedsalesrepresentativesaresentabroadtofindbusiness.Foreign-baseddistributorsoragents—Thesedistributorsandagentsmightbegivenexclusiverightstorepresentthecompanyinthatcountry,oronlylimitedrights.56ExportingUsedasaMeansforTestingOverseasMarketsManycompaniesuseexportingasawayto“testthewaters”beforebuildingaplantandmanufacturingaproductoverseas.ManycompaniessuchaselectronicmanufacturerSVAdependedondistributorsfirsttoaccessforeigndemandbeforebuildingitsownoverseascapabilities.57UsingtheInternetAcompanydoesnotnecessarilyhavetoattendinternationaltradeshowsifitcaneffectivelyusetheInternettoattractnewcustomersoverseas,supportexistingcustomerswholiveabroad,sourcefrominternationalsuppliers,andbuildglobalbrandawareness.SuccessfulcompaniesadapttheirWebsitestoprovidecountry-specificcontentandservicestotheirbestpotentialinternationalmarkets,ideallyinthelocallanguage.“Goingabroad”ontheInternetdoesposespecialchallenges.Theglobalmarketermayrunupagainstgovernmentalorculturalrestrictions.58LicensingLicensingisasimplewaytoengageininternationalmarketing.Thelicensorlicensesaforeigncompanytouseamanufacturingprocess,trademark,patent,tradesecret,orotheritemofvalueforafeeorroyalty.Advantages:Thelicensorgainsentryatlittlerisk;thelicenseegainsproductionexpertiseorawell-knownproductorbrandname.59LicensingLicensinghaspotentialdisadvantages.Thelicensorhaslesscontroloverthelicenseethanitdoesoveritsownproductionandsalesfacilities.Further,ifthelicenseeisverysuccessful,thefirmhasgivenupprofits;andifandwhenthecontractends,thecompanymightfindthatithascreatedacompetitor.60LicensinginAsiaInthepast,licensinghasgenerallybeenneglectedasanentrystrategyinAsiafortwomainreasons:thebelief,usuallytrue,thatlocalmanufacturersdonotpossessthecapabilityofabsorbingandapplyingadvancedtechnologies;andthepoorlegalprotectionforforeignintellectualpropertyintheregion.However,thesituationvariesfromcountrytocountry,withthemoredevelopedAsiannationssuchasJapan,Singapore,SouthKorea,andTaiwanbeingbetterchoicesforlicensing.61VariationsinLicensingArrangementsCompaniessuchasHyattandMarriottsellmanagementcontractstoownersofforeignhotelstomanagethesebusinessesforafee.Themanagementfirmmayevenbegiventheoptiontopurchasesomeshareinthemanagedcompanywithinastatedperiod.Incontractmanufacturing,thefirmhireslocalmanufacturerstoproducetheproduct.Contractmanufacturinggivesthecompanylesscontroloverthemanufacturingprocessandthelossofpotentialprofitsonmanufacturing.However,itoffersachancetostartfaster,withlessriskandwiththeopportunitytoformapartnershiporbuyoutthelocalmanufacturerlater.62VariationsinLicensingArrangementsFinally,acompanycanenteraforeignmarketthroughfranchising,whichisamorecompleteformoflicensing.Thefranchiseroffersacompletebrandconceptandoperatingsystem.Inreturn,thefranchiseeinvestsinandpayscertainfeestothefranchiser.McDonald’s,KFC,andAvishaveenteredscoresofcountriesbyfranchisingtheirretailconceptsandmakingsuretheirmarketingisculturallyrelevant.63Franchising—KFCKFC—KFCistheworld’slargestfast-foodchickenchain,owningorfranchising15,000outletsin123countries.KFChastailoreditsapproach,menu,andevenmascottoappealtoChinesetastesandhasbecomeChina’sfastest-growingandmostpopularfast-foodchain.64JointVenturesForeigninvestorsmayjoinwithlocalinvestorstocreateajointventurecompanyinwhichtheyshareownershipandcontrol.ShanghaiBaosteelGrouphasa$1.4-billionjointventuresteelmillinBrazilwithCompanhiaValedoRioDoce,theworld’slargestproducerofironore.Coca-ColaandNestléjoinedforcestodeveloptheinternationalmarketfor“ready-to-drink”teaandcoffee,whichtheycurrentlysellinsignificantamountsinJapan.InIndia,HindustanUnileverandTata-ownedLakmehaveformedLakmeLevertosellbrandedproductslikeElizabethArden,Rimmel,andCalvinKlein.65JointVenturesAjointventuremaybenecessaryordesirableforeconomicorpoliticalreasons.Theforeignfirmmightlackthefinancial,physical,ormanagerialresourcestoundertaketheventurealoneTheforeigngovernmentmightrequirejointownershipasaconditionforentry66DrawbacksofJointVenturesThepartnersmightdisagreeoverinvestmentThepartnersmightdisagreeovermarketingThepartnersmightdisagreeoverotherpolicies