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1、Global MarketingSpring 2003Some AboutsAbout meAbout this courseAbout the projectAbout the examinationAbout gradingText StructureIntroduction to global marketingThe global marketing environmentGlobal market opportunitiesGlobal marketing strategyGlobal marketing programGlobal marketing managementList

2、of QuestionsWhat is global marketing?Do we have to go global?Why?Where shall we go?What shall we know before plunging ourselves into the storming sea?How can we survive and thrive in a foreign market?Global Marketing- IntroductionWhat is Global Marketing?What is marketing?The process of planning and

3、 executing the conception, pricing, promotion, and distribution of ideas, goods, services, organizations, and events to create and maintain relationships that will satisfy individual and organizational objectives. The Three Principles of MarketingCustomer ValueValue Equation: V=B/PDifferential Advan

4、tageFocusWhat is global marketing?Practicing marketing in the global environment.An organization that engages in global marketing focuses its resources on global market opportunities and threatsGlobalization An open economic systemNon-discriminationGlobal brandsGlobal structuresExports % share of wo

5、rld productionAnnual % Growth of trade and GDP1959 96GDPGDPEffects of globalization on businessCheap offshore productionReduced transport costsVirtual communicationStandardization of logisticsGlobal marketingExport & Import By Regions2002/01-10Corporate Globalization-Chinas CaseWalmartWorld Women Ba

6、sket Ball GamesHaier in USATsingdao BeerGlobal Marketing VS Domestic MarketingMore difficult: language, law, culture, trade and non-trade barriers, market research, and communication;More complicated: currency, measures and weights, customs, monetary exchange, transportation, insurance, and counter-

7、claimMore risky: credibility, currency exchange, political risk, transportation, and pricing More opportunities and more profitable, hopefully.Should we go global?Internal analysisResources, managerial mindset, strengths, weaknesses,etc.External analysisCompetition, opportunities, threats, benefits,

8、 risks, etc. Cost VS IncomeManagement OrientationManagements assumptions or beliefs-both conscious and unconscious-about the nature of the worldEthnocentric PolycentricRegiocentric GeocentricEthnocentricHome country is superior.Domestic Company: No opportunities outside the home country;Internationa

9、l CompanyProducts and practices that succeed in the home country will be successful anywhere;Foreign operations are secondary or subordinateNissanPolycentricEach country is unique.Multinational Company:Each subsidiary should develop its own business and marketing strategies according to the specific

10、 situation in that country.Problem: Cost, control, headquarter out of gameRegiocentric & GeocentricRegiocentric: Each region is unique and an integrated regional strategy is to be developed to serve that region.Geocentric: The entire world is a potential market and integrated world market strategies

11、 should be developed. Global or transnational company.Global Localization: Think globally, act locally.Philips VS MatsushitaPhilips ElectronicsPolycentric: 7 models of TV based on 4 chassis, VarietyMatsushitaGeocentric: global strategy, 2 models of TV based on a single chassis, low priceDriving and

12、Restraining Forces Affecting Global Integration and Global MarketingDriving ForcesTechnologyInternet, Satellite Dish, Globe Spanning TVRegional Economic AgreementsNAFTA, EU, ASEAN, GCC, APECMarket Needs and WantsConverging, Global Brand, Transportation and Communication ImprovementsJet Plane, Large

13、Cargo Ship, email, fax, videoconferencing, cost deductionDriving Forces Cont.Product development costsQualityWorld Economic TrendsMore opportunitiesLess resistanceWorld-wide deregulation and privatizationDriving Forces Cont.LeverageExperience transfersScale economiesResource utilizationGlobal strate

14、gyThe Global/Transnational CorporationRestraining ForcesManagement MyopiaOrganization CultureIntegrate global vision and perspective with local market initiative and inputMutual respectNational controls and barriersTariff barriers and non-tariff barriersThe Global Economic EnvironmentChanges in The

15、World EconomyEmergence of global marketsEconomic integrationGlobal companies, global brandsCapital movements far exceed the volume of global merchandise and services trade$4 trillion VS. London Eurodollar Market, $100 trillion, VS. Foreign exchange $250 trillion Changes in The World EconomyProductiv

16、ity VS. EmploymentApplication of new technologiesIncrease in production efficiencyPlant emigrationInternal reformsChanges in The World EconomyWorld economy becomes the dominant economic unitThe end of the cold warCollapse of USSR, ISC, E. EuropeanChina, Vietnam, Cuba, North KoreaEconomic SystemsMark

17、et AllocationMarket economyRole of the stateCommand AllocationPlanned economyRole of the stateMixed SystemWhich plays the leading role?Stages of Market DevelopmentBased on GNP Per CapitaLower-Income Countries $2000Upper-Middle-Income Countries$3036-$9386High-Income Countries $9386Low-Income Countrie

18、sPreindustrial countries, less than $766Limited industrialization, high percentage of population in agriculture and farmingHigh birth ratesLow literacy ratesHeavy reliance on foreign aidPolitical instability and unrestAfrica, south of SaharaLower-Middle-Income CountriesLess developed countries (LDC)

19、Early stage of industrializationConsumer markets expandingLow labor costLabor-intensive products manufacturingUpper-Middle-Income CountriesIndustrializing countriesPercentage of people in agriculture dropping sharplyDegree of urbanization increasingHigh literacyRelatively low wage costsHigh-Income C

20、ountriesIndustrialized CountriesSustained economic growthKnowledge-basedService sectorNew products and innovations Income and PPPPurchasing Power ParityReal IncomeStandard of LivingThe concentration of incomeRegional, nationally, and within nations“Triad”: US, Canada, EU, and JapanIncome inequality

21、in developing countriesImplication for MarketersProfitabilityChances and challengesMarketings RoleMarket potential evaluationEmerging Markets EvaluationSocial and Cultural EnvironmentsDifferencesSimilaritiesMarketers two-folded task.Recognize differenceFind similaritiesCultureCulture includes both c

22、onscious and unconscious values, ideas, attitudes, and symbols that shape human behavior and that are transmitted from one generation to the next.Culture is learned, not born with.Culture can be changed.Implications for Global MarkersFood, drink preferencesKFC, Colgate, Coco-cola, Green Giant Foods,

23、 and soy sauceColor, flower, and other preferencesWhite, green, chrysanthemum, Corbie, dog,Converging global attitudesCultural universalsBe culturally sensitive!High and Low-Context CulturesLow-context: messages are explicit, words carry most of the information in a communication. “I mean what I say

24、”.High-context: much more information resides in the context of communication, including background, associations, and basic values of the communications rather in the verbal message. “Guess what I really mean.”High and Low Context CulturesFactorHigh ContextLow ContextLawyerLess importantVery import

25、antSpacePeople breath on each otherBubble of private space, no intrusionTimePolychronic, things dealt simultaneouslyMonochronic, linearNegotiationsLengthy, get to know each otherQuick, get things doneCountriesJapan, Middle East,US, Northern EuropeCommunication and NegotiationLanguage barriersIts a “

26、yes” or “no”?“You are invited to take advantage of the chambermaid”.“Ease your bosoms. This coffee has carefully selected high quality beans and roasted by our all the experience.”The lift is being fixed for the next day. During that time we regret you will be unbearable.”Nonverbal communicationVerb

27、al VS. NonverbalSocial BehaviorSneeze, belch, sharing foodSaudi: Dont ask the host about the health of his spouse. Dont show the soles of your shoes. Dont touch or deliver with the left hand.Japan, Korea, China, IndiaVenezuela, IndonesiaAfrica“Madam” or “maam”Analytical Approaches to Cultural Factor

28、sDont assume you know everything.Dont judge others by the culture you are from.There are no perfect cultures in this world, or there is no such culture superior than another.Try to understand the beliefs, values, and motives of another cultureBe open, be understanding.Maslows Hierarchy of NeedsPhysi

29、ologicalSafetySocialEsteemSelf-actualizationHofstedes Cultural TypologyPower distance Individualism or CollectivismMasculinity or FemininityUncertainty avoidancePower DistanceThe extent to which the less powerful members of a society accept or expect that power to be distributed unequally.High power

30、 distance Low power distanceIndividualism or CollectivismIndividualistic culture: Each member of society is primarily concerned with his or her own interest and those of the immediate family.Collectivist culture: All of societys members are integrated into cohesive in-groupsMasculinity of Femininity

31、MasculinityA society in which men are expected to be assertive, competitive, and concerned with material success while women fulfill the role of nurturer and take care of the familyFemininityA society in which the social roles of men and women overlap, with neither gender exhibiting overly ambitious

32、 or competitive behaviorUncertainty AvoidanceThe extent to which the members of a society are uncomfortable with unclear, ambiguous, or unstructured situations.Environmental SensitivityThe extent to which products must be adapted to the culture-specific needs of different national markets.Product Ad

33、aptationHighLowEnvironmental SensitivityLowHighIntegrated CircuitComputerFoodImpact on Marketing Consumer behaviorCampbell in US VS in ItalyInstant coffee in UK VS. in SwedenCake in US VS. in UKPersonal aspect of international businessSuggested SolutionsStake: expatriate failure averages $75,000, lo

34、ss of business: $2.5 billionResearchTraining in cross-cultural competency“Boot camp”“International exposure”“Workshop”The Political, Legal, and Regulatory Environments of Global MarketingThe Political EnvironmentSovereigntyPolitical riskTaxesDilution of Equity ControlExpropriationSovereigntyThe supr

35、eme and independent political authority.Control the flow of goods across borders Stage of developmentThe political and economical systemProtectionism: AgriculturePrivatization dilutes the command portion of a mixed economyGlobal market integration erodes national economic sovereignty.Political RiskT

36、he risk of a change in government policy that would adversely impact a companys ability to operate effectively and profitably.HK, Argentina, Venezuela, TaxesDiverse geographic activities of MNCHost country tax avoidanceBilateral tax treatiesDilution of Equity ControlControl ownership of foreign-owne

37、d companies. Equity percentage in local projects or joint venturesBecome an insiderExpropriationGovernmental action to dispossess a company or investor. CompensationNationalization: Ownership of the property or assets in question is transferred to the host government.ConfiscationExpropriationCreepin

38、g expropriation: limitations on repatriation of profits, dividends, royalties, or technical assistance fees from local investments or technology arrangements.Tariff and non-tariff barriersIntellectual property restrictionsRemedies: buy insurance, follow the lawInternational LawRules and principles t

39、hat nation-states consider binding upon themselves.Public law, international commercial lawCommon law VS code lawWhich Law Applies?Be explicit in the contractThe place of the domicile or principal place of business of one of the partiesThe place where the contract was enteredThe place of performance

40、 of the contractIntellectual PropertyPatents and TrademarksRegistrationProtectionCounterfeiting: The unauthorized copying and product of a product.Imitation: Use of a product name that differs slightly from a well-known brandPiracy: The unauthorized publication or reproduction of copyrighted work.In

41、tellectual Property ProtectionThe Paris Union: International Convention for the Protection of Industrial Property.The Patent Cooperation TreatyEuropean Patent ConventionTRIPs: Trade Related Intellectual Property RightsAntitrustTo combat restrictive business practices and to encourage competition.Con

42、stens case, Grundig Ruling: “Territorial protection proved to be particularly damaging to the realization of the common market.”IBM and Microsoft in EuropeLicensing Licensing is a contractual agreement in which a licensor allows a licensee to use patents, trademarks, trade secrets, technology, or ot

43、her intangible assets in return for royalty payments or other forms of compensation.What assets? At what price? The right to “make”, “use”, or “sell”? Sublicense? “Exclusive or nonexclusive?”Creation of competitor.Trade SecretsConfidential information or knowledge that has commercial value.TRIPs req

44、uires signatory countries to protect against acquisition, disclosure, or use of trade secrets in a manner contrary to honest commercial practices. Bribery and Corruption- A World-wide problemConflict resolutionLitigationDifferences in language, legal systems, currencies, traditional business customs

45、 and patterns, discovery procedure, and enforcement.Complex, time consuming, costlyArbitrationInternational Chamber of CommerceThe New York ConventionAAA and China Beijings Conciliation Center.Swedish Arbitration InstituteInternational Council for Commercial ArbitrationUN Conference on International

46、 Trade LawThe Regulatory EnvironmentGovernmental and nongovernmentalInternational Economic OrganizationsPrice control, valuation of imports and exports, trade practices, labeling, food and drug regulations, employment conditions, collective bargaining, advertising content, competitive practices, etc

47、.Regional Economic OrganizationsWTOEUNAFTAGlobal Markets and BuyersTrends of Global MarketMarkets in almost every world region are expected growing.The fastest growing markets are the developing countries.The fastest growing regions in the developing world are East AsiaThe fastest growing country in

48、 East Asia is China.The BoomCountries1974-19931994-2003Developed Countries2.9%2.7%Developing Countries3.0%4.8%East Asia7.5%7.6%South Asia4.8%5.3%Latin America2.6%3.4%East Europe1.0%2.7%Sub-Saharan Africa2.0%3.9%Middle East, North Africa1.2%3.8%Economic Cooperation & Preferential Trade ArrangementsIn

49、ternational economic cooperationFree Trade Area (FTA)Customs UnionCommon MarketEconomic UnionWTO and GATTRegional Trade AreasFree Trade Area (FTA)A group of countries that have agreed to abolish all internal barriers to trade among themselves.Certificates of originCustoms UnionMember countries agree

50、 to the establishment of common external barriers. The Central American Common Market, Southern Cone Common Market (Mercosur), and the Andean GroupCommon MarketRemoval of internal barriersEstablishment of external barriersElimination of barriers to flow of factors (labor and capital) within the mark

51、etFree markets not only for product, but also for services and capital.Economic UnionCreation of a unified central bank;Usage of a single currency-a struggle;Common policies on agriculture, social services and welfare, regional development, transportation, taxation, competition and mergersPolitical

52、unity, a central government;From GATT to WTOGATT: A treaty between 125 nations who agreed to promote trade among members.Trade-disputes settlement, no power of enforcementWTO: A forum for trade-related negotiations. A system to settle trade disputesService industry: Market-entry barriers in banking,

53、 insurance, telecommunications, etc.Regional Economic OrganizationsAPEC: Asian Pacific Economic CooperationNorth American Free Trade AgreementCentral American Common MarketAndean GroupSouthern Cone Common MarketCaribbean Community and Common MarketRegional Economic OrganizationsAssociation of Southe

54、ast Asian NationsThe European UnionCooperation Council for the Arab States of the GulfEconomic community of West African StatesSouth African Development Coordination ConferenceGlobal Marketing Information Systems and ResearchAcquire Global Information Superabundance in developed countriesScarcity in

55、 LDC and underdeveloped countriesWhere and how to get the right informationScanningGlobal Marketing Information SystemMIS definedGathering, analyzing, classifying, storing, retrieving, and reportingEDI: Electronic Data InterchangeBenetons MISTimely, cost-efficiently, actionableSubject Agenda for a G

56、lobal MISMarketsCompetitionForeign exchangePrescriptive informationResource informationGeneral conditionsMarketsDemand estimatesConsumer behaviorProductsChannelsCommunication media availability and costMarket responsivenessCompetitionCorporate strategiesBusiness strategiesFunctional strategiesForeig

57、n ExchangeBalance of paymentsInterest ratesAttractiveness of country currencyExpectations of analystsPrescriptive InformationLaws, regulations, rulings concerning taxes, earnings, dividends in both hose countries and home countryResource InformationAvailability of human, financial, information, and

58、physical resourcesGeneral ConditionsOverall review of sociocultural, political, technological environmentsScanning ModesSurveillanceInformal information gatheringViewing and monitoringSearchFormal information gatheringInvestigation and ResearchRule of ThumbCreate an efficient and effective scanning

59、system in both the home country and the host countriesCreate a MIS system Expanding information coverage to other regions of the worldSources of Marketing InformationHuman sourcesOverseas executivesFriends, acquaintances, professional colleagues, consultants, and prospective new employeesPersonal re

60、lationshipDirect perceptionSeeing, feeling, hearing, smelling, or tastingThe design of LexusFormal Marketing ResearchProject-specific, systematic gathering of data in the search scanning mode.Identify the research problemDevelop a research planCollect dataAnalyze dataInterpret and report findingsSte

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