INTERNATIONAL MARKETING92% of the worlds consumers live outside the U. S. Thus, international marketing is very important.
When selling to foreign markets, one must realize that there are major differences between other countries & the U. S. Aside from political and legal differences, there are economic, technological, social (family, religion, education, health . . .
) & cultural differences. Each 1 billion in trade deficit yields a loss of 25,000 jobs. See text for how international trade is measured and protectionism vs. free trade. Gray Goods – Goods imported from unauthorized dealer; problem = no manufacturers warranty. Dumping = Sale of export goods at less than normal value (less than cost or less than home-country price).Order now
Strategic Adaptations Of The Marketing Mix1Keep The Product & Promotion The Same Worldwide (Global Marketing)- e. g. , world brands such as Coca Cola and Marlboro. – Theodore Levitt is the guru of the globalization or global marketing approach. – Promotion mix elements such as advertising present the biggest problem to standardizing a marketing strategy across all borders because promotion is based on a communication process, which can differ from country to country – even if the languages are the same (e. g.
, the U. S. & the U. K. ). 2Adapt Only The Promotion – e.
g. , in most of the world, bicycles are promoted as transportation; in U. S. as leisure. 3Adapt Only The Product – e. g.
, Canadians prefer a more bitter beer; Barbie looks Asian in Japan. 4Adapt Promotion & Product – e. g. , American cereals in Asia = snack food; therefore, need different flavors (e.
g. , tofu). 5Backward Invention – Simplify product & use less technology. This makes the product more affordable & usable in certain foreign markets. Some Ways To Operate In Foreign Markets 1Exporting – A company sells what it produces to foreign markets via export merchants (e. g.
, export trading companies) or export agents (e. g. , export management companies) or a firms own sales branches. Risk of tariff & devaluation. 2Direct Investment & Ownership – Investment in production and or distribution facilities can occur either through a wholly-owned foreign subsidiary or a joint venture with a foreign company. Risk of nationalization.
Joint Ventures – domestic & foreign firms become partners. Strategic Alliance – a formal long-term agreement between firms in order to accomplish global objectives without formal ownership by either company. 3Contracting (Licensing, Franchising, Contract Manufacturing & Management Contracting)Licensing = selling rights to name, process or patent for a fee or royalty; e. g. , magazines such as Cosmopolitan & Playboy; Ampex licensed VCR technology to Japan.
Contract Manufacturing – Domestic firm contracts with a foreign firm to do production; marketing is done by domestic firm. Management Contracting – Seller provides management skills only; e. g. , Hilton Hotels. 3 Major Risks In Intl Mktg:1Radical Change In Government – a companys factories may be nationalized. 2Change In Export Rates – foreign currency may be devalued; a firm may want to hedge with options.
E. g. , many tech firms hurt by Asian economic crisis. 3Foreign Markets May Impose Tariffs, Taxes, Quotas On Your Product – They do so to make imports more expensive relative to domestic goods. Words/ Pages : 498 / 24