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InternationalMarketing 1 Chapter7InternationalMarketEntry Objectives Afterreadingthischapter youshouldbeableto A Explainwhatglobalizationis B Thedifferentwaysofenteringanewmarket C Thefactorswhichshouldbeconsideredwhenenteringaquitenewmarket D Theadvantagesanddisadvantagesofthedifferentwaysofenteringanewmarket 2 Keyterms 1 globalmarketing referstothemarketingofgoodsandservicesintheglobalscale 全球营销2 globalcompany acompanywhichenjoysthebenefitsofglobalizationofmarketing production andfinancing 全球公司3 exporting Enteringaforeignmarketbysendingproductsandsellingthemthroughinternationalmarketingintermediaries indirectexporting orthroughthecompany sowndepartment branch orsalesrepresentativesoragents directexporting 出口 3 Keyterms 4 turnover thetotalvalueofbusinessdoneduringagivenperiod usu thetotalannualsales营业额 销售额5 tradebarriers Atradebarrierisageneraltermthatdescribesanygovernmentpolicyorregulationthatrestrictsinternationaltrade Thebarrierscantakemanyforms includingthefollowingterms ImportdutiesImportlicensesExportlicensesImportquotasEmbargo 4 Keyterms 6 agency therelationshipbroughtaboutbyoneperson theprincipal委托人 appointinganotherperson theagent代理人 toactforhim e g toselltheprincipal sgoods代理关系7 licensing Amethodofenteringaforeignmarketinwhichthecompanyentersintoanagreementwithalicenseeintheforeignmarket offeringtherighttouseamanufacturingprocess trademark patent tradesecret orotheritemofvalueforafeeorroyalty 许可经营 5 Keyterms 8 royalty moneypaidtotheownerofapatentforpermissiontouseapatenteddesign usu atanagreedpercentageofthesellingpriceoftheproduct 专利使用费 6 Keyterms 9 franchising anarrangementcalledafranchisingagreementbywhichamonopolyproducer thefranchisor givesanotherproducerortrader thefranchisee byformallicencetheexclusiveright i e arightheldbynooneelse tomanufactureorselltheproductsofthefranchisorinacertainareasuchasatown county orcountry Thefranchiseemaypaythefranchisorbyanamountbasedonthenumberofunitsproducedoronthenumbersold orbyapercentageofhisgrosssales andhemustagreetobuyallhissuppliesonlyfromthefranchisor 特许经营 7 Keyterms 10 contractmanufacturing Aninwhichacompanycontractswithmanufacturersinaforeignmarkettoproduceitsproductorprovideitsservice 承包制造 委约生产11 OEM originalequipmentmanufacturer Anoriginalequipmentmanufacturer orOEMoriginallywasatermusedtodescribeacompanythatproducedhardwaretobemarketedunderanothercompany sbrand butnowisoftenusedasaverb 原始设备制造商 初始设备厂家 国际替牌商的替牌生产 8 Keyterms 12 managementcontracting Ajointventureinwhichthedomesticfirmsuppliesthemanagementknow howtoaforeigncompanythatsuppliesthecapital thedomesticfirmexportsmanagementservicesratherthanproducts 管理合同13 TurnkeyOperation ATurnkeyoperationisdefinedasaproductorserviceconceptthatiscomplete installedandreadytouseupondeliveryorinstallation Theproductorserviceisthenleasedorsoldtoanindividualtorunashis herownventure Manufacturersofindustrialplantslikeelectricgeneratingplants cementplants oilrefineries andmanyothersusuallymaketheirsalesonthisbasis 总承包经营 9 Keyterms 14 foreigndirectinvestment FDI Enteringaforeignmarketbydevelopingforeign basedassemblyormanufacturingfacilities 对外直接投资15 jointventure Enteringforeignmarketsbyjoiningwithforeigncompaniestoproduceormarketaproductorservice 合作经营16 intellectualpropertyrights Intellectualpropertyrightsareabundleofexclusiverightsovercreationsofthemind bothartisticandcommercial 知识产权 10 Name Organization Brand Company 1 GreenwichSavingsBank anAmericansavingsbankbasedinNewYorkCitythatoperatedfrom1833to1981 Atthetimeofitsclosurein1981 itwasthe16thlargestbankintheU S bytotaldeposits 格林威治银行2 TheFortuneGlobal500 arankingofthetop500corporationsworldwideasmeasuredbyrevenue ThelistiscompiledandpublishedannuallybyFortunemagazine 财富 全球500强 11 Name Organization Brand Company 3 Mitsumi MitsumiElectricCo Ltd isaJapanesemanufacturerofhuman interfacingdevicesfoundedin1954 Thecompanymanufacturesremotecontrolsformanyhomeelectronicsbrands aswellaskeyboardsandmiceforpersonalcomputers includingtheAppleProKeyboardandtheMightyMouse 日本三美电机株式会社4 Engel slaw Engel slawisanobservationineconomicsstatingthat withagivensetoftastesandpreferences asincomerises theproportionofincomespentonfoodfalls evenifactualexpenditureonfoodrises 恩格尔定律 12 I WhatisGlobalMarketing 1 Definitionofglobalmarketing globalmarketingreferstothemarketingofgoodsandservicesintheglobalscale2 Definitionofglobalcompany acompanywhichenjoysthebenefitsofglobalizationofmarketing production andfinancing 13 I WhatisGlobalMarketing 3 Whyshouldfirmsengageinglobalmarketing Globalcompetitors domesticmarket reduceitsdependenceonanyonemarket company scustomers 14 II GlobalBusinessInvolvement MarketEntryStrategies 1 Exportmodes出口模式 出口进入方式 Indirectexporting间接出口 Directexporting直接出口Acompanycanconductdirectexportinginseveralways A domesticexportdepartmentB overseassalesbranchC home basedsalespeopleD exportingthroughforeign baseddistributorsoragents 15 II GlobalBusinessInvolvement MarketEntryStrategies Agency therelationshipbroughtaboutbyoneperson theprincipal委托人 appointinganotherperson theagent代理人 toactforhim e g toselltheprincipal sgoods代理关系Whatisthedifferencebetweenanimporter andanagent 16 II GlobalBusinessInvolvement MarketEntryStrategies AdvantagesanddisadvantagesofexportmodesAdvantages a lessriskyb opportunityto learn overseasmarketsc capitalrequiredisnotveryhighd canexitthemarketrelativelyeasily 17 II GlobalBusinessInvolvement MarketEntryStrategies Disadvantages a salescontrolledbyoverseasagentsb profitsaffectedbythefluctuationofexchangerateandgovernment stradepolicy c cannotreactquicklytothechangeofthetargetmarket 18 II GlobalBusinessInvolvement MarketEntryStrategies 2 Intermediateentrymodes契约进入模式 Licensing许可经营 许可证进入模式ExampleCoca Colamarketsinternationallybylicensingbottlersaroundtheworldandsupplyingthemwiththesyrupneededtoproducetheproduct InJapan BudweiserbeerflowsfromKirinbreweries LadyBordenicecreamischurnedoutatMeijiMilkProductsdairies andMarlborocigarettesrolloffproductionlinesatJapanTobacco Inc TokyoDisneylandisownedandoperatedbyOrientalLandCompanyunderlicensefromtheWaltDisneyCompany The45 yearlicensegivesDisneylicensingfeesplus10percentofadmissionsand5percentoffoodandmerchandisesales 19 II GlobalBusinessInvolvement MarketEntryStrategies Advantages a Thecompanythusgainsentryintothemarketatlittlerisk b overcomethebarrierifthetargetcountryprohibitsimportanddirectinvestmentc getwell knowgloballywithoutabiginvestmentDisadvantages a lesscontroloverthelicenseeb createacompetitor 20 II GlobalBusinessInvolvement MarketEntryStrategies Franchising特许经营Question What sthedifferencebetweenfranchisingandlicensing 21 II GlobalBusinessInvolvement MarketEntryStrategies Advantagesa allowsfranchisortoincreaseitsnumberofoutletswithminimumcapitaloutlay 支出 b franchiseesaregenerallymorehighlymotivatedthansalariedmanagers c fewerpersonnelproblemsd littlerisk 22 II GlobalBusinessInvolvement MarketEntryStrategies Disadvantagesa hastocontrolandco ordinateanetworkofsemi independentbusinessmenb hastoensurethattheybuildandmaintainafavorableimageforthewholefranchisedoperationb monitoringofstandardsisvitalbutcanattimesbedifficultd createapotentialcompetitor 23 II GlobalBusinessInvolvement MarketEntryStrategies ContractManufacturing合约制造 合同制造 承包制造Definition AcooperationinwhichacompanycontractswithmanufacturersinaforeignmarkettoproduceitsproductorprovideitsserviceExamples aerospace computer semiconductor energy medical foodmanufacturing andautomotivefields 24 II GlobalBusinessInvolvement MarketEntryStrategies Advantages a reducethecostofbusinessexpansionandsavetimeb canrelyontheexpertiseofthethird partyc canfreetheirresourcesforotheractivitiesDisadvantages a themanufacturermaybecomeapotentialcompetitorb themanufacturermaynotbeabletodeliverthegoodsontimec maylosecontroloverthemanufacturer whichwillresultintheunsatisfiedqualityofgoods 25 II GlobalBusinessInvolvement MarketEntryStrategies OEM originalequipmentmanufacturer 原始设备制造商 初始设备厂家 国际替牌商的替牌生产Anoriginalequipmentmanufacturer orOEM manufacturesproductsorcomponentswhicharepurchasedbyapurchasingcompanyandretailedunderthepurchasingcompany sbrandname OEMreferstothecompanythatoriginallymanufacturedtheproduct Itisonepartyofcontractmanufacturing 26 II GlobalBusinessInvolvement MarketEntryStrategies Managementcontracting管理合同Definition Acooperationinwhichthedomesticfirmsuppliesthemanagementknow howtoaforeigncompanythatsuppliesthecapital thedomesticfirmexportsmanagementservicesratherthanproducts 27 II GlobalBusinessInvolvement MarketEntryStrategies Advantagesa low riskb yieldincomefromthebeginningc canuseexcessmanagerialtalentd canexploreopportunitiesforfurtherbusinessinvolvementDisadvantagesa limitedduration 28 II GlobalBusinessInvolvement MarketEntryStrategies TurnkeyOperation ATurnkeyoperationisdefinedasaproductorserviceconceptthatiscomplete installedandreadytouseupondeliveryorinstallation Theproductorserviceisthenleasedorsoldtoanindividualtorunashis herownventure Manufacturersofindustrialplantslikeelectricgeneratingplants cementplants oilrefineries andmanyothersusuallymaketheirsalesonthisbasis 总承包经营 交钥匙承包 29 II GlobalBusinessInvolvement MarketEntryStrategies Advantage theprojectsareusuallylarge long termandprofitableonesDisadvantage theabovementionedcharacteristicsalsoincreasetheuncertaintyoftheprojects e g politicalrisk it sdifficultforcompaniestopredicttheimpactofthechangesofforeigngovernmentontheproject 30 II GlobalBusinessInvolvement MarketEntryStrategies 3 ForeignDirectInvestment FDI Jointventures合资经营ExampleKFCenteredJapanthroughajointownershipventurewithJapaneseMitsubishi KFCsoughtagoodwaytoenterthelargebutdifficultJapanesefast foodmarket Inturn Mitsubishi oneofJapan slargestpoultryproducers understoodtheJapanesecultureandhadmoneytoinvest Together theyhelpedKFCsucceedinthesemiclosedJapanesemarket Surprisingly withMitsubishi sguidance KFCdevelopeddecidedlyun JapanesepositioningforitsJapaneserestaurants 31 II GlobalBusinessInvolvement MarketEntryStrategies AdvantagesofJointVenturesa extendyourmarketingreachb accessneededinformationandresourcesc buildcredibilitywithaparticulartargetmarketd accessnewmarketsthatwouldbeinaccessiblewithoutthepartnere Sharingofriskandability 32 II GlobalBusinessInvolvement MarketEntryStrategies Disadvantagesofjointventures a donothavefullcontrolofmanagementb potentialforconflictwithyourjointventurepartnerc culturaldifferencesandcommunicationsdifficultiesd potentiallyhighcapitalcostplusongoingfinancialsupportarerequirede highlevelofcommitmentofstaffandmanagementf higherrisk 33 II GlobalBusinessInvolvement MarketEntryStrategies HierarchicalModes Wholly ownedSubsidiaries全资进入模式Hierarchicalmodesrefertotheentryandstayinforeignmarketsthroughforeigndirectinvestmentinwhollyownedsubsidiaries 34 II GlobalBusinessInvolvement MarketEntryStrategies Advantagesofhierarchicalmodesa accesstolowercostsb improveitsimageinthehostcountryc deeperrelationshipwithgovernment customers localsuppliers anddistributorsd fullcontrolovertheinvestmentDisadvantagesofhierarchicalmodesfacemanyrisks 35 III FactorsConsideredinGlobalMarketing 1 EconomicEnvironmentA IncomeLevelPersonalincome decidesthepurchasingpowerofthepersonhimselfandhisfamilyNationalincome Generallyspeaking themorerapidistheincreaseofacountry sGNP themorebigarethedemandandpurchasingpowerformanufacturedgoods 36 III FactorsConsideredinGlobalMarketing B Populationa Thescaleofpopulationofcountrieswilldecidetheworldpotentialmarket b Thedistributionofpopulationwillinfluencethedemandforproducts promotionstrategiesanddistributionchannels c Theagestructureofthepopulationmeanstheamountofincome thesizeofhouseholdsanddifferentvaluestowardsanddemandsforgoods 37 III FactorsConsideredinGlobalMarketing d Thesexualstructurewillnotonlyinfluencethedemandfordifferentgoods thepurchasingmotivationandbehaviorofmaleandfemaleconsumersdiffer e Numbersofhouseholds numbersoffamilymembersandthedecision makingwayofahouseholdwillgreatlyinfluencethedemandoftheconsumers 38 III FactorsConsideredinGlobalMarketing C ConsumptionPatternsi Theexpenditureonfoodwillbereducedwhenahighincomehousehold sincomeincreases ii Theexpenditureonhousing powerandelectricalappliancesincreasesalittleandthatonfoodisreducedwhenahouseholdofaverageincomeseesanincreaseinitsincome iii Theexpenditureonfoodwillincreasewhenalowincomehousehold sincomeincreases butthisitemofexpenditurewilldecreasewhentheincomeisincreasingtoacertainamount 39 III FactorsConsideredinGlobalMarketing iv Whentheincomeofhouseholdsofaverageandhighincomeincreases theexpenditureonentertainment tourism educationandmedicalcarewillincrease v Withtheincreaseofincome theexpenditureonclothingoflowincomehouseholdswillincrease thatofaverageincomehouseholdswillincreasealittle butthatofhighincomehouseholdswillincreasegreatly 40 III FactorsConsideredinGlobalMarketing 2 SocialandCulturalEnvironmentDifferentwaysconsumersindifferentcountriesthinkaboutandusecertainproducts ExampleForexample theaverageFrenchmanusesalmosttwiceasmanycosmeticsandbeautyaidsashiswife Italianchildrenliketoeatchocolatebarsbetweenslicesofbreadasasnack WomeninTanzaniawillnotgivetheirchildreneggsforfearofmakingthembaldorimpotent 虚弱无力 41 III FactorsConsideredinGlobalMarketing Companiesthatignoresuchdifferencescanmakesomeveryexpensiveandembarrassingmistakes ExampleMcDonald sandCoca ColaoffendedtheentireMuslimworldbyputtingtheSaudiArabianflagontheirpackaging Theflag sdesignincludesapassagefromtheKoran thesacredtextofIslam andMuslimsfeelverystronglythattheirHolyWrit 圣经 shouldneverbewaddedupandtossedinthegarbage NikefacedasimilarsituationinArabcountrieswhenMuslimsobjectedtoastylized Air logoonitsshoesthatresembled Allah 安拉 真主 inArabicscript Nikeapologizedforthemistakeandpulledtheshoesfromdistribution 42 III FactorsConsideredinGlobalMarketing 万物非主 唯有真主 穆罕默德是安拉的使者 43 III FactorsConsideredinGlobalMarketing A Mainelementsofculturea Religionb Languagec SharedbeliefsandethicsExamples GiftgivinginMalaysia Giftsmaybeperceivedasabribe ifyouhavenotalreadyestablishedarelationshipwiththerecipient Thereisaculturalbeliefthatthegiverandrecipientmaybeembarrassedifthegiftturnsouttobeapoorchoice therefore giftsshouldbeputasideandopenwhenalone 44 III FactorsConsideredinGlobalMarketing Acceptablegiftsarequalitypens deskaccessories itemsrepresentingyourcountryorcity DonotgiveMuslimgiftsofalcohol anythingthathaspicturesofdogs DonotgiveHindusleatherproductsofanykind includingbeltsandpurses becausetheydonoteatbeeforusecattleproducts 45 III FactorsConsideredinGlobalMarketing B HowCultureAffectsConsumerBehavior a Culturehelpsindividualstodefineconceptsb Cultureaffects what when whoandtheoverallpatternofconsumerbuyingbehaviorC SomeExamplesofdifferentglobalbusinessbehavior SouthAmericansliketositorstandveryclosetoeachotherwhentheytalkbusiness infact almostnose to nose TheAmericanbusinessexecutivetendstokeepbackingawayastheSouthAmericanmovescloser Bothmayendupbeingoffended 46 III FactorsConsideredinGlobalMarketing Fastandtoughbargaining whichworkswellinotherpartsoftheworld isofteninappropriateinJapanandotherAsiancountries Moreover inface to facecommunications Japanesebusinessexecutivesrarelysayno Thus Americanstendtobecomeimpatientwithhavingtospendtimeinpoliteconversationabouttheweatherorothersuchtopicsbeforegettingdowntobusiness Theyalsobec
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