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Marketing:AnIntroductionFifteenthEditionChapter15TheGlobalMarketplaceCopyright©2023,2020,2017PearsonEducation,Inc.AllRightsReservedObjectivesOutline(1of2)15.1Defineglobalmarketingandthequestionscompaniesmustaskindecidingwhetherandhowtogoglobal.15.2Understandhowglobalpolitical,economic,sociocultural,technological,legal,andenvironmentalfactorsaffectacompany’sglobalmarketingdecisions.15.3
Discusshowcompaniesdecidewhethertogoglobaland,ifso,whichmarketstoenter.ObjectivesOutline(2of2)15.4Describethreekeyapproachestoenteringglobalmarkets.15.5Explainhowcompaniesadapttheirmarketingstrategiesandmarketingmixesforglobalmarkets.15.6Identifythethreemajorformsofglobalmarketingorganization.FirstStop:L’ORÉAL:“BeautyforAll.BeautyforEachIndividual.”Global–localbalance:CosmeticsandbeautycaregiantL’Oréalbalanceslocalbrandresponsivenessandglobalbrandimpact,offering“beautyforall”byproviding“beautyforeachindividual.”ObjectiveOutline15.1Defineglobalmarketingandthequestionscompaniesmustaskindecidingwhetherandhowtogoglobal.GlobalCompanyOperatesinmorethanonecountryGainsmarketing,production,researchanddevelopment(R&D),financialandotheradvantagesthatarenotavailabletopurelydomesticcompetitorsFacesincreasingproblemsHighlyunstablegovernmentsandcurrenciesRestrictivegovernmentpoliciesandregulationsHightradebarriersandcorruptionFigure15.1TheFive-StepGlobalMarketingProcessObjectiveOutline15.1SummaryGlobalmarketingistheprocessofmarketingproductsandserviceswithinandacrossmultiplecountries.Companiesmustcarefullyconsiderwhetherandhowtogoglobal.Theglobalmarketingprocessinvolvesfivesteps:UnderstandingtheglobalmarketingcontextDecidingwhethertogoglobalandwhichmarketstoenterDecidinghowtoenterglobalmarketsDecidingontheglobalmarketingprogramDecidingontheglobalmarketingorganizationObjectiveOutline15.2Understandhowglobalpolitical,economic,sociocultural,technological,legal,andenvironmentalfactorsaffectacompany’sglobalmarketingdecisions.UnderstandingtheGlobalMarketingContextThePESTLEframework-atoolforanalyzingtheforcesthatimpactmarketingdecisionsinglobalenvironmentsPESTLEstandsforfactorsthatsetthemarketingcontextinanycountryorregion:Political,Economic,Sociocultural,Technological,Legal/InstitutionalEnvironmental/EcologicalPoliticalContextThepoliticalsystemsinsomenationsarereceptivetoforeigncompanies;othersarelessso.Russia’srecentgeopoliticalconflictswithEurope,theUnitedStates,andothercountrieshavemadedoingbusinessinRussiadifficultandrisk.Acompanymustevaluateboththenatureandthecertaintyofthepoliticalclimatebeforecommittingtoenteracountry.Ifthereareseriouspoliticalconcerns,thecompanymaydecidetoenterinawaythatitscommitmentcanbereversedquicklyandefficiently.EconomicContextCompaniesshouldfocusontwokeyeconomicdimensions:thelevelofindustrialdevelopmentthepatternofincomedistribution.Thelevelofindustrialdevelopmentshapesitsincomeandemploymentlevelsanditsproductandserviceneeds.Asdevelopedmarketshavebecomemorestagnantandcompetitive,manycompanieshavefocusedonthepeoplewholiveonlessthan$2.50aday.SocioculturalContextEachcountryhasitsownpractices,norms,andtaboos.Companiesmustunderstandhowcultureaffectsconsumerreactionsineachoftheirglobalmarkets.Theymustalsounderstandhowtheirstrategiesaffectlocalcultures.TheImpactofCultureonMarketingStrategyCultureandmarketingstrategy:MarriottInternationalrecentlystumbledinChinawhenitswebsitelistedTibet,HongKong,Macau,andTaiwanas“countries.”TheChinesegovernmentshutdownMarriott’sChinesewebsiteandappformorethanaweek.DimensionsofNationalCulturesGeertHofstede’sSixDimensionsofNationalCultureframework:PowerDistanceIndex—HighversusLowIndividualismversusCollectivismToughnessversusTenderness.UncertaintyAvoidanceIndex—HighversusLow.Long-TermOrientationversusShort-TermOrientation.IndulgenceversusRestraint.Figure15.2AComparisonoftheUnitedStatesandChinaonHofstede’sSixCulturalDimensionsImpactofMarketingStrategyonCulturesAmericanbrandsinothercultures:KFChasbecomeoneofJapan’sleadingChristmasdiningtraditions.TheiconicColonelSandersstandsinasakindofJapaneseFatherChristmas,wishingJapanesecustomersamerry“KentuckyChristmas.”TechnologicalContextGlobalmarketinghasbeenenergizedbythreeadvances:Electronicnetworks
carryhugeamountsofinformationtoeverypartoftheglobe.Smartdevices:computers,smartphones,andtabletsinterfacewiththeInternetandnetworks.Digitalcommerceplatforms
bringtogetherbuyersandsellers.LegalandInstitutionalContextTheglobaltradeperspectiveCompaniesengaginginglobaltradefacerestrictionsbetweennations.Countriesmayimpose:tariffsduties,quotasInorderto:raiserevenue,protectdomesticcompanies,managecurrencyreservesandfluctuations,managetradedeficitsWorldTradeOrganization(WTO)EstablishedbytheGeneralAgreementonTariffsandTrade(GATT)in1995PromotesworldtradebyreducingtariffsandotherinternationaltradebarriersNegotiatestoreassesstradebarriersandestablishnewrulesforinternationaltradeImposesinternationaltradesanctionsandmediatesglobaltradedisputesRegionalFreeTradeZones(1of2)Economiccommunity:GroupofnationsorganizedtoworktowardcommongoalsintheregulationofinternationaltradeEuropeanUnion(EU)UnitedStates-Mexico-CanadaAgreement(USMCA).ComprehensiveandProgressiveAgreementforTrans-PacificPartnership(CPTPP)RegionalFreeTradeZones(2of2)Economiccommunities:TheEuropeanUnionrepresentsoneoftheworld’slargestsinglemarkets,hometonearlyhalfabillionconsumers.InternalLegalPerspective(1of2)Globalmarketersmayfacerulesandrestraints:CurrencyRestrictions:sellersmusttakepaymentinitsownoralesswidelyacceptedworldcurrency.LaborrestrictionsNontarifftradebarriers:biasesagainstcertainkindsofbidsforbusinesscontractsrestrictiveproductstandardsexcessiveorselectivehost-countryregulationsorenforcement.InternalLegalPerspective(2of2)Nontarifftradebarriers:Newrestrictionsonforeign-ownedonlinesellerscausedmajorobstaclesforAmazoninIndia’shugee-commercemarket.TheEnvironmentalandEcologicalContextCountriesandsocietiesareconcernedaboutsocialandenvironmentalconditionsandfeelincreasingpressurefrom:CustomersEmployeesPolicymakersCitizensGovernmentsandcompaniesincreasedregulationsandinitiativesforsustainablebusinesspractices.ManycompanieshavetheirownsustainableinitiativesandpracticesObjectiveOutline15.2SummaryAcompanymustunderstandthemacroenvironmentalcontextsofthecountriesorregionsinwhichitmightoperate.ThePESTLEframeworkprovidesausefultoolforanalyzingtheforcesthatmightimpactitsmarketinginvariousglobalmarkets.PESTLEstandsforthePolitical,Economic,Sociocultural,Technological,Legal/Institutional,andEnvironmental/Ecologicalfactorsthatsetthemarketingcontextinanycountryorregion.ObjectiveOutline15.3Discusshowcompaniesdecidewhethertogoglobaland,ifso,whichmarketstoenter.DecidingWhethertoGoGlobalFactorsinfluencingthedecision:Attacksonacompany’shomemarketbyglobalcompetitorsExpandingcustomerbaseininternationalmarketsBetteropportunitiesforgrowthDecidingWhichMarketstoEnterAcompanyshouldDefineitsinternationalmarketingobjectivesandpoliciesDecidewhatvolumeofforeignsalesitwantsChooseinhowmanycountriesitwantstomarketDeterminethetypesofcountriestoenterEvaluateeachmarketTable15.1IndicatorsofMarketPotential(PESTLEFactors)PoliticalcontextTechnologicalcontextNationalprioritiesPresenceofrobustelectronicnetworksPoliticalstabilityandcompatibilityAdoptionofsmartdevicesGovernmentattitudestowardglobaltradePresenceofdigitalcommerceplatformsMonetaryandtraderegulationsBlank
EconomiccontextLegalcontextCountrysizeMembershipinglobaltradeorganizationsGDPandgrowthrateCurrencycontrolsIncomedistributionLaborrestrictionsMarketaccessibilityNon-tradetariffbarriersNatural,financial,andhumanresourcesBlankSocioculturalcontextEnvironmentalcontextCulturalandsocialnormsCorporatesocialresponsibilityregulationsConsumerlifestyles,beliefs,andvaluesEnvironmentalregulationsBusinessnormsandapproachesExpectedvoluntarysustainabilityinitiativesLanguagesBlankObjectiveOutline15.3SummaryCompaniesmustassesswhichmarketsofferthebestopportunitiesOperatingdomesticallyiseasierandsaferAcompanycanchoosetogoglobalformultiplereasons:tofindgrowthinglobalmarketstofendoffcompetitiveattacksbycompetitorstobetterservicecustomerswhoareexpandingabroadtoreducetherisksofbeingconcentratedinonecountry.Themarketermustdecidewhichmarketsofferthemostattractivelong-runriskversusreturnprofilesObjectiveOutline15.4Describethreekeyapproachestoenteringglobalmarkets.Figure15.3MarketEntryStrategiesObjectiveOutline15.4SummaryThecompanymustdecidehowtoentereachchosenmarket:Exporting,JointventuringDirectinvestment.ObjectiveOutline15.5ExplainhowcompaniesadapttheirmarketingstrategiesandmarketingmixesforglobalmarketsDecidingontheGlobalMarketingProgramStandardizedglobalmarketingUsingthesamemarketingstrategyandmixinallofthecompany’sinternationalmarketsAdaptedglobalmarketingAdjustingthemarketingstrategyandmixelementstoeachinternationaltargetmarketCreatesmorecostsProducesalargermarketshareandreturnFigure15.4FiveGlobalProductandCommunicationsStrategiesPromotion(1of2)Globalcompaniesoftenhavedifficultycrossingthelanguagebarrier.CommunicationadaptationAglobalcommunicationstrategyoffullyadaptingadvertisingmessagestolocalmarkets.Promotion(2of2)Communicationadaptation:InChina,LEGOoffersroboticsclassesforkids.SaysoneChinesemotherwhopaysmonthlytoenrollherdaughter“She’slearningtothinkmorelogicallyandimprovinghermotorskills.Theclassesaresoworththecost.”PriceSetauniformpricegloballySetaccordingtothecustomersUseastandardmarkupofthecompany’scostseverywhereFigure15.5Whole-ChannelConceptforInternationalMarketingObjectiveOutline15.5SummaryCompaniesmustdecidehowmuchtheirmarketingstrategiesandtheirproducts,promotion,price,andchannelsshouldbeadaptedforeachforeignmarket.Someglobalcompaniesusestandardizedglobalmarketingworldwide.Othersuseadaptedglobalmarketing However,globalstandardizationisnotanall-or-nothingproposition.Mostinternationalmarketerssuggestthatcompaniesshould“thinkgloballybutactlocally”ObjectiveOutline15.6Identifythethreemajorformsofinternationalmarketingorganization.DecidingontheGlobalMarketingOrganizationMethodsofmanaginginternationalmarketingactivities:OrganizinganexportdepartmentCreatinginternationaldivisionsGeographicalorganizationsWorldproductgroupsInternationalsubsidiariesBecomingaglobalorganizationObjectiveOutline15.6SummaryCompaniesmustdevelopaneffectiveorganizationforinternationalmarketing.Therearethreemajorformsofinternationalmarketingorganization:ExportdepartmentInternationaldivisionGlobalorganizationsFinalThoughtsDescribethethreekeyapproachestoenteringinternationalmarkets.Whichdoyoubelievewouldbethebestforacompanyjustbeginningtoworkinternationally?Marketing:AnIntroductionFifteenthEditionChapter16SustainableMarketing:SocialResponsibilityandEthicsCopyright©2023,2020,2017PearsonEducation,Inc.AllRightsReservedObjectivesOutline(1of2)16.1Definesustainablemarketinganddiscussitsimportance.16.2Identifythemajorsocialcriticismsofmarketingandsomecounterarguments.ObjectivesOutline(2of2)16.3Understandhowconsumer,societal,andcorporateforcesdrivesustainablemarketingstrategy.16.4Understandhowtobuildasustainablemarketingorganization.FirstStop:Patagonia’s“ConsciousConsumption”:TellingConsumerstoBuyLessBalancingpurposeagainstprofits:Afor-profitfirmtellingcustomerstobuylesssoundscrazy.Butit’srightinlinewithPatagonia’sreasonforbeing—”tosaveourplanet.”ObjectiveOutline16.1Definesustainablemarketinganddiscussitsimportance.Figure16.1
SustainableMarketingSustainableMarketingSustainability:McDonald’shasrespondedtosustainabilitychallengesbydiversifyingintosalads,fruits,grilledchicken,low-fatmilk,andotherhealthyfare,includingHappyMealsofferingmorebalancedfoodcomponentswithsimpleringredients.ObjectiveOutline16.1SummarySustainablemarketing—meetingpresentneedswhilepreservingtheabilityoffuturegenerationstomeettheirneedsSustainablemarketingcallsforsociallyandenvironmentallyresponsibleactionsSustainablemarketingrequiresconsumers,companies,publicpolicymakers,andotherstoworktogetherObjectiveOutline16.2Identifythemajorsocialcriticismsofmarketingandsomecounterarguments.SocialCriticismsofMarketingImpactonIndividualConsumersImpactonSocietyasaWholeImpactonOtherBusinessesMarketing’sImpactonIndividualConsumers(1of2)HighpricesDeceptivepracticesHigh-pressuresellingShoddy,harmful,orunsafeproductsPlannedandperceivedobsolescencePoorservicetodisadvantagedconsumersMarketing’sImpactonIndividualConsumers(2of2)Aheavilypromotednationalbrandsellsformuchmorethanavirtuallyidenticalnon-brandedorstore-brandedproduct.Criticschargethatpromotionaddsonlypsychologicalvaluetotheproductratherthanfunctionalvalue.Marketing’sImpactonSocietyasaWhole(1of2)FalseWantsandTooMuchMaterialismTooFewSocialGoodsCulturalPollutionMarketing’sImpactonSocietyasaWhole(2of2)Materialism:Somemarketersareurging“consciousconsumption.”REIclosesitsstoresonBlackFridayandencouragescustomersto#OptOutside.Marketing’sImpactonOtherBusinessesAcquisitionsofcompetitorsMarketingpracticesthatcreatebarrierstoentryUnfaircompetitivemarketingpracticesObjectiveOutline16.2SummaryMajorsocialcriticismsofmarketingImpactonindividualconsumerwelfareImpactonsocietyImpactonotherbusinessesObjectiveOutline16.3Understandhowconsumer,societal,andcorporateforcesdrivesustainablemarketingstrategy.TraditionalRightsSeller’srightsBuyer’srightsTointroduceanyproductinanysizeandstylewithproperwarningsandcontrols,ifnecessaryTobuyaproductthatisofferedforsaleTochargeanypricefortheproductwithoutanydiscriminationToexpecttheproducttobesafeTospendanyamounttopromotetheproductifcompetingfairlyToexpecttheproducttoperformasclaimedTouseanyproductmessagethatisnotmisleadingordishonestBlankTousebuyingincentiveprogramsthatarenotunfairormisleadingBlankProposedConsumerRightsTobewellinformedTobeprotectedagainstquestionableproductsandmarketingpracticesToinfluenceproductsandmarketingpracticestoimprove“qualityoflife”ToconsumeinawaytopreservetheworldforfuturegenerationsofconsumersEnvironmentalismProtectsandimprovespeople’scurrentandfuturelivingenvironmentConcernedwithDamagetotheecosystemLossofrecreationalareasIncreaseinhealthproblemsEnvironmentalsustainability:GeneratingprofitswhilehelpingprotecttheenvironmentFigure16.2
EnvironmentalSustainabilityandSustainableValueSource:BasedonStuartL.Hart,“SustainableValue,”/sustainablevalue.html,October2016.ObjectiveOutline16.3SummaryCitizenactionmovementsConsumerismEnvironmentalismCompaniesareadoptingpoliciesofenvironmentalsustainability.ObjectiveOutline16.4Understandhowtobuildasustainablemarketingorganization.SustainableMarketingPrinciples(1of3)Customer-centricmarketingViewingandorganizingacompany’smarketingactivitiesfromtheconsumer’spointofviewCustomervalue-buildingmarketingPuttingmostofacompany’sresourcesintocustomervalue-buildingmarketinginvestmentsSense-of-missionmarketingDefiningacompany’smissioninbroadsocialtermsSustainableMarketingPrinciples(2of3)Marketingethics:UnderArmour’sCodeofConducturgesallemployeesto“Protectthishouse—Maketherightcall.”regardingissuesofethicsandsocialresponsibility.“It’sassimpleasitsounds.SustainableMarketingPrinciples(3of3)Sense-of-missionmarketing:Pedigreemakesgooddogfoodbutthat'snotwhatthebrandisreallyallabout.Instead,atitscore,thebrandisaboutlovingandcaringfordogs.MarketwithEthics(1of2)Corporatemarketingethicspoliciesshouldbedevelopedbyfirmsasguidelinesforhandlingvariousissuesanddilemmas.DistributorrelationsAdvertisingstandardsCustomerservicePricingProductdevelopmentGeneralethicalstandardsMarketwithEthics(2of2)Principlesareneededtoguidecompaniesandmarketingmanagersonissuesofethicsandsocialresponsibility.Thefreemarketandthelegalsystemshoulddecidesuchissues.Responsibilityisinthehandsofindividualcompaniesandmanagers.Addressingethicshelpsbuildstrongcustomerrelationshipsbasedonhonestyandtrust.Table16.1SomeMorallyDifficultSituationsinMarketing1.YourR&Ddepartmenthaschangedoneofyourcompany’sproductsslightly.Itisnotreally“newandimproved,”butyouknowthatputtingthis
statementonthepackageandinadvertisingwillincreasesales.Whatwouldyoudo?2.Youhavebeenaskedtoaddastripped-downmodeltoyourlinethatcouldbeadvertisedtopullcustomersintothestore.Theproductwon’tbe
verygoodbutsalespeoplewillbeabletoswitchbuyerswhocomeintothestoreuptohigher-pricedunits.Youareaskedtogivethegreenlight
forthestripped-downversion.Whatwouldyoudo?3.Youarethinkingofhiringaproductmanagerwhohasjustleftacompetitor’scompany.Shewouldbemorethanhappytotellyouallthe
competitor’splansforthecomingyear.Whatwouldyoudo?4.Oneofyourtopdealersinanimportantterritoryrecentlyhashadfamilytroublesandhissaleshaveslipped.Itlookslikeitwilltakehimawhile
tostraightenouthisfamilyproblems.Meanwhile,youarelosingmanysales.Legally,onperformancegrounds,youcanterminatethedealer’s
franchiseandreplacehim.Whatwouldyoudo?5.Youhaveachancetowinabigaccountinanothercountrythatwillmeanalottoyouandyourcompany.Thepurchasingagenthintsthata“gift”
wouldinfluencethedecision.Suchgiftsarecommoninthatcountryandsomeofyourcompetitorswillprobablymakeone.Whatwouldyoudo?6.Youhaveheardthatacompetitorhasanewproductfeaturethatwillmakeabigdifferenceinsales.Thecompetitorwilldemonstratethefeature
inaprivatedealermeetingattheannualtrades
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