Chapter 5 Global Marketing MKTG9 Lamb, Hair, and McDaniel © 2016 Cengage Learning. All Rights Reserved. 5-2 Multinational Firms Multinational corporations are those heavily engaged in international trade, moving products and services across national boundaries. A multinational company may have several worldwide headquarters. © 2016 Cengage Learning. All Rights Reserved. Global Business Development Avenues 1 Companies operate in one country and sell into others 2 Set up foreign subsidiaries to handle sales 3 Operate an entire line of business in another country 4 Virtual operation © 2016 Cengage Learning. All Rights Reserved. 3 Global Business Development Avenues 1 i.e. BMW 2 i.e. Hamilton 3 i.e. Coca-Cola 4 i.e. Amazon 4 5-3 External Environment Facing Global Marketers Lets Discuss the external environment facing global marketers © 2016 Cengage Learning. All Rights Reserved. External Environment Facing Global Marketers Culture Natural Resources Economic Development Political Structure Demographic Makeup © 2016 Cengage Learning. All Rights Reserved. 6 Economic Development: ex - China and India • China and India have two of the highest growth rates in the world. • Have the world’s two largest populations. • Among highest levels of income disparity. • Great linguistic and cultural diversity. 7 Legal Considerations Tariff A tax levied on goods Entering a country Quota Limit on the amount of a product entering a country Boycott Exclusion of products from a country Exchange Control Currency Restriction Trade Agreement An agreement to stimulate international trade 8 Global Marketing by the Individual Firm Lets discuss the various ways of entering the global marketplace 9 4 Why “Go Global”? ▪ Saturated domestic markets ▪ Generate new streams of revenues from an untapped market with new target audience segments 10 Entering the Global Marketplace Export Sell domestically produced products to buyers in other countries Licensing and Franchising Legal process allowing use of manufacturing/patents/knowledge Contract Manufacturing Private-label manufacturing by a foreign country Joint Venture Domestic firm buys/joins a foreign company to create new entity Direct Investment Active ownership of a foreign company/manufacturing facility 11 Entering the Global Marketplace Export i.e. Ford Mustang Licensing and Franchising Broadway Plays Contract Manufacturing Product Manufacturing Limitations Joint Venture ABC, FOX & NBC form Hulu Direct Investment Invest in Swatch Group 12 Homework Due On 10/19 For your Group Project, based on this deck and CH 5 in your text book, provide a preliminary opinion as to whether or not you will engage in international trade (sell your product oversees) either now or in the future. If yes, describe an example of how you would do this. For example would it be a joint venture or a direct investment? 13
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