Welcome - 2003

• Course introduction and overview
• The course game plan - shorter assignments to build skills
• Web sites - ITC is updated frequently - unavailable due to updates
• Exporters’ Handout - bring every week
• Readings - 5 tonight
• Protectionism, cooperation, multinational markets

• Meeting unmet needs for target markets
• Identifying those unmet needs, planning how to meet them through products, services, and ideas. Choosing appropriate marketing research methods to do so.
• Communicating that these solutions are available
• Pricing them so that they are affordable and profitable
• Distributing them so that customers have appropriate access and delivery

• We examine the political, legal, cultural, economic, financial systems that are operating and forecast alternative futures
• We evaluate the infrastructure using reliable data sources
• We assess these against the core competencies of our company
• We apply proven frameworks, such as SWOT analysis, gap analysis, etc.
• We search for appropriate partners

• What is it??? Lack of consensus
• Can having a well-planned global marketing strategy result in satisfactory global market performance?
• Standardization: Levitt approach to similar products and demands
• Configuration and Coordination: configure value chain for comparative advantage and coordinate across markets
• Integration: interdependence among actions in multiple markets

• Looking at global markets from a managerial point of view - analyzing, interpreting, planning the connection between marketing decisions and performance
• Learning the concepts and frameworks for analysis
• Learning how to find accurate, current data
• Companies:  Starbucks, Pepsi, Sanex, the GAP, AOL, Wal Mart, and DowBrands

Why Global Marketing is Imperative
“Change in the World’s 100 Largest Companies”-
     what happened to U.S. leadership?
     Is this good or bad or expected?
Global vs international vs multinational

What is meant by a Global firm?
      What mindset do you think that U.S. firms adopt?
      What mindset do we adopt in our classes?

Evolution of Global Marketing
  Export Marketing
        ethnocentric - starts with home needs
        sweetened cereal to CountryX??
   International Marketing
        polycentric - different cereals to each market
        multidomestic marketing - different subsidiaries for each market - is it ever justified?
    Multinational Marketing
        regiocentric - looks for some commonalities among regions - cereals in Asia?

Evolution of Global Marketing (cont)
 Global Marketing
        geocentrism
        reduction of cost inefficiencies and duplication of efforts
        opportunities to transfer products, brands and ideas across subsidiaries
        emergence of global customers
        improved linkages … leading to global market infrastructure

Globalization of Markets and Competition
    “ US Balance of Goods, Services and Income over 20 Year Period”
    What’s all the fuss about? See ITC web site for product-specific information
    Isn’t this natural as other nations grow and develop their own industries?
    Isn’t this natural as products from other countries are desirable around the world?

• Suppose that the US had highly integrated trade agreements with Iraq? With North Korea?

What Should Be Counted?
    If a product is made in US and sold overseas
    If a US firm makes a product in Japan and sells it in a third country
    If Honda makes a car in Marysville but sells it in Europe
    If a US-owned firm licenses its technology and brands to be manufactured and sold in another country
    Is the trade balance really understood?
 

Strategies for Global Firms
All countries are considered as part of your market
Identify globally strategic markets, understand needs, commonalities and differences
Identify whether adaptations are needed or whether a standardized product is acceptable
Can you name some global brands?  Why do you think that they are global?
 

Standardization vs. Adaptation
How much can be kept the same?
From the customer’s point of view?
From the company’s point of view?
Coke vs. Pepsi

See page 27 - dominant design story of VHS and Betamax
 

Costs of redesign? Engineering time?
Sourcing? local content laws? tariffs? expense of transportation?
Local labor? qualifications? tariff reduction? less vulnerability?
Production facilities? quality of plants? technology?
Nontariff barriers?  packaging? ingredients? other restrictions?
Shift costs among multiple markets?
Consumer preferences? changes in taste, size, flavor? use? ads?

Let’s Consider Honda’s 1997 Platform as an Example
Flexible platform to reduce redesign
same platform used for vastly different vehicles
One size does not fit all
Consumer preferences? too small in U.S., smaller in Japan, narrow in Europe

Theory of Comparative Advantage
The total world product is less at various levels of production mixes
    than when there is a concentration of production units on the product
    in which the country has the greatest comparative advantage
Principles of international trade
1. countries benefit from international trade
2. international trade increases worldwide production by specialization
3. exchange rates are primarily determined by traded goods

Where and how to locate value-added chain
Global environment - How to reduce tariffs, how to work with gov.
        (countervailing duties vs. dumping)
        how to predict political risk and minimize product vulnerability
 What is going on in the industry? - competitive changes?
 What is going on in our firm? - do we have capital to invest?
    What is happening in all markets? How much time can we allow for profits to occur?
How can we optimize our choices and location of each part of the process?
 

 Recognize interdependence of markets:
    Can some markets be grouped into regions?
    Will the product be considered the same way in different countries?
    Can some sourcing be done for several markets?
    Can manufacturing in one location serve several markets?
    Can similar technologies or basic products serve several markets?
    Can intellectual property rights be maintained?
 

You are a senior exec in the international division of a food MNC
You manufacture standardized breakfast cereals to many countries around the world
Sweetness may be modified
Highly successful in China - new in India
First year was good - then sales dropped
HH with career couples adopted it - but returned to traditional Indian breakfast
What can you do?
 
 
 
 
 

Website exercises
Look at www.toyota.com
Is it a global company?
How would you describe Toyota in terms of their approach to marketing?
How about www.kelloggs.com
www.pg.com
 
 
 

 

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