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Chapter 8
Global Marketing
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Learning Objectives
Learning Objective 8.1 Describe the components of a
country market assessment.
Learning Objective 8.2 Understand the marketing
opportunities in BRIC countries.
Learning Objective 8.3 Identify the various market entry
strategies.
Learning Objective 8.4 Highlight the similarities and
differences between a domestic marketing strategy
and a global marketing strategy.
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Globalization
The processes by
which goods,
services, capital,
people, information,
and ideas flow
across national
borders.
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Assessing Global Markets
EXHIBIT 8.1 Components of a Country Market Assessment
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Evaluating the General Economic Environment Using Economic Metrics
Trade deficit or
surplus
Gross domestic product (GDP)
Purchasing power parity
(PPP)
Gross national income (GNI)
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Evaluating Market Size and Population Growth Rate
Population growth dispersal: strong demand
in BRIC (Brazil, Russia, India, China) nations
Distribution of the population within a
particular region: rural vs. urban
Shutterstock / Pablo Scapinachis 7
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Exhibit 8.2 Big Mac Index
Source: The Economist, “The Big Mac Index,” July 13, 2017,
www.economist.com/content/big-mac-index.
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Evaluating Real Income
Firms can make
adjustments to an existing
product or change the price
to meet the unique needs of
a particular country market.
For the Chinese market,
Haier sells washing
machines that can wash
both clothes and vegetables.
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Analyzing Infrastructure and Technological Capabilities
Marketers are especially concerned with four
key elements of a country’s infrastructure:
• Transportation.
• Distribution Channels.
• Communications.
• Commerce.
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Analyzing Governmental Actions
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Tariffs and Quotas
Tariffs
• Tax on Imported
good.
• Artificially raises
prices.
• Lowers demand.
Quotas
• Minimum or
maximum limit.
• Reduces availability
of imported goods.
Both benefit domestically made products because
they reduce foreign competition.
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Exchange Control
Regulation of a country’s currency
exchange rate: the measure of how much
one currency is worth in relation to
another.
In recent years, the value of the U.S.
dollar has changed significantly
compared with other important world
currencies.
Prices are nearly always lower in the
country of origin because there are no
customs or import duties to pay, and
international transportation expenses are
less than domestic ones.
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Trade Agreements
A trade agreement is an intergovernmental
agreement designed to manage and promote trade
activities for a specific region, and a trading bloc
consists of those countries that have signed a
particular trade agreement.
• There have been recent challenges to long-
established regional trade agreements (RTAs),
• Yet RTAs account for more than half of
international trade.
Source: Information about EU members is from http://europa.eu/about-eu/countries/./index_en.htm 14
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Analyzing Sociocultural Factors
Understanding another culture is crucial to the
success of a global marketing initiative.
Exists on two levels:
• Visible artifacts.
• Underlying values.
Participants in a parade during the 23rd International
Mariachi & Charros festival in Guadalajara Mexico
Kobby Dagan/Shutterstock 15
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Ethical & Societal Dilemma 8.2: Dolce & Gabbana Faces Public Scrutiny in China
Dolce & Gabbana learned a tough lesson about the
importance of embracing and promoting a local
audience’s culture in a positive way.
An international fashion crisis ensued when designer Dolce & Gabbana released videos
satirizing the Chinese dialect and dining customs. Alibaba and JD.com, China’s two largest e-
commerce sites, retaliated by removing Dolce & Gabbana products from their online stores.
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Geert Hofstede’s Cultural Dimensions
Power distance
Uncertainty avoidance
Individualism Masculinity
Time orientation
IndulgenceCulture
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Exhibit 8.3: Country Clusters Power Distance and Individualism
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Source: Geert Hofstede, Gert Jan Hofstede, and Michael Minkov, Cultures and Organizations, Software of the Mind, Third Revised Edition, McGraw-Hill 2010, ISBN: 0-07-
166418-1. © Geert Hofstede B.V. quoted with permission. 18
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The Appeal of the BRIC Countries
Great potential for growth in the global community:
• Brazil.
• Russia.
• India.
• China.
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PROGRESS CHECK (1 of 3)
1. What metrics can help analyze the economic
environment of a country?
2. What types of governmental actions should we
be concerned about as we evaluate a country?
3. What are some important cultural dimensions?
4. Why are each of the BRIC countries viewed as
potential candidates for global expansion?
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Exhibit 8.4: Global Entry Strategies
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Exporting
Exporting means producing
goods in one country and
selling them in another.
This entry strategy requires
the least financial risk but
also allows for only a limited
return to the exporting firm.
Rolex exports its watches to countries all over the
world from its factory in Switzerland.
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Franchising
A franchising contract allows the
franchisee to operate a
