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Because learning changes everything.®

Chapter 8

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Global Marketing

Copyright 2022 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.



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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


Learning Objective 8.4 Highlight the similarities and

differences between a domestic marketing strategy

and a global marketing strategy.




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The processes by

which goods,

services, capital,

people, information,

and ideas flow

across national


deepblue4you/Getty Images 4



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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


Gross domestic product (GDP)

Purchasing power parity


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,


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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.

Shutterstock/Africa Studio 9



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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


• Tax on Imported


• Artificially raises


• Lowers demand.


• 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


In recent years, the value of the U.S.

dollar has changed significantly

compared with other important world


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.

© Sean Pavone / Alamy Stock Photo 13



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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


eu/about-eu/countries/index_en.htm” target=”_blank” rel=”nofollow noopener”>http://europa.eu/about-eu/countries/index_en.htm


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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.

Davydenko Yuliia/Shutterstock 16



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Geert Hofstede’s Cultural Dimensions

Power distance

Uncertainty avoidance

Individualism Masculinity

Time orientation





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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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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 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.

Jeafish Ping/Shutterstock 22



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A franchising contract allows the

franchisee to operate a

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