Chapter 15 - Reaching Global Consumers and Markets

14 MARKETING AN INTRODUCTION
Armstrong/Kotler
15 Reaching global consumers

and markets
Copyright © 2015 Pearson Education, Inc. Publishing as Prentice Hall

Chapter Outline
A. The nature of global marketing strategies
B. Global environmental scan
C. Global market-entry strategies
D. Global marketing programme
Copyright 2020 Pearson Education, Ltd 14- 2

(Armstrong, Kotler & Opresnik)
Copyright © 2015 Pearson Education, Inc. Publishing as Prentice Hall
Global Firm
• Operating in more than one country, often in
numerous countries, gains marketing, production,
R&D, financial, and other advantages that are not
available to purely domestic competitors.
• Faces increasing problems
• Highly unstable governments and currencies
• Restrictive government policies and regulations
• High trade barriers and corruption
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Figure 15.1
The Five-Step Global Marketing Process
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Understanding the Global Marketing
Context
• The PEST L E framework- a tool for analyzing the forces
that impact marketing decisions in global environments
PESTL E stands for factors that set the marketing context
in any country or region:
– Political,
– Economic,
– Sociocultural,
– Technological,
– Legal and Institutional
– Environmental and Ecological
Political Context
• The political systems in some nations are receptive to

foreign companies; others are less so.
– Russia’s recent geopolitical conflicts with Europe, the
United States, and other countries have made doing
business in Russia difficult and risk.
• A company must evaluate both the nature and the certainty
of the political climate before committing to enter a country.
Economic Context
• Companies should focus on two key economic dimensions:
– the level of industrial development (structure)
 Subsistence, developed, and developing economies
– the pattern of income distribution (low-, medium-, and

high-income households).
• The level of industrial development shapes its income and
employment levels and its product and service needs.
Sociocultural Context
• Companies must understand how culture affects consumer

reactions in each of their global markets.
• They must also understand how their strategies affect local
cultures.
The Impact of Culture on Marketing
Strategy
Culture and marketing
strategy: Marriott International
recently stumbled in China
when its website listed Tibet,
Hong Kong, Macau, and
Taiwan as “countries.” The
Chinese government shut
down Marriott’s Chinese
website and app for more
than a week.
Impact of Marketing Strategy on
Cultures
American brands in other
cultures: K F C has become
one of Japan’s leading
Christmas dining traditions.
The iconic Colonel Sanders
stands in as a kind of
Japanese Father
Christmas, wishing
Japanese customers a
merry “Kentucky
Christmas.”
Technological Context
• Global marketing has been energized by three advances:
– Electronic networks carry huge amounts of
information to every part of the globe.
– Smart devices: computers, smartphones, and tablets
interface with the Internet and networks.
– Digital commerce platforms bring together buyers
and sellers.
Legal and Institutional Context
• The global trade perspective
– Companies engaging in global trade face restrictions
between nations.
– Countries may impose:
 tariffs
 quotas
 exchange controls
 nontariff trade barriers
• In order to:
– raise revenue,
– protect domestic companies,
– manage currency reserves and fluctuations
– manage trade deficits
The Environmental and Ecological
Context
• Countries and societies are concerned about social and

environmental conditions and feel increasing pressure
from:
– Customers
– Employees
– Policy makers
– Citizens
• Governments and companies increased regulations and
initiatives for sustainable business practices.
Deciding Whether To Go Global
Factors influencing the decision:
• Attacks on a company’s home market by global
competitors
• The company might want to counterattack these
competitors in their home markets.
• The company’s customers might be expanding
abroad and require international servicing.
• A diversified presence across numerous countries
can dilute the risks that come with being overly
concentrated in one country.
• Expanding customer base in international markets
and better opportunities for growth.
Deciding Which Markets To Enter
• Define international marketing objectives and
policies
• Foreign sales volume
• How many countries to enter
• Types of countries to enter based on:
 Geography
 Income and population
 Political climate
Evaluate each market

Deciding How To Enter The Market
Market Entry Strategies
Exporting
Exporting is when the company produces its goods
in the home country and sells them in a foreign
market. It is the simplest means involving the least
change in the company’s product lines,
organization, investments, or mission.
• Indirect exporting
• Direct exporting

Joint venturing
Joint venturing is when a firm joins with foreign
companies to produce or market products or
services.
i. Licensing
ii. Contract manufacturing
iii. Management contracting
iv. Joint ownership
Joint venturing differs from exporting in that the
company joins with a host country partner to
sell or market abroad.

Direct Investment
Direct investment is the development of
foreign-based assembly or manufacturing
facilities. It offers a number of advantages
including:
• Labor
• Logistics
• Control
• Government incentives
• Lower costs
• Raw materials
Deciding on the Global
Marketing Program
Standardized global marketing
• Using the same marketing strategy and mix in all of the

company’s international markets
• Cost more affordable
Adapted global marketing
• Adjusting the marketing strategy and mix elements to each

international target market
• Creates more costs
• Produces a larger market share and return

Product
• Straight product extension means marketing a product
in a foreign market without any change.
• Product adaptation involves changing the product to
meet local conditions or wants.
• Product invention consists of creating something new for
a specific country market.
Promotion
• Global companies often have difficulty crossing the
language barrier.
• Companies can either:
– Adopt the same communication strategy they used in
the home market, or
– Change it for each local market.
Price
• Regardless of how companies go about pricing their
products, their foreign prices probably will be higher than
their domestic prices for comparable products.
• Set a uniform price globally
• Set according to the customers
• Use a standard markup of the company’s costs
everywhere
Distribution
• The whole-channel view takes into account the entire
global supply chain and marketing channel. It recognizes
that to compete well internationally, the company must
effectively design and manage an entire global value
delivery network.
Deciding on the Global Marketing
Organization
• Methods of managing international marketing activities:
– Organizing an export department
– Creating international divisions
 Geographical organizations
 World product groups
 International subsidiaries
– Becoming a global organization

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14 MARKETING AN INTRODUCTION

15 Reaching global consumers

Copyright © 2015 Pearson Education, Inc. Publishing as Prentice Hall

Copyright 2020 Pearson Education, Ltd 14- 2

Copyright © 2023 Pearson Education, Inc.

• The political systems in some nations are receptive to

– the pattern of income distribution (low-, medium-, and

• Companies must understand how culture affects consumer

• Countries and societies are concerned about social and

Copyright © 2023 Pearson Education, Inc.

Market Entry Strategies

Copyright © 2023 Pearson Education, Inc.

Copyright © 2023 Pearson Education, Inc.

• Using the same marketing strategy and mix in all of the

Adapted global marketing

• Adjusting the marketing strategy and mix elements to each

Copyright © 2023 Pearson Education, Inc.

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