marketing report

Report 1

The importance of global marketing from the perspectives of the individual firm and the nation:

For the nation, global trade provides a source of needed raw materials and other products not available

domestically in sufficient amounts, opens up new markets to serve with domestic output, and converts

countries and their citizens into partners in the earch for high-quality products at the lowest possible

prices. Companies find that global marketing and international trade can help them meet customer

demand,reduce certain costs, provide information on markets around the world, and increase

employment.

The basic functions of GATT,WTO,NAFTA, FTAA,CAFTA-DR, and the European Union:

The General Agreement on Tariffs and Trade is an accord that has substantially reduced tariffs. The

World Trade Organization oversees GATT agreements, mediates disputes, and tries to reduce trade

barriers throughout the world. The North American Free Trade Agreement removes trade restrictions

among Canada, Mexico, and the United States. The proposed Free Trade Area of the Americas seeks

to create a free-trade area covering the entire Western Hemisphere. As another step in that direction,

the United States has made an agreement with the Dominican Republic and Central American nations

known as the Central American Free Trade Agreement-DR (CAFTA-DR). The European Union is a

customs union whose goal is to remove all barriers to free trade among its members.

The alternative strategies for entering foreign markets:

Once marketers have completed their research, they may choose from three basic strategies for

entering foreign markets: importing and exporting; contractual agreements such as franchising,

licensing, and subcontracting; and international direct investment. As Figure 7.3 shows, the level of

risk and the firm’s degree of control over international marketing increase with greater involvement.

Firms often use more than one of these entry strategies. A firm that brings in goods produced abroad to

sell domestically or to be used as components in its products is an importer. In making import

decisions, the marketer must assess local demand for the product, taking into consideration factors

such as the following:

• ability of the supplier to maintain agreed-to quality levels

• flexibility in filling orders that might vary considerably from one order to the next

• response time in filling orders

• total costs—including import fees, packaging, and transportation—in comparison with costs of

domestic suppliers

The alternative marketing mix strategies used in global marketing:

Global marketers can choose from among five strategies for selecting the most appropriate product

and promotion strategy for a specific foreign market: straight extension, promotion adaptation,

product adaptation, dual adaptation, and product invention. As Figure 7.4 indicates, the strategies

center on whether to extend a domestic product and promotional strategy into international markets or

adapt one or both to meet the target market’s unique requirements. A firm may follow a one-product, one-message straight extension strategy as part of a global marketing strategy. This strategy permits

economies of scale in production and marketing. Also, successful implementation creates universal

recognition of a product for consumers from country to country. After pursuing a strategy of adapting

its dolls to reflect the looks and styles of 40 different nationalities, marketers for Mattel Toys

discovered that children around the world just wanted regular Barbies. “Blond Barbies sell just as well

in Asia as in the United States,” the marketing research told them. So Mattel went back to its

one-product, one-message strategy. Its subsequent introduction of Rapunzel Barbie, complete with

ankle-length blond locks, to 59 countries was the firm’s biggest product launch ever. Other strategies

call for product adaptation, promotion adaptation, or both. In Latin America, Nike relies on local

soccer stars instead of Michael Jordan to promote its products. David Beckham represents Pepsi in his

home country of England. Some marketing research has revealed that consumers around the world are

becoming less enamored of major American brands, so marketers are taking this into consideration

when creating global messages. Finally, a firm may select product invention to take advantage of

unique foreign market opportunities. To match user needs in developing nations, an appliance

manufacturer might introduce a hand-powered washing machine even though such products became

obsolete in industrialized countrieyears ago.