Opportunities and Challenges in Global Marketing 16. Goals of This ... Notes 19.
Chapter 2 International Trade Policy and Trade Institutions 21. 1. The Global ...
Globa Marketing Foreign Entry, Market Development & Strategy Implementation first Canadian edition
Michael R. Czinkota Georgetown. University
Ilkka A. Ronkainert Georgetown University
Carlyle Farrell Ryerson University
Ronald McTavish Brock University
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E D U C A T I O N
Part 1 Overview of Global Marketing Chapter I
The Global Marketing Imperative 3 The Global Marketplace l.l:TheTriumph of Free Enterprise and Global Markets 3 Global Marketing Defined 5 In More Detail I. I: Selected Approaches t o Foreign Market Entry 6 Evolution of the Concept
Globalization
7
8
Forms of Globalization 10 Globalization Drivers 10
In More Detail 1.2: Economies of Scale vs. Economies of Scope Globalization of the Canadian Economy 14 The Global Marketplace 1.2: Caron's Farm 15 The Anti-Globalization Movement 15 Opportunities and Challenges in Global Marketing 16 Goals of This Book
11
18
Key Terms 18 Questions for Discussion 19 Internet Exercises 19 Recommended Readings 19 Notes
Chapter 2 1
19
International Trade Policy and Trade Institutions 21 The Global Marketplace 2.1 :Trade as the Engine of Growth 21 Theoretical Foundation for International Trade 22 Mercantilism 22 The Theory of Absolute Advantage
23
In More Detail 2.1: An Example of Absolute Advantage 23 In More Detail 2.2: An Example of Comparative Advantage 24 The Theory of Comparative Advantage The Heckscher-Ohlin Model 24 The Product Cycle Theory 25
24
In More Detail 2.3:The Leontief Paradox 25 The Under Theory 2 7 Krugman's Model of International Trade
27
In More Detail 2.4: An Example of the Country Similarity Theory 27 The Diamond of National Advantage
28
Models of International Investment 29 Dunning's OLI Framework Transactions Cost Analysis
30 30
Transnational Institutions Affecting World Trade 31 The World Trade Organization
31
In More Detail 2.5:Trade in Textiles and Clothing 33 The International Monetary Fund The World Bank 34
34
The Global Marketplace 2.2: The W T O and the Softwood Lumber Dispute 35 xvi | NEL
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In More Detail 2.6: Balance of Payments 35 The United Nations 36 International Trace Policy and Protectionism 36 Arguments for Protection 37 Forms of Protectionism 37 Government Export Promotion 40 International Trade and Investment Performance 42 InternationalTrade Performance 42 international Investment Performance 4b Implementation of InternationalTrade and Investment Policy 47 Summary 48 Key Terms 48 Questions for Discussion 48 Internet Exercises 48 Recommended Readings 49 Notes 49
Part I Cases Starbucks in Ireland 51 Starbucks' Foray into Foreign Markets 51 Expansion Strategies in Ireland 54 A Competitive Existence 55 Notes 56
Parker Pen Company 57 Globalization. 57 Globalization at Parker Pen Company 57 Epilogue 59 Questions for Discussion 60
Part 2 The Global Market Environment Chapter 3
The Role of Culture in Global Marketing 63 The Global Marketplace 3.1 Transferring Cultural Values 63 Culture Defined 65 In More Detail 3.1 :What Is Canadian Culture? 67 The Global Marketplace 3.2: In Defence of Chinese Cultural Values? 68 The Elements of Culture 69 The Global Marketplace 3.3: Soup: Now It's M'm-M'm-Global! 79 Cultural Literacy and Ethnocentricity 82 Sources of Cultural Knowledge 82 Cross-Cultural Training 83 Cultural Analysis 84 In More Detail 3.2: Alternative Models of Cultural Analysis 87 Cultural Rules for Success in Global Marketing 88 Summary 89 Key Terms 90 Questions for Discussion 90 Internet Exercises 90 Recommended Readings 90 Notes 91
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Chapter 4
The Economic Environment 93 The Global Marketplace 4.1: Markets at the Bottom of the Income Pyramid 93 Economic Factors in Assessing Foreign Markets 95 Market Characteristics
97
The Global Marketplace 4.2: Income Disparity in Japan 103 The Global Marketplace 4.3: In Search of the New China 106 Impact of the Economic Environment on Social Development 113 In More Detail 4.1: An Alternative Measure of Welfare I 13 Regional Economic Integration 114 Levels of Economic Integration 114 Economic Integration in Europe 116 North American Integration 119
The Global Marketplace 4.4: NAFTA and Wal-Mart: Re-shaping the Mexican Retail Market 121 Other Economic Alliances
121
Implications of Economic Integration for Global Marketing 124 Dealing with Financial Crises 125 Causes of the Crises 125 Effects of the Crises 125 Consumer Marketer Responses 126 Summary 12 7 Key Terms 128 Questions for Discussion 128 Internet Exercises 128 Recommended Readings 128 Notes
Chapter 5
129
The Global Political and Legal Environments 131 The Global Marketplace 5.1: Las Cristinas—Trouble for Crystallex Home Country Political and Legal Environments 132 Embargoes and Sanctions
131
133
In More Detail 5.1 :The Legal Authority for Canadian Sanctions 135 Export Controls 135 Import Controls 139 Regulation of International Business Behaviour
140
The Global Marketplace 5.2: Marketing Opportunity in Post-War Iran? 144 Host Country Political and Legal Environment 145 Political Action and Risk
145
In More Detail 5.2:Terrorism and Global Marketing 148 In More Detail 5.3:The Measurement of Political Risks 151 Legal Differences and Restraints 152 Influencing Politics and Laws 153
The International Environment 154 International Politics 154 International Law 154 Summary 155 Key Terms 155 Questions for Discussion 156 Internet Exercises 156 Recommended Readings 156 Notes 156
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Part 2 Cases China's Beauty Industry: L'Oreal's Foray 158 Introduction 158 China's Beauty Industry 158 L'Oreal's International Expansion 159 L'Oreal's Foray into China 160 L'Oreal's Acquisitions 162 Challenges 162' Notes 162
Muslim Colas: Cola Wars or Cola Crusades 164 Online Boycott Lists that Prominently Feature Coca-Cola
164
Muslim Colas 164 Questions 165 Notes 165
Shrimp Farming in Ecuador 167 Xavier's Dilemma 167 The Family Business 167 The Asian Shrimp Disaster 168 Xavier's Entrepreneurship 168 Investment Alternatives 169
Part 3 Foreign Market Entry Analysis and Planning Chapter 6
Strategic Planning 173 The Global Marketplace 6.1:Appliance Makers on a Global Quest 173 Global Marketing 174 Why Do Firms Internationalize? 176 Issues in Internationalization
Strategy
178
In More Detail 6. l:The Case of Automobiles 180 Market Segmentation 187 The Global Marketplace 6.2: Segmenting Global Markets by Cultural Values 189 The Global Marketplace 6.3: How to Segment the Robotic Equipment Market 190 Why Segmentation Is Important to Canadian Companies
191
Other Aspects of Global Strategy:The Business Definition Issue 192 The Global Marketplace 6.4: Canadian Practice in Business Definition 192 Issues in the Development of Global Marketing Strategy 193 Implementing Global Marketing Strategy
195
The Global Marketplace 6.5: Finding the Fit Overseas 197 In More Detail 6.2: How Toyota Does Things 199 The Local Company in the Global Environment 199 Summary 201 Key Terms 201 Questions for Discussion 202 Internet Exercises 202 Recommended Readings 202 Notes 203
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Chapter 7
Global Marketing Research 205 The Global Marketplace 7.1 :The Toasted Deli Sandwich 205 Marketing Research Defined 206 Global Marketing Research 207 The Importance of Global Marketing Research 208 In More Detail 7.1: Environmental Scanning 209 The Global Marketplace 7.2:Welcoming China to Global Marketing Research 210 The Process of Global Marketing Research 211 Define the Research Problem 212 Determine the Information Needs 212 Develop the Research Design 213 In More Detail 7.2: Decision Support Systems 214 The Global Marketplace 7.3: Domaine Pinnacle 216 In More Detail 7.3: Data Privacy 217 In More Detail 7.4:Tips for Conducting Interviews in Foreign Markets The Global Marketplace 7.4:Adapting Research Procedures to Local Conditions 220 In More Detail 7.5: Online Surveys 222 In More Detail 7.6:Validity versus Reliability 223 Collect the Data 226 Analyze and Interpret the Data 226 In More Detail 7.7: Delphi Forecasting 228 Present the Research Findings 228 Research Administration 229 Approaches to Research Administration 229 Summary 231 Key Terms 231 Questions for Discussion 232 Internet Exercises 232 Recommended Readings 232 Notes 232
Foreign Market Entry Strategies 237 The Global Marketplace 8.1: Gen-u-Wine Storage 237 Motivations to Enter Foreign Markets 238 Proactive Motivations 239 Reactive Motivations 240 The Global Marketplace 8.2: Russian Vodka Manufacturers Go Global In More Detail 8.1 :Waterfall vs. Sprinkler: Foreign Market Expansion Strategies 243 The Internationalization Process 243 Modes of Entry 244 Exporting 244 The Global Marketplace 8.3: GV Snowshoes 245 In More Detail 8.2: Entry-Mode Selection 245 The Global Marketplace 8.4:Jamaica Pepper Exports 247 Licensing and Franchising 248
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The Global Marketplace 8.5: International Franchising That Will Melt in Your Mouth 249 The Global Marketplace 8.6:Saputo Inc.—Growth by Acquisition 253 Foreign Direct Investment 253 Summary 265 Key Terms 266 Questions for Discussion , 266 Internet Exercises 266 Recommended Readings Notes 267
266
Part 3 Cases Exporting Chopsticks to Japan 269 Company Background 269 Learning About the Chopstick Market 269 The Founding of Lakewood Forest Products 269 The Production and Sale of Chopsticks 270 Questions for Discussion 270
Global Market Opportunity in the Olive Oil Industry: The Case of Baser Food 271 Background 271 Industry in Turkey 272 The World of Olive Oil 274 Company 275 Potential Markets 278 Endnotes 281
Dr. Eris: Cosmetics from Poland 282 The Polish Cosmetics Market 282 The Company 284 Brand Image 285 Diversification 285 Marketing Communications 286 Internationalization 286 Questions for Discussion 286 Notes 286
Ruth's Chris:The High Stakes of International Expansion 287 The House That Ruth Built 287 A World of Opportunities 288 What Should Ruth's Chris Do Next? Notes 291
290
Tri Star International 292 Changing Face of Shoe Industry (1988) Product Design 292 Brand 293 Competitive Advantage 293 China's Competitive Advantages 293 Questions 294
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Part 4 Global Marketing Strategy Chapter 9
Product Strategies and Global Brand Management 297 The Global Marketplace 9.1: Using Canadian Product Innovation t o Meet Global Energy Needs 297 ProductVariables 298 Standardization versus Adaptation 298 Factors Affecting Adaptation 301 The Market Environment 302 Government Regulations 302 In More Detail 9. l:The Economics of Product Adaptation 303 Non-Tariff Barriers 304 Customer Characteristics, Expectations, and Preferences 305 The Global Marketplace 9.2: Jeans for Muslims 307 Economic Development 308 Competitive Offerings 308 Climate and Geography 309 Product Characteristics 309 Product Constituents 309 Branding 309 Packaging 310 Appearance 311 Method of Operation or Usage 312 Quality 312 Service 313 Country-of-Origin Effects 313 Company Considerations 313 Product Counterfeiting 314 The Global Marketplace 9.3:The Phantom Pirates 315 Global Product Development and Brand Management 317 Global Product Development 317 Management of the Product and Brand Portfolio 323 Summary 328 Key Terms 329 Questions for Discussion 329 Internet Exercises 329 Recommended Readings Notes 330
329
Chapter 10 International Services Marketing 333 The Global Marketplace 10.1: Cell Phones in Africa 333 Differences between Services and Goods 334 Linkage between Services and Goods 336 Stand-Alone Services 337 The Role of Services in the Canadian Economy 338 The Role of Services in the Global Economy 344 Global Trade Problems in Services 345 Regulation of Services Trade 345 Global Strategic Challenges in Services 346 Drivers of Global Services Growth 347 The Internet and the Global Marketing of Services 349 Typical International Services 350 Starting t o Market Services Internationally 352 Strategic Implications of International Services Marketing
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Strategic Planning for Global Services Marketing
354
Selecting Target Markets 354 Planning the Product Offering 356
In More Detail 10.1: Developments in NAICS 356 The Global Marketplace 10.2: How Technical and Financial Services Help Heavy-Equipment Marketing 359 Sales Promotion and Pricing
362
The Global Marketplace 10.3: Royal Bank of Canada Faces Combative Advertising in the U.S. 363 International Channels of Distribution for Services
365.
The Global Marketplace 10.4:Winning Service Contracts Is Long, Hard Work 366 Summary 367 Key Terms 368 Questions for Discussion Internet Exercises 368
368
Recommended Readings Notes 369
Chapter I I
368
Global Pricing Strategies 371 The Global Marketplace 11.1: Price Fixing in the Cargo Services Industry 371 Price Dynamics 372 Pricing in Foreign Markets 374 Corporate Objectives Costs 375
374
The Global Marketplace I 1.2:Just Do It in a Recession! Demand and Market Factors
Market Structure and Competition Environmental Constraints 377
Pricing Strategies in Global Markets Transfer Pricing 379
377
378
Transfer Prices and Corporate Objectives
Export Pricing
376
376
380
382
The Process of Setting Export Prices 382 Strategies for Setting Export Prices 383 Export-Related Costs 384 Terms of Sale 387
The Global Marketplace 11.3: Penetrating Foreign Markets by Controlling Export Transport 389 Terms of Payment 390 Getting Paid for Exports 394 Managing Foreign Exchange Risk 395 Sources of Export Financing 396
In More Detail 11.1: EDC Export Financing Dumping 399 Non-Price Options 400 Countertrade 400 Summary 404 Key Terms 404 Questions for Discussion Internet Exercises 405 Recommended Readings Notes 406
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Chapter 12 Global Distribution and Logistics 409 The Global Marketplace 12.1:"Just Chill'n" 409 The Structure of Global Distribution Channels 410 Design of Global Distribution Channels 411 Customer Characteristics 412 Culture 412 Competition 414 Company Objectives 415 Character 415 Capital 415 Cost 416 Coverage 417 Control 417 Continuity 418 Communication
418
Selection of Intermediaries
419
Types of Intermediaries 419 Sources for Finding Intermediaries
419
The Global Marketplace 12.2: Clinotech Diagnostics
A Definition of Global Logistics 428 The New Dimensions of Global Logistics International Transportation Issues 430
430
In More Detail 12.1 :The Role of Freight Forwarders 431 The Global Marketplace 12.3:Vancouver Port Strike 433 The International Shipment 436 Documentation 437 Management of Global Logistics
438
In More Detail 12.2: Global Outsourcing Summary 440 Key Terms 440 Questions for Discussion Internet Exercises 441 Recommended Readings Notes 442
439
441 441
Chapter 13 Global Advertising and Sales Promotion 443 The Global Marketplace 13.1: Canwest Global Communications: Growth oi an International Media Conglomerate 443 Formulation of Global Marketing Communications Strategy 444 Planning Global Promotional Campaigns
446
The Global Marketplace 13.2:The World Wants Its MTV! In More Detail 13.1: Culture and Advertising Style 459 Communications Tools
464
The Global Marketplace 13.3: At the Fair Other Promotional Techniques 4 71 Summary 477 Key Terms 477 Questions for Discussion 477 Internet Exercises 478 Recommended Readings 478 Notes 478
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Chapter 14 Management of the Global Sales Force 481 The Global Marketplace 14.1:Why Personal Selling Matters to Canadian Companies 481 The Sales Force as a Company Resource 483 The Resource-Based View and Company Resources
484
Personal Selling and the Degree of Internationalization of the Firm Personal Selling Effectiveness 487 The Sales Process and Relationship Selling
484
488
The Global Marketplace 14.2: Relationship Building in Developing Markets: The Case of Nigeria 489 Personal Selling in Practice
490
In More Detail 14.1 targeting the Chilean Market 492 Management of the Global Sales Force 495 In More Detail 14.2: Gearing Up for Sales in India 495 In More Detail 14.3: Why Strong International Sales Management Is Important 497 The Global Marketplace l4.3:The Information Needs of Global Salespeople 500 Sales-Force Automation
503
The Global Marketplace 14.4: Automating the Sales Force 504 In More Detail 14.4: European Experience of SFA 505 Selling Through Distributor Partners 507 The Role of Expatriates in Global Sales-Force Management 510 Summary 512 Key Terms 513 Questions for Discussion Internet Exercises 513 Recommended Readings Notes 514 ,
513 513
Part 4 Cases Polar-adidas 516 Introduction 516 About Partnership Agreements 516 The Growth of Polar Electro Oy 518 Polar Marketing 519 Other Partnerships 520 Growth Prospects of Polar 520 Questions for Discussion 520
Nova Scotia 521 The U.S. Market for Canadian Travel Services A Benefit-Matching Model 521 The Case of Nova Scotia 522 Examples of Successful Positioning 523 Positioning Nova Scotia 524 Questions for Discussion 524 Notes 524
521
Starwood Hotels & Resorts Worldwide Inc. Cross-Marketing Strategies 525 Starwood Hotels and Resorts:A Business Profile Cross-Marketing Strategies 529 Notes 529 NEL
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Medi-Cult: Pricing a Radical Innovation 531 Company Background 531 Assisted Reproductive Technologies 532 Customers 535 Competition 536 Market Launch 536 Henrik Krogen's Dilemma 537
Samsung: From Cheap to W O W ! 538 Samsung's Ascendancy 538 Staying Laser-Focused 540 What's Next... 541
Branding:The Asian Dilemma 542 What's in a Name? 542 Proud to Be Asian 544 The Changing Mindset 544 Miles to Go... 545 Notes 546
Part 5 The Implementation of Global Marketing Strategy Chapter 15 Marketing Organization, Implementation, and Control 549 The Global Marketplace 15.1: Procter & Gamble: Organization 2005 549 Organizational Structure 551 Organizational Designs 551 In More Detail 15.1: From International to Global Organization 554 Global Organizational Structures 554 In More Detail 15.2: Product Structures in Practice 556 Evolution of Organizational Structures 561 The Global Marketplace 15.2: Beyond the Matrix 561 Implementation 562 Locus of Decision Making 562 Factors Affecting Structure and Decision Making 563 The Networked Global Organization 564 Promoting Internal Cooperation 566 In More Detail 15.3: Working Together at Boeing 567 The Role of Country Organizations 568 The Global Marketplace 15.3: Characteristics of Success 569 Control 572 Types of Controls 572 The Global Marketplace 15.4: International Best Practice Exchange 573 Exercising Control 5 76 Summary 577 Key Terms 578 Questions for Discussion 5 78 Internet Exercises 578 Recommended Readings 5 78 Notes 579
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Chapter 16 International Negotiations 581 The Global Marketplace 16.1 :The A r t of Negotiation 581 The Importance of Negotiations in Global Marketing 583 Stages of the Negotiating Process 584
The The The The
Influence of Culture on Global Negotiations 586 Global Marketplace 16.2: How the Japanese See Things 586 Global Marketplace 16.3: A Majestic Misstep in Thailand 587 Global Marketplace 16.4: Should You Give a Gift? 589 Preparing for Global Negotiations
590
The Global Marketplace 16.5: Practical Advice for Negotiating with Chinese Partners: "Where You Stand Depends on Where You Sit" 591 Success Factors in Global Negotiations 595 The Global Marketplace 16.6: Don't Contract Yourself into a Corner 596 In More Detail 16.1 :The Case of Distributors' Contracts 597 Summary
598
Key Terms 598 Questions for Discussion Internet Exercises 599 Recommended Readings Notes 599
598 599
Part 5 Cases Importing Industry Specific Software: How American Are Canadians? 601 Background 601 The Selection Process 602 The Purchase Decision 602 The Implementation Plan 603 The Crisis 603
Teleflex Canada:A Culture of Innovation 604 Teleflex Inc. 604 Teleflex Canada 605 Innovation.Technology, and Product Development 605 Teleflex Canada Culture 607 Teleflex Inc. and Teleflex Canada 608 Pull-Through Strategy 608 The Future 609 'Conclusion 611
Part 6 Looking Ahead Chapter 17 The Future of Global Marketing 615 The Global Marketplace 17.1: Marketing Overseas: Excellent for Career Advancement 615 The Global Marketing Environment 616 Planned versus Market Economies 6 / 6 The North-South Relationship 618 The Asia-Pacific Region and China 619 The BRIC Countries 619
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The Global Marketplace 17.2: Laying the Groundwork for East Asian Collaboration 620 In More Detail 17.1: Selling Mobile Telephones and Laptops to Poorer Countries 621 Factors Influencing Global Marketing 621 The Global Financial Environment 621 The Influence of Technology 622 Trade and Protectionism 623 Population and Immigration 624 The Global Marketplace 17.3: Migration:A Double Blessing 625 Government Policy 626 Government Attitudes 627 In More Detail 17.2: Picking Winners and Losers 628 The Future of Global Marketing Management 628 Research and Planning 629 In More Detail 17.3: The Global Marketer's Catch-22 629 Product Policies 630 Trends in Global Communications 632 Distribution Trends 632 The Global Marketplace 17.4: Towards Paperless Trading? 633 Pricing Policies 633 In More Detail 17.4: Short- vs. Long-Term Pricing Problems 634 Careers in Global Marketing 634 FurtherTraining 634 Employment with Large Firms 635 Employment with SMEs 636 Self-Employment 637 Opportunities for Women 637 Canada and the "New" International Competition 639 What Can Be Done? 639 The Role of the Government 640 Summary 641 Key Terms 641 Questions for Discussion 641 Internet Exercises 641 Recommended Readings 642 Notes 642
