First, firms must assess the general economic environment. For instance, countries with a trade
surplus, strong domestic and national products, growing populations, and income growth
generally are relatively more favorable prospects. ¬Second, firms should assess a country’s
infrastructure. To be successful in a particular country, the firm must have access to adequate
transportation, distribution channels, and communications. Third, firms must determine whether
the proposed country has a political and legal environment that favors business. Fourth, firms
should be cognizant of the cultural and sociological differences between their home and host
countries and adapt to those differences to ensure successful business relationships.
LO2 Understand the marketing opportunities in BRIC countries.
Technology, particularly in the communication field, has facilitated the growth of global markets.
Firms can communicate with their suppliers and customers instantaneously, easily take
advantage of production efficiencies in other countries, and bring together parts and finished
goods from all over the globe. Four countries that provide tremendous marketing opportunities
are the BRIC nations—Brazil, Russia, India and China. These countries have large populations
that are increasingly interested in the latest goods and services.
LO3 Identify the various market entry strategies.
Firms have several options for entering a new country, each with a different level of risk and
involvement. Direct investment is the most risky but potentially the most lucrative. Firms that
engage in a joint venture with other firms already operating in the host country share the risk and
obtain knowledge about the market and how to do business there. A strategic alliance is similar
to a joint venture, but the relationship is not as formal. A less risky method of entering a new
market is franchising, in which, as in domestic franchise agreements, the franchisor allows the
franchisee to operate a business using its name and strategy in return for a fee. The least risky
method of entering another country is simply exporting.
LO4 Highlight the similarities and differences between a domestic marketing strategy
and a global marketing strategy.
The essence of a global marketing strategy is no different from that of a domestic strategy. The
firm starts by identifying its target markets, chooses specific markets to pursue, and crafts a
strategy to meet the needs of those markets. However, additional issues make global expansion
more problematic. For instance, should the product or service be altered to fit the new market
better? Does the firm need to change the way it prices its products in different countries? What is
the best way to get the product or service to the new customers? How should the firm publicize
its product or service offering in various countries?
Extended Chapter Outline With Teaching Tips
Growth Of The Global Economy: Globalization Of Marketing And Production (PPT slide
8-4)
