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Chapter 2
Marketing Foundations: Global, Ethical, Sustainable
2-1
LEARNING OBJECTIVES
LO 2-1 Identify the various levels in the Global Marketing Experience Curve.
LO 2-3 Define the key regional market zones and their marketing challenges.
LO 2-5 Recognize key factors in creating a global product strategy.
LO 2-7 Recognize the significance of sustainability as part of the marketing strategy and the
use of the triple bottom line as a metric for evaluating corporate performance.
CHAPTER OUTLINE
I. MARKETING IS NOT LIMITED BY BORDERS
II. THE GLOBAL EXPERIENCE LEARNING CURVE
A. Companies with No Foreign Marketing
B. Companies with Foreign Marketing
C. International Marketing
D. Global Marketing
2-2
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Marketing Foundations: Global, Ethical, Sustainable
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E. Essential Information
i. Economic
ii. Culture, Societal Trends
iii. Business Environment
iv. Political and Legal
v. Specific Market Conditions
F. Emerging Markets
G. Multinational Regional Market Zones
i. Europe
ii. Americas
iii. Asia
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Marketing Foundations: Global, Ethical, Sustainable
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III. SELECT THE GLOBAL MARKET
A. Identify Selection criteria
B. Company review
IV. DEVELOP GLOBAL MARKET STRATEGIES
A. Market Entry Strategies
i. Exporting
a. Internet
b. Exporter and Distributor
ii. Distributors
a. Direct Sales Force
iii. Contractual Agreements
a. Licensing
b. Franchising
iv. Strategic Alliances
a. International Joint Venture
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v. Direct Foreign Investment
B. Organizational Structure
C. Product
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D. Consumers
i. Quality
ii. Fitting the Product to the Culture
iii. Brand Strategy
iv. Country of Origin
E. Market Channels
i. Channel Structures
ii. Channel Factors
a. Cost
b. Capital
c. Coverage
d. Character
e. Continuity
F. Marketing Communications
i. Advertising
ii. Personal Selling
iii. Sales promotion
iv. Public Relations
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Marketing Foundations: Global, Ethical, Sustainable
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G. Pricing
i. One World Price
ii. Local Market Conditions Price
iii. Cost-Based Price
iv. Price Escalation
a. Product export costs
b. Tariffs, import fees, taxes
c. Exchange rate fluctuations
d. Middlemen and transportation costs
v. Global Pricing Issues
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V. ETHICS: AT THE CORE OF SUCCESSFUL
MARKETING MANAGEMENT
A. Ethics and the Value Proposition
B. Ethics and the Elements of the Marketing Mix
i. Product
ii. Price
iii. Distribution
iv. Promotion
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Marketing Foundations: Global, Ethical, Sustainable
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C. Code of Marketing Ethics
VI. SUSTAINABILITY: NOT JUST THE RIGHT THING
TO DO BUT A GOOD MARKETING STRATEGY
A. Triple Bottom Line: The Link between Doing Well
and Doing Good
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VII. SUMMARY
KEY TERMS
developed economies Specific economies that have fueled world economic growth for much of
the 20th century, including Western Europe, the United States, and Japan.
emerging markets Growing economies that have developed over the last 25 years that are
projected to contribute toward 75 percent of world economic growth over the next 20 years.
regional market zones A group of countries that create formal relationships for mutual
economic benefit through lower tariffs and reduced trade barriers.
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contractual agreements Enduring, nonequity relationships with another company that allow a
company to expand its participation in a foreign market.
in which every partner holds an equity position.
direct foreign investment A strategic alliance with long-term implications in which a company
moves
decision-making authority An issue that arises when companies grow internationally and lines
of authority become longer and more complicated resulting in difficulty in defining decision-
making protocols.
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basket of global marketing themes Global advertising strategy in which distinct ads built
around several marketing messages are created that local marketers can select from to best fit
their specific market situation
Triple bottom line (TBL) A metric for evaluating not only the financial results of the company
but the broader social equity, economic, and environmental considerations as well.
APPLICATION QUESTIONS
1. You are the marketing manager for a small company located in the United States that
manufactures specialized parts for high-end ink-jet printers. The company’s largest customer
(Hewlett Packard) has asked your company to supply parts to 10 of its distribution and repair
sites around the world. The company has never sold products outside the United States, so
this represents a significant step for the company. What stage in the global experience
learning curve is the company likely entering and why? Identify the activities the company
should undertake at this stage.
2. You are the market research director for a consumer product company. You have been asked
to evaluate China as a potential market for your company’s products and begin a search of
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secondary data. What types of information would you consider in assessing China? How
would you find information on these issues?
3. You are the marketing manager for Oxymoron Detergent and have been tasked with
introducing this product into Argentina. What six factors would you need to consider in
determining the proper channel of distribution for the introduction of Oxymoron detergent?
4. The marketing manager for McDonald’s has been asked to develop a code of marketing
ethics for the company. Develop a marketing code of ethics for McDonald’s, keeping in
mind that the company has stores all over the world.
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Marketing Foundations: Global, Ethical, Sustainable
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5. The CEO of Timberland has called and asked you to develop a triple bottom line report for
the company. What might be included in a TBL report for Timberland?
Here, students should focus not on developing a code of behavior, but rather a progress
report on how well Timberland is doing in the key areas of the Triple Bottom Line. Exhibit
MANAGEMENT DECISION CASE
Selling to the Bottom of the Pyramid
Marketing Unilever Products in Rural Villages Around the World
Instructors leading a discussion about this case will find a review of the two HBR articles by
Simanis & Duke and Mahajan to be very helpful*. One way to introduce the case is to ask
students why a company would even bother marketing to a target market made up of consumers
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Questions for Consideration:
1. Is Unilever providing value to their Indian customers? In what ways? Consider the four
types of utility when forming your answer.
Value is defined in this chapter as a ratio of the bundle of benefits a customer receives from
2. Considering the competition Unilever is receiving from Procter & Gamble and other
companies, in what creative ways could Unilever change their Wheel detergent product
offering to differentiate it from competitors’ offerings?
3. What principles should be used to determine if a product is a good fit for a BOPM market?
Are there products that should not be offered to BOPM consumers? Should this issue be
decided by marketers, governments or consumers?
Potential principles for “good BOPM fit” could include:
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4. Is it ethical for marketers to try to make money off people who are living at a subsistence
level? Should companies only market their products to people in certain income classes?
What factors should a marketer take into consideration when trying to answer these
questions?
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V. Mahajan, “How Unilever Reaches Rural Consumers in Emerging Markets,” Harvard Business Review Digital
Articles, (2016), pp. 2-6.
SUGGESTED VIDEO
YUM! BrandsS (11:30 Minutes)
Description: YUM! Brands customizes its marketing approach to expand to global markets.
Peter Bassi (President of YUM! Restaurants International) describes 7 key marketing
perspectives that company focuses on to be competitive and successful on a global scale.
1. What central changes are contributing to the growth of Yum! Brands in global markets?
2. Give some examples of ways that you believe Yum! Brands will have to adapt its offerings to
appeal to global customers in different countries.
Global Marketing: Domino’s Abroad (4:18 minutes)
Description: Domino's Pizza is the world's largest pizza delivery chain, with stores in over 80
countries worldwide and over half its sales outside the United States. In order to satisfy
consumer preferences in that many markets, Domino's must understand its global customers
and adjust its marketing mix to meet local needs. The video describes Domino's marketing
efforts in several countries.
1. When going global, one of the most fundamental decisions marketers must make is the
standardization/localization decision regarding the different elements of the marketing mix.
For the Product component of the mix, Domino’s chose a localization strategy, modifying
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Marketing Foundations: Global, Ethical, Sustainable
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the product to regional tastes. Some companies choose a standardization approach, keeping
the product essentially the same as the one offered in domestic markets.
a. What are the pros and cons of standardization?
b. Considering the markets in India, do you believe Domino’s could have been as
successful with this one-size-fits-all approach?
c. What steps could you take as a marketing manager to determine which approach—
localization or standardization—would be most effective for moving into India or any
other new region/country?
1
Friedman, T. L. (2005). The world is flat: A brief history of the twenty-first century. New York: Farrar, Straus and
Giroux.
