978-1259709074 Chapter 8 Part 1

Chapter 8 – Global Marketing Marketing 6th

McGraw-Hill Education.

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Chapter 8

Global Marketing

Tools for Instructors

• Brief Chapter Outline

• Learning Objectives

• Extended Chapter Outline with Teaching Tips

• Answers to End of Chapter Learning Aids

• Chapter Case Study

• Additional Teaching Tips

• Connect Activities

Brief Chapter Outline

Assessing Global Markets

Choosing a Global Entry Strategy

Choosing a Global Marketing Strategy

End of Chapter Learning Aids

Chapter Case Study: The Globalization of the Most Ubiquitous of American Cuisines—The Hamburger

Learning Objectives

LO8-1 Describe the components of a country market assessment.

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

business relationships.

LO8-2 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

LO8-3 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 riskiest but potentially the most lucrative. Firms that engage in a joint venture with

Chapter 8 – Global Marketing Marketing 6th

McGraw-Hill Education.

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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.

LO8-4 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

Extended Chapter Outline with Teaching Tips

I. Assessing Global Markets

A. Economic Analysis Using Metrics

B. Analyzing Infrastructure and Technological Capabilities

C. Analyzing Governmental Actions

D. Analyzing Sociocultural Factors

E. The Appeal of the BRIC Countries

Progress Check: Several questions are offered for students to check their understanding of core

concepts.

1. What metrics can help analyze the economic environment of a country?

parity, and the human development index.

2. What types of governmental actions should we be concerned about as we evaluate a country?

Chapter 8 – Global Marketing Marketing 6th

McGraw-Hill Education.

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2 Moots is a high-end bicycle manufacturer located in Steamboat Springs, Colorado. Assume

the company is considering entering the Brazilian, Chinese, and Indian markets. When

conducting its market assessment, what economic factors should Moots consider to make its

decision? Which market do you expect will be more lucrative for Moots? Why?

By taking the perspective of a global marketing professional considering expansion, students should

recognize the need for analyses of the Brazilian, Chinese, and Indian markets and thus recall the key

concepts of an economic analysis.

The three key economic factors that Moots should consider are the general economic environment, the

population size and growth rate, and real income. In analyzing the general economic environment, the

3 Now consider the political, economic, and legal systems of China, India, and Brazil. Explain

why you think one country might be more hospitable to Moots than the others.

As a follow-up, this question prompts students to examine China, India, and Brazil from another

perspective: the political and legal risk. In this way, students gain a more comprehensive picture of the

country might be most welcoming to export products.

4 Colgate sells its products in many countries throughout the world. How would you expect its

market position to differ in various countries, compared with that in the United States?

Consider various areas across the globe in formulating your answer.

Colgate should invest in understanding its international markets. Colgate might adapt some of the flavors

and benefits of its products to meet the unique needs of international markets. For example, consumers

5 How does Coca-Cola market its products differently in the BRIC countries? In formulating

your answer, go to: http://www.cocacola.com.br/; https://www.coca-cola.ru/;http://www.coca–

cola.in/en/home/; and http://www.icoke.cn/. What are the benefits of being able to offer a

globally standardized product? What types of products easily lend themselves to global

standardization?

Global products generally rely on one of three strategies: (a) sell the same product in both the home

country market and the host country (Coca-Cola’s Coke brand is available in all BRIC countries), (b) sell a

product similar to that sold in the home country but include minor local/regional adaptations (People in

Chapter 8 – Global Marketing Marketing 6th

McGraw-Hill Education.

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6 What are some examples of companies that use a glocalization strategy?

McDonald’s does not offer an American-style menu in a place like India, where many residents do not eat

beef. In India, McDonald’s sells mostly chicken, lamb, and vegetarian offerings.

features regional and international musicians.

7 Choose a firm that currently manufactures and sells its products or services only in the United

States. Choose and defend a global entry strategy for the firm.

The Kroger Company is an American retailer and is the country’s largest supermarket chain by revenue

($109.83 billion for fiscal year 2015). It maintains markets in 34 states, with store formats that include

supermarkets, superstores, department stores, 786 convenience stores, and 326 jewelry stores.

Kroger could use a direct investment global entry strategy to enter a foreign country. Direct investment

requires a firm to maintain 100 percent ownership of its plants, operation facilities, and offices in a foreign

Quiz Yourself

1 The shift of population from rural to urban areas in countries such as India helps global marketers by:

a. decreasing pollution.

b. simplifying the supply chain needed to make goods and services available.

c. increasing the human development index.

d. decreasing competition for intellectual capital.

e. increasing nonmaterial GDP output.

2 Why should marketers be aware of the BRIC countries?

a. They are a microcosm of the rest of the world.

b. They represent almost half the world’s population.

c. They are likely to be the source of most market growth.

d. They have had the most dramatic changes in culture and consumer buying patterns.

e. They have stable population growth, which makes them easier to study.

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McGraw-Hill Education.

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Chapter Case Study: The Globalization of the Most Ubiquitous of American

Cuisines—The Hamburger

1 Which sociocultural factors have informed McDonald’s global expansion?

While most of the sociocultural factors may impact expansion depending on the country, here are some of

the more dominant:

Uncertainty avoidance: The extent to which the society relies on orderliness, consistency, structure, and

2 Describe some of the global distribution strategies that McDonald’s uses or might consider

using to spread through-out the world.

In most countries the companies employs a franchising strategy. A franchising contract allows the

franchisee to operate a business using the name and business format developed and supported by the

3 Explain McDonald’s global marketing strategy. Compare McDonald’s strategy in the U.S.

(http://www.mcdonalds.com/us/en/home.html) to McDonald’s strategy in India

(http://www.mcdonaldsindia.com/).

Overall, McDonald’s values transcend borders and culture. However, the company will make the

necessary changes to adapt to the local environment. Globally, McDonald’s typically segments on (1) on

Additional Teaching Tips

In this chapter, students are exposed to global product development, distribution, and marketing strategy.

Students evaluate the similarities and differences between a domestic marketing strategy and a global

marketing strategy. Ethical consideration and cultural diversity are addressed as they impact the

marketing message.

Students will be re-introduced to business terms such as quota, various trade agreements, joint

venture, GNP, GDP, etc. To review these terms before discussing the concepts in the chapter, the

instructor may want to exercise a challenge similar to the Jeopardy game.

Divide students into four or five groups of equal size. The instructor writes down three-four terms from the

chapter on four or five note cards. The group then takes the word and writes a story problem without the