Global Marketing Management, 5e
Why Global Marketing is Imperative
Globalization of Markets: Convergence
Evolution of Global Marketing
Appendix: Theories of International Trade and the Multinational Enterprise Introduction
* Products have been traded across borders throughout recorded civilization, extending back beyond the Silk Road that once connected East with West from Xian (China) to Rome (Italy). * Total world merchandise trade volume grew from $7.6 trillion in 2000 to $16.3 trillion in 2008.
1. Why Global Marketing is Imperative
* Big Emerging Markets (BEMs): In the next ten to twenty years, BEMs such as the Chinese Economic Area (CEA: including China, Hong Kong Region, and Taiwan), India, South Korea, Mexico, Brazil, Argentina, South Africa, Poland, Turkey, and the Association of Southeast Asian Nations (ASEAN: including Indonesia, Brunei, Malaysia, Thailand, the Philippines, and Vietnam) will provide many opportunities in global business. -In the next 10-20 years the greatest commercial opportunities are expected to be found increasingly in BEMs * Saturation of domestic markets: Domestic-market saturation in the industrialized parts of the world and marketing opportunities overseas are evident in global marketing. -The saturation of domestic markets in the industrialized parts of the world forced many companies to look for marketing opportunities beyond their national boundaries * Global competition: Competition around the world and proliferation of the Internet have been on the rise and are now intensifying. * Need for global cooperation: Global competition brings global cooperation. * Internet revolution: The Internet and electronic commerce (e-commerce) are bringing major structural changes to the way companies operate worldwide. -The Proliferation of the internet and e-commerce is far reaching -Developing countries led by the United States are still leading players in this field, while developing countries such as china are becoming an important force -Compared to B2C e-commerce, B2B e-commerce is larger, growing faster, and has less unequal geographical distribution globally p.5 -The Internet opened the gates for companies to sell direct-to-consumers easily across national boundaries -Many argue that e-commerce is less intimate than face-to-face retail
-however, it actually provides more targeted demographic and psychographic information -Internet builds a platform for 2-way dialogue between manufacturers and consumers
-this allows for customization and “build to order”
* The term global epitomizes both the competitive pressure and expanding market opportunities. * Whether a company operates domestically or across national boundaries, it can no longer avoid competitive pressures from around the world.
Exhibit 1-1: Change in World’s 100 Largest Companies and Their Nationalities
2. Globalization of Markets: Convergence and Divergence
* Per capita income is an important determinant of consumer buying behavior. * When a country’s per capita income is less than $10,000, much of the income is spent on food and other necessities, and very little disposable income remains. * As a country’s per capita incomes reaches $20,000, the disposable portion of income increases dramatically. * This is due to the fact that income spent on necessities does not rise nearly as fast as income itself * This increased disposable income level results in increased convergent pressures on consumer buying behavior. * People with higher incomes tend to enjoy similar educational levels, desires for material positions, ways of spending leisure time, and aspirations for the future. As these social and cultural dimensions begin to resemble each other in many countries -Peoples desire for material possessions, ways of spending leisure time, and aspirations of the future become...
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