Discussion Question Chapter 14: Global Marketing

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Instructions

Write a post for the Discussion Question on this topic, 1–2 paragraphs in length.

Part 1: Current Status

What are the global implications for the product or service you are marketing? What are the global implications of your marketing strategy and recommendations?

You should consider whether there are any global factors related to the marketing environment in which you operate, your targeting and segmentation strategy, and any aspect of the marketing mix: product, price, place (distribution), promotion.

CHAPTER 14: MARKETING GLOBALLY WHY IT MATTERS: MARKETING GLOBALLY Why learn about global marketing? Suppose you’re in the marketing department for a highly successful snack food company in the U.S. You’re in a brainstorming meeting about expanding into China, and the discussion is starting to get heated. Should you lead with your company’s best-selling nacho-cheese-flavored snacks to take China by storm? Or would it be better to start out with the ranch-dressing-flavored snack instead, because it’s so quintessentially American and it’d be a great way to introduce the Chinese to the tastes Americans love? Or would something else be a better fit? It’s time to vote: your manager wants everyone on the team to name the flavor they want to lead with. What are you going to choose? Set aside your top pick while you watch this short but very interesting video. Watch this video online: https://youtu.be/BA8bCNiKZsg You can read a transcript of the video here. So . . . how did you do? How close did you come to favorite flavors in the video? Were you in the ballpark? Are you ready for a career developing snack foods for global markets? If you’re like most Americans, your recommendation probably wasn’t very close to the mark, and you’re probably thinking that many of the flavors that are delicious to Chinese consumers sound a bit odd to you. Well, now you know how a lot of Chinese consumers probably feel when presented with Cheetos Crunchy Flamin’ Hot Limon Cheese Flavored Snacks or Zapp’s Spicy Cajun Crawtator potato chips. A little queasy. Hopefully this scenario helps highlight some of the challenges of global marketing, as companies start selling products in other countries. How should you enter a new market? Are you offering products that consumers in other countries will want to buy? What should you do to make sure your product–and the rest of your marketing mix–is a good fit for the global customers you want to attract? Global marketing is a complex and fascinating business. In this module, we can’t cover everything about global marketing–not by a long shot. But we will introduce key challenges, opportunities, and factors to consider when marketing to target audiences outside your home country.Licensing & Attributions CC licensed content, Original · Why It Matters: Marketing Globally. Provided by: Lumen Learning. License: CC BY: Attribution CC licensed content, Shared previously · Chinese Flavors for American Snacks. Provided by: BBC. Located at: https://youtu.be/BA8bCNiKZsg. License: CC BY-NC-ND: Attribution-NonCommercial-NoDerivatives INTRODUCTION TO GLOBALIZATION BENEFITS AND CHALLENGES What you’ll learn to do: describe globalization and the major benefits and challenges it poses for multinational organizations penetrating global markets We live in an increasingly globalized, interconnected world. There is a strong likelihood that clothes you’re wearing now, some of the food you’ve eaten today, and the device you’re using to read this page are all products of globalization: they come to you via other countries where they were produced and prepared for your consumption. Globalization is the growing level of interconnection between people, businesses, and countries around the world. And, where businesses and people exist, there is marketing. This next reading introduces the concept of globalization, the great benefits it can offer, as well as some of the challenges that businesses face when doing business in multiple countries.Licensing & Attributions CC licensed content, Original · Outcome: Globalization Benefits and Challenges. Provided by: Lumen Learning. License: CC BY: Attribution GLOBALIZATION BENEFITS AND CHALLENGES Learning Objectives · Define globalization · Explain key benefits and challenges of globalization Defining Globalization Globalization is a term used to describe how countries, people and businesses around the world are becoming more interconnected, as forces like technology, transportation, media, and global finance make it easier for goods, services, ideas and people to cross traditional borders and boundaries. Globalization offers both benefits and challenges. It can provide tremendous opportunity for economic growth to improve the quality of life for many people. It can also lead to challenges with the welfare of workers, economies, and the environment as businesses globalize and shift their operations between countries to take advantage of lower costs of doing business in other world regions. Watch the following short video for an overview of globalization and its impacts. Watch this video online: https://youtu.be/JJ0nFD19eT8 Globalization, Economic Growth and Market Opportunity Globalization creates opportunities for many countries to experience economic growth. Economic growth is the increase in the amount of the goods and services produced by an economy over time. It is conventionally measured as a percentage change in the Gross Domestic Product (GDP) or Gross National Product (GNP). These two measures, which are calculated slightly differently, total the amounts paid for the goods and services that a country produced. As an example of measuring economic growth, a country that creates $9,000,000 in goods and services in 2010 and then creates $9,090,000 in 2011 has a nominal economic growth rate of 1 percent for 2011. A way of classifying the economic growth of countries is to divide them into three groups: (a) industrialized, (b) developing, and (c) less-developed nations. · Industrialized nations have economies characterized by a healthy climate for private enterprise (business) and a consumer orientation, meaning the business climate focuses on meeting consumers’ long-term wants and needs. These nations have high literacy rates, modem technology, and higher per capita incomes. Historically, industrialized nations include United States, Canada, Japan, South Korea, Australia, New Zealand, and most Western European nations. Newly industrialized countries include Russia and most other eastern European countries, Turkey, South Africa, China, India, and Brazil, among others. · Less-developed nations, also known as least-developed countries (LDCs) have extensive poverty, low per capita income and standards of living, low literacy rates, and very limited technology. Often these nations lack strong government, financial, and economic systems to support a healthy business community. Their economies tend to be focused on agriculture and production of raw materials (such as the mining and timber industries). There are many less-developed nations in the world, with most located in Africa and Asia. · Developing nations are those that are making the transition from economies based on agricultural and raw-materials production to industrialized economies. They exhibit rising levels of education, technology, and per capita incomes. Governments in these nations typically have made strong progress to improve the climate for business in order to attract business and economic investment. There is a growing list of developing nations, including many countries in Latin America and Asia. Usually, the most significant marketing opportunities exist among the industrialized nations, as they have higher levels of income, one of the necessary ingredients for the formation of markets. However, market saturation for many products already exists in these nations. The developing countries, on the other hand, have growing population bases, and although most import a limited number of goods and services from other countries, longer-term growth potential exists in these nations. Often, marketers in developing nations must be educators, using marketing techniques to education populations about unfamiliar, new products and services and the benefits they provide. As the degree of economic development increases, so does the sophistication of the marketing effort focused on a country. Figure 1, below, illustrates nations and regions according to their economic growth prospects. Darker green areas indicate where the strongest growth opportunities currently exist, as of 2011. Figure 1: GDP growth rate by country: Shading indicates expected rate of economic growth in 2011. Benefits of Globalism for Business Those in favor of globalization theorize that a wider array of products, services, technologies, medicines, and knowledge will become available, and that these developments will have the potential to reach significantly larger customer bases. This means larger volumes of sales and exchange, larger growth rates in GDP, and more empowerment of individuals and political systems through the acquisition of additional resources and capital. These benefits of globalization are viewed as utilitarian, providing the best possible benefits for the largest number of people. For global companies, often referred to as multinational corporations (MNCs), common benefits of expanding into developing markets include unsaturated demand for new products, lower labor costs, less expensive natural resources, and other inputs to products. Technological developments have made doing business internationally much more convenient than in the past. MNCs seek to benefit from globalism by selling goods in multiple countries, as well as sourcing production in areas that can produce goods more profitably. In other words, organizations choose to operate internationally either because they can achieve higher levels of revenue or because they can achieve a lower cost structure within their operations. MNCs look for opportunities to realize economies of scale by mass-producing goods in markets that have substantially cheaper costs for labor or other inputs. Or they may look for economies of scope, through horizontal expansion into new geographic markets. If successful, both of these strategies lead to business growth, with stronger margins and/or larger revenues. There is particularly strong opportunity for business growth in markets where strong economic growth is also projected. In these areas, incomes are rising. In many cases, local populations can now afford goods and services that were previously out-of-reach, including many good produced in industrialized countries. Global companies stand to capture stronger growth and profitability if they can make headway into these markets. At the same time, international operations contain innate risk in developing new opportunities in foreign countries. Challenges of Globalism for Business Along with arguments supporting the benefits of a more globally connected economy, critics question the ethics and long-term feasibility of profits captured through global expansion. Some argue that the expansion of global trade creates unfair exchanges between larger and smaller economies. They argue that MNCs and industrialized economies capture significantly more value because they have more financial leverage and can dictate advantageous terms of exchange, which end up victimizing developing nations. Critics also raise concerns about damage to the environment, decreased food safety, unethical labor practices in sweatshops, increased consumerism, and the weakening of traditional cultural values. As MNCs do business in new global markets, they may encounter several significant challenges: · Ethical Business Practices: Arguably the most substantial of the challenges faced by MNCs, ethical business practices in areas such as labor, product safety, environmental stewardship, corruption, and regulatory compliance have historically played a dramatic role in the success or failure of global players. For example, Nike’s brand image was hugely damaged by reports that it utilized sweatshops and low- wage workers in developing countries. In some nations, particularly those without a strong rule of law, bribing public officials (e.g., paying them off with gifts or money) is relatively common by those seeking favorable business terms. Although national and international laws exist to crack down on bribery and corruption, some businesspeople and organizations are pressured to go along with locally accepted practices. Maintaining the highest ethical standards