GLOBAL MARKETINGGLOBAL MARKETING

University of Central Punjab, LahoreUniversity of Central Punjab, Lahore

BYBY

Prof. Prof. AMJAD HABIB MIRZA AMJAD HABIB MIRZA Business and ManagementBusiness and Management

Consultant Consultant

IN THE NAME OF ALLAHTHE MOST BENEFICIENT, THE MOST MERCIFUL

GLOBAL MARKETINGGLOBAL MARKETINGCOURSE OUTLINECOURSE OUTLINE

GLOBAL MARKETING IS THE LOGICAL GLOBAL MARKETING IS THE LOGICAL OFFSHOOT OF INTERNATIONAL OFFSHOOT OF INTERNATIONAL MARKETING WITH A SUBBTLE DIFFERENCE MARKETING WITH A SUBBTLE DIFFERENCE GLOBAL MARKETING USHRED FROM THE GLOBAL MARKETING USHRED FROM THE ROLE AND APPROACH OF MNCs. HENCE ROLE AND APPROACH OF MNCs. HENCE GLOBAL MARKETING NEEDS A DIFFERENT GLOBAL MARKETING NEEDS A DIFFERENT STUDY, MAY BE WITH A LOT OF THINGS IN STUDY, MAY BE WITH A LOT OF THINGS IN COMMON. GLOBAL MARKETING IS AN COMMON. GLOBAL MARKETING IS AN APPROACH OR A CONCEPT; HENCE WE APPROACH OR A CONCEPT; HENCE WE NEED TO EXPLORE IT AS SUCHNEED TO EXPLORE IT AS SUCH

TOPICAL OUTLINETOPICAL OUTLINE INTRODUCTION TO GLOBAL MARKETINGINTRODUCTION TO GLOBAL MARKETING PLANNING IN GLOBAL MARKETING AND ITS PLANNING IN GLOBAL MARKETING AND ITS

SIGNIFICANCESIGNIFICANCE STUDY OF GLOBAL ECONOMIC ENVIRONMENTSTUDY OF GLOBAL ECONOMIC ENVIRONMENT STUDY OF GLOBAL SOCIAL AND CULTURAL STUDY OF GLOBAL SOCIAL AND CULTURAL

ENVIRONMENTENVIRONMENT STUDY OF GLOBAL LEGAL AND REGULATORY STUDY OF GLOBAL LEGAL AND REGULATORY

ENVIRONMENTENVIRONMENT STUDY OF GLOBAL FOREIGN EXCHANGE STUDY OF GLOBAL FOREIGN EXCHANGE

ENVIRONMENTENVIRONMENT SOURCING DECISIONS AND VALUE CHAINSOURCING DECISIONS AND VALUE CHAIN GLOBAL PRODUCT DECISIONSGLOBAL PRODUCT DECISIONS GLOBAL PRICING DECISIONSGLOBAL PRICING DECISIONS EXPORTING AND IMPORTINGEXPORTING AND IMPORTING FUTURE OF GLOBAL ENVIRONMENTFUTURE OF GLOBAL ENVIRONMENT

GRADE DISTRIBUTOINGRADE DISTRIBUTOIN ASSIGNMENTSASSIGNMENTS 20% (TWO ASSINGS)20% (TWO ASSINGS) QUIZ QUIZ 10% (TWO QUIZ )10% (TWO QUIZ ) MIDTERM MIDTERM 30%30% END TERMEND TERM 40 40

TOTALTOTAL 100 % 100 %

CLASS PROCTORCLASS PROCTOR Will assist the ProfessorWill assist the Professor

RECOMMENDED BOOKRECOMMENDED BOOK

GLOBAL MARKETING MANAGEMENT BYGLOBAL MARKETING MANAGEMENT BY WARREN J. KEEGAN of Pace UniversityWARREN J. KEEGAN of Pace University

1------Inaugural Lecture1------Inaugural Lecture

GLOBAL MAKRKETING GLOBAL MAKRKETING

INTRODUCTION TO GLOBAL INTRODUCTION TO GLOBAL MARKETING MARKETING

Following the WW II, unprecedented Following the WW II, unprecedented expansion took place world wide. New expansion took place world wide. New economies came into being—such as Japan, economies came into being—such as Japan, China, Korea, Singapore Australia and China, Korea, Singapore Australia and Canada. Canada.

Product, Labour and Consumption shifted Product, Labour and Consumption shifted from place to place.from place to place.

Hence global marketing and positioning Hence global marketing and positioning became most important not from the became most important not from the success point of view but also from the very success point of view but also from the very existence of firms, specially of those who existence of firms, specially of those who had expansionist designs and agendahad expansionist designs and agenda

NEW CONCEPTSNEW CONCEPTS From 1969 onwards the focus of business From 1969 onwards the focus of business

shifted from Product to Customer. The shifted from Product to Customer. The objective however remained Profit. We objective however remained Profit. We developed for 4 Ps approach…the Product, developed for 4 Ps approach…the Product, the Price, the Placement and the the Price, the Placement and the Promotion. This customer focus took us Promotion. This customer focus took us beyond the frontiers and made us broaden beyond the frontiers and made us broaden our approach horizon. The newer concepts our approach horizon. The newer concepts were:were:

““Search the Customer wherever and Search the Customer wherever and however he is”however he is”

““Introduce potential customer with Introduce potential customer with your product” your product”

““Do not be scared to encroach on Do not be scared to encroach on cultural domains”cultural domains”

““Make international environment Make international environment objective rather than subjective”objective rather than subjective”

THREE PRONG APPROACH IN THREE PRONG APPROACH IN MARKETINGMARKETING

CUSTOMER VALUE AND VALUE CUSTOMER VALUE AND VALUE EQUATIONEQUATION

Create customer value of your Create customer value of your customer with your product and customer with your product and then make it greater than that of then make it greater than that of competitive productcompetitive product

CREATE COMPETITIVE AND CREATE COMPETITIVE AND DIFFERENTIAL ADVANTAGEDIFFERENTIAL ADVANTAGE

Making a total product offere to the Making a total product offere to the customer and create the differencecustomer and create the difference

FOCUSFOCUS

Create focus on markets as per Create focus on markets as per their environment, rather than their environment, rather than fighting with environmentfighting with environment

FROM DOMESTIC MARKETING TO FROM DOMESTIC MARKETING TO GLOBAL MARKETING—A GLOBAL MARKETING—A

HUNDRED YEAR JOURNEYHUNDRED YEAR JOURNEY

Domestic MarketingDomestic Marketing

When marketing was done When marketing was done within a city of province or even within a city of province or even on national scale. It depend on on national scale. It depend on the product and its the product and its transportationtransportation

Export MarketingExport Marketing

When the product moved to When the product moved to places beyond the political places beyond the political frontiers due to surplus or price frontiers due to surplus or price advantageadvantage

MULTINATIONAL MARKETINGMULTINATIONAL MARKETING

When the exports started to When the exports started to many countries, but the focus many countries, but the focus remained on Product and Profitsremained on Product and Profits

GLOBAL MARKETINGGLOBAL MARKETING

When the focus shifted from When the focus shifted from Product to environment and Product to environment and product was amended to suit the product was amended to suit the environmentenvironment

==============================================

FACTORS THAT LEADS TO FACTORS THAT LEADS TO GLOBAL MARKETINGGLOBAL MARKETING

MARKET NEED----beveragesMARKET NEED----beveragesTECHNOLOGY---commercial realityTECHNOLOGY---commercial realityCOSTS—theory of comparative costsCOSTS—theory of comparative costsQUALITY—technological edgeQUALITY—technological edgeCOMMUNICATION AND TRANSPORTCOMMUNICATION AND TRANSPORTGEO-POLITICAL LOCATION--GEO-POLITICAL LOCATION--

geographicalgeographical

RESTRAINT FACTORSRESTRAINT FACTORS

MARKET DIFFERENCEMARKET DIFFERENCECULTURAL BARRIERSCULTURAL BARRIERSRELIGIOUS DIVIDERELIGIOUS DIVIDEORGANISATIONAL CULTUREORGANISATIONAL CULTURENATIONAL CONTROL POLICIESNATIONAL CONTROL POLICIESPOLITICAL UPHEAVALSPOLITICAL UPHEAVALS

REQUIREMENTS OF GLOBAL REQUIREMENTS OF GLOBAL MARKETING PLANSMARKETING PLANS

GOBAL MARKETING PLAN REQUIRE GOBAL MARKETING PLAN REQUIRE THREE ESSENTIAL THINGSTHREE ESSENTIAL THINGS

KNOWLEDGE OF THE MARKET AND KNOWLEDGE OF THE MARKET AND MARKETING ENVIRONMENTMARKETING ENVIRONMENT

KNOWLEDGE OF THE PRODUCT, KNOWLEDGE OF THE PRODUCT, PEOPLE AND COMPETITIONPEOPLE AND COMPETITION

KNOWLEDGE OF THE MARKETING KNOWLEDGE OF THE MARKETING FUNXTION AND PROCESSFUNXTION AND PROCESS

KINDS OF GLOBAL PLANSKINDS OF GLOBAL PLANS

STANDARDIZED OR CENTRALISED STANDARDIZED OR CENTRALISED PLANSPLANS

THE PLAN IS PREPARED AT ONE THE PLAN IS PREPARED AT ONE POINT FOR THE ENTIRE GLOBE. THIS POINT FOR THE ENTIRE GLOBE. THIS SYSTEM HAS ADVANATAGES OF SYSTEM HAS ADVANATAGES OF CENTRALIZED STRATEGY AND CENTRALIZED STRATEGY AND CONTROLCONTROL

DECENTRALISED PLANSDECENTRALISED PLANS

WHERE PLANS ARE PREPARED AT WHERE PLANS ARE PREPARED AT EACH TARGET MARKET OR COUNTRY EACH TARGET MARKET OR COUNTRY OR TERRITORRY. IT HAS THE OR TERRITORRY. IT HAS THE ADVANTAGES OF CLOSE TO LOCAL ADVANTAGES OF CLOSE TO LOCAL CONDITIONSCONDITIONS

INTERACTIVE PLANSINTERACTIVE PLANS

IN SUCH TYPE WE USE MISED RATIO IN SUCH TYPE WE USE MISED RATIO OF THE TWO ABOVEOF THE TWO ABOVE

PLANNING DEPENDS ON THE PLANNING DEPENDS ON THE PRODUCTPRODUCT

HITECHHITECHCONSUMER ITEMSCONSUMER ITEMSFOOD AND AGRICUTIRAL PRODUCTFOOD AND AGRICUTIRAL PRODUCTFASHION INDUSTRY ITEMSFASHION INDUSTRY ITEMS

ELEMENTS OF PLANNING ELEMENTS OF PLANNING PROCESSPROCESS

ELEMENTSELEMENTS PCT OF STANDARDIZEDPCT OF STANDARDIZED

PRODUCT CHARACTERPRODUCT CHARACTER 29% 29% PACKAGINGPACKAGING 9% 9% BRAND NAME BRAND NAME 51% 51% RETAIL PRICINGRETAIL PRICING 20% 20% ADVERTISING MESSAGEADVERTISING MESSAGE 20% 20% SALES PROMOTIONSALES PROMOTION 33% 33% ROLE OF SALES FORCEROLE OF SALES FORCE 15% 15% MGT OF SALES FORCEMGT OF SALES FORCE 17% 17% TYPE OF RETAIL OUTLETTYPE OF RETAIL OUTLET 52% 52%

THE BALANCE OF THE PERCENTAGE IS DECENTRALISED THE BALANCE OF THE PERCENTAGE IS DECENTRALISED WITH A SMALL ELEMENT OF INTERACTIVE PLANNINGWITH A SMALL ELEMENT OF INTERACTIVE PLANNING

============================================================================

ENVIRONMENTSENVIRONMENTS

GLOBAL ECONOMIC ENVIRONMENTGLOBAL ECONOMIC ENVIRONMENTCapital movement, and not just Capital movement, and not just

commodity movements, have commodity movements, have become a driving forcebecome a driving force

Production has become ‘uncoupled’ Production has become ‘uncoupled’ from employmentfrom employment

The world economy is in control. The The world economy is in control. The usual macro economic factors no usual macro economic factors no more control economic environmentmore control economic environment

Population is moving within the Population is moving within the countries with greater ease than beforecountries with greater ease than before

The so-called cold war between The so-called cold war between socialism and capitalism is no more. socialism and capitalism is no more. Communism has gone dead within its Communism has gone dead within its own weightown weight

Global trade has assumed the trend of Global trade has assumed the trend of a global village. Mpvement of good and a global village. Mpvement of good and services are no more a peril or a services are no more a peril or a problem as it was 100 years backproblem as it was 100 years back

MARKETS DEVELOPMENTMARKETS DEVELOPMENT

LOW INCOME COUNTRIESLOW INCOME COUNTRIESproduction is limitedproduction is limitedmore reliance on agriculture and more reliance on agriculture and

natural vegetationnatural vegetation low literacy and technical know-howlow literacy and technical know-howheavy reliance on foreign aidheavy reliance on foreign aidpolitical instability and immaturitypolitical instability and immaturity

LOWER INCOME –MIDDLE LOWER INCOME –MIDDLE COUNTRIESCOUNTRIES

expanding consumer goods marketexpanding consumer goods market local production possiblelocal production possiblemotivated labour & entrepreneurshipmotivated labour & entrepreneurship

UPPER INCOME COUNTRIESUPPER INCOME COUNTRIESHigh technologyHigh technologyLow number of peopleLow number of peopleHigh education and technologyHigh education and technologyHigh production of goods and High production of goods and

servicesservicesPeaceful and healthy environmentPeaceful and healthy environment

CATEGORIES BY CATEGORIES BY POPULATIONPOPULATION SOUTH ASIA AND FAR EASTSOUTH ASIA AND FAR EAST AFRICAN CONTINENTAFRICAN CONTINENT SOUTH AMERICAN COUNTRIESSOUTH AMERICAN COUNTRIES AUSTRALIA AUSTRALIA CANADACANADA NORTH AMERICANORTH AMERICA NAFTA, GROUP OF SEVEN, LAFTA, ASEAN NAFTA, GROUP OF SEVEN, LAFTA, ASEAN

ETCETC

Assignment –NO 1Assignment –NO 1

Write a note on Global Village. Write a note on Global Village. What is this concept? The write What is this concept? The write up should be of minimum two up should be of minimum two

computer pages of font 12 sizecomputer pages of font 12 size

STUDY OF ECONOMIC ENVIRONMENTSTUDY OF ECONOMIC ENVIRONMENT make a detailed study of Global Segments, make a detailed study of Global Segments,

Economic Blocks and make their needs well Economic Blocks and make their needs well knownknown

carry out extensive survey on people and carry out extensive survey on people and other environmental factorsother environmental factors

identify products and your capability of identify products and your capability of productionproduction

make bi-lateral trade agreementsmake bi-lateral trade agreements develop infrastructure to boost trade and its develop infrastructure to boost trade and its

developmentdevelopment improve means of transport and improve means of transport and

communicationcommunication

Assignment Assignment Suppose your is a well developed Suppose your is a well developed

country. What kinds of bilateral country. What kinds of bilateral trade agreements can you make trade agreements can you make with countries like with countries like

PAKISTAN, INDIA, BANGLADESH, PAKISTAN, INDIA, BANGLADESH, SRILANKA AND JAPANSRILANKA AND JAPAN

ANALYTICAL APPROACH TO ANALYTICAL APPROACH TO CULTURE FACTORCULTURE FACTOR

Two footwear Salesmen went to a Two footwear Salesmen went to a remote island in Pacific. The islands remote island in Pacific. The islands total population was some 500 total population was some 500 people. they were not wearing any people. they were not wearing any footwear. One salesman reported: footwear. One salesman reported:

“ “ we cant sell a piece, people are not we cant sell a piece, people are not used to wearing footwear”. used to wearing footwear”. The other The other salesman reported,salesman reported, “we have a “we have a potential to sell 1000 pairs at least, if potential to sell 1000 pairs at least, if we make them aware of footwear”we make them aware of footwear”

Culture is one of the most prominent Culture is one of the most prominent factors in global marketing. We can factors in global marketing. We can use culture the way we want and use use culture the way we want and use it positively to our benefitit positively to our benefit

Culture is a learned behavior of Culture is a learned behavior of people passed on from generation to people passed on from generation to generationgeneration

ApproachApproach

We should understand the wisdom that We should understand the wisdom that we do not understand people even within we do not understand people even within ourselves, not even ourselves. There is no ourselves, not even ourselves. There is no element of misunderstanding; there element of misunderstanding; there ought to be understanding onlyought to be understanding only

Our perpetual system is extremely limitedOur perpetual system is extremely limited If we want to make ourselves effective, If we want to make ourselves effective,

then we should not make foreign culture then we should not make foreign culture as a joke or a matter of bizarre. We must as a joke or a matter of bizarre. We must learn to draw our business advantage out learn to draw our business advantage out of this.of this.

LEGAL & REGULATORY LEGAL & REGULATORY ENVIRONMENTENVIRONMENT

Though globally we are one and Though globally we are one and call ourselves a global village, call ourselves a global village, yet there are laws and rules yet there are laws and rules which differ. We are all which differ. We are all Sovereign States. There are Sovereign States. There are several kinds of laws:several kinds of laws:

INTERNATIONAL LAWS INTERNATIONAL LAWS NATIONAL LAWSNATIONAL LAWSLEGAL FRAMEWORKLEGAL FRAMEWORKLOCAL AND REGULATORY LAWSLOCAL AND REGULATORY LAWSTAX LAWSTAX LAWSPOLICIES AND RUGULATIONSPOLICIES AND RUGULATIONS

INTERNATIONAL LAWSINTERNATIONAL LAWS THESE ARE THESE LAWS AND BINDING THESE ARE THESE LAWS AND BINDING

FORCES, IN WHICH ALL NATIONS ARE FORCES, IN WHICH ALL NATIONS ARE BOUND TOGETHER. SUCH ARE BOUND TOGETHER. SUCH ARE ENVIRONMENTAL LAWS, SHIPPING ENVIRONMENTAL LAWS, SHIPPING LAWS, HUMAN RIGHTS LAWS, TRADE LAWS, HUMAN RIGHTS LAWS, TRADE AND COMMERCIAL PRACTICES. THESE AND COMMERCIAL PRACTICES. THESE LAWS ARE IN THE SHAPE OF LAWS ARE IN THE SHAPE OF ENACTMENTS, CONVENTIONS, ENACTMENTS, CONVENTIONS, COVENANTS, AGREEMENTS ETC AND COVENANTS, AGREEMENTS ETC AND RATIFIED BY U.N.ORATIFIED BY U.N.O

NATIONAL LAWSNATIONAL LAWS THESE LAWS ARE ENACTED BY THE THESE LAWS ARE ENACTED BY THE

GOVERNMENTS OF THESE COUNTRIES. THEY GOVERNMENTS OF THESE COUNTRIES. THEY ARE MADE UNDER THE UMBRELLA OF ARE MADE UNDER THE UMBRELLA OF SOVERIGNITY THEY ENJOY AS INDEPENDENT SOVERIGNITY THEY ENJOY AS INDEPENDENT COUNTRIES. PRIOR TO 1990, THESE LAWS COUNTRIES. PRIOR TO 1990, THESE LAWS COULD BE DIFFERENT IN MANY RESPECTS. COULD BE DIFFERENT IN MANY RESPECTS. BUT AFTER THE BREAKUP OF SOCIET UNION BUT AFTER THE BREAKUP OF SOCIET UNION AND DOWN FALL OF COMMUNISM, THEY AND DOWN FALL OF COMMUNISM, THEY CANNOT FRAME LAWS REPUGNENT TO CANNOT FRAME LAWS REPUGNENT TO WORLD ORDER. THE SO-CALLED IRON WORLD ORDER. THE SO-CALLED IRON CURTAIN WAS BROKEN IN CHINA AND CURTAIN WAS BROKEN IN CHINA AND SOVIET UNION.SOVIET UNION.

LAWS ARE BROADLY OF TWO KINDS:LAWS ARE BROADLY OF TWO KINDS: BRITISH ORIENTEDBRITISH ORIENTED AMERCIAN ORIENTEDAMERCIAN ORIENTED THESE TWO NATURES OF LAWS DIFFER IN THESE TWO NATURES OF LAWS DIFFER IN

WORDS AND APPROACH. BUT THE SPIRIT OF WORDS AND APPROACH. BUT THE SPIRIT OF THESE LAWS ARE THE SAME. MERCANTILE THESE LAWS ARE THE SAME. MERCANTILE LAWS ARE ALL OVER MORE OR LESS THE LAWS ARE ALL OVER MORE OR LESS THE SAMESAME

CONTRACT ACT, SALES OF GOODS ACT, CONTRACT ACT, SALES OF GOODS ACT, NEGOTIABLE INSTRUMENTS ACT, COMPANYS NEGOTIABLE INSTRUMENTS ACT, COMPANYS LAW, PARTNERSHIP ACT, LAWS RELATED TO LAW, PARTNERSHIP ACT, LAWS RELATED TO AGENY, BROKERAGE, PAYMENTS, LOANS, AGENY, BROKERAGE, PAYMENTS, LOANS, BANKING AND BANK PRACTICES, BANKING AND BANK PRACTICES, TRANSACTIONAL LAWS ETC. THEY ARE ALL TRANSACTIONAL LAWS ETC. THEY ARE ALL BINDING ON LOCALS AND FOREIGNERS ALIKE.BINDING ON LOCALS AND FOREIGNERS ALIKE.

THEN THERE ARE THEN THERE ARE ARBITRATION LAWS AND ARBITRATION LAWS AND CONFLICT RESOLUTION, LABOUR CONFLICT RESOLUTION, LABOUR LAWS UNDER GENEVA LAWS UNDER GENEVA CONVENTIONS AND ILO OF UN CONVENTIONS AND ILO OF UN REGULATIONSREGULATIONS

THEN THERE ARE POLICIESTHEN THERE ARE POLICIES FINANCE POLICIESFINANCE POLICIES TRADE POLICIESTRADE POLICIES COMMERCIAL POLICIES AND LAWSCOMMERCIAL POLICIES AND LAWS AGRICUTLTURAL POLICIES AND LAWSAGRICUTLTURAL POLICIES AND LAWS INDUSTIRIAL POLICIESINDUSTIRIAL POLICIES VALIDATION POLICIESVALIDATION POLICIES FOREIGN INVESTMENT POLICIESFOREIGN INVESTMENT POLICIES

THEN THERE ARE TAX THEN THERE ARE TAX LAWSLAWS

CORPORATE TAX REGULATIONSCORPORATE TAX REGULATIONSREPATRIATION OF INVESTMENTS REPATRIATION OF INVESTMENTS

AND PROFITSAND PROFITSINDIVIDUAL TAXESINDIVIDUAL TAXESLOCAL TAXESLOCAL TAXES

WHEN BUILDING GLOBAL WHEN BUILDING GLOBAL BUSINESS, WE HAVE TO ABIDE BUSINESS, WE HAVE TO ABIDE BY THESE NATIONAL AND BY THESE NATIONAL AND INTERNATIONAL LAWSINTERNATIONAL LAWS

WE CALL THEM REGULATORY WE CALL THEM REGULATORY FRAMEWORKFRAMEWORK

WE MUST LEARN TO ACCEPT WE MUST LEARN TO ACCEPT THEM AS THEY ARE AND CANNOT THEM AS THEY ARE AND CANNOT IMPOSE OUR LAWSIMPOSE OUR LAWS

A GOOD PART OF THE WORLD IS A GOOD PART OF THE WORLD IS REGULATED BY SHARIAH AND REGULATED BY SHARIAH AND ISLAMIC LAWS—HENCE THESE ISLAMIC LAWS—HENCE THESE LAWS ARE TO BE STRICTLY LAWS ARE TO BE STRICTLY ADHERED TO REGARDLESS OF ADHERED TO REGARDLESS OF ONES BELEIF AND DOCTRINEONES BELEIF AND DOCTRINE

ACCORDING TO INTERNATIONAL ACCORDING TO INTERNATIONAL JURISPRUDENCE, EVERY BODY IS JURISPRUDENCE, EVERY BODY IS UNDER THE LAW OF THE LAND UNDER THE LAW OF THE LAND AND NOT HIS OR HER LAWS AND AND NOT HIS OR HER LAWS AND BELIEFS OR CONSENT. BELIEFS OR CONSENT. INTERNATIONAL LAWS ARE INTERNATIONAL LAWS ARE APPLICABLE TO ALL NATIONS APPLICABLE TO ALL NATIONS WITH OR WITHOUT CONSENT---IT WITH OR WITHOUT CONSENT---IT IS A PART OF UNO CHARTER.IS A PART OF UNO CHARTER.

SOME OF THE INTERNATIONAL SOME OF THE INTERNATIONAL BUSINESS ISSUESBUSINESS ISSUES

PATENT LAWPATENT LAWBRIBERY AND COMMERCIAL BRIBERY AND COMMERCIAL

CORRUPTION AND CORRUPY CORRUPTION AND CORRUPY PRACTICESPRACTICES

LIBELLING LAWSLIBELLING LAWSFOREIGN EXCHAGE PRACTICESFOREIGN EXCHAGE PRACTICESMONEY LAUNDERINGMONEY LAUNDERING

ANOTHER LECTUREANOTHER LECTURE

FINANCIAL ENVIRONMENTFINANCIAL ENVIRONMENT

Finance is like a lubricant in a machine. Finance is like a lubricant in a machine. Without these liquid we cannot transact Without these liquid we cannot transact trade. We are far from barter systemtrade. We are far from barter system

Finance involves:Finance involves: understanding means of exchangeunderstanding means of exchange certain financial decisioncertain financial decision creating parity on exchangecreating parity on exchange certain repercussions and complications certain repercussions and complications

involved in rate of exchange fluctuationinvolved in rate of exchange fluctuation

Each country has its own currency, Each country has its own currency, with a lot different back ground and with a lot different back ground and policies. The transaction cannot be policies. The transaction cannot be made or even parity cannot be made or even parity cannot be attained unless both the currencies attained unless both the currencies are translated into gold or another are translated into gold or another stable currency. GOLD it cannot be as stable currency. GOLD it cannot be as there is no assurance of gold; hence there is no assurance of gold; hence foreign currency. In globe we have foreign currency. In globe we have dollar basket which is a common dollar basket which is a common denominator.denominator.

On the basis of this common On the basis of this common denominator, we financial agreements denominator, we financial agreements because US Dollar itself fluctuates. And because US Dollar itself fluctuates. And there is what we call International there is what we call International currency market There are spot rates---currency market There are spot rates---means immediate rate of exchange and means immediate rate of exchange and there are forward transactions, which there are forward transactions, which means exchange in terms of dollar is means exchange in terms of dollar is fixed in advance. This currency market fixed in advance. This currency market is governed by the rule of supply and is governed by the rule of supply and demand. This establishes Purchasing demand. This establishes Purchasing Power Parity (PPP).Power Parity (PPP).

Bank of England works as a Bank of England works as a centre of WORLD financial centre of WORLD financial marketmarket

IMPLICATIONS ON BUSINESS IMPLICATIONS ON BUSINESS DUE TO EXCHANGE RATE DUE TO EXCHANGE RATE

FLUCTUATIONSFLUCTUATIONS

EXCHANGE RATE FLUCTUATIONSEXCHANGE RATE FLUCTUATIONSMakes import and export rate Makes import and export rate

cheaper or expensivecheaper or expensiveEXCHANGE RATE EXPOSUREEXCHANGE RATE EXPOSUREThe company profit or loss The company profit or loss

depends upon not only in terms of depends upon not only in terms of local currency but also its ability local currency but also its ability to stand in the world markets. to stand in the world markets. That is in terms of US DollarsThat is in terms of US Dollars

We must learn to adjust our costs and We must learn to adjust our costs and profits and there fore prices according profits and there fore prices according to exchange rates. We determine our to exchange rates. We determine our prices according to:prices according to:

FOREIGN STOCK INVESTMENTSFOREIGN STOCK INVESTMENTS REPATRIATION OF FOREIGN EXCHANGE REPATRIATION OF FOREIGN EXCHANGE

BY EXPATSBY EXPATS IMPORT BILLIMPORT BILL EXPORT EARNINGSEXPORT EARNINGS COSTS OF INFRASTRUCTURAL COSTS OF INFRASTRUCTURAL

PROJECTSPROJECTS

Next lectureNext lecture

GLOBAL MARKET GLOBAL MARKET SEGMENTATION AND SEGMENTATION AND

TARGETING TARGETING

Market segmentation is one of Market segmentation is one of the most difficult task in global the most difficult task in global marketing. It dates back to marketing. It dates back to ancient traders as well. ancient traders as well. Depending on the nature of your Depending on the nature of your product, segmentation is done product, segmentation is done today on variety of ways and today on variety of ways and methodsmethods

DEMOGRAPHIC METHODDEMOGRAPHIC METHOD Means segmentation is done on age, Means segmentation is done on age,

gender, income level, buying power, gender, income level, buying power, ecuation and occupationecuation and occupation

PSYCHOGRAPHIC PSYCHOGRAPHIC Segmentation si done on the basis of Segmentation si done on the basis of

attitude, lifestyles and valuesattitude, lifestyles and values

BEHAVIORIALBEHAVIORIAL On the basis of how people use or consume On the basis of how people use or consume

product and how do they react to it?product and how do they react to it?

Global segmentation should be done Global segmentation should be done carefully firstly to make more carefully firstly to make more penetration in the world and penetration in the world and secondly to avoid wasting time and secondly to avoid wasting time and take a competitive edgetake a competitive edge

GLOBAL TARGETINGGLOBAL TARGETING

It means focusing your attention It means focusing your attention to specific markets and to specific markets and concentration once it has been concentration once it has been done. It means to identifying and done. It means to identifying and evaluating consumers on a evaluating consumers on a predetermined basis. There are predetermined basis. There are three methods:three methods:

1 CONSUMER TARGETING1 CONSUMER TARGETING This targeting is done on the size and potential This targeting is done on the size and potential

growth in the market marketgrowth in the market market

2 POTENTIAL COMPETITION2 POTENTIAL COMPETITION How vulnerable is this market to competitors How vulnerable is this market to competitors

productsproducts

3 COMPATBILITY AND FEASIBILITY3 COMPATBILITY AND FEASIBILITY This is how much political and cultural alliance is This is how much political and cultural alliance is

with the market? Many countries may have different with the market? Many countries may have different cultures, but they have acceptance and response to cultures, but they have acceptance and response to certain kind of goods and also their sources. For certain kind of goods and also their sources. For example, we have softness of goods from UK in example, we have softness of goods from UK in PakistanPakistan

GATTGATT

General Agreement of Trade and TariffGeneral Agreement of Trade and Tariff FREE TRADE AREAS----Nafta, Lafta, ECMFREE TRADE AREAS----Nafta, Lafta, ECM ASEAN CONTRIESASEAN CONTRIES

Association of South East Asian NationsAssociation of South East Asian Nations CARICOMCARICOM

Carribean Consumer and Common Carribean Consumer and Common MarketMarket

ADVANTAGES OF SEGMENTATION & ADVANTAGES OF SEGMENTATION & TARGETINGTARGETING

Available StatisticsAvailable StatisticsCultural compatibility of Cultural compatibility of

InformationInformationOpen Dialogue and RelationshipOpen Dialogue and RelationshipRegional ProximityRegional ProximityTravel Ease. Social and Cultural Travel Ease. Social and Cultural

RelationsRelations

Next LectureNext Lecture

GLOBAL MARKET ENTRY AND GLOBAL MARKET ENTRY AND EXPANSIONEXPANSION

We begin with marketing now. We begin with marketing now. We discussed market We discussed market segmentation and having done segmentation and having done that, we must plan which market that, we must plan which market we must tner and target and we must tner and target and make cound planning vis-à-vis make cound planning vis-à-vis entry and expansionentry and expansion

We must establish objectives. Volume We must establish objectives. Volume share that we aim at,and of course share that we aim at,and of course profitabilityprofitability

By Entry we mean, the method we By Entry we mean, the method we must enter the country. There are must enter the country. There are several methods and depending on the several methods and depending on the nature of the product, we decide which nature of the product, we decide which which method we employ/which method we employ/

How should we execute market plan? How should we execute market plan? The simple decision is Direct Marketing The simple decision is Direct Marketing or through Agents or third party?or through Agents or third party?

VARIOUS METHODS OF VARIOUS METHODS OF ENTRYENTRY

EXPORTINGEXPORTING It is an age old method and perhaps tadictional and It is an age old method and perhaps tadictional and

oldold Exporting is to sell directly to the local parties of Exporting is to sell directly to the local parties of

that country or to consumers who use the product. that country or to consumers who use the product. We export cotton and cotton yarn to textile We export cotton and cotton yarn to textile manufacturing countries. Exporting is very simple manufacturing countries. Exporting is very simple and low-caost initiative. It does not invlolve and low-caost initiative. It does not invlolve manufacturing overhead abroad. One of the manufacturing overhead abroad. One of the advantages oif exporting is that it is simple affair to advantages oif exporting is that it is simple affair to handle. Take care of your importers and their deals handle. Take care of your importers and their deals and commitment. But exporting has limited and commitment. But exporting has limited expansion scope. We can always increase our expansion scope. We can always increase our exports by finding new markets, but we can hardly exports by finding new markets, but we can hardly do anything ins the same marketdo anything ins the same market

LICENSINGLICENSING Licensing is one step ahead of exporting. Licensing is one step ahead of exporting.

We authorize foreign agents to manufacture We authorize foreign agents to manufacture under a licence agreement under an agreed under a licence agreement under an agreed technological input and brand image. technological input and brand image. Licensing is a very neat and clean way of Licensing is a very neat and clean way of global marketing. However, it presupposes global marketing. However, it presupposes good relations and trust on one another. Its good relations and trust on one another. Its only overhead is policing the conditions of only overhead is policing the conditions of licencing agreement. We have numerous licencing agreement. We have numerous complaints of abuse of conditions and even complaints of abuse of conditions and even dissolution of agreements.dissolution of agreements.

FRANCHISINGFRANCHISING

For the franchisor, the franchise is For the franchisor, the franchise is an alternative to building 'chain an alternative to building 'chain stores' to stores' to distributedistribute goods and goods and avoid investment and liability over avoid investment and liability over a chain. The franchisor's success a chain. The franchisor's success is the success of the franchisees. is the success of the franchisees. The franchisee is said to have a The franchisee is said to have a greater incentive than a direct greater incentive than a direct employee because he or she has a employee because he or she has a direct stake in the business.direct stake in the business.

Businesses for which franchising Businesses for which franchising works best have the following works best have the following characteristics:characteristics:

Businesses with a good track Businesses with a good track record of profitability. record of profitability.

Businesses which are easily Businesses which are easily duplicated. duplicated.

franchise usually lasts for a fixed time franchise usually lasts for a fixed time period (broken down into shorter period (broken down into shorter periods, which each require periods, which each require renewalrenewal), ), and serves a specific "territory" or area and serves a specific "territory" or area surrounding its location. One franchisee surrounding its location. One franchisee may manage several such locations. may manage several such locations. Agreements typically last from five to Agreements typically last from five to thirty years, with premature thirty years, with premature cancellations or terminations of most cancellations or terminations of most contracts bearing serious consequences contracts bearing serious consequences for franchisees.for franchisees.

JOINT VENTURESJOINT VENTURES JVs overcome policing and is considered JVs overcome policing and is considered

as advanced method of global as advanced method of global marketing. JVs integrate value chain marketing. JVs integrate value chain strengths—such as manufacturing strengths—such as manufacturing strength with international exporting strength with international exporting expertiseexpertise

JVs are a direct investment along with JVs are a direct investment along with other nations interst in business. It calls other nations interst in business. It calls for enhanced technological advantagefor enhanced technological advantage

Some of the famous JVs are:Some of the famous JVs are:GM/ TOYOTAGM/ TOYOTATexas Instrument / Kobe SteelTexas Instrument / Kobe SteelAT & T / MISTSHUBISHIAT & T / MISTSHUBISHI

JVs depend upon the product JVs depend upon the product kind time and situation world kind time and situation world widewide

OWNERSHIPOWNERSHIPThis is the most advanced method. It This is the most advanced method. It

is 100 pct ownership of a project on is 100 pct ownership of a project on foreign land. The most glorious foreign land. The most glorious example is that of ASWAN DAM in example is that of ASWAN DAM in Egypt.Egypt.

This method entails various financial This method entails various financial and entrepreneurial challenges.and entrepreneurial challenges.

USUAL PRODUCTS WHERE USUAL PRODUCTS WHERE ABOVE METHODS ARE ABOVE METHODS ARE

EMPLOYEDEMPLOYED FOOD AND BEVERAGESFOOD AND BEVERAGES APPAREL, CLOTHING AND PERSONAL CARE APPAREL, CLOTHING AND PERSONAL CARE

itemsitems PHARMACUETICALSPHARMACUETICALS CONSUMERS PRODUCTSCONSUMERS PRODUCTS MEDIA AND ENTERTAINMENTMEDIA AND ENTERTAINMENT INFRA-STRUCTURAL BIG PROJECTSINFRA-STRUCTURAL BIG PROJECTS AMUSEMENT PARKSAMUSEMENT PARKS AUTOMOBILE AND RELATED PROJECTSAUTOMOBILE AND RELATED PROJECTS FASHION WEARFASHION WEAR COSMETICS AND CLEANSING PRODUCTSCOSMETICS AND CLEANSING PRODUCTS

MARKET EXPANSION MARKET EXPANSION STRATEGIESSTRATEGIES

There are two methods of expansionThere are two methods of expansionOne is concentration in the same One is concentration in the same

market and diversifyingmarket and diversifyingSecond is to find new marketsSecond is to find new marketsAgain it depends of the nature of Again it depends of the nature of

product, the investment involved and product, the investment involved and technological edgetechnological edge

MARKET POSITIONINGMARKET POSITIONING We have to find answers to the following We have to find answers to the following

questionsquestions is your country condition comfortable and is your country condition comfortable and

stable?stable? Are there avenues of diversification?Are there avenues of diversification? Does your condition allow you to financially Does your condition allow you to financially

expand and technically feasible?expand and technically feasible? Will expansion strengthen your current Will expansion strengthen your current

position?position? Will expansion give you more positive or Will expansion give you more positive or

negative exposure?negative exposure? Are your political relations likely to be good in Are your political relations likely to be good in

long run of time?long run of time? What is each other geo-political condition?What is each other geo-political condition? --------------------------------------------------------------------------------------------------------------------

PRODUCT DECISIONSPRODUCT DECISIONS

YOU MAY HAVE STUDIED PRODUCT YOU MAY HAVE STUDIED PRODUCT BEFORE. BUT LET US UNDERSTAND BEFORE. BUT LET US UNDERSTAND

PRODUCT OUR WAY.PRODUCT OUR WAY.

WHAT IS PRODUCTWHAT IS PRODUCT? As in marketing? As in marketing

Product is defined in physical Product is defined in physical attributes—weight, dimension, and attributes—weight, dimension, and material used. But we go into some material used. But we go into some greater detailsgreater details

Color, style, shape and even contour. This Color, style, shape and even contour. This description is limited to physical attributes description is limited to physical attributes only.only.

For example we talk of a car, we say it is 17 For example we talk of a car, we say it is 17 feet long, 7 feet wide and weighs 5000 lbs. feet long, 7 feet wide and weighs 5000 lbs.

We apply to its functions. It fulfills many needs. We apply to its functions. It fulfills many needs. It is used for plying people to works and back. It is used for plying people to works and back. It is used for recreation. It is a means of It is used for recreation. It is a means of transport. We then have brands of cars. BMW, transport. We then have brands of cars. BMW, Honda, Toyota. Product converts to need or Honda, Toyota. Product converts to need or desire. We even don’t call it car. We say, “are desire. We even don’t call it car. We say, “are you mobile”. Product is classified into variety you mobile”. Product is classified into variety of needsof needs

ON GLOBAL BASISON GLOBAL BASIS

LOCAL PRODUCTLOCAL PRODUCTDimensionally, the product is Dimensionally, the product is

developed as a local product meant developed as a local product meant for local market. However, for local market. However, technology, skills, raw material, cost technology, skills, raw material, cost etc bring superb advantage locally, etc bring superb advantage locally, to convert into a global market on to convert into a global market on the basis of need the basis of need

TV for example is developed by Sony TV for example is developed by Sony locally. Soon Sony too strides locally. Soon Sony too strides towards becoming a global product. towards becoming a global product. How?How?

* technological advantage* technological advantage

* material advantage* material advantage

* cost of production advantage* cost of production advantage

* need of good quality and lasting TV in * need of good quality and lasting TV in other countriesother countries

Sony became soon a global product. Sony became soon a global product. Another example is Locktite Another example is Locktite Corporation. It manufactures adhesives Corporation. It manufactures adhesives and sealants. 90 percent of product is and sealants. 90 percent of product is sold in other countries than local and so sold in other countries than local and so does it profit come from overseas. It does it profit come from overseas. It was the need of adhesives and sealants was the need of adhesives and sealants in other countries which gave them in other countries which gave them simple comparative cost and price simple comparative cost and price advantage advantage

Some of the other Global Some of the other Global ProductsProducts

Sony, Locktite, Walkman, CD players, Sony, Locktite, Walkman, CD players, Burgers, Pizzas etcBurgers, Pizzas etc

The major reasons behind are:The major reasons behind are:

uniqueness, technological uniqueness, technological advantage, workman shipadvantage, workman ship

IN SOME COUNTRIES, REFRIGRATOR IN SOME COUNTRIES, REFRIGRATOR IS A PRESTIGE ITEMIS A PRESTIGE ITEM

IN OTHER COUNTRIES, FROZEN IN OTHER COUNTRIES, FROZEN FOOD IS NOT USED, INSTEAD FRESH FOOD IS NOT USED, INSTEAD FRESH VEGETABLES, THIS IS TRUE IN VEGETABLES, THIS IS TRUE IN LOWER INCOME COUNTRIES. IN LOWER INCOME COUNTRIES. IN SOME COUNTRIES, PRESERVATION SOME COUNTRIES, PRESERVATION OF FOOD IS NOT PART OF THEIR OF FOOD IS NOT PART OF THEIR CULTURECULTURE

HOWEVER, DURABILITY AND QUALITY HOWEVER, DURABILITY AND QUALITY OF PRODUCT IS COMMON FACTOR, OF PRODUCT IS COMMON FACTOR, PRICE IS ALSO CONSIDERED PRICE IS ALSO CONSIDERED IMPORTANT IN SOME PARTS. THEY IMPORTANT IN SOME PARTS. THEY BECOME SALIENT POINTS IN SELLING BECOME SALIENT POINTS IN SELLING AND ESTABLISHING PRODUCTAND ESTABLISHING PRODUCT

GLOBAL BRANDINGGLOBAL BRANDING

Every brand has it strategic position. Every brand has it strategic position. Some brands have an image concept, Some brands have an image concept, others vary their positioning based others vary their positioning based on local need. Levi for example, has on local need. Levi for example, has the image of rugged users of levi by the image of rugged users of levi by the cowboys in USA. We do not have the cowboys in USA. We do not have such culture in Pakistan. Hence Levi such culture in Pakistan. Hence Levi uses fashion as its image, by making uses fashion as its image, by making their jeans look like rugged. their jeans look like rugged.

Mcdonalds uses fast food as their Mcdonalds uses fast food as their symbol of sales in foreign countries, symbol of sales in foreign countries, where time is of great significance. But where time is of great significance. But in Pakistan, it is addressed to youngsters in Pakistan, it is addressed to youngsters and kids. Global branding is done on and kids. Global branding is done on country to country, depends on need country to country, depends on need and desires according to culture. Brands and desires according to culture. Brands are established with the help of publicity are established with the help of publicity and advertisement. One might say, we and advertisement. One might say, we used same marketing approach as we used same marketing approach as we use in domestic marketinguse in domestic marketing

SATURATION LEVEL OF SATURATION LEVEL OF PRODUCTSPRODUCTS

In some countries saturation level of In some countries saturation level of products have reached. Then there is products have reached. Then there is dramatic turnaround of lifestyle. For dramatic turnaround of lifestyle. For example in Germany and France, example in Germany and France, vacuum cleaner has gone out dated vacuum cleaner has gone out dated because people no more use carpets. because people no more use carpets. They have taken to wooden floors. All They have taken to wooden floors. All vacuum makers are now concentrating vacuum makers are now concentrating on Holland and other countrieson Holland and other countries

PRODUCT DECISIONSPRODUCT DECISIONS

PRODUCT MUST BE CAMPATIBLE PRODUCT MUST BE CAMPATIBLE WITH LOCAL CULTURE, LIFESTLE AND WITH LOCAL CULTURE, LIFESTLE AND NATURE OF THE PEOPLENATURE OF THE PEOPLE

PRODUCT NEEDS TO BE ALTERED TO PRODUCT NEEDS TO BE ALTERED TO MATCH LOCAL CONDITIONSMATCH LOCAL CONDITIONS

COST OF THE PRODUCT MUST BE COST OF THE PRODUCT MUST BE WORKED OUT CAREFULLYWORKED OUT CAREFULLY

PRODUCT SHOULD BE IN PRODUCT SHOULD BE IN CONSISTENT WITH THE RELIGIONS CONSISTENT WITH THE RELIGIONS OF THE COUNTRYOF THE COUNTRY

INTRODUCE MULTI-PRODUCTS INTRODUCE MULTI-PRODUCTS SYSTEMSYSTEM

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PRICING DECISIONSPRICING DECISIONS

THERE ARE THREE FACTORS AROUND THERE ARE THREE FACTORS AROUND WHICH PRICING BOUNDARIES ARE WHICH PRICING BOUNDARIES ARE FIXEDFIXED

11 THE PRODUCT COST, WHICH SET THE THE PRODUCT COST, WHICH SET THE PRICE FLOORPRICE FLOOR OR THE MINIMUM OR THE MINIMUM PRICEPRICE

22 THE COMPETITIVE PRICE OF THE COMPETITIVE PRICE OF COMPARABLE PRODUCT/SCOMPARABLE PRODUCT/S

33 THE EXPECTED MARGINS FROM THE EXPECTED MARGINS FROM OPERATIONOPERATION

WE HAVE THE FOLLOWING WE HAVE THE FOLLOWING QUESTIONSQUESTIONS

11 Does the price reflect the product quality?Does the price reflect the product quality?22 Is the price competitive?Is the price competitive?33 Should we pursue market penetration?Should we pursue market penetration?44 What types of discounts or allowances be What types of discounts or allowances be

offered to international customers?offered to international customers?55 Should the price differ from segment to Should the price differ from segment to

segment?segment?66 Is the price welcome in host country?Is the price welcome in host country?77 What ingresients can we use locally to What ingresients can we use locally to

matter our coist and therefore prices?matter our coist and therefore prices?

PRICING STRATEGIESPRICING STRATEGIES

11 Determine the Elasticity of Demand in Determine the Elasticity of Demand in the host country. Inelasticity will assist the host country. Inelasticity will assist in setting higher pricesin setting higher prices

22 Evaluate fixed and variable costsEvaluate fixed and variable costs

33 Identify and associate all costs related Identify and associate all costs related to marketing process, depending on to marketing process, depending on entry strategyentry strategy

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CHANNEL DISTRIRIBUTION CHANNEL DISTRIRIBUTION DECISIONDECISION

AMA defines Channel Distributions as AMA defines Channel Distributions as “oganized network of agencies and “oganized network of agencies and institutions, which, in combination, institutions, which, in combination, with each otherslink between the with each otherslink between the producers and consumers and producers and consumers and complete the task of marketing”complete the task of marketing”

Distributions channels highly differ from Distributions channels highly differ from country to country. We must establish country to country. We must establish distinct characteristics of product and distinct characteristics of product and customers. The income level, their customers. The income level, their lifestyles, shopping habits,and reaction lifestyles, shopping habits,and reaction to various marketing methods. to various marketing methods. Similarly, the product nature, the Similarly, the product nature, the standardization, the presihability of the standardization, the presihability of the product etc all determine the channel product etc all determine the channel decisionsdecisions

TERMINOLOGYTERMINOLOGY

1 HYPER MARKETS---selling store of 1 HYPER MARKETS---selling store of averaging 2,00,000 sq ftaveraging 2,00,000 sq ft

2 DISCOUNT STORES. Selling stores of 2 DISCOUNT STORES. Selling stores of avergaing 70,000 sq ftavergaing 70,000 sq ft

3 SUPER MARKETS– Selling stores with 3 SUPER MARKETS– Selling stores with an average of 30 to 40,000 sq ftan average of 30 to 40,000 sq ft

4 SUPERRTES. Small shops of 1000 to 4 SUPERRTES. Small shops of 1000 to 4000 sq ft4000 sq ft

CHANNELS IN LDCSCHANNELS IN LDCS

LOTS OF PEOPLE ARE ENGAGED IN LOTS OF PEOPLE ARE ENGAGED IN PROCESSPROCESS

TOO MANY INTERMEDIARIESTOO MANY INTERMEDIARIESSMALL STORES USUALLYSMALL STORES USUALLYLESS NUMBER OF LAWS REGULATINGLESS NUMBER OF LAWS REGULATINGLESS SPECIALIZATIONLESS SPECIALIZATION

CHANNEL DECISIONSCHANNEL DECISIONS

Introduce Innovations and stress on Introduce Innovations and stress on trainingtraining

Introduce direct marketing retailingIntroduce direct marketing retailingAvoid change of hands too manyAvoid change of hands too manySet your own standardsSet your own standards

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EXPORTS AND IMPORTSEXPORTS AND IMPORTSTHE CRUX OF GLOBAL THE CRUX OF GLOBAL

MARKETINGMARKETING Exports and Imports are two sides of the Exports and Imports are two sides of the

same coin. By export we mean saending same coin. By export we mean saending good out of your frontiers and importing good out of your frontiers and importing means to bring them in. as we have learnt means to bring them in. as we have learnt globe is unequal in products and natural globe is unequal in products and natural resources. Hence this exchange takes place resources. Hence this exchange takes place to equate the situation. Saudia Arabia has to equate the situation. Saudia Arabia has abundant of oil but little or no agriculture. abundant of oil but little or no agriculture. Hence has ti import even cooking oil and Hence has ti import even cooking oil and fresh vegetables to make human life fresh vegetables to make human life possible.possible.

DIFFERENCE BETWEEN SELLING DIFFERENCE BETWEEN SELLING AND MARKETING IN EXPORTSAND MARKETING IN EXPORTS

Export selling does not involve tailaoring of Export selling does not involve tailaoring of product, it price, or its promotion and advertising. product, it price, or its promotion and advertising. Export marketing involves all three. Export Export marketing involves all three. Export marketing includes:marketing includes:

11 understanding of environmentunderstanding of environment 2 the application of all conceptual and analytical 2 the application of all conceptual and analytical

tools of marketingtools of marketing 3 the use of marketing research and identification 3 the use of marketing research and identification

of potential marketof potential market 4 product design decisions and advertising and 4 product design decisions and advertising and

promotional toolspromotional tools 5 it involves organizational set up and controls5 it involves organizational set up and controls

THIS IS GLOBAL THIS IS GLOBAL MARKETINGMARKETING

GLOBAL MARKETING GLOBAL MARKETING ACTIVITIESACTIVITIES

Global marketing has assumed Global marketing has assumed unprecedented proportion. Japan is thw unprecedented proportion. Japan is thw world leader with over 1500 billion US $ world leader with over 1500 billion US $ surplus to wards USA alone and with nearly surplus to wards USA alone and with nearly 750 billion US $s from the rest of the world. 750 billion US $s from the rest of the world. Surplus is when exports are more than Surplus is when exports are more than imports and Japan does not have a litre of imports and Japan does not have a litre of oil reserve or bauxite, or steel or zinc, the oil reserve or bauxite, or steel or zinc, the basic ingredient of manufacturing. They basic ingredient of manufacturing. They even even ‘import their breakfast’‘import their breakfast’

Governments regulate exports and Governments regulate exports and imports through a commercial policy, imports through a commercial policy, declared annually. Imports are regulated declared annually. Imports are regulated through cess, import duty, custom duty through cess, import duty, custom duty and excise. While exports are and excise. While exports are encouraged to enhance productivity and encouraged to enhance productivity and employment through incentive schemes. employment through incentive schemes. There are tariff and non-tarriff barriers. There are tariff and non-tarriff barriers. These are permits and grants to These are permits and grants to importers and exporter following the importers and exporter following the Protectionist PolicyProtectionist Policy

EXPORT DECISIONSEXPORT DECISIONS

SIGMA m. c. p1, p2, p3, p4SIGMA m. c. p1, p2, p3, p4then exportingthen exporting

TR-costTR-costM stands for potential marketM stands for potential marketC for competitive offeringsC for competitive offeringsP1 for productP1 for productP2 for priceP2 for priceP3 for advertising and promotionP3 for advertising and promotionP4 distributionP4 distribution

TR FOR TOTAL REVENUETR FOR TOTAL REVENUE

QUESTIONSQUESTIONS

WHO BUYS OUR PRODUCT?WHO BUYS OUR PRODUCT? WHO DOES NOT BUY OUR PRODUCT AND WHO DOES NOT BUY OUR PRODUCT AND

WHY?WHY? WHAT NEEDS OUR PRODUCT SERVE?WHAT NEEDS OUR PRODUCT SERVE? WHAT PROBLEMS OUR PRODUCT SOLVE?WHAT PROBLEMS OUR PRODUCT SOLVE? WHAT IS CUSTOMER CURRENTLY USING?WHAT IS CUSTOMER CURRENTLY USING? WHAT PRICE ARE THEY BUYING AT?WHAT PRICE ARE THEY BUYING AT? WHERE AND WHY IS OUR PRODUCT WHERE AND WHY IS OUR PRODUCT

PURCHASED?PURCHASED?

TheTheENDEND

ALHAMDOLILLAH ALHAMDOLILLAH THIS IS THE CONCLUSION OF GLBAL THIS IS THE CONCLUSION OF GLBAL

MARKETING COURSEMARKETING COURSE

THANKS FOR YOUR PERSISTENCETHANKS FOR YOUR PERSISTENCETHE BEGINNING HAS JUST BEGUNTHE BEGINNING HAS JUST BEGUN