MKTG 376 INTRODUCTION Lars Perner, Instructor 1

Welcome to MKGT 376:Global Welcome to MKGT 376:Global Marketing Strategy!Marketing Strategy!

Introduction to the Introduction to the coursecourse– Overview of course Overview of course

issuesissues– ApproachApproach– ProjectsProjects

MKTG 376 INTRODUCTION Lars Perner, Instructor 2

Instructor: Lars PernerInstructor: Lars Perner Education:Education:

– Ph.D. in marketing, University of Southern California, 1998Ph.D. in marketing, University of Southern California, 1998– M.B.A., B.A. (political science and psychology), Cal Poly, San Luis M.B.A., B.A. (political science and psychology), Cal Poly, San Luis

ObispoObispo

Research interestsResearch interests: consumer behavior, consumer : consumer behavior, consumer bargain hunting, pricing, branding, measurement bargain hunting, pricing, branding, measurement individual differences, cross cultural marketing issuesindividual differences, cross cultural marketing issues

Teaching interestsTeaching interests: consumer behavior, international, : consumer behavior, international, principles, distribution, retailing, research methodsprinciples, distribution, retailing, research methods

Country of birthCountry of birth: Denmark—immigrated at age 14: Denmark—immigrated at age 14 Previous teaching experiencePrevious teaching experience: USC, Cal State L.A., : USC, Cal State L.A.,

Loyola Marymount, U of Maryland, George Washington Loyola Marymount, U of Maryland, George Washington University, U.C. RiversideUniversity, U.C. Riverside

MKTG 376 INTRODUCTION Lars Perner, Instructor 3

Course philosophyCourse philosophy

Why take this course?Why take this course? DODO “stop and think about tomorrow. Yesterday’s “stop and think about tomorrow. Yesterday’s

gone!”gone!” Business problems are usually not neatly Business problems are usually not neatly

structured!structured! Expectations:Expectations:

– Hard workHard work– Individual analysis, evaluation, innovation, and Individual analysis, evaluation, innovation, and

applicationapplication Evaluating quality of workEvaluating quality of work

MKTG 376 INTRODUCTION Lars Perner, Instructor 4

SCOPE AND CHALLENGES OF SCOPE AND CHALLENGES OF INTERNATIONAL MARKETINGINTERNATIONAL MARKETING

Marketing decision factorsMarketing decision factors The marketing environmentThe marketing environment

– DomesticDomestic– ForeignForeign

Trade policyTrade policy

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Internationalization of MarketingInternationalization of Marketing

Global productsGlobal products Global brandsGlobal brands Leading marketsLeading markets The Product Life CycleThe Product Life Cycle

MKTG 376 INTRODUCTION Lars Perner, Instructor 6

The International Product Life CycleThe International Product Life Cycle

Product categories will tend Product categories will tend to spread first in developed to spread first in developed countriescountries

Resale of capital productsResale of capital products Country of origin effects over Country of origin effects over

timetime

MKTG 376 INTRODUCTION Lars Perner, Instructor 7

The International Marketing TaskThe International Marketing Task

Marketing Decision FactorsMarketing Decision Factors– PricePrice– PromotionPromotion– ProductProduct– DistributionDistribution

The Domestic EnvironmentThe Domestic Environment The Foreign EnvironmentThe Foreign Environment

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EnvironmentsEnvironments

DomesticDomestic– Political/legal Political/legal

forcesforces– Competitive Competitive

structurestructure– Economic Economic

climateclimate

ForeignForeign– Political/legalPolitical/legal– EconomicEconomic– CultureCulture– Geography/ Geography/

infrastructureinfrastructure– DistributionDistribution– CompetitionCompetition– TechnologyTechnology

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Obstacles to Trade: Obstacles to Trade: ProtectionismProtectionism

Differing interests of consumers and Differing interests of consumers and manufacturersmanufacturers

Benefits of trade tend to be more diffused Benefits of trade tend to be more diffused than benefits to specific groups of than benefits to specific groups of protectionism protectionism

MKTG 376 INTRODUCTION Lars Perner, Instructor 10

Approaches to ProtectionismApproaches to Protectionism

TariffsTariffs QuotasQuotas ““Voluntary” export Voluntary” export

restrictionsrestrictions Subsidies to domestic Subsidies to domestic

producers/exportersproducers/exporters Non-tariff barriersNon-tariff barriers

– legal obstacleslegal obstacles– differential treatmentdifferential treatment

MKTG 376 INTRODUCTION Lars Perner, Instructor 11

U.S. Protectionism--justified or U.S. Protectionism--justified or not...not...

Defense industryDefense industry Agricultural products--e.g., beef, Agricultural products--e.g., beef,

sugarsugar TextilesTextiles Automobiles (“voluntary” import Automobiles (“voluntary” import

restrictions)restrictions) SteelSteel

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Justifications for ProtectionismJustifications for Protectionism

Protect infant industryProtect infant industry Resist “unfair” or inappropriate competitionResist “unfair” or inappropriate competition Protect home market (ensure that product Protect home market (ensure that product

can be produced domestically)--defensecan be produced domestically)--defense Intervene into temporary imbalanceIntervene into temporary imbalance Maintain domestic living standardsMaintain domestic living standards Preserve jobsPreserve jobs Bargaining power/retaliation (Super-301 Bargaining power/retaliation (Super-301

provision in U.S.)provision in U.S.)

MKTG 376 INTRODUCTION Lars Perner, Instructor 13

Effects of ProtectionismEffects of Protectionism

Reduced competition ---> inflationReduced competition ---> inflation More tariffs More tariffs Weaken balance of payments (have to pay Weaken balance of payments (have to pay

more in own currency)more in own currency) Reduce choice to consumers Reduce choice to consumers May induce global trade wars (vicious cycle)May induce global trade wars (vicious cycle)

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Stages in GlobalizationStages in Globalization

Across country economiesAcross country economies For the individual firmFor the individual firm

– CustomersCustomers– CompetitionCompetition– SuppliersSuppliers

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Drivers of GlobalizationDrivers of Globalization

Market DriversMarket Drivers– Global Customers and Global Customers and

needsneeds– Global channelsGlobal channels– Opportunities for marketing Opportunities for marketing

transfertransfer Competitive DriversCompetitive Drivers Cost DriversCost Drivers

– Economies ofEconomies of ScaleScale ScopeScope

– SourcingSourcing– Labor costsLabor costs– Environmental regulationsEnvironmental regulations

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More DriversMore Drivers

TechnologyTechnology– Increasing speed of Increasing speed of

Product Life CyclesProduct Life Cycles– InternetInternet– Lower costs of entry Lower costs of entry

into some marketsinto some markets– Improved transportation Improved transportation

and communicationand communication

GovernmentalGovernmental– Trade agreementsTrade agreements

WTOWTO NAFTANAFTA Regional agreementsRegional agreements

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Essential Global Marketing AssetsEssential Global Marketing Assets

ProductsProducts– ExistingExisting– NewNew

Models of existing Models of existing product linesproduct lines

ExtensionsExtensions

Advertising/PromotionAdvertising/Promotion DistributionDistribution

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Perspectives on International TradePerspectives on International Trade

Traditional economic Traditional economic perspective—based perspective—based mostly on labor costsmostly on labor costs– Absolute advantageAbsolute advantage– Relative advantageRelative advantage

Country Specific Country Specific AdvantagesAdvantages– Labor costsLabor costs– Labor skillLabor skill– InfrastructureInfrastructure– Legal and political Legal and political

stabilitystability– Government policy and Government policy and

regulationsregulations– Natural resourcesNatural resources

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Firm Specific Advantages (FSAs)Firm Specific Advantages (FSAs)

Knowledge-BasedKnowledge-Based MarketingMarketing

– Brand imageBrand image– DistributionDistribution– Knowledge of marketsKnowledge of markets

Transferability of FSAsTransferability of FSAs The value chainThe value chain