what is global marketing

    GLOBAL MARKETING

                

 growing number of U.S. corporations ha transverse geographical boundaries and become Transvaal geographical boundary and become true.

multinational in nature. For most other dome companies, the question is no longer, Should we go int factional? Instead, the questions relate to when, how, and where companies should enter the international marketplace. The 15 years have seen the reality of a truly world market unfold in today's world, the global economy is becoming almost total integrated, versus 25 percent integrated in 1980 and 50 percent integrated in the early 90s. Primary reasons for previously sane rated, individual markets evolving to a network of interpret. dent economies include

1. The growing influence and economic development of lesser developed countries. In years to come, the real battleground for the two trade powers. the United States and Japan, will take place in the developing world. Containing 80 percent of the world's population and with growth rates nearly double those of industrial nations, these countries have emerged as the “fourth engine in the world economy” (following the United States, Japan,and Europe).

 2. The integration of world financial markets. For example, changes in currency exchange rates between the yen and the dollar greatly influence issues relating to import and export activities for all countries.

3. Increased efficient in transportation and telecommunication and data communication networks. To illustrate, consider the cases of Eastern Europe, China, and Russia. In these countries, technological advances have allowed the emergence of stock exchanges on which brokers throughout the world can trade.

 4. The opening of new markets. For example, recent political events in Vietnam have led to the opening of a market that for decades (since the Che the Vietnam War) was closed to U.S. companies.

Multinational firms invest in foreign countries for the same basic reasons they invest in their own country. These reasons vary from firm to firm but falll under the categories of achieving offense or defense goals. Offense goals recto (1) increase long-term growth and profit prospects; (2) maximize total vales revenue; (3) take advantage of economies of scale; and (4) improve era market position. As many American markets reach saturation, American firms look to foreign markets as outlets for surplus production capacity cures of new customers, increased profit margins, and improved returns investment. For example, the ability to expand the number of locations of McDonald's restaurants in the United States is becoming severely limited. Yet, on any given day, only 0.5 percent of the world's population visits McDonald's. This fact illustrates the vast potential markets still open to the company Indeed, in the recent past, of the 50 most profitable McDonald's outlets, 25 were located in Hmong Kong. For Pepsi Co, the results are similar. Its restaurant division operates 7,400 Kentucky Fried Chicken, Pizza Hut, and Taco Bell outlets abroad, deriving over $5.6 billion in sales from these foreign locations.

Multinational firms also invest in other countries to achieve defense goals. Chief among these goals are the desire to (1) compete with foreign companies on their own turf instead of in the United States; (2) have access to technological innovations that are developed in other countries; (3) take advantage of significant differences in operating costs between countries; (4) preempt competitors' global moves; and (5) not be locked out of future markets by arriving too late.

Such well-known companies as Zenith, Pillsbury, A&P, Shell Oil, CBS Records, and Firestone Tire & Rubber are now owned by non-U.S. interests. Since 1980, the share of the U.S. high-tech market held by foreign products has grown from less than 8 percent to close to 25 percent. In such diverse industries as power tools, tractors, television, and banking, U.S. companies have lost the dominant position they once held. By investing solely in domestic operations or not being willing to adapt products to foreign markets, U.S. companies are more susceptible to foreign incursions. For example, there has been a great uproar over Japan's practice of not opening up its domestic automobile market to U.S. companies. However, as of 1996, a great majority of the American cars shipped to Japan still had the steering wheel located on the left side of the vehicle--the opposite of where it should be for the Japanese market.

In many ways. marketing globally is the same as marketing at home. Regardless of which part of the world the firm sells in, the marketing program must still be built around a sound product or service that is properly priced, promoted, and distributed to a carefully analyzed target market. In other words, the marketing manager has the same controllable decision variables in both domestic and non domestic markets.

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