Gerardo P.

Payno III August 15-16, 2011

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Chapter 1 : GLOBAL MARKETING INTRO
Driving Forces
Multilateral Trade Agreements
Convergence of Markets and Info Revolution
Transport and Communication Improvements
Product Development Costs
World Economic Trends
Leverage
Types of Leverage
Experience Transfers market tested ideas in one country and apply to comparable
markets
Scale Economies taking advantage of capability to produce volume from different one
or more different plants
Resource Utilization - ability to scan the world to identify people, money and raw
materials to compete effectively in world markets
Global Strategy Built on an info system that scans the world business environments to
identify SWOTS and resources.

Restraining Forces
Management Myopia - when managements attempts to dictate instead of listening
Opposition to Globalization - Globaphobia , hostility towards trade agreements and
global brands.
National Controls the efforts of the country to protect the commercial interest of local
enterprises.
Market Differences






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Chapter 2 Reviewer: Global Economic
Environment
New Realities to Achieve Success
Capital Movements have replaced trade as the driving force of the world economy
Production has become uncoupled from employment
The world economy dominates the scene; individual country economy play a subordinate
role.
The struggle between capitalism and socialism that began in 1917 is large over
The growth of e-commerce diminishes the importance of national barriers and forces
companies to re-evaluate their business models.
Economic Systems
Traditional Systems
Market Capitalism individuals and firms allocate resources and produce resources are
privately owned (consumer decides what they want and producers decide how many)
Centrally Planned socialism state has broad powers to serve the public interest as it
sees fit
Centrally planned capitalism given considerable freedom to operate within a market
system.
Market Socialism - market allocation policies are permitted within an overall
environment of state ownership
Descriptive Criteria
Type of Economy
Type of Government
Trade and Capital Flows
The Command Heights
Services Provided by State and Funded Through Taxes
Institutions
Markets
Country Income
Low Income - Less than 825$ GNI
Lower middle Income 825$ - $3,255 GNI
Upper Middle Income $3,256 $10, 065 GNIs
High Income Countries 10,066$ or Higher

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Mistaken Economic Assumptions
1. The poor have no money
2. The poor are too concerned with fulfilling basic needs to waste money in non-
essential goods
3. The goods sold in developing markets ae so inexpensive that there is no room for a
new market entrant to make profit
4. People in BOP markets cannot use advance technologies
5. Global companies that target BOP markets will be criticized for exploiting the poor.
The Balance of Payments is a record of all economic transaction between residents of a
country and the rest of the world , it is comprised of a Current Account and a Capital Account.
Shows if a country has trade surplus (EX > IM) or trade deficits (IM> EX)
International Finance
ForEx Market
Spot Market for immediate delivery
Forward Market future delivery
PPP (Purchase Power Parity) Adjust the national income data for improve comparability
Economic Exposure refers to the impact of currency fluctuations on the present value of
companys expected future cash flows.
Managing ExRate Exposure
Hedging involves an offsetting currency position by offsetting the loss or gain of one
currency position to another currency.
Put Options the buter is given the right, not the obligation to sell a specified number of
currencies at a fixed priced up to the expiration date
Call Options is the right but not the obligation to buy the foreign currency.








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CHAPTER 3: REGIONAL MARKET
CHARACTERISTICS AND PREFRENTIAL
TRADE AGREEMENTS
WTO (World Trade Organization) - Multilateral, successor of GATT.
GATT (General Agreement on Tariffs and Trade)- promotes free trade on a global basis
Preferential Trade Agreement is a mechanism that confers special treated to on selecting
trade partners.
Free Trade Area (FTA) when two or more countries agree to eliminate tariffs and other
barriers that restrict trade. Engaging in a Free Trade Agreement. (LOWEST LEVEL OF
INTEGRATION)
Customs Union represents the logical evolution of free trade area, establishing Common
External Tariffs (CETs) (MIDDLE LEVEL INTEGRATION)
Common Market is the next level of economic integration
Economic Union builds upon the elimination of internal tariffs barriers and establishing
common external barriers and the free flow of factors. Seeks to coordinate and harmonize
economic and social policies. ( THE HIGHEST LEVEL OF ECONOMIC INTEGRATION)










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CHAPTER 4: SOCIAL AND CULTURAL
ENVIRONMENTS
Culture ways of living built up by a group humans; both conscious and unconscious values,
ideas, attitudes and symbols that shape human behavior and are transmitted from one
generation to the next.
Two Components of Culture
Physical Component/ Physical Culture Clothing and Tools
Non-Material/ Abstract Culture Religion, Perception and Attitudes
Attitudes is a learned tendency to respond in a consistent way to a given object/entity
Beliefs is an organized pattern of knowledge that an individual holds to be true about the
world.
Values -can be defined as and enduring belief for feeling that a specific mode of conduct is
personally or socially preferable
BAV( Belief, Attitude and Values) Sources
Religion
Aesthetics
Dietary Preferences
Language and Communication
Geert Hofstede Organizational Anthropologist
Hofstedes Typology
Power Distance the degree to which members of society expect power to be
unequally shared
Individual Culture the degree of which special institutions encourage individuals to
integrate to groups within organization and society.
Collective Cultures extent of which members of a society take pride in membership
in small groups, such as family, circle of close friends etc.,
Gender Differentiation The extent to which a society maximizes gender role
differences.
Uncertainty Avoidance extent of which a society accepts ambiguous situation or
comfortable with unfamiliar situation
Long Term and Short Term Orientation The extent to which society encourages
and rewards future oriented behaviors.

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Martin Rosss Brand Images
Functional Problem Solving or Problem Prevention
Social Fulfills group membership needs
Sensory provision of novelty, variety and sensory gratification
The Self-Reference Criterion and Perception a framework for systematically reducing
perceptual blockage and distortion and was develop by James Lee in 1966.
Diffusion Theory Found by Everett Rogers
Adoption Process an mental stage where an individual passes from time to time his or her 1
st

knowledge of an innovation to the time of product adoption or purchase ..
Adoption Process
Awareness
Interest
Evaluation
Trial
Adoption
Characteristics of Innovations affect the rate at which innovations are adopted.
Characteristics of Innovation
Relative Advantage how a new product compares with existing product
Compatibility extent of which a product is consistent with existing values of past
experiences of adopters
Complexity the degree to which an innovation or new product is difficult to understand
and use
Divisibility the ability of a product to be tried and used on a limited basis w/o great
expense
Communicability the degree of which benefits of an innovation or the values of a
product maybe communicated to a potential market
Adopter Categories are classifications of individuals w/in a market on the basis of their
innovativeness.
1
st
2.5% Innovators
1
st
13.5% - Early Adopters
1
st
34% - Early Majority
2
nd
34% - Late Majority
Rem. 16% - Laggards
Product Life Cycle
1. Introduction
2. Growth
3. Maturity
4. Decline
Environmental Sensitivity Reflects
the extent to which products must be
adapted to the culture specific needs of
different national markets.
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CHAPTER 5: POLITICAL LEGAL &
REGULATORY ENVIRONMENT
Sovereignity can be defined as supreme an independent political authority.
Sovereign State was considered free and independent, it regulated trade, managed the flow
of people into and out of its boundaries and exercised, undivided jurisdiction over all persons
and property within its territory.
Political Risk - is the possibility of a change in a countrys political environment or
government policy but that would adversely affect a companys ability to operate effectively and
profitability; It can deter a company from investing abroad.
Expropriation refers to governmental action to dispossess a foreign company of investor
with a provision of compensation; otherwise such action without the existence of compensation
is referred to as Confiscation.
Nationalization is generally broader in scope than expropriation, it occurs when the
government takes control of some or all of the enterprises in a particular industry; international
law recognize this as a legitimate government power as long as the act will stratify the public
purpose and is accompanied by adequate payment.
International Law may be defined as the rules and principles that nation states consider
binding upon themselves. It pertains to property, trade, immigration and other areas that have
traditionally been under the jurisdiction of individual nations.
Public International Law are disputes that arose in between nations and is taken before
the ICJ or World Court.
Private International Law is the body of law that applies to disputes arising from
commercial transactions between companies of different nations.
Civil Law is one which the legal system reflects the structural concepts and principles of the
Roman Empire
Common Law Disputes are decided by reliance on the authority of past judicial decisions
(cases). Rely on Codifications in Certain Areas
Islamic Law the sharia is a comprehensive code governing Muslim Conduct in all areas of
life, including business and is derived from the Koran and Hadith.



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Intellectual Property
Patent is a formal document that gives an inventor exclusive rights to make, use and sell an
invention for a specified period of time
Trademark is defined as a distinctive mark, motto, device or emblem that a manufacturer
affixes to a particular product or package to distinguish it from goods produced by others.
Copyright establishes ownership of a written, recorded, performed or filmed creative work.
Infringement of Intellectual Property
Counterfeiting is the unauthorized copying and production of a product.
Associative Counterfeiting/ Imitation uses product name that differs slightly from a
well- known brand but is close enough that the consumer will associate it with the genuine
product.
Piracy is the unauthorized publication or reproduction of copyrighted work.
Antitrust designed by countries to combat restrictive business practices and to encourage
competition.
Licensing is a contractual agreement in which a licensor allows a licenses to use intellectual
property, trade secrets and tech or other intangible assets in return for royalty payments or
other forms of compenstation.
Trade Secrets are confidential information or knowledge that has commercial value and is
not in public domain and which steps have been taken to keep it secret.
Bribery is the corrupt business practices of demanding or offering some type of
consideration when negotiating a cross border deal.
Arbitration - is a negotiation process to settle disputes outside the courtroom, that to parties
have, by prior agreement committed themselves to using. It is a fair process in the sense that
the parties using it have created it themselves.
The Regulatory Environment consist of agencies both government and non-
governmental that enforce laws or set guidelines for conducting business.





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CHAPTER 6: GLOBAL INFO SYSTEMS AND
MARKET RESEARCH
Management Information System (MIS) and Intranet provided decision makers with
a continuous flow of information.
Information Technology (IT) is profoundly affecting global marketing activities by
allowing managers to access and manipulate data to assist decision making.
NEW TOOLS and TECHNIQUE IN IT
- Electronic Data Interchange (EDI)
- Electronic Point of Sale (EPOS)
- Efficient Consumer Response (ECR)
- Customer Relationship Management (CRM)
- Data Warehouse
Markets are classified in IT through data as either latent or incipient
Market Research is the project specific systematic gathering of data and is often require
before marketers make key decisions
Global Market Research link customers and marketers through information gathered on a
global scale.
Research Plan specifies the relative amounts of qualitative and quantitative ainformation
desired.
Two Types of Data Classification
Primary collected by the researcher himself
Secondary data taken or re-used and is researched by another person or researcher.
Conducting Research
Surveys
Personal Interviews
Consumer Panels
Observations
Focus Groups
Analyzing Data
Factor Analysis
Cluster Analysis
Multidimensional Scaling (MDS)
Conjoint Analysis

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CHAPTER 7: SEGMENTATION, TARGETNG,
POSITIONING
Market Segmentation represents an effort to identify and categorize groups of consumers
and countries to common characteristics.
Targeting the process of evaluating segments and focusing marketing efforts on a country,
region, or group of people that has significant potential to respond.
Global Marketing Segmentation has been defined as the process of identifying specific
segments whether the by country groups or individual consumer groups of potential customers
with homogenous attributes who are likely to exhibit responses to a marketing mix.
Marketing Wisdoms
Conventional Wisdom
1. Assumes heterogeneity between countries
2. Assumes homogeneity within any given country
3. Focuses heavily and cultural differences at a macro level
4. Segmentations relies heavily on clustering of national markets
5. Within-country micro-segments are assigned secondary priority
Unconventional Wisdom
1. Assumes the emergences of segments that transcends national boundaries
2. Acknowledges the existence of within-country differences
3. Emphasizes differences and commonalities in micro-level values , consumptions
patterns etc.
4. Segmentation relies on grouping micro-markets within a country between countries
5. Micro-segments based on consumer behavior are assigned high priority

Types of Segmentation
Demographic based on measurable characteristics of the population
Pscyhographic involves grouping people in terms of their Attitudes , Values and Lifestyle.
Behavior focuses on whether or not people buy and use a product as well as how often and
how much they use or consume (Usage Rates)
Benefit - focuses on the Numerator of the Value Formula, is based on marketers superior
understanding of the problem a product solves and benefit that it gives
Ethnic
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Pitfalls of Marketing Segmentation
1. There is a tendency to overstate he size and short-term attractiveness of individual
country markets.
2. Targeting a country because shareholders or competitors exert pressure on management
not to miss out on a strategic opportunity.
3. Managements Networks of contacts will emerge as primary criterion for targeting
Market Selection Framework a framework that incorporates some elements of marketing
such as:
1. Market Size
2. Competitive Advantage
3. Market Potential,
4. Terms of Access
5. Overall Market Potential
Segmentation Analysis
Top Down Segmentation Analysis focuses on income or population data
Bottoms-Up Segmentation Analysis analysis that begins at the product-market level
(market defined by a product category)
Marketing Model Drivers- are key drivers required for a business to take root and grow in a
particular country market environment.
Enabling Conditions are structural market characteristics whose presence or absence can
determine the success of the marketing model.
First Move Advantage the first company to enter market has the best chances of becoming
the market leader.