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Marketing Strategy

by: Jeremie Satterfield

Marketing Strategy MKTG 3219

Jeremie Satterfield
GPA 3.64

Linyun Yang

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Linyun Yang
Class Notes
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This 39 page Class Notes was uploaded by Jeremie Satterfield on Sunday October 25, 2015. The Class Notes belongs to MKTG 3219 at University of North Carolina - Charlotte taught by Linyun Yang in Fall. Since its upload, it has received 25 views. For similar materials see /class/228891/mktg-3219-university-of-north-carolina-charlotte in Marketing at University of North Carolina - Charlotte.


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Date Created: 10/25/15
a MKGT 3215021 L 1I 0 139I Ia Summer 2010 BW n1 Husmss39 Mrs Tamara L Cohen Global Political amp Legal Environments Progress anyone Grouo Project Project Proposal due on July 20 What do you need to do 1 Choose your group 2 Choose your country already taken 3 Choose your productbrand 4 Tell me Global Political amp Legal I Environments I 39 39 5 Reading forthiSclass 39 n i I Cateora Gilly amp Graham ch6 amp 7 39 marketing trim WWMM Political Environment Sovereign right of nation Political risks Confiscation Expropriation Domestication NGOs Gov t agencies that help companies in global marketplace lnt l Leqal Environment Jurisdiction amp dispute resolution Protection of intellectual property rights Green marketing laws Antitrust legislation Key Concepts Sovereign state is independent amp free from all external control equal to other sovereign states Political risk Benefits of foreign investment 4 heritages form basis for most legal systems in world 1 Common law English law 2 Civil or code law Napoleonic Code 3 Islamic law Shari ah 4 Marxistsocialist tenets Even though country s laws may be based on doctrine of one of these 4 legal systems individual interpretation may vary significantly Global Perspective of Political Environment Crucial reality of international business both host amp home gov ts are integral partners Gov t controls amp restricts company s activities encourages amp offers support discourages amp bans or restricts its activities International law recognizes sovereign right of nation to grant or withhold permission to do business within its political boundaries to control where its citizens conduct business The Sovereignty of Nations Nations can amp do abridge specific aspects of their sovereign rights in order to coexist with other nations eg strategic alliances for trade NAFTA North America Free Trade Agreement NATO North Atlantic Treaty Organization VVTO World Trade Organization 52 EU European Union wm AU African Union Issues that can affect stability of a gov t radical shifts in government philosophy when opposing political party comes to power pressure from special interest groups weakened economic conditions bias against foreign investment conflicts between governments Main political causes of int l market instability 9155 N some forms of gov t inherently unstable changes in political parties during elections can affect trade conditions nationalism animosity targeted toward specific countries trade disputes themselves livithui men Expropriation investment seized by government but there is some reimbursement for assets Domestication host countries gradually cause transfer of foreign investments to national control amp ownership through series of gov t decrees k ll 2 F Venezuela expropriations last year gjyl i If courses President Hugo Chavez s Venezuelan government s broad nationalizations amp asset seizures have gone far beyond the oil industry to include coffee roasters cattle ranches and tomatoprocessing plants dozen oil rigs gt 30 0 terminals gt 300 boats some 60 0 service companies Margarita Hilton Hotel Ternium steel company 2008 Hilton Political In countries where 2 strong political parties typically succeed one another important to know direction each party is likely to take Great Britain Labour Party vs Conservative Party Unpredictable amp drastic shifts in gov t policies deter investments whatever the cause Current assessment of country s political philosophy amp attitudes important in gauging stability amp attractiveness in terms of market potential Violence and Terrorism State Department reported 3200 terrorist incidents worldwide in 2004 Goals of terrorism against multinationals embarrass gov t amp its relationship with firms generate funds by kidnapping executives use as pawns in political or social disputes inflict terror within a country as did 911 In past 30 years 80 terrorist attacks against US have been aimed at American businesses Armed Conflicts around the World 60 50 40 0 53 99 4quot 6quot 63quot inquot b quot 6 395 b q 6quot qquot qquot qquot q 0iquot 0 65 0quot r9 r9 r9 r9 398 3 q 399 9 r9 r9 r9 395 395 8 r9 3 399 3919 I19 3919 DMinor Conflicts Intermediate Conflicts Wars DWars Only gt1000 dead Forecasting Political Risk Political risk assessment Gov t failure is greatest risk to international marketers Risk assessment of investments Nationalism intense feeling of national pride amp unity National interest amp security more important than int l relations Countries use nationalism to protect themselves against intru5ions threats from outside forces declines in domestic economy Nationalism comes amp goes Marketers should not confuse nationalism with Widespread fear or animOSIty directed at particular country Toyota in US 19803 animosity toward US in France i unhappiness in many other countries re war in Iraq Economic Risks Exchange controls stem from shortages of foreign exchange held by country Localcontent laws Import restrictions force foreign industry to purchase more supplies within host country so creating markets for local industry Tax controls Price controls essential products with high public interest Pharmaceuticals Food Gasoline Labor problems labor unions have strong gov t support Political Sanctions One or group of nations may boycott another nation stop all trade between countries issuing sanctions against trade of specific products eg US boycotts of trade with CubaIran History indicates that sanctions often unsuccessful 39 PH Isa Hl Not usually gov t sanctioned Can interrupt normal flow of trade Range from those who seek peaceful change to those who resort to violence amp terrorism to effect change eg worldwide boycott of Nestle products Internet an effective tool of activists NGOs NGOs increasingly affecting policy decisions made by governments Protests Lobbying Collaborations with governmental organizations many NGOs involved in relieving human misery plaguing parts of world care Habitat for Humanity a ITERES Amnesty International PI lNlLli KHUN L ER 1139 Hg Hu NEVA leil39l lingi39W lkr Ifm39h US State Department Travel Warnings Eritrea f Timor Leste Congo Democratic Republic of 39 u an Chad Haiti Iran Central African Republic Algeria 5 Israel the West Bank and Gaza Burundi Colombia Cote d39lvoire Philippines Somalia Afghanistan Iraq Reducing Political Vulnerability Strategies that MNCs use to minimize political vulnerability amp risk joint ventures expanding the investment base licensing planned domestication political bargaining political payoffs Government Encourages Foreign Investment to accelerate development of an economy US government motivated for economic political reasons encourages US firms to seek business opportunities in countries worldwide including politically risky Department of Commerce DOC International Trade Administration ITA Agencies that provide assistance to US companies ExportImport Bank Exlm Bank Foreign Credit Insurance Association FCIA The Agency for International Development AID The Overseas Private Investment Corporation OPIC International Legal Issues 4 heritages of today s legal systems 1 Common law 2 Civil code law 3 Islamic law 4 Commercial legal system lm ortant factors in jurisdiction Of egal dlSpUteS World Court adjudicates betw gov ts not indlv s 3911 a Jurisdiction amp dispute resolution 1 Conciliation 2 Arbitration 3 Litigation Protecting intellectual property rights Internatlonal piracy amp counterfeiting Common amp Code Law Common law interpretation through past decisions of higher courts Code law legal system is generally divided into 3 separate codes 1 Commercial 2 Civil 3 Criminal Islamic Law Shari ah Basis for Islamic law is interpretation of Koran Among uniqueaspects of Islamic law is prohibition against payment of interest Islamic system emphasis on ethical moral social amp religious dimensions to enhance equality amp fairness for good of society MarxistSocialist Tenets Socialist countries now trade with non Marxist countries Pattern for development varies among countries Premise is that law is strictly subordinate to prevailing economic conditions Marketing Laws All countries have laws regulating marketing activities Promotion especially advertising censorship Product development cheaper to meet EU stds with regular product range than design especially for EU market Labeling Pricing Channels of distribution Discrepancies across markets create challenges for trade negotiators differences in enforcement amp interpretation Conflict Resolution Jurisdiction What recourse Conciliation mediation nonbinding agreement to resolve dispute Arbitration parties agree to honor judgment made by mutually selected referee Litigation lawsuits in public courts China Japan Poland S Korea Sweden Turkey France Netherlands Germany United Kingdom Italy Spain United States 0 50 100 150 200 250 300 35C Lawyers per 1 00000 people in selected countries Counterfeiting amp Piracy Lost sales from unauthorized use of it US patents trademarks amp copyrights gt 100 billion annually Piracy industry has grown sophisticated many counterfeit goods indistinguishable from original Counterfeit pharmaceuticals 2 of 327 billion drugs sold each year Piracy Rates for Computer Software Highest Piracy Rates Armenia Moldova Azerbaijan Zimbabwe Vietnam Venezuela Algeria Montenegro El Salvador Zambia Bolivia Ivory Coast China Nigeria Paraguay Guatemala Lowest Piracy Rates Unites States New Zealand Japan Denmark Austria Switzerland Sweden Finland United Kingdom Belgium Germany Netherlands Australia Norway Israel Canada UAE South Africa Ireland Singapore Protection of Intellectual I a Property Rights Companies spend millions of dollars establishing brand names or trademarks Millions spent on research Intellectual properties valuable assets New technologies developed to prevent piracy Failing to protect intellectual property rights can lead legal loss of rights Cases where companies legally lost rights to trademarks had to buy back these rights or pay royalties fOl39 their use eg McDonald s in Japan amp South Africa Bermuda onions Green Marketing amp Antitrust Legislation Green marketing laws focus on environmentally friendly products amp focus on product packaging amp effect on solid waste management o Antitrust for most of 20th century antitrust laws nonexistent not enforced in most countries EXCEPT US EU dealt severe penalties for anti monopoly price discrimination supply restrictions amp fullline forcing Cyber law Taxes company deemed to have taxable presence in country if it had permanent establishment there EU Commission Proposes valueadded tax VAT Jurisdiction of disputes amp validity of contracts EU Commission adopted ecommerce directive that will permit online retailers to trade by rules of home country unless seller enticed or approached consumer by way of advertising US Laws Apply in Host Countries Foreign Corrupt Practices Act illegal for companies to pay bribes to foreign officials candidates or political parties National security laws controlled products Antitrust laws protect US consumers protect US exports amp investments against private restrictions Antiboycott law Extraterritoriality of US laws sovereignty of nations affects stability of government pOIICIes differentgovernmental types political parties nationalism targeted fearanImOSIt amp trade disputes can affect the enVIronment for mar eting in foreign coun rIes political risks of global business importance of political system to international marketing impact of political amp social activists violence amp terrorism on international busmess how to assess amp reduce effect of political vulnerability how amp why governments encourage foreign investment What do we know about the International Legal Environment Various legal systems in world affect business Legalques ons Jurisdiction amp legal recourse in disputes Protection of intellectual property rights Extended US law enforcement Enforcement of antitrust legislation by US amp foreign governments Internet amp its new legal implications Engage competent international lawyers Next class GUEST Al Guarni 39 artner amp International business legal specialist Parker Poe law firm Homework What do the Gulf Oil Spill and the Iraqi W common and wha do they have to do E Conf Icf h v In with Global Marketing Nextnext class Multinational Negotiations I39l39lg ym 1 5 Preparation Read Cateora amp Graham ch19 quotL39quot 35 Homework Read the art of woo chapters 1 3 Write a summary no more than one page 39


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