Global Marketing eighth edition

Warren J. Keegan • Mark C. Green

this is a special edition of an established title widely used by colleges and universities throughout the world. Pearson published this exclusive edition for the benefit of students outside the United States and Canada. If you purchased this book within the United States or Canada you should be aware that it has been imported without the approval of the Publisher or Author.

Pearson Global Edition

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ISBN-13: ISBN-10:

978-1-292-01738-9 1-292-01738-4

9 7 8 1 2 9 2 0 1 7 3 8 9

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GlobAl edition

For these Global editions, the editorial team at Pearson has collaborated with educators across the world to address a wide range of subjects and requirements, equipping students with the best possible learning tools. this Global edition preserves the cutting-edge approach and pedagogy of the original, but also features alterations, customization, and adaptation from the north American version.

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• Study Plan – Help students build a basic understanding of key concepts. Students start by taking a pretest to gauge initial understanding of key concepts. Upon completion, they receive a personalized path of study based on the areas where they would benefit from additional study and practice.

• Business Today – Bring current events alive in your classroom with videos, discussion questions, and author blogs. Be sure to check back often; this section changes daily.

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Writing Space can also check students’ work for improper citation or plagiarism by comparing it against the world’s most accurate text comparison database, available from Turnitin.

http://www.pearsonmylabandmastering.com

Whatever your course goals, we’ve got you covered!

Use MyMarketingLab™ to improve student results!

• Business Today – Bring current events alive in your classroom with videos, discussion questions, and author blogs. Be sure to check back often; this section changes daily.

Writing Space can also check students’ work for improper citation or plagiarism by comparing it against the world’s most accurate text comparison database, available from Turnitin.

http://www.pearsonmylabandmastering.com

Warren J. Keegan Lubin Graduate School of Business

Pace University

New York City and Westchester, New York

Mark C. Green Department of Business Administration

and Economics

Simpson College

Indianola, Iowa

Tippie College of Business

University of Iowa

Iowa City, Iowa

Boston Columbus Indianapolis New York San Francisco Upper Saddle River

Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montréal

Toronto Delhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo

Global MaRKETING Eighth Edition

gLoBAL Edition

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Editor in Chief: Stephanie Wall acquisitions Editor: Mark Gaffney Senior acquisitions Editor, Global Editions: Steven Jackson Project Editor, Global Editions: Suchismita Ukil Program Manager Team lead: ashley Santora Program Manager: Jennifer M. Collins Editorial assistant: Daniel Petrino Director of Marketing: Maggie Moylan Executive Marketing Manager: anne Fahlgren Project Manager Team lead: Judy leale Project Manager: becca Groves Head of learning asset acquisition, Global Editions: laura Dent Media Producer, Global Editions: M. Vikram Kumar

associate Print and Media Editor, Global Editions: anuprova Dey Chowdhuri Senior Manufacturing Controller, Production, Global Editions: Trudy Kimber Creative Director: blair brown Senior art Director: Janet Slowik Manager of Central Design, Cover: Jayne Conte Designer, Cover: Karen Salzbach Cover Image: © My life Graphic/Shutterstock VP, Director of Digital Strategy & assessment: Paul Gentile Digital Editor: brian Surette Digital Development Manager: Robin lazrus Digital Project Manager: alana Coles Mylab Product Manager: Joan Waxman Digital Production Project Manager: lisa Rinaldi

Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on the appropriate page within the text.

Pearson Education limited Edinburgh Gate Harlow Essex CM20 2JE England

and associated Companies throughout the world

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The rights of Warren J. Keegan and Mark C. Green to be identified as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents act 1988.

all rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a license permitting restricted copying in the United Kingdom issued by the Copyright licensing agency ltd, Saffron House, 6–10 Kirby Street, london EC1N 8TS.

all trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners.

ISbN 10: 1-292-01738-4 ISbN 13: 978-1-292-01738-9

british library Cataloguing-in-Publication Data a catalogue record for this book is available from the british library

10 9 8 7 6 5 4 3 2 1 14 13 12 11

Typeset in 10/12 Times by Integra Printed and bound by Courier Kendallville in The United States of america

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To Cynthia, my wife, best friend, and partner in living life creatively.

—WJK

In memoriam: Peter Nathaniel Green 1964–2013

—MCG

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Brief Contents

Preface 17 Acknowledgments 21

Part ONE Introduction 24 Chapter 1 Introduction to Global Marketing 24 Case 1-1 The Global Marketplace Is Also Local 24 Case 1-1 The Global Marketplace (continued) 54 Case 1-2 McDonald’s Expands Globally While Adjusting Its Local

Recipe 55 Case 1-3 Apple versus Samsung: The Battle for Smartphone Supremacy

Heats Up 58

Part twO the Global Marketing Environment 60 Chapter 2 The Global Economic Environment 60 Case 2-1 A New Front in the Battle of Ideas 60 Case 2-1 A New Front in the Battle of Ideas (continued) 89 Case 2-2 Argentina Uncorks Malbec; World Ready

for a Glass 90

Chapter 3 The Global Trade Environment 92 Case 3-1 Global Trading Partners Look East and West

for Economic Growth 92 Case 3-1 Will New Trade Partnerships Fuel East-West Growth?

(continued) 121 Case 3-2 Will the Euro Survive? The Euro Zone Fights

for Its Life 122

Chapter 4 Social and Cultural Environments 124 Case 4-1 Will Tourism Ruin Venice? 124 Case 4-1 Is Tourism the Savior or the Scourge of Venice?

(continued) 148 Case 4-2 Soccer and the Fashion World 150

Chapter 5 The Political, Legal, and Regulatory Environments 152

Case 5-1 Mr. President—Free Pussy Riot! 152 Case 5-1 Mr. President—Free Pussy Riot! (continued) 181 Case 5-2 America’s Cuban Conundrum 183 Case 5-3 Gambling Goes Global on the Internet 186

Part thrEE approaching Global Markets 188 Chapter 6 Global Information Systems and Market Research 188 Case 6-1 Nestlé’s Middle East Investment in Market Research 188 Case 6-1 Nestlé’s Middle East Investment in Market Research

(continued) 217 Case 6-2 Research Helps Whirlpool Keep Its Cool at Home, Act Local

in Emerging Markets 218

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6 BRIEF CoNTENTS

Chapter 7 Segmentation, Targeting, and Positioning 220 Case 7-1 Global Companies Target Low-Income Consumers (A) 220 Case 7-1 Global Companies Target Low-Income Consumers (A)

(continued) 250 Case 7-2 Cosmetics Giants Segment the Global Cosmetics Market 252

Chapter 8 Importing, Exporting, and Sourcing 254 Case 8-1 East-Asian Countries: Export-led Growth for Economic

Success 254 Case 8-1 Hong Kong Trade and Investment Hub (continued) 281 Case 8-2 Turkish Cars: The Big Picture 282 Case 8-3 A Day in the Life of an Export Coordinator 283

Chapter 9 Global Market-Entry Strategies: Licensing, Investment, and Strategic Alliances 284

Case 9-1 Mo’men Launches Franchises in UAE 284 Case 9-1 Mo’men Launches Franchises in UAE (continued) 311 Case 9-2 Jaguar’s Passage to India 313

Part fOur the Global Marketing Mix 314 Chapter 10 Brand and Product Decisions in Global Marketing 314 Case 10-1 The Beatles Story, Liverpool 314 Case 10-1 The Beatles Story, Liverpool (continued) 347 Case 10-2 The Smart Car 348

Chapter 11 Pricing Decisions 350 Case 11-1 Global Companies Target Low-Income Consumers (B) 350 Case 11-1 Global Companies Target Low-Income Consumers (B)

(continued) 379 Case 11-2 LVMH and Luxury Goods Marketing 380 Case 11-3 One Laptop Per Child 382

Chapter 12 Global Marketing Channels and Physical Distribution 384 Case 12-1 Carrefour’s Entry in Dubai 384 Case 12-1 How Successful is Carrefour’s Joint Venture in the UAE?

(continued) 415 Case 12-2 Fail! Tesco Strikes Out in the United States 416

Chapter 13 Global Marketing Communications Decisions I: Advertising and Public Relations 418

Case 13-1 The Gulf Oil Spill: BP’s Public Relations Nightmare 418 Case 13-1 The BP Oil Spill (continued) 445 Case 13-2 Samsung: Launching People 446

Chapter 14 Global Marketing Communications Decisions II: Sales Promotion, Personal Selling, and Special Forms of Marketing Communication 448

Case 14-1 Red Bull 448 Case 14-1 Red Bull (continued) 479 Case 14-2 Marketing an Industrial Product in Latin America 480

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BRIEF CoNTENTS 7

Chapter 15 Global Marketing and the Digital Revolution 482 Case 15-1 Africa 3.0 482 Case 15-1 Africa 3.0 (continued) 508 Case 15-2 Global Marketers Discover Social Media 509

Part fIvE Strategy and Leadership in the twenty-first Century 510

Chapter 16 Strategic Elements of Competitive Advantage 510 Case 16-1 Volkswagen Aims for the Top 510 Case 16-1 Volkswagen (continued) 538 Case 16-2 IKEA 541 Case 16-3 LEGO 543

Chapter 17 Leadership, organization, and Corporate Social Responsibility 544

Case 17-1 A Changing of the Guard at Unilever 544 Case 17-1 Unilever (continued) 572

Glossary 575 Author/Name Index 589 Subject/Organization Index 597

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Contents

Preface 17 Acknowledgments 21

Part ONE Introduction 24

Chapter 1 Introduction to Global Marketing 24 introduction and overview 25 Principles of Marketing: A Review 27

Competitive Advantage, Globalization, and Global Industries 28

global Marketing: What it is and What it isn’t 31 the importance of global Marketing 38 Management orientations 40

Ethnocentric Orientation 40 Polycentric Orientation 41 Regiocentric Orientation 41 Geocentric Orientation 42

Forces Affecting global integration and global Marketing 44 Multilateral Trade Agreements 44 Converging Market Needs and Wants and the Information Revolution 45 Transportation and Communication Improvements 45 Product Development Costs 45 Quality 46 World Economic Trends 46 Leverage 48

Experience Transfers 48 Scale Economies 48 Resource Utilization 49 Global Strategy 49

Restraining Forces 49 Management Myopia and Organizational Culture 49 National Controls 50 Opposition to Globalization 50

outline of this Book 51

Part twO the Global Marketing Environment 60

Chapter 2 the Global Economic Environment 60 the World Economy—An overview 62 Economic Systems 63

Market Capitalism 64 Centrally Planned Socialism 65 Centrally Planned Capitalism and Market Socialism 65

Stages of Market development 70 Low-Income Countries 70 Lower-Middle-Income Countries 71 Upper-Middle-Income Countries 73 Marketing Opportunities in LDCs and Developing Countries 75 High-Income Countries 77 The Triad 78 Marketing Implications of the Stages of Development 79

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