Preface
We are proud that this Tenth Edition of Global Marketing marks more than two decades of publication
success. In this new edition, as in prior editions, we take an environmental and strategic
approach to global marketing by outlining the major dimensions of the global business environment.
We also provide a set of conceptual and analytical tools that prepare students to successfully
apply the 4Ps when pursuing careers in global marketing or related areas.
Guided by our experience using the text in undergraduate and graduate classrooms and in
corporate training seminars, we have revised, updated, and expanded Global Marketing. One
of our challenges in developing a new edition of Global Marketing is the rate of change in the
global business environment. Yesterday¡¯s impossibility becomes today¡¯s reality; new companies
explode onto the scene; company leadership changes abruptly. In short, any book can be quickly
outdated by events. Even so, we set out to create a compelling narrative that captures the unfolding
drama that is in inherent in marketing in the globalization era.
When Principles of Global Marketing first appeared in 1996, we invited readers to ¡°look
ahead¡± to such developments as the ending of America¡¯s trade embargo with Vietnam, Europe¡¯s
new single market, Daimler AG¡¯s Smart car, Volkswagen¡¯s global ambitions, and Whirlpool¡¯s
expansion into emerging markets. This newly revised edition also surveys important current
developments in the international arena, including Britain¡¯s tortuous path towards Brexit,
China¡¯s ascendance on the world stage, evolving trade relations in the Trump era, achievements
by entrepreneurs such as Elon Musk, plus much more.
We are passionate about the subject of global marketing; if our readers detect a note of
enthusiasm in our writing, then we have been successful. Our goal for all ten editions has been
the same: to write a book that is authoritative in content yet relaxed and assured in style and
tone. One instructor using the Ninth Edition wrote us to say, ¡°I love the text, and really like
the way it engages students. That is invaluable.¡± We believe that you will find latest edition of
Global Marketing to be the most engaging, up-to-date, relevant, useful text of its kind.
New to This Edition
As with previous editions, the Tenth Edition offers up-to-date, original insights into the complexities
and subtleties of shifts in the external environment and their implications for global
marketers. Specific updates and revisions include:
.
More than fifty percent of the chapter-opening vignettes and related endof-
chapter cases are new to the Tenth Edition. Cases retained from the
prior edition have also been revised and updated for this new edition.
.
Revised and updated end-of-chapter cases include Case 1-2,
¡°McDonald¡¯s Expands Globally While Adjusting Its Local Recipe¡±;
Case 1-3, ¡°Apple versus Samsung: The Battle for Smartphone
Supremacy Heats Up¡±; Case 6-1, ¡°Google¡±; Case 7-1, ¡°Global
Automakers Target Low-Income Consumers¡±; Case 12-1, ¡°IKEA.¡±
.
New cases in the Tenth Edition include Case 8-1, ¡°Welcome to the
World of Fast Fashion¡±; Case 11-1, ¡°How Do You Like Your Reality?
Virtual? Augmented? Mixed?¡±
.
New discussion of social media is integrated throughout the Tenth
Edition. Chapter 11, ¡°Global Marketing and the Digital Revolution,¡± has
been thoroughly revised and updated to include discussion of location-
based mobile platforms, cloud computing, tablets, wearable devices,
autonomous mobility, and other cutting-edge topics.
.
In addition, most chapters contain sidebar features on the following
themes: Emerging Markets Briefing Book; Entrepreneurial Leadership,
Creative Thinking, and the Global Startup; and The Cultural Context.
.
Among the entrepreneurs profiled in these sidebars are Kevin Systrom
CASE 1-3
Apple versus Samsung: The Battle for Smartphone
Supremacy Heats Up
W
W
hen Steve Jobs died in October 2011, the world lost one of the
rivalry between Apple and Samsung has been heated, with the two
towering figures of the modern business era (see Exhibit 1-14).
sides squaring off in court over alleged patent infringement.
Apple, the company Jobs cofounded, was a pioneer in the consumer
China and Europe are two of Samsung¡¯s key markets; in 2012,
electronics world; its key product introductions included the Apple II
the company launched the Galaxy S III in Europe. In 2013, however,
(1977), the Macintosh (1984), the iPod and iTunes (2001), the Apple
Samsung staged a lavish event at Radio City Music Hall in New York to
Store (2001), the iPhone (2007), and the iPad (2009). At the time of
launch the Galaxy S4. Why the change? As J. K. Shin, the executive in
Jobs¡¯s death, Apple was the most valuable tech company in the world.
charge of Samsung¡¯s mobile business, noted, ¡°We¡¯re a global player in
By September 2012, Apple stock had soared to record levels, with
the smartphone market and a global company, and the U.S. is an imporits
price briefly rising above $700 per share. In addition, Apple had
tant market for us....I¡¯m not satisfied with our U.S. market share.¡±
amassed more than $100 billion in cash, most of it held abroad as
In many developing countries, there is strong demand for inexpenforeign
earnings. Meanwhile, once-dominant tech industry giants such
sive mobile phones. Some Android-based models from Samsung and
as Nokia, Sony, Dell, and BlackBerry were struggling.
other companies sell for much less than Apple¡¯s cheapest models. For
Despite strong 2012 sales for the iPhone 5, industry observers
many years, Apple did not offer a lower-cost version of the iPhone. In
began to wonder whether Apple¡¯s hot streak of hit product introduc
the United States, wireless carriers such as Verizon and AT&T subsidized
tions was starting to cool. Apple¡¯s reputation was based on its proven
the price of the iPhone for consumers who signed multiyear service
ability to disrupt existing markets (e.g., the music and telecommunica
contracts¡ªa factor that explained why an American iPhone 5 sold for
tions industries) and to create new markets through the introduction
$199. By contrast, in other countries consumers paid the full, unsubsiof
technical and design innovations. However, some viewed the 2012
dized price of the iPhone but were not tied to a contract. Moreover, the
launch of the iPhone 5 as an evolutionary step rather than a revolution
iPhone 5 was the same in every world market. By contrast, Samsung
ary breakthrough. In fact, many consumers opted to buy the slower,
made several versions of the Galaxy S4¡ªusing different processors, for
cheaper iPhone 4 or 4S rather than upgrade to the iPhone 5. Without
example¡ªto suit the needs of different regions.
Jobs, who was considered by many to be the heart and soul of the
Not surprisingly, smartphone makers are setting their sights on
company, were Apple¡¯s best days behind it?
China, India, and other emerging markets. For example, Greater China,
which includes China, Hong Kong, and Taiwan, is now Apple¡¯s second-
The Competitive Threat
largest market. In 2013, Cook announced that China Mobile, the larg-
As growth in the key smartphone sector began to slow, Apple¡¯s most
est carrier in the region and the world¡¯s largest carrier overall, would
formidable competitor was Samsung Electronics, a division of Korean
begin selling the iPhone. Apple faces strong competition from local
industrial giant Samsung Group, whose products range from semicon
competitors such as Oppo and Xiaomi; Oppo¡¯s R9 bested the iPhone
ductors to household appliances to smartphones. Samsung¡¯s popular
6 as the top-selling smartphone in 2016. Distribution is critical, and
Galaxy series of phones are powered by Android, an operating system
Cook is aggressively expanding the number of outlets in China that
developed by Google. Some Galaxy models, including the Galaxy Note
sell iPhones.
(also known as a ¡°phablet¡±), have larger screens than the iPhone¡ªa
As growth in China and Europe slows, India, the number 2 smart-
point of difference that has helped drive sales of those devices. The
phone market, is becoming increasingly important. Here, however,
Apple¡¯s 3 percent market share means that it lags far behind Samsung
and Chinese producers in terms of smartphone shipments. Two-thirds
of the phones sold in India cost less than $180. By contrast, Indian consumers
pay about $300 for an iPhone 5S, the older model that Apple
launched in 2013. These devices are sold through small, independent
retailers; for entry-level buyers, Apple¡¯s Web site offers only the iPhone
SE and iPhone 6. In May 2017, Apple began manufacturing the SE in
India, bringing the price down to approximately $325. Local manufacturing
will also allow Apple to open its own flagship stores in India.
Famously, Steve Jobs downplayed the importance of formal market
research, saying that consumers don¡¯t know what they want. By
contrast, Samsung Electronics relies heavily on market research; it has
60,000 staff members working in dozens of research centers in China,
Great Britain, India, Japan, the United States, and elsewhere. Samsung
designers have backgrounds in such diverse disciplines as psychology,
sociology, and engineering. Researchers track trends in fashion and
interior design. Also, Samsung spends more on advertising and promotion
than does Apple.
The Post-Jobs Era Begins
In the months following Jobs¡¯s death, Cook made a number of key strategic
decisions. For example, he authorized the introduction of the iPad
Exhibit 1-14 Apple cofounder Steve Jobs wore many hats during his illustri-
ous career, including inventor, entrepreneur, CEO, and visionary technolo-
gist. He was also a master showman, a storyteller, and marketing genius.
His appearances at product launches are the stuff of legend, and under his
guidance Apple¡¯s must-have products¡ªincluding the iPod, the iPhone, and the
iPad¡ªwere, simply put, the epitome of ¡°cool.¡±
xvi PREFACE
Kevin Systrom and Mike Krieger ar
an innovative pr
market it. By applying the basic tools and principles of moder
ing, the two Stanfor
success.
As is true with many entr
recognition of a pr
and wants. Systr
the potential of social media. He hit upon an idea for a location-based
photo-sharing app that he dubbed Burbn (after his favorite distilled
spirit). He then r
Meebo. Krieger liked Systr
overloaded with functionality. Realizing that ¡°Ther
way,¡± the duo stripped out everything but the photo-sharing function,
which they conceptualized as an ¡°instant telegram¡± (see Exhibit 1-9).
In October 2010, Systr
Apple¡¯s App Stor
sharing app had 30 million users. Soon ther
also launched on the Andr
Systrom¡¯
municated visually. T
sible, just as Gutenberg¡¯ e
accessible. Instagram¡¯s
that users can apply to their photos (the idea for filters came from
Systrom¡¯s girl
In 2012, Facebook acquire
tagram has mor
..........................
users are in the United States. In 2016, Instagram generated more
............................................
Social-media savvy companies in the luxury goods industry have
been quick to embrace Instagram. To
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Financiiiiy
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ENTREPRENEURIAL LEADERSHIP, CREATIVE THINKING, AND THE GLOBAL STARTUP
Kevin Systrom and Mike Krieger, Instagram
Exhibit 1-9 Stanfor e
Instagram's co-founders.
Exhibit 3-8 GNH (gr
happiness), rather than GNP (gross
national product), guides policy in
Bhutan. Some critics argue that
promoting happiness in the
state has resulted in some
consequences. For example, the
emphasis on the Buddhist e
shared by the majority of the
population has caused resentment
among the Nepalese minority living in
the south.
When Britain¡¯s Prince Wi
Catherine, the Duchess of Cambridge, the world got a rar
into a country that has been called the ¡°forbidden kingdom.¡± Why ¡°for-
bidden?¡± For one thing, the country¡¯
57,000 foreign visitors traveled to Bhutan in 2015. One hopes that the
royal couple wer s
secret regarding happiness.
Bhutan is a kingdom of 754,000 people in the Himalaya Mountains
(see Exhibit 3-8). Per capita GNI is appr
ure as a metric, Bhutan is included in the ranks of lower
nations. However
another measur
gross national happiness (GNH).
It has been argued that indicators such as GDP and GNI per capita
are inadequate when explaining a nation¡¯
China¡¯s GDP has doubled twice since 1990, yet or
zens do not appear any happier today than they wer
try¡¯s leaders began transitioning to a fr
income and consumption don¡¯t corr
does? According to some economists and policymakers, supplemental
indicators that measur
and sustainability ar
The GNH Index includes both objective and subjective indicators:
psychological well-being, time use, community vitality, cultur
education, envir
Lyonpo Jigmi Thinley, home minister of Bhutan, explained, ¡°W
think of human well-being in br
one component. That doesn¡¯t ensur
ronment and in harmony with each other
Not surprisingly, ther
regarding the best way to define, track, and measur
happiness and quality of li
oped a summary of ¡°sustainable development indicators¡± that include
measures of traf
e
r
e
ess
resear
f
Y imes iiine:
T
imes
Financiimes
Financiimes
o imes
THE CULTURAL CONTEXT
Bhutan and GNH (Gross National Happiness)
T
As the data in Figure 3-5 clearly show, Brazil is an economic powerhouse
in South America. Brazil has the largest geographical territory and the larg-
est population in the region. It has emerged on the world stage as a strong
exporter, and its rapid economic growth has given Brazilian policymakers a
greater presence on the global stage and more clout at global trade talks.
One symbol of Brazil¡¯s new role in the global economy is Embraer, a
jet aircraft manufacturer (see Exhibit 3-6). Specializing in regional jets that
seat between 37 and 124 passengers, Embraer has won orders from a
variety of carriers. A cornerstone of Embraer¡¯s strategy is its management¡¯s
policy of sourcing the best components available anywhere in the world.
This approach, known as reverse outsourcing, has proved its worth in the
development of new models such as the E-170/175. In that program,
more than one dozen partners, including GE and Honeywell, shared the
development risks in exchange for a percentage of revenue from aircraft
sales. To sell more regional jets to China, Embraer has also established a
$50 million joint venture with China Aviation Industry Corporation.
In the United States alone, more than 850 Embraer jets are cur-
rently in service. The reason is simple: It is a huge market. As Paulo
Cesar Silva, Embraer¡¯s top executive for Commercial Aviation, notes,
¡°For us, North America is¡ªand will continue to be¡ªthe most impor-
tant market in terms of the potential to sell new products here. Aviation
in North America is about 40 percent of aviation in the world.¡± Embraer
is also aggressively pursuing the defense sector with its light attack
aircraft, the Super Tucano. The U.S. military has expressed interest,
and orders have come in from Colombia, Indonesia, and other nations.
Brazil¡¯s agricultural sector is also a leading exporter. Brazil is the
world¡¯s number 1 exporter of beef, coffee, orange juice (check the label
on your orange juice carton), and sugar. Annual coffee bean production
totals 40 million 60-kilo bags¡ªone-third of the world total. JBS is the
world¡¯s largest meat processor. Brazil is also rapidly gaining a reputation
as a producer of sugar-based ethanol fuel. Says Ermor Zambello, man-
ager of the Grupo Farias sugar mill, ¡°Globalization has made us think
more about foreign markets. Now, we have more of a global outlook,
and we are concerned about global production.¡±
The central issue in the stalled Doha Round of WTO negotiations was
agriculture. Brazil and India are taking the lead of the Group of Twenty
developing nations calling for agricultural sector reform. For example, the
average tariff on Brazil¡¯s exports to the 34 Organisation for the Economic
Co-operation and Development (OECD) nations is 27 percent.
Government subsidies are also a key issue. In the EU, government
spending accounts for approximately one-third of gross farm receipts;
in the United States, the government provides about one-fourth of
gross farm receipts. By contrast, Brazil farm support spending amounts
to only 3 percent of farm receipts.
Moving forward, Brazil faces a number of other challenges. Reper-
cussions are still being felt from Lava Jato (¡°Car Wash¡±), a massive
corruption scandal that ensnared politicians and top officials at Brazil¡¯s
national oil company. Former president Luiz In¨¢cio Lula da Silva was
convicted on corruption charges and sentenced to prison. In the wake
of the scandal, Brazil¡¯s current president, Michel Temer, is privatizing a
wide range of state-owned businesses.
Despite improvements made prior to the country¡¯s hosting of the
2016 Summer Olympics, Brazil¡¯s infrastructure remains woefully under-
developed. Significant investment is required to improve highways, rail-
roads, and ports. Businesspeople speak of ¡°the Brazil cost,¡± a phrase
that refers to delays related to excessive red tape.
Trade with China is presenting both opportunities and threats. In
2009, China surpassed the United States to become Brazil¡¯s top trading
partner and is investing tens of billions of dollars in the country. China¡¯s
explosive economic growth has created great demand for soybeans, iron
ore, and other Brazilian commodity exports. However, Brazilian manufac-
turers in light-industry sectors such as toys, eyeglasses, and footwear are
facing increased competition from low-priced Chinese imports.
Sources: Joe Leahy, Andres Schipani, and Lucy Hornby, ¡°¡®Suddenly Everything Is for
Sale,¡¯¡± Financial Times (November 14, 2017), p. 9; Ben Mutzabaugh, ¡°Brazil¡¯s Embraer
Jets Are Sized Just Right,¡± USA Today (July 6, 2012), pp. 1B, 2B; Joe Leahy, ¡°In Search
of More High-Flyers,¡± Financial TiEconomy: A High-Flyer Now Flags,¡± FiRegalado, ¡°Soccer, Samba, and Outsourcing?¡±, The Wall Street Journal (January 25,
2007), pp. B1, B8; David J. Lynch, ¡°Brazil Hopes to Build on Its Ethanol Success,¡± USA
Today (March 29, 2006), pp. 1B, 2B; David J. Lynch, ¡°China¡¯s Growing Pull Puts Brazil
in a Bind,¡± USA Today (March 21, 2006), pp. 1B, 2B; David J. Lynch, ¡°Comeback Kid
Embraer Has Hot New Jet, and Fiery CEO to Match,¡± USA Today (March 7, 2006), pp.
1B, 2B; David J. Lynch, ¡°Brazil¡¯s Agricultural Exports Cast Long Shadow,¡± USA Today
(March 10, 2006), pp. 1B, 2B.
EMERGING MARKETS BRIEFING BOOK
Brazil
Exhibit 3-6 Embraer is the world¡¯s
fourth-largest aircraft manufacturer,
but is second only to Canada¡¯s Bom-
bardier in the regional aircraft sector.
Source: Alexandre Meneghini/AP Images.
mes (April 17, 2012), p. 10; Joe Leahy, ¡°The Brazilian
nancial Times (January 11, 2012), p. 7; Antonia
(Instagram); Reed Hastings (Netflix); Daniel Ek (Spotify); Oscar Farinetti
(Eataly); Elon Musk (Tesla); Jack Ma (Alibaba), Sir James Dyson (Dyson),
and Brian Chesky and Joe Gebbia (Airbnb).
.
The Entrepreneurial Leadership, Creative Thinking, and the Global Startup
sidebars also contain expanded coverage of digital entrepreneurship, including
financial technology (¡°fintech¡±), in this Tenth Edition.
.
All tables containing key company, country, and industry data have been updated.
all the income and population tables in Chapters 3; Table 6-2, ¡°The World¡¯s Most
Valuable Brands¡±; Table 9-1, ¡°Top 25 Global Marketers¡±; and Table 9-2, ¡°Top 20
Global Advertising Agency Companies.¡±
.
The discussion of the BRICS nations has been updated to incorporate the impact
of slowing growth in China and the volatility of commodity prices.
.
More infographics have been incorporated into the text to enhance clarity and visual
appeal.
Solving Teaching and Learning Challenges
Today¡¯s Millennial and Generation Z students are networked and technology-savvy. They have
access to more content across more platforms than previous generations. Many are also taking
on substantial debt loads as they pursue their college degrees. For these and other reasons, it is
important to give them a textbook that is ¡°worth the money,¡± and that provides an experience
that is rewarding and motivates them to ¡°keep reading.¡±
We have been gratified to receive positive feedback from students who have benefited
from college courses in which Global Marketing was the required text. The following student
comments suggest that Global Marketing does exactly that:
¡°The textbook is very clear and easy to understand.¡±
¡°An excellent textbook with many real-life examples.¡±
¡°The authors use simple language and clearly state the important points.¡±
¡°This is the best textbook that I am using this term.¡±
¡°The authors have done an excellent job of writing a text that can be read easily.¡±
The Tenth Edition helps students develop cross-cultural awareness and engage with issues
relating to sustainability and corporate social responsibility. The new edition also profiles some
of the most innovative thinkers and entrepreneurial leaders of the modern era.
Each chapter opens with a brief case study introducing a company, a country, a product,
or a global marketing issue that directly relates to chapter themes and content. The cases were
written with the same objectives in mind: to raise issues that will encourage student interest and
learning; to stimulate class discussion; to give students a chance to apply theory and concepts
while developing critical-thinking skills; and to enhance the classroom experience for students
and instructors alike. Every chapter and case has been classroom-tested in both undergraduate
and graduate courses.
Throughout the text, we have added scores of current examples of global marketing practice
as well as quotations from global marketing practitioners and industry experts. Organizational
Web sites are referenced for further student study and exploration.
We have benefited tremendously from adopter feedback and input; we also continue to draw
on our direct experience in key world regions. The result is a text that addresses your needs and
the needs of instructors in every part of the world.
Developing Employability Skills
Employers at global companies want to know that the people they hire understand and can think
critically about contemporary issues such as the dynamics of globalization and growth opportunities
in emerging markets. One MBA student wrote to say that reading Global Marketing for coursework in
PREFACE xvii
2017 provided her with a competitive advantage when pursuing a new career opportunity. She said, ¡°I
used many of the text¡¯s theories during my interview process, and I incorporate the lessons learned on
a daily basis as I work with our offices in locations around the world!¡±
The Tenth Edition addresses current global trends and issues, including the economic disruption
and social disruption that are among the forces at work in the world today. The resulting
shifts in global market opportunities and threats are important themes in this revision, as are the
rise of economic nationalism and populism. Terms such as austerity, capital flight, currency
wars, double-dip recession, global imbalances, global rebalancing, quantitative easing (QE),
secular stagnation, sovereign-debt crisis, and negative interest rates appear regularly in the business
news. New terms such as tax inversion are now part of the conversation as well.
Recent research findings have been integrated into each chapter of Global Marketing
to help students be conversant in the most current conversations that are happening in this
field. For example, our thinking about the benefits of globalization has been influenced by
Richard Baldwin¡¯s 2016 book, The Great Convergence: Information Technology and the New
Globalization. As Baldwin notes, the process of removing constraints on the costs of moving
goods, people, and ideas began in the late 19th century. The first wave of globalization was
driven by the falling costs of water transport (e.g., ocean-going freighters) and land transport
(e.g., the railroads). In keeping with the theory of competitive advantage, this meant that countries
with manufacturing prowess benefited by trading with countries whose primary outputs
were agricultural production. The current wave of globalization has resulted in part from the
digital revolution that allows supply chains to stretch around the world.
Instructor Teaching Resources
The following supplements are available with this text:
Supplements available to instructors Features of the Supplement
at www.pearsonhighered.com
Instructor¡¯s Manual . Chapter-by-chapter summaries
authored by Kerry Walsh from University . Examples and activities not in the main book
of South Florida . Teaching outlines
.
Teaching tips
.
Solutions to all questions and problems in the book
Test Bank
authored by Mahmood Khan from Pamplin
College of Business, Virginia Tech
4,000 multiple-choice, true/false, short- answer, and
graphing questions with these annotations:
.
Difficulty level (1 for straight recall, 2 for some
analysis, 3 for complex analysis)
.
Type (Multiple-choice, true/false, short-answer, essay
.
Topic (The term or concept the question supports)
.
Learning outcome
.
AACSB learning standard (Written and Oral
Communication; Ethical Understanding and
Reasoning; Analytical Thinking; Information
Technology; Interpersonal Relations and Teamwork;
Diverse and Multicultural Work; Reflective Thinking;
Application of Knowledge)
Page number in the text
Computerized TestGen TestGen allows instructors to:
.
Customize, save, and generate classroom tests
.
Edit, add, or delete questions from the Test Item Files
.
Analyze test results
.
Organize a database of tests and student results.
xviii PREFACE
Supplements available to instructors Features of the Supplement
at www.pearsonhighered.com
PowerPoints
authored by Jill Solomon from University
of South Florida
Slides include all the graphs, tables, and equations in
the textbook. PowerPoints meet accessibility standards
for students with disabilities. Features include, but not
....................
.
Keyboard and Screen Reader access
.
Alternative text for images
.
High color contrast between background and
foreground colors