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the years, Congress has greatly expanded the powers of the FTC. Its responsibilities have

grown so large that the FTC has created several bureaus to better organize its operations.

One of the most important is the Bureau of Competition, which promotes and protects

competition. The Bureau:

reviews mergers and acquisitions, and challenges those that would likely lead to higher

prices, fewer choices, or less innovation;

seeks out and challenges anti-competitive conduct in the marketplace, including

monopolization and agreements between competitors;

promotes competition in industries where consumer impact is high, such as health

care, real estate, oil and gas, technology, and consumer goods; and

provides information and holds conferences and workshops for consumers, businesses,

and policy makers on competition issues for market analysis.

Federal Trade Commission (FTC)

a federal agency empowered to prevent persons or corporations from using unfair

methods of competition in commerce

The FTC’s Bureau of Consumer Protection works for the consumer to prevent fraud,

deception, and unfair business practices in the marketplace. The Bureau claims that it:

enhances consumer confidence by enforcing federal laws that protect consumers,

empowers consumers with free information to help them exercise their rights and to

spot and avoid fraud and deception, and

wants to hear from consumers who want to get information or file a complaint about

fraud or identity theft.

Another important FTC Bureau is the Bureau of Economics. It provides economic analysis

and support to antitrust and consumer protection investigations. Many consumer

protection issues today involve the Internet.

CONSUMER PRIVACY

The popularity of the Internet for direct marketing, for collecting consumer data, and as a

repository for sensitive consumer data has alarmed privacy-minded consumers. The U.S.

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Congress passed the CAN-SPAM Act in an attempt to regulate unsolicited e-mail advertising.

The act prohibits commercial e-mailers from using false addresses and presenting false or

misleading information, among other restrictions.

Internet users who once felt fairly anonymous when using the Web are now disturbed by

the amount of information marketers collect about them and their children as they visit

various sites in cyberspace. The FTC, with jurisdiction under the Children’s Online Privacy

Protection Act, requires Web site operators to post a privacy policy on the home page and a

link to the policy on every page where personal information is collected. An area of growing

concern to privacy advocates is called behavioral targeting, which is discussed in more

detail in Chapter 9. Behavioral targeting is used by researchers to better target advertising

to Web surfers and users of search engines and social media.

In 2012, the FTC called for online data collectors to adopt better privacy policies and asked

Congress to pass comprehensive privacy legislation. The FTC wants data collectors to

implement a “Do Not Track” button in Web browsers. “No one has the right to put anything

on [your

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computer] that you don’t want,” said Jon Leibowitz, chairman of the FTC.

THE EYES OF THE E-BOOK

Online privacy is a fairly common discussion today, particularly in U.S. legislation. But few

people mention e-reader privacy, despite the ever increasing numbers of e-books sold each

year. However, the companies that sell e-books are able to track how people read, what

they read, the amount of time spent in each book, and even what passages they underline

and bookmark. While Amazon touts this feature as a “collective intelligence,” the Electronic

Frontier Foundation (EFF) is concerned that this data could be used against individuals. In

California, the EFF has worked to implement legislation requiring a warrant before

personal e-reader data is released for investigation. The EFF hopes to encourage other

states to enact the same legislation in order to safeguard consumer privacy.

Source: Alexandra Alter, “Your E-Book is Reading You,” Wall Street Journal, July 19, 2012

(Accessed September 3, 2012)

http://online.wsj.com/article/SB10001424052702304870304577490950051438304.html.

© iStockphoto.com/Bill Noll

The agency also turned its attention to off-line data brokers—which buy and sell names,

addresses, and other personal information—calling on them to create a centralized Web site

providing consumers with better access to their data. The agency also wants legislation

requiring data brokers to give consumers the right to see and make corrections to their

information.

4-8: COMPETITIVE FACTORS

The competitive environment encompasses the number of competitors a firm must face, the

relative size of the competitors, and the degree of interdependence within the industry.

Management has little control over the competitive environment confronting a firm.

4-8a: Competition for Market Share and Profits

As U.S. population growth slows, global competition increases, costs rise, and available

resources tighten, firms find that they must work harder to maintain their profits and

market share regardless of the form of the competitive market. Sometimes technology

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advances can usher in a whole new set of competitors that can change a firm’s business

model. In the single-serve coffee brewing market, Keurig and Green Mountain have the

lion’s share of the market, but Starbucks is hoping to cash in on some of that market share

by working with Green Mountain to package its super-premium coffee into the single-serve

pods used in the Keurig machines. Dunkin’ Donuts coffee is also offered by Green Mountain,

but Starbucks would represent the only super-premium coffee offered by the company. This

is one of several moves Starbucks is making to add profit growth by selling in consumer

goods markets beyond its retail coffee shops.

4-8b: Global Competition

Boeing is a very savvy international business competitor. Many foreign competitors also

consider the United States to be a ripe target market. Thus, a U.S. marketing manager can no

longer focus only on domestic competitors. In automobiles, textiles, watches, televisions,

steel, and many other areas, foreign competition has been strong. In the past, foreign firms

penetrated U.S. markets by concentrating on price, but today the emphasis has switched to

product quality. Nestlé, Sony, and Rolls-Royce are noted for quality, not cheap prices. Global

competition is discussed in much more detail in Chapter 5.

STUDY TOOLS 4

LOCATED AT BACK OF THE TEXTBOOK

Rip out Chapter Review Card

LOCATED AT WWW.CENGAGE.COM/LOGIN

Review Key Terms Flashcards (print or online)

Download audio and visual summaries to review on the go

Complete both Practice Quizzes to prepare for tests

Play “Beat the Clock” and “Quizbowl” to master concepts

Complete “Crossword Puzzle” to review key terms

Watch Video on “GaGa’s Inc.” for a real company example

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Chapter 5: Developing a Global Vision

Learning Outcomes

5-1 Discuss the importance of global marketing 58–61

5-2 Discuss the impact of multinational firms on the world economy 61–63

5-3 Describe the external environment facing global marketers 63–70

5-4 Identify the various ways of entering the global marketplace 71–73

5-5 List the basic elements involved in developing a global marketing mix 73–77

5-6 Discover how the Internet is affecting global marketing 77–78

After you finish this chapter go to p78 for STUDY TOOLS

5-1: REWARDS OF GLOBAL MARKETING

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Today, global revolutions are under way in many areas of our lives: management, politics,

communications, and technology. The word global has assumed a new meaning, referring to

a boundless mobility and competition in social, business, and intellectual arenas. Global

marketing—marketing that targets markets throughout the world—has become an

imperative for business.

global marketing

marketing that targets markets throughout the world

Over the past two decades, world trade has climbed from $200 billion a year to over $12.5

trillion.

U.S. managers must develop a global vision not only to recognize and react to international

marketing opportunities but also to remain competitive at home. Often a U.S. firm’s

toughest domestic competition comes from foreign companies. Moreover, a global vision

enables a manager to understand that customer and distribution networks operate

worldwide, blurring geographic and political barriers and making them increasingly

irrelevant to business decisions. In summary, having a global vision means recognizing and

reacting to international marketing opportunities, using effective global marketing

strategies, and being aware of threats from foreign competitors in all markets.

global vision

recognizing and reacting to international marketing opportunities, using effective

global marketing strategies, and being aware of threats from foreign competitors in

all markets

Over the past two decades, world trade climbed from $200 billion a year to over $12.5

trillion in 2009. This was a 12 percent contraction from 2008 sparked by the global economic

crisis. As the world slowly began to emerge from the Great Recession, world trade grew by

14 percent in 2010.

Today’s marketers face many challenges to their customary practices. Product development

costs are rising, the life of products is getting shorter, and new technology is spreading

around the world faster than ever. But marketing winners relish the pace of change instead

of fear it.

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Adopting a global vision can be very lucrative for a company. Caterpillar, one of the world’s

largest manufacturers of construction and mining equipment, diesel and natural gas

engines, and industrial turbines, has sales of over $33 billion annually. Almost $21 billion

comes from sales outside the United States.

Despite the increasing availability of foreign customers, small businesses still account for

only approximately 30 percent of U.S. exporting volume. Whether global business is

daunting because of the various trade laws or tariffs, or because the markets are unfamiliar,

small businesses are taking only slow, hesitant steps into the global market.

Global marketing is not a one-way street whereby only U.S. companies sell their wares and

services throughout the world. Foreign competition in the domestic market was once

relatively rare but now is found in almost every industry. In fact, in many industries, U.S.

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