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Chap001

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International Marketing

Chap001

  1. 1. I n t e r n a t i o n a l M a r k e t i n g The Scope and Challenge of International Marketing Chapter 1 1 4 t h E d i t i o n P h i l i p R. C a t e o r a M a r y C. G i l l y J o h n L . G r a h a m McGraw-Hill/Irwin International Marketing 14/e Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
  2. 2. What Should You Learn? <ul><li>The changing face of U.S. business </li></ul><ul><li>The scope of the international marketing task </li></ul><ul><li>The importance of the self-reference criterion (SRC) in international marketing </li></ul><ul><li>The progression of becoming a global marketer </li></ul><ul><li>The increasing importance of global awareness </li></ul>
  3. 3. Global Perspective: Global Commerce Causes Peace <ul><li>Global commerce during peace time </li></ul><ul><ul><li>Commercial aircraft and space vehicle industries </li></ul></ul><ul><ul><li>Mobile phone industry </li></ul></ul><ul><ul><li>Individuals and small companies </li></ul></ul><ul><li>International markets are ultimately unpredictable </li></ul><ul><ul><li>Flexibility means survival </li></ul></ul>
  4. 4. Events and Trends Affecting Global Business <ul><li>The rapid growth of the World Trade Organization and regional free trade areas </li></ul><ul><li>The trend toward the acceptance of the free market system among developing countries in Latin America, Asia, and Eastern Europe </li></ul><ul><li>The burgeoning impact of the Internet, mobile phones, and other global media on the dissolution of national borders </li></ul><ul><li>The mandate to properly manage the resources and global environment for the generations to come </li></ul>
  5. 5. The Internationalization of U.S. Business <ul><li>Increasing globalization of markets </li></ul><ul><li>Increasing number of U.S. companies are foreign controlled </li></ul><ul><ul><li>$16.3 trillion in foreign investment in the U.S. – $2.6 trillion more than American overseas investment </li></ul></ul><ul><li>Increasing number of foreign companies building and buying manufacturing plants in the U.S. </li></ul><ul><li>Increasing difficulty for domestic markets to sustain customary rates of growth </li></ul>
  6. 6. Foreign Acquisitions of U.S. Companies <ul><li>Exhibit 1.1 </li></ul>
  7. 7. Selected U.S. Companies and Their International Sales Exhibit 1.2
  8. 8. International Marketing <ul><li>Performance of business activities designed to </li></ul><ul><ul><li>Plan </li></ul></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Promote , and </li></ul></ul><ul><ul><li>Direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit </li></ul></ul>
  9. 9. The International Marketing Task <ul><li>Exhibit 1.3 </li></ul>
  10. 10. Environmental Adaptation <ul><li>Ability to effectively interpret the influence and impact of the culture in which you hope to do business </li></ul><ul><ul><li>Cultural adjustments </li></ul></ul><ul><li>Establish a frame of reference </li></ul><ul><li>Avoid measuring and assessing markets against the fixed values and assumptions of your own culture </li></ul>
  11. 11. The Self-Reference Criterion and Ethnocentrism <ul><li>The key to successful international marketing is adaptation to the environmental differences from one market to another </li></ul><ul><li>Primary obstacles to success in international marketing </li></ul><ul><ul><li>SRC </li></ul></ul><ul><ul><li>Associated ethnocentrism </li></ul></ul>
  12. 12. SRC and Ethnocentrism <ul><li>SRC is an unconscious reference to </li></ul><ul><ul><li>One’s own cultural values, experiences, and knowledge as a basis for decisions </li></ul></ul><ul><li>Dangers of the SRC </li></ul><ul><ul><li>Failing to recognize the need to take action </li></ul></ul><ul><ul><li>Discounting the cultural differences that exist among countries </li></ul></ul><ul><ul><li>Reacting to a situation in an offensive to your hosts </li></ul></ul><ul><li>Ethnocentrism </li></ul><ul><ul><li>Notion that one’s own culture or company knows best </li></ul></ul>
  13. 13. <ul><li>Ethnocentrism and the SRC can influence an evaluation of the appropriateness of a domestically designed marketing mix for a foreign market </li></ul><ul><li>The most effective way to control the influence of ethnocentrism and the SRC is to recognize their effects on our behavior </li></ul>SRC and Ethnocentrism
  14. 14. Framework for Cross-cultural Analysis <ul><li>Define business problem or goal </li></ul><ul><ul><li>Home-country vs. foreign-country cultural traits, habits, or norms </li></ul></ul><ul><ul><li>Consultation with natives of the target country </li></ul></ul><ul><li>Make no value judgments </li></ul><ul><li>Isolate the SRC influence </li></ul><ul><ul><li>Examine it carefully to see how it complicates the problem </li></ul></ul><ul><li>Redefine the problem </li></ul><ul><ul><li>Without SRC influence </li></ul></ul><ul><ul><li>Solve for the optimum business goal situation </li></ul></ul>
  15. 15. Developing a Global Awareness <ul><li>Tolerance of cultural differences: </li></ul><ul><ul><li>Understanding cultural differences and accepting and working with others whose behavior may be different from yours </li></ul></ul><ul><li>Knowledge of cultures, history, world market potential, and global economic, social, and political trends </li></ul>
  16. 16. Approaches to Global Awareness <ul><li>Select individual managers specifically for their demonstrated global awareness </li></ul><ul><li>Develop personal relationships in other countries </li></ul><ul><li>Have a culturally diverse senior executive staff or board of directors </li></ul>
  17. 17. Stages of International Marketing Involvement <ul><li>No direct foreign marketing </li></ul><ul><li>Infrequent foreign marketing </li></ul><ul><li>Regular foreign marketing </li></ul><ul><li>International marketing </li></ul><ul><li>Global marketing </li></ul>
  18. 18. No Direct Foreign Marketing <ul><li>Products reach foreign markets indirectly </li></ul><ul><ul><li>Trading companies </li></ul></ul><ul><ul><li>Foreign customers who contact firm </li></ul></ul><ul><ul><li>Wholesalers </li></ul></ul><ul><ul><li>Distributors </li></ul></ul><ul><ul><li>Web sites </li></ul></ul><ul><li>Foreign orders pique a company’s interest to seek additional international sales </li></ul>
  19. 19. Infrequent Foreign Marketing <ul><li>Caused by temporary surpluses </li></ul><ul><ul><li>Variations in production levels </li></ul></ul><ul><ul><li>Increases in demand </li></ul></ul><ul><li>Firm has little or no intention of maintaining continuous market representation </li></ul><ul><ul><li>Foreign sales decline when demand or surplus decreases </li></ul></ul><ul><ul><li>May withdraw from international markets </li></ul></ul><ul><li>Little or no change in company organization or product lines </li></ul>
  20. 20. Regular Foreign Marketing <ul><li>Firm has production capacity devoted to foreign markets </li></ul><ul><li>Firm employs domestic or foreign intermediaries </li></ul><ul><ul><li>Uses its own sales force </li></ul></ul><ul><ul><li>Sales subsidiaries in important markets </li></ul></ul><ul><li>Products allocated or adapted to foreign markets as demand grows </li></ul><ul><li>Firm depends on profits from foreign markets </li></ul>
  21. 21. Global Marketing <ul><li>Company treats world, including home market as one market </li></ul><ul><li>Market segmentation decisions no longer focused on national borders </li></ul><ul><ul><li>Defined by income levels, usage patterns, or other factors </li></ul></ul><ul><li>More than half of revenues come from abroad </li></ul><ul><li>Organization takes on global perspective </li></ul>
  22. 22. Strategic Orientation <ul><li>Domestic market extension orientation </li></ul><ul><li>Multidomestic market orientation </li></ul><ul><li>Global market orientation </li></ul>
  23. 23. Domestic Market Orientation <ul><li>International operations viewed as secondary </li></ul><ul><li>Prime motive is to market excess domestic production </li></ul><ul><li>Firm’s orientation remains basically domestic </li></ul><ul><li>Minimal efforts are made to adapt product or marketing mix to foreign markets </li></ul><ul><li>Firms with this approach are classified as ethnocentric </li></ul>
  24. 24. Multidomestic Market Orientation <ul><li>Companies have a strong sense that foreign country markets are vastly different </li></ul><ul><li>Market success requires an almost independent program for each country </li></ul><ul><ul><li>Separate marketing strategies </li></ul></ul><ul><ul><li>Subsidiaries operate independently of one another in establishing marketing objectives and plans </li></ul></ul><ul><ul><li>Products are adapted for each market </li></ul></ul><ul><li>Control is decentralized </li></ul>
  25. 25. Global Market Orientation <ul><li>Company guided by global marketing orientation </li></ul><ul><ul><li>Marketing activity is global </li></ul></ul><ul><ul><li>Market coverage is the world </li></ul></ul><ul><li>Firm develops a standardized marketing mix applicable across national boundaries </li></ul><ul><ul><li>Markets are still segmented </li></ul></ul><ul><ul><li>Each country or region is considered side by side with a variety of other segmentation variables </li></ul></ul><ul><ul><li>Fits the regiocentric or geocentric classifications </li></ul></ul>
  26. 26. The Orientation of International Marketing <ul><li>An environmental/cultural approach to international strategic marketing </li></ul><ul><li>Intended to demonstrate the unique problems of international marketing </li></ul><ul><li>Discussion of international marketing ranges from the marketing and business practices of small exporters to the practices of global companies </li></ul>
  27. 27. Foreign Policy’s Global Top 20 <ul><li>Exhibit 1.4 </li></ul>
  28. 28. Summary <ul><li>The internationalization of American business is proceeding with increasing pace </li></ul><ul><li>The globalization of markets and competition necessitates all managers to pay attention to the global environment </li></ul><ul><li>International marketing is defined as the performance of business activities across national borders </li></ul>
  29. 29. <ul><li>Environmental differences must be taken into account if firms are to market products and services at a profit in other countries </li></ul><ul><ul><li>Laws </li></ul></ul><ul><ul><li>Customs </li></ul></ul><ul><ul><li>Cultures </li></ul></ul><ul><li>Self-reference criteria and ethnocentrism limit international marketer’s abilities to understand and adapt to differences prevalent in foreign markets </li></ul>Summary
  30. 30. Summary <ul><li>Solutions to SLC and ethnocentrism </li></ul><ul><ul><li>Global awareness </li></ul></ul><ul><ul><li>Sensitivity </li></ul></ul><ul><li>Strategic orientations found among managers of international marketing operations </li></ul><ul><ul><li>Domestic market extension orientation </li></ul></ul><ul><ul><li>Multidomestic market orientation </li></ul></ul><ul><ul><li>Global market orientation </li></ul></ul>
  • MdNazmulHassan10

    Aug. 31, 2018
  • AbdallaJbara

    Jan. 8, 2016
  • TrinhTrn1

    Feb. 15, 2014

International Marketing

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