International Marketing Introduction

1. THE SCOPE AND CHALLENGE
OF INTERNATIONAL MARKETING
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
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
TRƯỜNG ĐẠI HỌC NGOẠI NGỮ- TIN HỌC THÀNH PHỐ HỒ CHÍ MINH
Ho Chi Minh City University of Foreign Languages – Information Technology
NGO BINH
Senior Marketing Lecturer
FIBA - HUFLIT
Feb. 2020
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CHAPTER 1

2. WHAT SHOULD YOU LEARN?
• The scope of the international marketing task
• The importance of the self-reference criterion
(SRC) in international marketing
• The progression of becoming a global marketer
• The increasing importance of global awareness
• States of international marketing involvement
• Strategic orientation of international marketing
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3. DISCUSSION
• What is Marketing? What is International Marketing?
• What are the most important and fundamental thing in
Marketing?
• Why doing business outside the firm’s country?
• What are the major advantages and disadvantages of
international marketing?
• Multinational Company vs. Global Company?
• Self-Reference Criterion vs. Ethnocentrism?
• Global Awareness
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4. 1.What is Marketing?
– The American Marketing Association: “Marketing is an
organizational function and a set of processes for creating,
communicating, and delivering value to customers and for
managing customer relationships in ways that benefit the
organization and its stakeholders”.
– Essentially:
• Marketing deals with identifying and meeting human and social
needs. It is essentially about “meeting needs profitably.”
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5. Marketing – basic model
5
Target
Customers
Company Competitors
Need
Physical
Emotional
Competition
Quality
Price
Capability
Product
Price
Place
Promotion
Value

6. What is Marketing Management?
Marketing management is the
art and science
of choosing target markets
and getting, keeping, and growing
customers through
creating, delivering, and communicating
superior customer value.
1- 6
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7. Marketing Management Tasks
• Develop market strategies and plans
• Capture marketing insights
• Connect with customers
• Build strong brands
• Shape market offerings
• Deliver value
• Communicate value
• Create long-term growth
7
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8. 1-8
2.International Marketing
• Performance of business activities designed to
– Plan
– Price
– Promote, and
– Direct the flow of a company’s goods and services to
consumers or users in more than one nation
for a profit
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9. The International Marketing Task
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10. Controllable factors
o Corporate resources, structures, and core
competencies that can limit or promote strategic
choices
o 4Ps, channels-of-distribution, research activities to
capitalize on anticipated demand
The International Marketing Task
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11. 1-11
Aspect of foreign environment (uncontrollable)
o Economic forces
o Political and legal forces
o Cultural forces
o Competitive forces
o Level of technology
o Structure of distribution
o Geography and infrastructure
 So how these factors impact on MNCs’ marketing strategy?
The International Marketing Task
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12. 12
The International Marketing Task
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13. The International Marketing Task

14. 14
The International Marketing Task

15. Case 1-1 Starbucks – Going Global Fast
1. Identify the controllable and uncontrollable
elements that Starbucks has encountered in
entering global markets
2. What are the major sources of risk facing the
company and discuss potential solutions
3. Critique Starbucks’ overall corporate strategy
4. How might Starbucks improve profitability in
Japan/Vietnam?
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16. 3.SRC and Ethnocentrism
• SRC is an unconscious reference to
– One’s own cultural values, experiences, and
knowledge as a basis for decisions
• Dangers of the SRC
– Failing to recognize the need to take action
– Discounting the cultural differences that exist among
countries
– Reacting to a situation in an offensive to your hosts
• Ethnocentrism
– Notion that one’s own culture or company knows best
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17. 1-17
• Ethnocentrism and the SRC can influence
an evaluation of the appropriateness of a
domestically designed marketing mix for a
foreign market
• The most effective way to control the
influence of ethnocentrism and the SRC is
to recognize their effects on our behavior
SRC and Ethnocentrism
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18. 1-18
Environmental Adaptation
• Ability to effectively interpret the
influence and impact of the
culture in which you hope to do
business
– Cultural adjustments
• Avoid measuring and assessing
markets against the fixed
values and assumptions of your
own culture
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19. 1-19
The Self-Reference Criterion
and Ethnocentrism
• The key to successful international marketing is
adaptation to the environmental differences from one
market to another
• Primary obstacles to success in international marketing
– SRC
– Associated ethnocentrism
– E.g., Pepsi Cola changed in name to Lehar Pepsi to gain as
much political and cultural support as possible
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20. The Faces of Coca-Cola
Around the World
Arabic
Read right to left
Chinese
“delicious/happiness”
STANDARDIZATION vs.
ADAPTATION
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21. McDonald’s Global Marketing
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22. 1-22
Framework
for Cross-cultural Analysis
1. Define business problem or goal
• Home-country vs. foreign-country cultural traits, habits, or
norms
• Consultation with natives of the target country
2. Make no value judgments
3. Isolate the SRC influence
• Examine it carefully to see how it complicates the problem
4. Redefine the problem
• Without SRC influence
• Solve for the optimum business goal situation
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23. 1-23
4. Developing a Global Awareness
• Tolerance of cultural differences:
– Understanding cultural differences and
accepting and working with others whose
behavior may be different from yours
• Knowledge of cultures, history, world
market potential, and global economic,
social, and political trends
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24. 1-24
Approaches to Global Awareness
• Select individual managers specifically for
their demonstrated global awareness
• Develop personal relationships in other
countries
• Have a culturally diverse senior executive
staff or board of directors
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25. 1-25
5. Stages of International
Marketing Involvement
• No direct foreign marketing
• Infrequent foreign marketing
• Regular foreign marketing
• International marketing
• Global marketing
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26. 1-26
No Direct Foreign Marketing
• Products reach foreign markets indirectly
– Trading companies
– Foreign customers who contact firm
– Wholesalers
– Distributors
– Web sites
• Foreign orders pique a company’s interest to
seek additional international sales
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27. 1-27
Infrequent Foreign Marketing
• Caused by temporary surpluses
– Variations in production levels
– Increases in demand
• Firm has little or no intention of maintaining continuous
market representation
– Foreign sales decline when demand or surplus decreases
– May withdraw from international markets
• Little or no change in company organization or product
lines
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28. 1-28
Regular Foreign Marketing
• Firm has production capacity devoted to foreign markets
• Firm employs domestic or foreign intermediaries
– Uses its own sales force
– Sales subsidiaries in important markets
• Products allocated or adapted to foreign markets as
demand grows
• Firm depends on profits from foreign markets
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29. International Marketing
• Companies are fully committed to and involved
in international marketing activities
• Seeking markets all over the world
• Planning entails not only the marketing but also
the production of goods outside the home
market.
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30. 1-30
Global Marketing
• Company treats world, including home market as one
market
• Market segmentation decisions no longer focused on
national borders
– Defined by income levels, usage patterns, or other factors
• More than half of revenues come from abroad
• Organization takes on global perspective
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31. 1-31
6.Strategic Orientation
• Domestic market extension orientation
• Multidomestic market orientation
• Global market orientation
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32. 1-32
Domestic Market Orientation
• International operations viewed as secondary
• Prime motive is to market excess domestic
production
• Firm’s orientation remains basically domestic
• Minimal efforts are made to adapt product or
marketing mix to foreign markets
• Firms with this approach are classified as
ethnocentric

33. 33
Examples of Domestic Orientation
• Nissan’s earliest exports were cars and trucks that
designed for Japan – vehicles were difficult to start in
many parts of the U.S during the winter months. “We
tried for a long time to design cars in Japan and shove
them down the American consumer’s throat. That did
not work very well…”
• Cell phone divisions of Toshiba, Sharp focused
domestic market. Later realized that Nokia, Motorola
and Samsung already dominated key world markets –
CEO of Toshiba “We were thinking only about Japan,
we really missed out chance…”

34. 1-34
Multidomestic Market Orientation
• Companies have a strong sense that foreign
country markets are vastly different
• Market success requires an almost
independent program for each country
– Separate marketing strategies
– Subsidiaries operate independently of one
another in establishing marketing objectives and
plans
– Products are adapted for each market
• Control is decentralized
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35. 1-35
Multidomestic Market Orientation
• Country-by-country basic
• Advertising campaign are localized
o Unilever, Rexona brand had 30 different
package designs and 48 different
formulation
o Nestle, Nescafe, Nestle Gau in Vietnam
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36. 1-36
Global Market Orientation
• Company guided by global marketing orientation
– Marketing activity is global
– Market coverage is the world
• Firm develops a standardized marketing mix
applicable across national boundaries
– Markets are still segmented
– Each country or region is considered side by side with
a variety of other segmentation variables
– Fits the regiocentric or geocentric classifications
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37. 37
Standardized vs. Localized
• Standardized its process, logo, most of its
advertising and store décor and layouts
whenever and wherever as possible
• Standardized Big Mac but localized
McAloo Tikka potato burger (India), and
vetergian menu
• Advertising slogan “I’m lovin’it”, but
“Hawaii surfing hula” promotion in
Japan
• Prices: $5.79 in Norway or $3.54 in the
U.S but $1.85 in China
Global Market Orientation
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38. 1-38
The Orientation
of International Marketing
• An environmental/cultural approach to
international strategic marketing
• Intended to demonstrate the unique problems of
international marketing
• Discussion of international marketing ranges
from the marketing and business practices of
small exporters to the practices of global
companies
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39. Foreign Policy’s Global Top 20
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40. Discussion questions
• Discuss the phases of international marketing
involvement.
• Discuss the conditions that have led to the
development of global markets.
• Differentiate between a global company and a
multinational company.
• Differentiate among the three international
marketing concepts.
• Discuss the three factors necessary to achieve
global awareness.
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41. Summary
• The internationalization of American business is
proceeding with increasing pace
• The globalization of markets and competition
necessitates all managers to pay attention to the
global environment
• International marketing is defined as the
performance of business activities across
national borders
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42. • Environmental differences must be taken into account if
firms are to market products and services at a profit in
other countries
– Laws
– Customs
– Cultures
• Self-reference criteria and ethnocentrism limit
international marketer’s abilities to understand and adapt
to differences prevalent in foreign markets
Summary
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43. Summary
• Solutions to SLC and ethnocentrism
– Global awareness
– Sensitivity
• Strategic orientations found among managers of
international marketing operations
– Domestic market extension orientation
– Multidomestic market orientation
– Global market orientation
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44. The Value Chain (Porter)
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45. Standardization vs. Adaptation debate
Standardization Customization Contingency
Trends Homogenous market need: information,
communication, transportation, technology
development
Economies to scale, scope, learning curve
Different needs in different
countries due to culture,
language, economic
development level, political,
legal, customer value and life
styles.
Better satisfy local need. Source
of differentiation
S and C are two extreme of one
continuum.
S and C is very situation-
specific issue.
Company has to position itself
in the continuum.
Marketing
aspects
Global group of customer: global citizen,
global language (English), global market
(Triad)
Standardization of marketing program is
essential to compete in global market (high
quality product at a competitive price)
Marketing program is largely a
local issue and the best course
of action for a product ought to
differ from market to market
depends on internal and
external factors: target market,
market position, nature of
product, environment, and
organization factors.
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46. Industry
Globalizatio
n
Market
Drivers
Cost Drivers Government Drivers
Competitive
Drivers
Globalization Drivers
(Total Global Strategy II, Goege Yip)
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47. Market Drivers
• Homogeneous needs
• Global customers
• Global Language
• Global Culture
• Global Currency
• Global Channels
• Transferable marketing
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48. Costs Drivers
• Economies of scale and scope
• Learning and experience
• Sourcing efficiencies
• Favorable logistics
• Differences in country costs and skills
• Product development costs
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49. Government Drivers
• Favorable trade policy
• Compatible technical standards
• Common marketing regulations
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50. Competitive Drivers
• Interdependence of countries
• Competitors globalized or might globalize
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51. The concept of Inter Linked Economy
(ILE) - Kenichi Ohmae
• Global business has become more and more important
and vital for nations, industries, and firms. Nation can no
longer close it door and applies protectionism. Nations
and citizens around the world are more interlinked than
ever before, giving greater opportunity to a borderless
world.
• Trends leading to borderless world: global citizen, global
language (English), global products, and global
competitors.
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52. • ILE – Interlinked economy of the Triad, which consists three major
players in global marketplace, i.e. US, Europe, and Japan (now expand
to be Latin American, Europe, and Asia). Interdependencies of
economy create opportunities and basic security.
• The policy objective for ILE will be ensuring the free flow of information,
money, and services, as well as the free migration of people and
corporations.
• ILE has become so powerful and has made the national borders almost
invisible (borderless world). Participation in the ILE is the key to
prosperity for traditional isolationist nations.
The concept of Inter Linked Economy
(ILE) - Kenichi Ohmae
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53. • What are the basic goals of marketing? Are these goals
relevant to global marketing?
• What is meant by “global localization?” Is Coca-Cola a global
product? Explain
Discussion Questions
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54. • Q1. Identify the key elements in McDonald’s global marketing strategy. In
particular, how does McDonald’s approach the issue of standardization?
• Q2. Do you think government officials in developing countries such as Russia,
China and India welcome McDonald’s. Do consumers in these countries
welcome McDonald’s? Why or why not?
• Q3. Is it realistic to expect that McDonald’s – or any well-known company – can
expand globally without occasionally making mistakes or generating controversy?
Why do anti-globalization protesters around the world frequent target
McDonald’s?
Case Discussion
McDonald’s Expand Globally While Adjusting Its Local Recipe
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