International marketing 14 edition chapter 1
-
Upload
rex-international-trading -
Category
Documents
-
view
3.652 -
download
5
description
Transcript of International marketing 14 edition chapter 1
I n t e r n a t i o n a l M a r k e t i n g 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/IrwinInternational Marketing 14/e
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
1-2
What Should You Learn?What Should You Learn?
• The changing face of U.S. business
• 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
1-3
Global Perspective: Global Commerce Causes Peace
Global Perspective: Global Commerce Causes Peace
• Global commerce during peace time
– Commercial aircraft and space vehicle industries– Mobile phone industry– Individuals and small companies
• International markets are ultimately unpredictable
– Flexibility means survival
1-4
Events and Trends Affecting Global Business
Events and Trends Affecting Global Business
• The rapid growth of the World Trade Organization and regional free trade areas
• The trend toward the acceptance of the free market system among developing countries in Latin America, Asia, and Eastern Europe
• The burgeoning impact of the Internet, mobile phones, and other global media on the dissolution of national borders
• The mandate to properly manage the resources and global environment for the generations to come
1-5
The Internationalization of U.S. Business
The Internationalization of U.S. Business
• Increasing globalization of markets
• Increasing number of U.S. companies are foreign controlled
– $16.3 trillion in foreign investment in the U.S. – $2.6 trillion more than American overseas investment
• Increasing number of foreign companies building and buying manufacturing plants in the U.S.
• Increasing difficulty for domestic markets to sustain customary rates of growth
1-6
Foreign Acquisitions of U.S. Companies
Foreign Acquisitions of U.S. Companies
Exhibit 1.1
1-7
Selected U.S. Companies and Their International SalesSelected U.S. Companies
and Their International SalesExhibit 1.2
1-8
International MarketingInternational 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
1-9
The International Marketing TaskThe International Marketing Task
Exhibit 1.3
1-10
Environmental AdaptationEnvironmental Adaptation
• Ability to effectively interpret the influence and impact of the culture in which you hope to do business– Cultural adjustments
• Establish a frame of reference
• Avoid measuring and assessing markets against the fixed values and assumptions of your own culture
1-11
The Self-Reference Criterion and Ethnocentrism
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
1-12
SRC and EthnocentrismSRC 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
1-13
• 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 EthnocentrismSRC and Ethnocentrism
1-14
Framework for Cross-cultural Analysis
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
1-15
Developing a Global AwarenessDeveloping 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
1-16
Approaches to Global AwarenessApproaches 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
1-17
Stages of International Marketing InvolvementStages of International Marketing Involvement
• No direct foreign marketing
• Infrequent foreign marketing
• Regular foreign marketing
• International marketing
• Global marketing
1-18
No Direct Foreign MarketingNo 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
1-19
Infrequent Foreign MarketingInfrequent 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
1-20
Regular Foreign MarketingRegular 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
1-21
Global MarketingGlobal 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
1-22
Strategic OrientationStrategic Orientation
• Domestic market extension orientation
• Multidomestic market orientation
• Global market orientation
1-23
Domestic Market OrientationDomestic 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
1-24
Multidomestic Market OrientationMultidomestic 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
1-25
Global Market OrientationGlobal 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
1-26
The Orientation of International Marketing
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
1-27
Foreign Policy’s Global Top 20Foreign Policy’s Global Top 20
Exhibit 1.4
1-28
SummarySummary
• 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
1-29
• 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
SummarySummary
1-30
SummarySummary
• 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