International Marketing Chap 1
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Transcript of International Marketing Chap 1
8/9/2019 International Marketing Chap 1
http://slidepdf.com/reader/full/international-marketing-chap-1 1/29
I n t e r n a t i o n a l M a r k e t i n gI 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 InternationalMarketing
Chapter 1
P h i l i p R. C a t e o r a
J o h n L . G r a h a m
McGraw-Hill/Irwin International Marketing Iftekhar Amin Chowdhury (IAC)
8/9/2019 International Marketing Chap 1
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Foreign Acquisitionsof U.S. Companies
Foreign Acquisitionsof U.S. Companies
Exhibit 1.1
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Selected U.S. Companiesand Their International Sales
Selected U.S. Companiesand Their International Sales
Exhibit 1.2
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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 aprofit
Multinational process of planning andexecuting the conception, pricing, promotion,and distribution of ideas, goods, and servicesand to create exchanges that satisfyindividual and organizational objectives
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The International Marketing TaskThe International Marketing Task
Exhibit 1.3
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Environmental AdaptationEnvironmental Adaptation
Ability to effectively interpret the influence andimpact of the culture in which you hope to dobusiness
± Cultural adjustments
Establish a frame of reference
Avoid measuring and assessing markets againstthe fixed values and assumptions of your own
culture
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Environmental Adaptation (Examples)Environmental Adaptation (Examples)
Color of Mourning
- Westerner: Black (White considers bridal dress)
- Easterner: White
Raise a hand and make a circle with the thumb and
forefinger (like zero)
- In US: OK
- In France: Zero / Worthless- In Japan: Money
[See the photographs at Page 14]
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The Self -Reference Criterionand Ethnocentrism
The Self -Reference Criterionand Ethnocentrism
The key to successful international marketing isadaptation to the environmental differencesfrom one market to another
Primary obstacles to success in internationalmarketing
± SRC
± Associated ethnocentrism
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SRC and EthnocentrismSRC and Ethnocentrism
SRC is an unconscious reference to
± One¶s own cultural values, experiences, andknowledge as a basis for decisions
Dangers of the SRC
± Failing to recognize the need to take action
± Discounting the cultural differences that exist amongcountries
± Reacting to a situation in an offensive to your hosts Ethnocentrism
± Nation that one¶s own culture or company knows best
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Ethnocentrism and the SRC can influence anevaluation of the appropriateness of adomestically designed marketing mix for aforeign market
The most effective way to control the influenceof ethnocentrism and the SRC is to recognizetheir effects on our behavior
SRC and EthnocentrismSRC and Ethnocentrism
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The Self -Reference Criterion andEthnocentrism
(E
xamples)
The Self -Reference Criterion andEthnocentrism
(E
xamples)
Communication Distance (American Vs Asian)
Refuse the hospitality (American Vs Asian)
Real Example: US experience regarding ³Esso´(The brand name of gasoline)«in Japan, itmeans µstalled car¶.
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The Self -Reference Criterion andEthnocentrism
(E
xamples)
The Self -Reference Criterion andEthnocentrism
(E
xamples)Successful Stories:
1. A British Manufacturer
In America: Cookies
In Japan: Chocolate Biscuits (McVitie)
2. Unilever
In UK: Paper pack and big in size
In Brazil: Plastic pack and small in size3. McDonald¶s
In America and Europe: Big Mac (with beef patties)
In India: Maharaja Mac (with mutton patties)
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Frameworkfor Cross-cultural Analysis
Frameworkfor 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 theproblem
4. Redefine the problem
Without SRC influence
Solve for the optimum business goal situation
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Frameworkfor Cross-cultural Analysis
(Real Story)
Frameworkfor Cross-cultural Analysis
(Real Story)
Story of an American CEO, who was posted in
Japan and changed the meeting schedule«
What happened ultimately??????
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Developing a Global AwarenessDeveloping a Global Awareness
Tolerance of cultural differences:
± Understanding cultural differences and accepting and
working with others whose behavior may be differentfrom yours
Knowledge of cultures, history, world market
potential, and global economic, social, andpolitical trends
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Approaches to Global Awareness 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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Stages of InternationalMarketing InvolvementStages of InternationalMarketing Involvement
No direct foreign marketing
Infrequent foreign marketing
Regular foreign marketing
International marketing
Global marketing
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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 toseek additional international sales
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Infrequent Foreign MarketingInfrequent Foreign Marketing
Caused by temporary surpluses
± Variations in production levels
± Increases in demand
Firm has little or no intention of maintainingcontinuous market representation
± Foreign sales decline when demand or surplusdecreases
± May withdraw from international markets Little or no change in company organization or
product lines
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Regular Foreign MarketingRegular Foreign Marketing
Firm has production capacity devoted to foreignmarkets
Firm employs domestic or foreign intermediaries
± Uses its own sales force ± Sales subsidiaries in important markets
Products allocated or adapted to foreign marketsas demand grows
F
irm depends on profits from foreign markets
Example: Meter-Man (Producer of agricultural measuring devices)
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Regular Foreign MarketingRegular Foreign Marketing
Director of Sales and Marketing of Meter -Manquoted ±
³When you start exporting, you say toyourself, this will be icing on the cake; butnow, I say going international has becomecritical to our existence.´
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International MarketingInternational Marketing
Companies are fully committed and involved ininternational marketing activities. This generally
entails not only the marketing but also theproduction of goods outside home country.
Example: The story of Fedders (Largestmanufacturer of Air conditioner in US)in China (Sales increased from 5 lacsto 4 million in five years)
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Global MarketingGlobal Marketing
Company treats world, including home marketas 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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Strategic OrientationStrategic Orientation
Domestic market extension orientation
Multidomestic market orientation
Global market orientation
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Domestic Market OrientationDomestic Market Orientation
International operations viewed as secondary
Prime motive is to market excess domesticproduction
Firm¶s orientation remains basically domestic
Minimal efforts are made to adapt product or marketing mix to foreign markets
F
irms with this approach are classified asethnocentric
Example of Meter-Man
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Multidomestic Market OrientationMultidomestic Market Orientation
Companies have a strong sense that foreigncountry markets are vastly different
Market success requires an almost independent
program for each country ± Separate marketing strategies (mostly polycentric) ± Subsidiaries operate independently of one another in
establishing marketing objectives and plans ± Products are adapted for each market
Control is decentralized
Example of Fedders
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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 mixapplicable across national boundaries
± Markets are still segmented
± Each country or region is considered side by side witha variety of other segmentation variables
± Fits the regiocentric or geocentric classifications
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Global Market Orientation(Example)
Global Market Orientation(Example)
McDonald¶s:
± Process is standardized in every country ± Logo is same
± Most of the advertisements are similar ± Store decoration and layout almost alikeBUT
± Wine in France and Beer in Germany ± A Filipino Style spicy burger in Manila
± Pork burgers in Thailand
P&G pursue a global strategy for disposable diapers,but a multidomestic strategy in Asian markets for detergents. (The strategy differs product to product)
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The Orientationof International Marketing
The Orientationof International Marketing
An environmental/cultural approach tointernational 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 globalcompanies