BA 486 International Marketing Dr. Frankenberger Intro_05.ppt

What is International Marketing? U.S. marketing principles applied to more than one country market: –Exchanges: across international borders –Satisfaction: of company & customer needs But with a difference in the company’s marketing environments –Internal: management’s approach to international marketing; experience, resources, etc. –External: uncontrollable elements in the external environment

Uncontrollable Elements in the External Environment Standard domestic market variables… Economic Political/legal Level of technology Consumer social- demographics Competitive forces …plus special international factors… Geography & infrastructure Communication & distribution Cultural characteristics

International marketing is essentially a matter of investigating and adapting to a company’s foreign environments

Orientations to foreign marketing Ethnocentric – USA is best! Polycentric – each country is unique Regio/Geocentric – the region/world is one market Management Orientation leads to different approaches to foreign markets

No/infrequent foreign marketing Foreign/International marketing Global marketing Least international commitment Domestic only Export only Ethnocentric Limited to substantial international commitment Focus on individual countries or regions each country seen as an independent market different marketing program for each country polycentric Extensive international commitment the world is one market Focus on segments rather than countries or regions geocentric Domestic Market Extension Multi-domestic Marketing Global Marketing

Beware the pitfalls of SRC Self Reference Criterion Referring to one’s own cultural experience, knowledge, etc. as the basis for decisions about foreign markets.

Avoiding SRC Ask the right question … Campbell’s might introduce a soup product to India. What information would help with this decision? In India, people eat with their fingers… does this knowledge influence the type of information you seek?

Avoiding SRC Frito Lay wants to introduce a snack chip in Thailand. What flavor would be appropriate? Prawn?… or BBQ? Focus group research indicates that while prawn is the favorite flavor in Thailand for most food items, Thais prefer Western flavors for potato chips.

If nearly 100% of the population in Central America watches the nightly TV soap operas while enjoying a beverage from the fridge, what can we assume about demand for electric appliances? BE CAREFUL – don’t make assumptions based on the way things are in the U.S. –Up to 35% of households have no electricity: Most TVs (esp. rural) are battery powered Most refrigerators are gas powered

Adapting to Foreign Marketplaces Getting to global… 1.Be Tolerant of Cultural Differences, and 2.Be Knowledgeable of: (a) Culture, (b) History, (c) World Market Potential, (d) Global Economic, Social and Political Trends

Generally, four distinctive approaches dominate strategic thinking in international marketing: Strategic orientations Ethnocentric or Domestic Marketing Extension Concept: Polycentric or Multi-Domestic Marketing Concept: Opposite of ethnocentrism Management of these multinational firms place importance on international operations as a source for profits Management believes that each country is unique and allows each to develop own marketing strategies locally Home country marketing practices will succeed elsewhere without adaptation; however, international marketing is viewed as secondary to domestic operations

Generally, four distinctive approaches dominate strategic thinking in international marketing: Strategic Orientations Regiocentric and Geocentric are synonymous with a Global Marketing Orientation where a uniform, standardized marketing strategy is used for several countries, countries in a region, or the entire world Regiocentric & Geocentric : Sees the world as one market and develops a standardized marketing strategy for the entire world

Self-Reference Criterion (SRC) and Ethnocentrism:Major Obstacles SRC is an unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions Ethnocentrism refers to the notion that one’s own culture or company knows best how to do things Both the SRC and ethnocentrism impede the ability to assess a foreign market in its true light Reactions to meanings, values, symbols, and behavior relevant to our own culture are different from those of foreign Relying on one’s SRC could produce an unsuccessful marketing program