McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. History and Geography: The Foundations of Culture Chapter 3

3-2 Learning Objectives LO1The importance of history and geography in understanding international markets LO2 The effects of history on a country’s culture LO3 How culture interprets events through its own eyes LO4 How long-past U.S. international policies still affect customer attitudes abroad LO5 The effect of geographic diversity on economic profiles of a country LO6 Why marketers need to be responsive to the geography of a country LO7 The economic effects of controlling population growth and aging populations LO8 Communication infrastructures are an integral part of international commerce

3-3 History & Contemporary Behavior  Historical events between nations influence business and history  Any nation’s business and political culture is shaped by history

3-4 Case in Point: Japan  Why do the Japanese have such strong loyalty toward their companies?  Why is a distribution system so difficult for an outsider to develop?  Why are decisions made by consensus?  Why are they loyal to family, to country, to company, and to social group?

3-5 Manifest Destiny  Manifest Destiny and Monroe Doctrine were the basis of U.S. foreign policy in the 19 th and 20 th centuries  Manifest Destiny meant that Americans were a chosen people ordained by God to create a model society. It referred to the territorial expansion of the United States from the Atlantic to the Pacific

3-6 Monroe Doctrine  The Monroe Doctrine has three basic premises: No further European colonization in the New World abstention of the United States from European political affairs, and nonintervention by European governments in the governments of the Western Hemisphere.

Exhibit 3.1. Source: Oxford Atlas of the World, 18 th ed., 2002 Preprinted with permission of Philip Maps 3-7

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3-9 Geography and Global Markets  Climate & Topography Climate & Topography  Geography, Nature & Economic Growth Geography, Nature & Economic Growth  Social Responsibility and Environmental Management Social Responsibility and Environmental Management  Resources Resources

Climate and Topography Knowledge about geography, the climate and physical terrain when appraising a market Influences marketing from product adaptation to the development of marketing systems Climatic features affect uses and functions of products and equipment 3-10

Climate and Topography Products may require special cooling or lubrication to function adequately in tropical zones Climate differences in Europe caused Bosch-Siemens to alter its washing machines Geographic terrain such as mountain ranges in a country can influence transportation of products. 3-11

Geography, Nature & Economic Growth Linkage exists between geographic location and economic growth Association between landlocked countries and level of economic development Countries with hostile climates associated with economic stagnation Countries that suffer the most from major calamities are among the poorest in the world, which influences ability to market products 3-12

Social Responsibility & Environmental Management Environmental protection is not an optional extra; it is an essential part of the complex process of doing business. Of special concern to governments and businesses are ways to stem the tide of pollution and to clean up decades of neglect. Many governments are drafting new regulations and enforcing existing ones. A strong motivator is the realization that pollution is on the verge of getting completely out of control. 3-13

Resources Importance of natural resources especially to manufacturing of products; Supply of natural resources not endless Human labor provides the preponderance of energy in many countries Importance of oil and gas in world energy consumption 3-14

Exhibit 3.3 Source: EuroMonitor International, 2012; Intergovernmental Panel on Climate Change 3-15

Exhibit 3.4 Source: Data compiled from Energy Information Administration (EIA), International Energy Outlook 2011 (Washington, D.C. 2012),

Global Population Trends Important to know about current population trends because people constitute markets for various categories of goods Necessary to know about: rural/urban population shifts rates of growth age levels population control population decline and aging worker shortage and immigration 3-17

Exhibit 3.5 Source: World Population Prospects, The 2011 Revision, United Nations Economic and Social Affairs,

3-19 Population Control Issues  Adequate Incomes  High literacy levels  Education for women  Health care  Family planning  Cultural attitudes  Political reasons

World Trade Routes & Communication Links Knowledge about trade routes over land, sea, and air important in making marketing decisions The majority of world trade is among the most industrialized and industrializing countries of Europe, North America, and Asia Need to be aware about communication links—the underpinning of all commerce Impact of the Internet revolution especially for global marketing of products 3-20