The Scope of International Marketing Chapter 1
John F. Welch, Jr. Chairman and CEO, General Electric "Our vision has been described to you for a decade. We believed that only businesses that were number-one or number-two in their markets could win in the increasingly competitive global arena. Those that could not were to be fixed, closed or sold."
F Until recently, competition for U.S. markets was only among U.S. businesses with the same relative cost of money, labor and product è U.S market now includes competitors from all over the world Globalization of Business and Markets
Why internationalization? F Saturation of U.S. markets
Foreign Acquisitions of U.S. Companies U.S. CompanyForeign Owner Keebler (Cookies and other foods)Britain J. Walter Thompson (Advertising)Britain Spiegal (Catalog retailing)Germany Mack Trucks (Automotive)France Giant Food Stores (Supermarkets)Netherlands Pillsbury, Burger King, Pearle VisionBritain CBS Records (Music and Entertainment)Japan Carnation (Coffee-Mate, Friskies pet food)Switzerland Chesebrough-Pond’s (Vaseline)Netherlands SOURCE: Adapted from “The 100 Largest Foreign Investments in the U.S.,” Forbes, July 18, 1994, pp
Why internationalization? F Saturation of U.S. markets F Higher ROI in foreign markets
Some Big U.S. Players in the Global Game* *1993 data. SOURCE: Adapted from “The 100 largest Multinationals: Getting the Welcome Carpet,” Forbes, July 18, 1994, pp Company Foreign Revenues % of Total Foreign Profits % of Total Foreign Assets % of Total Ei du Pont de Nemours Proctor & Gamble Coca-Cola Eastman Kodak Motorola Johnson & Johnson Sara Lee Colgate-Palmolive Gillette Compaq Computer McDonald’s Avon Products
Why internationalization? F Saturation of U.S. markets F Higher ROI in foreign markets F Establish early position in world markets
Share of Global Sales ( ) Energy Equipment & Services 93% 1%6% Aerospace & Military Technology Data Processing & Reproduction73225 Electronic Components & instruments62362 Beverages & Tobacco Health & Personal Care Leisure & Tourism Forest Products & Paper Energy Source Metals-Nonferrous Recreation & other Consumer Goods33616 Food & hh Products Electrical & Electronics Chemicals Industrial Components Automobiles Machinery & Engineering Appliances & hh Durables86726 Metals-Steel ALL INDUSTRIES (SALES)37%32%31% ALL INDUSTRIES (PROFITS)48%16%37% IndustryU.S.JapanEurope
Invented Here, Made Elsewhere U.S. Invented Technology Phonographs Color TVs Audiotape Recorders Videotape Recorders Machine Tools Telephones Semiconductors Computers 7 4% 9 8% 6 4% 8 9% 2 5% 9 9% 3 5% 9 9% 1% 1 0% 0% 4 0% 1 0% 9 0% 1% 9 0% N O W
“Every American company is international, at least to the extent that its business performance is conditioned in part by events that occur abroad”
Definition of International Marketing F The performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than nation for profit.
What’s the difference between international marketing and domestic marketing? F The environment in which marketing strategies have to be implemented
7 The International Marketing Task Political/legal forces Economic forces 1 2 Environmental uncontrollables country market A Environmental uncontrollables country market B Environmental uncontrollables country market C Competitive structure Competitive Forces Level of Technology PriceProduct Promotion Channels of distribution Geography and Infrastructure Foreign environment (uncontrollable) Structure of distribution Economic climate Cultural forces Political/ legal forces Domestic environment (uncontrollable) (controllable)