The Scope and Challenge of International Marketing Chapter 1

What are the trends? Late 1990’s Early 2000’s Since then 1990’s- Economic boom, technology at offices lowering prices, lower trade barriers, internet, end of Cold War 2000’s- 9/11, terrorism, SARS, tech bust, Enron scandals, Despite all of this, there is still a great deal of international marketing

Internationalization of America Foreign Ownership of Businesses Chrysler Foreign Investment: $25.2 trillion (2013) Exportation of Products Why go international? Why?- More profits, grow twice as fast, high ROA and ROE.

International v. Domestic Marketing What is MKT? International focuses on working in more than one country. It is more complex. More uncontrollable factors Domestic- Slightly more control; Go over Figure 1-3

The International Marketing Task Controllable Factors Product Price Place Promotion Domestic Uncontrollables Political/Legal Economic Competition Political/Legal- Bans, sanctions, Economics- Can you make money in order to invest? Competition- How much in home country? If increases, then must refocus its efforts on its own turf instead of foreign markets, BUT, may increase innovation (according to Porter).

The International Marketing Task Foreign Environment Uncontrollables Political/Legal Economic Competitive Level of technology Structure of distribution Geography and infrastructure Cultural forces Political- China’ laws on who can set up a business. What if the government decides to take back the plant? Alien status- Alien b/c foreigners own it and culture is alien to it Legal- Is there corruption? Tech- Is machinery available?, Technical expertise, train others to work with them Culture- Cultural adjustment. Language, gestures, symbols.

International Marketing Issues Self-Reference Criterion Ethnocentrism Examples Cross-cultural Analysis SRC- Unconscious reference to one’s own cultural values, experiences and knowledge Ethno- Believing your culture’s way is the best way to do things Standing to close, Nova= “no go” in Spanish CCA- How are things done here? Why? Do those underlying principles apply to the values and culture of the other country?

Global Awareness Tolerance for other cultures Knowledge of other cultures

International Marketing Involvement No Direct Foreign Marketing Infrequent Foreign Marketing Regular Foreign Marketing International Marketing Global Marketing NDFM- Does not pursue international markets, but still sells overseas. Like a website IFM- Used if there is a surplus. Maybe in the second quarter 2005 we will have 5 tons extra, so we will try to sell overseas. No long-tern relationship RFM- Still a major focus domestically; however, does have middlemen or salesforce devoted to sales overseas. IM- Fully committed to overseas markets; GM- Companies treat the entire world as one market. More than half of sales are from overseas, usually same product throughout the world.

Strategic Orientation Domestic Market Extension Orientation Primarily domestic Multidomestic Market Orientation Fine-tune product/strategy to market Global Market Orientation Look at entire world as market Use the same product, different forms of advertising DME- Primarily domestic, but no effort to fine-tune products to specific markets MM- Company recognizes that each country is different; there is little interaction between country “departments”, there is a separate marketing mix for each country GM- Entire world is its market; Ford, Coke; still fine-tune, but consider income age, etc, as segments. Same product, different advertising; standardize mix where cost effective.