1. International Marketing 16 th edition Philip R. Cateora, Mary C. Gilly, and John L. Graham

2. Introduction To understand a society’s actions and its points of view, you need to appreciate: – The influence of historical events – The geographical uniqueness to which a culture has had to adapt Culture can be defined as society's accepted basis for responding to external and internal events To interpret a culture’s behavior and attitudes, a marketer must have some idea of a country’s history and geography Roy Philip2

3. Overview Historical perspective in global business Geography and global markets – Climate and topography, geography, nature, and economic growth, social responsibility and environmental management, and resources Dynamics of global population trends – Controlling population growth, rural/urban migration, population decline and aging, and worker shortage and immigration World trade routes Communication links 3Roy Philip

4. Global Perspective Birth of a Nation – Panama in 67 Hours History and geography can affect public and political attitudes of a nation in the present and far into the future The Panama Canal is but one example of the many U.S. intrusions during the early 20 th century that have tainted U.S. - Latin American relationships A Chinese-company has operational control of both the Pacific and Atlantic ports making the control of the Canal a sensitive issue 4Roy Philip

5. History Perspective in Global Business History helps define a nation’s mission – How it perceives its neighbors – How it perceives itself – Its place in the world Insights into history are important for understanding current attitudes It is necessary to study culture as it is now as well as to understand culture as it was – A country’s history 5Roy Philip

6. International Marketing 16 th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

7. History and Contemporary Behavior Japanese history – Seven centuries under the shogun feudal system – The isolation before the coming of Admiral Perry in 1853 – Threat of domination by colonial powers – Rise of new social classes – Western influences – Humiliation of World War II – Involvement in the international community Historically, loyalty and service, a sense of responsibility, and respect for discipline, training, and artistry were stressed to maintain stability and order A historical perspective gives the foreigner a basis on which to begin developing cultural sensitivity and a better understanding of contemporary Japanese behavior 7Roy Philip

8. 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?

9. History is Subjective Historical events always are viewed from one’s own biases and SRC A crucial element in understanding any nation’s business and political culture is the subjective perception of its history – Relationship between U.S. and Mexico Monroe Doctrine 9Roy Philip

10. Territorial Expansion of United States from 1783 Exhibit 3.1 10Roy Philip

11. Manifest Destiny and the Monroe Doctrine Both accepted as the basis for U.S. foreign policy during much of the 19 th and 20 th centuries Manifest Destiny justified U.S. expansion – Annexation of Texas, Oregon, New Mexico, and California – U.S. involvement in Cuba, Alaska, Hawaii, and the Philippines Three basic dicta of the Monroe Doctrine – No further European colonization in the New World – Abstention of the U.S. from European political affairs – Nonintervention of European governments in the governments of the Western Hemisphere Change in the Monroe Doctrine – 1881 – Roosevelt Corollary 11Roy Philip

12. U.S. Intervention in Latin America Since 1945 Exhibit 3.2 12Roy Philip

13. Geography and Global Markets Geography – an element of the uncontrollable environment that confronts every marketer – Affects a society’s culture and economy – Physical makeup limits a nation’s ability to supply its people’s needs 13Roy Philip

14. International Marketing 16 th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

15. Climate and Topography Altitude, humidity, and temperature extremes – South America – British resistance of the English Channel – Trade through the Alps 15Roy Philip

16. 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 3-16

17. 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. 3-17

18. Geography, Nature and Economic Growth As countries prosper, natural barriers are overcome Environmental issues – Disruption of ecosystems – Relocation of people – Inadequate hazardous waste management – Industrial pollution 18Roy Philip

19. Social Responsibility and Environmental Management Environmental protection is not an optional extra Pollution is on the verge of getting completely out of control China has 16 of the world’s 20 most polluted cities Critical issue: the disposal of hazardous waste Sustainable development The World’s 10 Most Polluted Places America’s Most Polluted Cities 19Roy Philip

20. A Comparison of Green-House Gas Emission Rates and Pledges for Reductions Roy Philip20 Exhibit 3.3

21. Resources (1 of 2) The availability of minerals and the ability to generate energy are the foundations of modern technology The principal supplements to human energy – Animals – Wood – Fossil fuel – Nuclear power – Ocean tides – Geothermal power – The sun 21Roy Philip

22. Resources (2 of 2) United States in perspective – 1942 – nearly self-sufficient – 1950 – major importer – 1973-2000 – increased dependency from 36% to 66% – Mid-2000’s – predicted to be importing more than 70% of needs The location, quality, and availability of resources will affect the pattern of world economic development and trade well into the 21 st century 22Roy Philip

23. World Energy Consumption Roy Philip23 Exhibit 3.4

24. Dynamics of Global Population Trends Global population trends determine today’s demand for goods – Rural/urban population shifts – Rates of growth – Age levels – Population control Changes in population will profoundly affect future demand The most important deterrent to population control is cultural attitudes about the importance of large families 24Roy Philip

25. World Population by Region – 2005-2050 Life Expectancy at Birth – 2005-2010 (millions) Roy Philip25 Exhibit 3.5

26. World Population by Region – 2005-2050 Life Expectancy at Birth – 2005-2010 (millions) Roy Philip26 Exhibit 3.5

27. International Marketing 16 th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

28. Controlling Population Growth Procreation is one of the most culturally sensitive uncontrollable factors Perhaps the most important deterrent to population control is cultural attitudes about the importance of large families Family planning and all that it entails is by far the most universal means governments use to control birthrates, but some economists believe that a decline in the fertility rate is a function of economic prosperity and will come only with economic development 28Roy Philip

29. Population Control Issues Adequate Incomes High literacy levels Education for women Health care Family planning Cultural attitudes Political reasons

30. Rural/Urban Migration Result of a desire for greater access to: – Sources of education – Health care – Improved job opportunities 30Roy Philip

31. Population Decline and Aging Population growth in many countries has dropped below the rate necessary to maintain present levels A nation needs a fertility rate of about 2.1 children per woman Not one major country has sufficient internal population growth to maintain itself 31Roy Philip

32. Age Density for World and Selected Countries Roy Philip32 Exhibit 3.6

33. Worker Shortage and Immigration The free flow of immigration will help to ameliorate the dual problems of explosive population expansion in less-developed countries and worker shortage in industrialized regions Europe will need 1.4 billion immigrants over the next 50 years Japan and the U.S. will need 600 million immigrants between now and 2050 33Roy Philip

34. World Trade Routes Progression of trade routes – Overland – Sea routes – Air routes – The Internet Trade routes bind world together, minimizing: – Distance – Natural barriers – Lack of resources – Fundamental differences between and economies Trade routes represent attempts to overcome influence of geography causing economic and social imbalances 34Roy Philip

35. International Marketing 16 th edition Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

36. Telegraph Communication Links McGraw-Hill/Irwin©2006 The McGraw-Hill Companies, Inc. All rights reserved. ComputerInternet TelevisionSatellites Telephone

37. Summary (1 of 2) A prospective international marketer should be reasonably familiar with the world, its climate, and topographic differences Geographic hurdles must be recognized as having a direct effect on marketing and the related activities of communications and distribution 37Roy Philip

38. Summary (2 of 2) Without a historical understanding of a culture, the attitudes within the marketplace may not be fully understood The study of history and geography is needed to provide the marketer with an understanding of why a country has developed as it has rather than as a guide for adapting marketing plans 38Roy Philip