1. INTERNATIONAL MARKETING
Culture
Product strategies
Legal issues

2. Learning Objectives Identify impact of culture on
Values
Perception of reality
Product choices
Response to marketing activity
Identify advantages and disadvantages of product standardization, adaptation, and customization under different circumstances
Identify some legal issues that must be considered by firms doing business abroad

3. An Effective Billboard Advertisement?
VERY DIRTY CLOTHES
CLOTHES GETS WASHED WITH THE ADVERTISED DETERGENT BRAND
SQUEEKY CLEAN CLOTHES

4. LEARNING OUTCOME OBJECTIVES
Identify the for forces impacting the marketer operating in varying cultural, legal, economic, and political environments
Identify the increasingly competitive international market place
Identify strategic opportunities for operating internationally
Identify the interdependent nature of decisions made in the international context

5. International Marketing: Considerations and Outcomes
MKT 465 COVERS INTERNATIONAL MARKETING IN MORE DETAIL

6. Definitions
Culture: “That complex whole which includes knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by man as a member of society.”
Alternative definition: “Meanings that are shared by most people in a group [at least to some extent]”. (Adapted from Peter and Olson, 1994)
We tend to associate the word “culture” with behavior. However, the term is technically defined as a set of “shared meanings.” This, obviously, is a somewhat deeper definition, focusing more on the basis for the observed behaviors.
A concept related to that of culture is socialization--the way that one learns to be part of a society. For example, mathematics books in the United States may focus on the calculation of interest, which is not a legitimate concept in most countries governed primarily by Muslim law. 4

7. Cultural Lessons
Diet Coke is named Light Coke in Japan—dieting was not well regarded
Red circle trademark was unpopular in Asia due to its resemblance of Japanese flag
Packaging of products is more important in some countries than in U.S.
Advertisement featuring man and dog failed in Africa—dogs were not seem as man’s best friend 5

8. More Cultural Lessons...
Cologne ad featuring a man “attacked” by women failed in Africa
Food demonstration did well in Chinese stores but not in Korean ones--older women were insulted by being “taught” by younger representatives
Pauses in negotiations
Level of formality 6

9. Approaches to Product Introduction
● Customization
Standardization ●
Adaptation
Completely new product made for each country
Products sold across the World are identical
Adjustments are made in regions or countries to accommodate infrastructure, cultural, economic, or other differences
Complete customization or standardization are rare—modest adjustments are usually made
Not suitable for the Middle East!

10. Reasons for Standardization
Avoiding high costs of customization, if applicable
Technological intensity
Reduced confusion
International compatibility among product group components
Faster spread of rapid life cycle products
Convergence of global consumer tastes/needs
Country of origin positioning

11. Standardization—Advantages
Benefits
Economies of scale
More resources available for development effort
Better quality possible
Rapid product life cycles may make extensive adaptation infeasible

12. Standardization—Disadvantages
Unnecessary features
Vulnerability to trade barriers
Strong local competitors

13. Product Adaptations
Mandatory—required by laws of nature or laws of government
Legal requirements
Infrastructure
“Discretionary”—not required by natural or human laws but often not really “optional” in practice (needed to compete with brands that do offer adaptations)
Local tastes
Fit into cultural environment

14. Mandatory Adaptation Issues
Infrastructure differences—e.g., electricity supplies vary among countries in
Voltage
Frequency (time between flips in polarity under alternating current)
Plugs
Conflicting rules between countries—it may not be possible to make a product that would be simultaneously legal in both of two countries

15. Country of Origin Effects
Perception of product
quality (e.g., Japan, Germany)
elegance and style (e.g., France, Italy)
Historical associations
Positioning strategies
Emphasis on origin (e.g., French wine)
De-emphasis/obfuscation of country of origin (e.g., French beer, American products with French language labels)

16. Flops in the Transplantation of Advertising
Man and his dog
“Follow the leader—he’s on a Honda!”
Detergent ad
“Get your teeth their whitest!”

17. International Brand Adaptations
Chevy Nova did not do well in Latin America (“no va.”)
A Japanese soft drink which did not sell well in English speaking countries…

18. U.S. Laws of Interest…
Anti-trust: It is illegal for U.S. firms to participate in collusion and other anti-competitive activities abroad. Most countries have such laws; not all enforce these.
Foreign Corrupt Influences Act: It is illegal for U.S. firms to pay bribes abroad.
Anti-boycott laws: It is illegal for U.S. firms to participate in a boycott of Israel or even certify that one’s firm does not do business with Israel. Technically, it is illegal to participate in all non-U.S. Government sanctioned boycotts, but the emphasis is on Israel.
Trading With the Enemy:
It is illegal to trade at all (with few exceptions) with enemy certain states (e.g., North Korea, Iran, Libya).
Exports of certain technologies (mostly with potential for military use) is heavily restricted.
Extra-territoriality: U.S. courts will often take jurisdiction over cases of violations of U.S. law that occurred entirely abroad.