1. The Scope of International Marketing Chapter 1

2. CULTURAL IQ!  Japan is a high context culture, where small gestures convey great meaning. Which is an appropriate behavior in Japan? A. Covering your mouth when you laugh B. Winking to convey agreement C. Speaking in a loud, forceful voice  True or false: Never keep your left hand in your pocket while shaking hands with your right in Germany.  Spitting is grotesque in many places, but is actually against the law in which country? A. St. Thomas B. St. Martin C. Singapore  You are the sole passenger on a bus in Bahrain. A man enters, and chooses the seat next to you. True or false: He intends to start a conversation with you.

3.  You are greeting a new associate in France. As you firmly grasp his hand, heartily pumping it up and down, he looks a bit bemused. This is because: A. He's relieved you didn't kiss him. B. The French handshake is more of a handclasp, with no pumping action. C. He wishes you had kissed him.  True or false: Before female executives travel to Brazil, they should be certain their nails are well-manicured.  You feel good after your big sales call in Stockholm, Sweden. It's a surprise to you, then, when they don't accept the deal. This could be because during the meeting, you: A. Leaned backward in your chair and crossed your arms B. Rested your ankle on your knee the whole time C. Laughed loudly D. All of the above

4. F The Internationalization of U.S. Business F International Marketing Defined F The International Marketing Task –Marketing Controllables –Domestic Uncontrollables –Foreign Uncontrollables F Self-Reference Criterion F Internationalization Process –Phases of international Involvement u Domestic Market Expansion u Multi-Domestic Market Concept u Global Marketing Concept Lecture Outline

5. 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."

6. 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

7. Why internationalization? F Saturation of U.S. markets

8. 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. 266-270.

9. Why internationalization? F Saturation of U.S. markets F Higher ROI in foreign markets

10. 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. 276-279. Company Foreign Revenues % of Total Foreign Profits % of Total Foreign Assets % of Total Ei du Pont de Nemours 51.4 99.837.3 Proctor & Gamble 52.1 65.140.7 Coca-Cola 67.0 67.848.6 Eastman Kodak 48.8 41.532.4 Motorola 43.9 84.834.6 Johnson & Johnson 49.1 54.643.9 Sara Lee 35.5 41.345.0 Colgate-Palmolive 64.5 67.046.9 Gillette 67.5 61.465.7 Compaq Computer 49.0 63.640.5 McDonald’s 46.9 45.146.9 Avon Products 32.0 59.948.3

11. Why internationalization? F Saturation of U.S. markets F Higher ROI in foreign markets F Establish early position in world markets

12. Share of Global Sales (1987-92 ) Energy Equipment & Services 93% 1%6% Aerospace & Military Technology761523 Data Processing & Reproduction73225 Electronic Components & instruments62362 Beverages & Tobacco631620 Health & Personal Care492031 Leisure & Tourism461638 Forest Products & Paper511732 Energy Source461341 Metals-Nonferrous303139 Recreation & other Consumer Goods33616 Food & hh Products332246 Electrical & Electronics215128 Chemicals283042 Industrial Components244531 Automobiles373528 Machinery & Engineering194635 Appliances & hh Durables86726 Metals-Steel105733 ALL INDUSTRIES (SALES)37%32%31% ALL INDUSTRIES (PROFITS)48%16%37% IndustryU.S.JapanEurope

13. 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% 020406080100 1 9 7 0 N O W

14. “Every American company is international, at least to the extent that its business performance is conditioned in part by events that occur abroad”

15. 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.

16. What’s the difference between international marketing and domestic marketing? F The environment in which marketing strategies have to be implemented

17. 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 3 4 5 6 7 Political/ legal forces Domestic environment (uncontrollable) (controllable)

18. Self-Reference Criterion (SRC) F An unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions

19. International Marketing Concepts Domestic Market Extension(Ethnocentric) Multi-Domestic Market(Polycentric) Global Marketing(Regio/Geocentric) ConceptEPRG Schema

20. Coca-Cola Global Marketing Strategy Think Globally Act Locally

21. Examples of Global Marketing Product Design Brand Name Product Positioning Packaging Advertising Strategy Sales Promotion Distribution Customer Service Canon photocopier/McDonalds/Toyota/Ford Marlboro/Coke/Pepsi/Mercedes/Caterpillar Colgate toothpaste/Unilever fabric softener Gillette razors Coca-Cola/British Airways/Benetton IBM Benetton/United Distillers American Express/Hertz