2. International Marketing

3. CHAPTER 1 The Scope and Challenge of International Marketing

4. Top 10 U.S. Players in the Global Game Company Foreign Revenues ($ Mil) Foreign Revenues (% of Total) Foreign Profits (% of Total) SOURCE: Adapted from Brian Zajac, “Global Giants”. Forbes, July 24, 2000 Irwin/McGraw-Hill 1-4 Foreign Assets (% of Total) ExxonMobil IBM Ford Motor General Motors General Electric Texaco Citigroup Hewlett-Packard Wal-Mart Stores Compaq Computer 115,464 50,377 50,138 46,485 35,350 32,700 28,749 23,398 22,728 21,174 71.8 57.5 30.8 26.3 31.7 77.1 35.1 55.2 13.8 55.0 62.7 49.6 N/A 55.3 22.8 54.1 N/A 58.0 8.2 101.4 63.9 43.7 44.2 38.0 47.4 45.2 41.0 51.5 36.0 28.2

5. Foreign Acquisitions of U.S. Companies U.S. CompaniesForeign Owner Bestfoods (foods)U.K. Ben & Jerry’s (ice cream)U.K. Alpo (pet food)Swiss Pillsbury (food)U.K. Burger King (fast food)U.K. Random House (publishing)Germany Chrysler (autos)Germany TV Guide (magazine)Australia New York Post (newspaper)Australia LA Dodgers (sports)Australia Arco (gasoline) U.K. CompUSA (retailing) Mexico Seagram (alcoholic beverages)France SOURCE: Adapted from Kuri Badenhausen. “Name Game”, Forbes. Jul 24, 2000 Irwin/McGraw-Hill 1-2

6. Leading World Trading Countries, 1997 ($ billions) EU-15 $2,723.5$2,565.4$5,289.9 U.S.A.948.61,058.82,007.4 Germany620.6584.71205.3 Japan422.6384.4771.0 United Kingdom372.6386.5 759.1 France377.2339.0716.2 Italy309.7267.9577.6 Canada248.2240.2488.4 Netherlands238.4216.5454.9 Belgium/Luxembourg 268.0196.5406.5 China202.3174.7337.0 Spain158.0156.0314.0 South Korea156.3114.9271.2 Mexico121.7121.9243.6 Switzerland105.595.5201.4 Country*Exports ImportsTotal Irwin/McGraw-Hill SOURCE: Statistic Report of Import and Export Trade 1999. Ministry of foreign Trade and Economic Cooperation, China and National Accounts, Foreign Trade by Commodities, OECD 2000. 3-12

7. Domestic Policy Repercussions §Influences in the U.S. l 1 out of every 3 U.S. farm acres is producing for export l 1 of every 6 U.S. manufacturing jobs produces for export l $1 of every $7 of U.S. sales goes abroad l 1 of every 3 cars, 9 out of 10 TVs, 2 out of 3 suits, and every VCR sold in the U.S. is imported. l Travel and tourism is the #1 source of U.S. foreign exchange. l $1 of every $4 of U.S. bonds & notes is issued to foreigners.

8. I. The Internationalization of U.S. Business II.International Marketing International Marketing - is concerned with planning and conducting transactions across international borders to satisfy the objectives of individuals and organizations. The Scope and Challenge of International Marketing

9. - Q: Why Study International Marketing? - A: There is a trend toward a global economy. §No longer enough to look at domestic market §Markets across the world being sought after by more competitors §Explosion of international trade §Global linkages become important

10. The Scope and Challenge of International Marketing “If we only distributed pictures in the U.S., we’d lose money. It takes the whole world now to make the economics of movie-making work” - William Mechanic President, 20th Century Fox

11. The Scope and Challenge of International Marketing “Half the people in the world have yet to take their first picture. The opportunity is huge, and it’s nothing fancy. We just have to sell yellow boxes of film.” - George M.C. Fisher CEO, Eastman Kodak Company

12. 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 Irwin/McGraw-Hill 1-3

13. World Trade Flows ( in billions of dollars ) WESTERN EUROPE Intra-Trade: 1,230 Exports: 481 Imports: 473 AMERICAS Intra-Trade: 221 Exports: 364 Imports: 455 ASIA Intra-Trade: 394 Exports: 491 Imports: 360 REST OF WORLD Intra-Trade: 57 Exports: 255 Imports: 303 160 253 191 143 160 162 128 170 72 68 44 40 1992 Source: International Trade Statistics General Agreement on Tariffs and Trade Geneva 1993

14. The Scope and Challenge of International Marketing III.Comparing Domestic and International Marketing §Similarity: - Both carry out transactions that meet the needs of individuals and organizations §Differences: - International markets have greater growth potential - Some tasks associated with international marketing not included (or less intense ) than in domestic marketing (e.g., cultural research, political factors, exchange rates, trade laws, long distance distribution.)

15. The Scope and Challenge of International Marketing §Why U.S. Share of Trade is Declining: - Lack of awareness of importance of world markets - More intense foreign competition (more modern production facilities and lower costs than in past) §How the U.S. Can Compete (given high labor costs): - Modernization and automation (investment in R&D) - Focus on high capital/labor ratio industries - Manage services - Use foreign labor in manufacturing industries - Do effective marketing research

16. The Scope and Challenge of International Marketing IV.Being International V.International Marketing Concepts

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

18. The Scope and Challenge of International Marketing Figure 1.1: International and Global Marketing Multi-Country Marketing Global Marketing

19. The Scope and Challenge of International Marketing Figure 1.2: International and Global Marketing and Related Fields of Study International Business International Marketing International Trade International Management International Finance

20. The Scope and Challenge of International Marketing Figure 1.2: International and Global Marketing and Related Fields of Study International Business International Marketing International Trade International Management International Finance Global Marketing