1. The Scope of International Marketing Chapter 1

2. 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."

3. 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

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

5. 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.

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

7. 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

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

9. 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

10. 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

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

12. 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.

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

14. 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)