international mktg 1

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International Marketing1 [vj gomes] 1

1

The Scope and

Challenge ofInternational Marketing

McGraw-Hill/Irwin

International Marketing, 13/e 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.

Chapter


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Chapter Learning Objectives

The changing face of U.S. business

The scope of the international marketing task

The importance of the self-reference criterion(SRC) in international marketing

The progression of becoming a globalmarketer

The increasing importance of globalawareness


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Global Perspective:

Global Commerce Causes Peace

Global commerce during peace time

Commercial aircraft and space vehicle industries

Mobile phone industry

Individuals and small companies

International markets are ultimatelyunpredictable

Flexibility means survival


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Events and Trends Affecting Global

Business

The rapid growth of the World TradeOrganization and regional free trade areas

The trend toward the acceptance of the free

market system among developing countries inLatin America, Asia, and eastern Europe

The burgeoning impact of the Internet, mobilephones, and other global media on thedissolution of national borders

The mandate to properly manage the resourcesand global environment for the generations to

come


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The Internationalization of U.S. Business

Increasing globalization of markets

Increasing number of U.S. companies are foreigncontrolled

$9.6 trillion in foreign investment in the U.S. $2.6trillion more than American overseas investment

Increasing number of foreign companies building andbuying manufacturing plants in the U.S.

Increasing difficulty for domestic markets to sustaincustomary rates of growth


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Foreign Acquisitions of U.S. Companies


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Selected U.S. Companies and Their

International Sales


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International Marketing Defined

d

International marketing is the performance of

business activities designed to plan, price,promote, and directthe flow of a companys

goods and services to consumers or users in more

than one nation for a profit.


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The International Marketing Task

Insert Exhibit 1.3


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Environmental Adaptation Needed

Be able to interpret effectively the influenceand impact of the culture in which you hopeto do business

Cultural adjustments

Establish a frame of reference

Avoid measuring and assessing markets

against the fixed values and assumptions ofyour own culture


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The Self-Reference Criterion and

Ethnocentrism

The key to successful international marketingis adaptation to the environmentaldifferences from one market to another.

Primary obstacles to success in internationalmarketing:

SRC

Associated ethnocentrism

SRC is an unconscious reference to

ones own cultural values,

experiences, and knowledge as a basis

for decisions.

Ethnocentrism is the notion that

ones own culture or company knows

best how to do things.


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The Self-Reference Criterion and

Ethnocentrism (continued)

Dangers of the SRC:

Failing to recognize the need to take action

Discounting the cultural differences that exist

among countries Reacting to a situation in a way offensive to your

hosts

Ethnocentrism and the SRC can influence anevaluation of the appropriateness of adomestically designed marketing mix for aforeign market.

The most effective way to control the


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Framework for Cross-cultural Analysis

1. Define the business problem or goal in home-countrycultural traits, habits, or norms.

2. Define the business problem or goal in foreign-countrycultural traits, habits, or norms through consultation withnatives of the target country. Make no value judgments.

3. Isolate the SRC influence in the problem and examine itcarefully to see how it complicates the problem.

4. Redefine the problem without the SRC influence andsolve for the optimum business goal situation.


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Developing a Global Awareness

Tolerance of cultural differences:

Understanding cultural differences and accepting andworking with others whose behavior may be differentfrom yours

Knowledge of cultures, history, world market potential,and global economic, social, and political trends

Approaches to global awareness:

Select individual managers specifically for theirdemonstrated global awareness

Develop personal relationships in other countries

Have a culturally diverse senior executive staff orboard of directors


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Stages of International Marketing

Involvement

No direct foreign marketing

Infrequent foreign marketing

Regular foreign marketing

International marketing

Global marketing


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Strategic Orientation

Domestic market extension orientation

Multidomestic market orientation

Global market orientation


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The Orientation ofInternational

Marketing An environmental/cultural approach to

international strategic marketing.

Intended to demonstrate the unique problems

of international marketing.

Discussion of international marketing rangesfrom the marketing and business practices of

small exporters to the practices of globalcompanies.


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Foreign Policys Global Top 20

Insert Exhibit 1.4


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Summary

The internationalization of American businessis proceeding with increasing pace.

The globalization of markets and competition

necessitates all managers to pay attention tothe global environment.

International marketing is defined as the

performance of business activities acrossnational borders.

Environmental differences such as laws,

customs, and cultures must be taken into


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Summary (continued) Self-reference criteria and ethnocentrism limit the

international marketers abilities to understand and adaptto differences prevalent in foreign markets. Solutions:

Global awareness

Sensitivity

Strategic orientations found among managers ofinternational marketing operations:

Domestic market extension orientation

Multidomestic market orientation

Global market orientation

international mktg 1

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