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- 1. The Scope and Challenge of International Marketing Chapter 1
- 2. Int’l Marketing and Global MarketingInt’l Marketing is the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit. Global marketing focuses its resources on global marketing opportunities and threats considering the scope of activities and universal marketing fundamentals.
- 3. III International Marketing Firm has production capacity devoted to foreign markets Firm employs domestic or foreign intermediaries – Uses its own sales force – Sales subsidiaries in important markets Products allocated or adapted to foreign markets as demand grows Firm depends on profits from foreign markets
- 4. Global Marketing Company treats world, including home market as one market Market segmentation decisions no longer focused on national borders – Defined by income levels, usage patterns, or other factors More than half of revenues come from abroad Organization takes on global perspective Mass production a priority
- 5. Foreign Acquisitions of U.S. Companies U.S. Companies Foreign Owner Bestfoods (foods) U.K. Ben & Jerry’s (ice cream) U.K. Carnation Swiss Pillsbury (food) U.K. Burger King (fast food) U.K. Random House (publishing) 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 Zenith South Korea 1-2
- 6. 4 Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Invented in US, 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% 0 20 40 60 80 100 1 9 7 0 N O W Irwin/McGraw-Hill 1-3
- 7. 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.2005Irwin/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
- 8. 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 Price Product 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) 1-5
- 9. Cross Cultural Analysis Step 1: Define the business problem or goal in home- country cultural traits, habits, or norms. Step 2: Define the business problem or goal in foreign-country cultural traits, habits, or norms. Make no value judgements. Step 3: Isolate the Selected Reference Countries (SRC) Influence in the problem and examine it carefully to see how it complicates the problem. Step 4: Redefine the problem without the SRC influence and solve for the optimum business goal situation.* 1-6
- 10. Being Globally Aware To be Globally Aware is to be: Objective Tolerant of Cultural Differences Knowledgeable of: Cultures History World Market Potentials Global Economic, Social and Political Trends 1-7
- 11. Stages of International Marketing Involvement 1. No Direct Foreign Marketing 2. Infrequent Foreign Marketing 3. Regular Foreign Marketing 4. International Marketing 5. Global Marketing 1-8
- 12. International Marketing Concepts Domestic Market Extension (Ethnocentric) Multi-Domestic Market (Polycentric) Global Marketing (Regio/Geocentric) Concept EPRG Schema 1-9