Chapter 3

History and Geography:The Foundations of Culture

International Marketing15th edition

Philip R. Cateora, Mary C. Gilly, and John L. GrahamMcGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

3Introduction

• To understand a society’s actions and its points of view, you need to appreciate:– The influence of historical events – The geographical uniqueness to which a

culture has had to adapt• Culture can be defined as society's

accepted basis for responding to external and internal events

• To interpret a culture’s behavior and attitudes, a marketer must have some idea of a country’s history and geography

Roy Philip 3-2

3Overview • Historical perspective in global business• Geography and global markets– Climate and topography, geography,

nature, and economic growth, social responsibility and environmental management, and resources

• Dynamics of global population trends– Controlling population growth, rural/urban

migration, population decline and aging, and worker shortage and immigration

• World trade routes• Communication linksRoy Philip 3-3

3Global Perspective

Birth of a Nation – Panama in 67 Hours

• History and geography can affect public and political attitudes of a nation in the present and far into the future

• The Panama Canal is but one example of the many U.S. intrusions during the early 20th century that have tainted U.S. - Latin American relationships

• A Chinese-company has operational control of both the Pacific and Atlantic ports making the control of the Canal a sensitive issue

Roy Philip 3-4

3Panama Canal

www.pancanal.com

Roy Philip 3-5

3-6 3-6

3-7

3-8

3History Perspective in Global Business

• History helps define a nation’s mission– How it perceives its neighbors– How it perceives itself– Its place in the world

• Insights into history are important for understanding current attitudes

• It is necessary to study culture as it is now as well as to understand culture as it was– A country’s history

Roy Philip 3-9

3History and Contemporary Behavior

• Japanese history– Seven centuries under the shogun feudal system– The isolation before the coming of Admiral Perry in

1853– Threat of domination by colonial powers– Rise of new social classes– Western influences– Humiliation of World War II– Involvement in the international community

• Historically, loyalty and service, a sense of responsibility, and respect for discipline, training, and artistry were stressed to maintain stability and order

• A historical perspective gives the foreigner a basis on which to begin developing cultural sensitivity and a better understanding of contemporary Japanese behavior

Roy Philip 3-10

3History is Subjective

• Historical events always are viewed from one’s own biases and SRC

• A crucial element in understanding any nation’s business and political culture is the subjective perception of its history– Relationship between U.S. and Mexico• Monroe Doctrine

Roy Philip 3-11

3Territorial Expansion of United States from 1783

Exhibit 3.1

Roy Philip 3-12

3Manifest Destiny and the Monroe Doctrine• Both accepted as the basis for U.S. foreign policy

during much of the 19th and 20th centuries• Manifest Destiny justified U.S. expansion

– Annexation of Texas, Oregon, New Mexico, and California

– U.S. involvement in Cuba, Alaska, Hawaii, and the Philippines

• Three basic dicta of the Monroe Doctrine– No further European colonization in the New

World– Abstention of the U.S. from European political

affairs– Nonintervention of European governments in the

governments of the Western Hemisphere• Change in the Monroe Doctrine

– 1881 – Roosevelt Corollary

Roy Philip 3-13

3U.S. Intervention

in Latin America Since 1945

Exhibit 3.2

Roy Philip 3-14

3Geography and Global Markets

• Geography – an element of the uncontrollable environment that confronts every marketer– Affects a society’s culture and economy – Physical makeup limits a nation’s ability to

supply its people’s needs

Roy Philip 3-15

3Climate and Topography

• Altitude, humidity, and temperature extremes– South America– British resistance of the English Channel– Trade through the Alps

Roy Philip 3-16

3-17

3-18

http://www.msnbc.msn.com/id/19248748/

3-19

3-20

3Geography, Nature and Economic Growth

• As countries prosper, natural barriers are overcome

• Environmental issues– Disruption of ecosystems– Relocation of people– Inadequate hazardous waste management– Industrial pollution

Roy Philip 3-21

3Social Responsibility and Environmental

Management• Environmental protection is not an optional extra• Pollution is on the verge of getting completely

out of control• China has 16 of the world’s 20 most polluted

cities• Critical issue: the disposal of hazardous waste• Sustainable development• http://www.time.com/time/specials/2007/0,28757,

1661031,00.html

• http://www.forbes.com/2006/03/21/americas-most-polluted-cities-cx_rm_0321pollute.html

Roy Philip 3-22

3A Comparison of Green-House Gas

Emission Rates and Pledges for Reductions

Roy Philip

Exhibit 3.3

3-23

3Resources (1 of 2)

• The availability of minerals and the ability to generate energy are the foundations of modern technology

• The principal supplements to human energy – Animals– Wood– Fossil fuel– Nuclear power– Ocean tides– Geothermal power– The sun

Roy Philip 3-24

3Resources (2 of 2)• United States in perspective– 1942 – nearly self-sufficient– 1950 – major importer– 1973-2000 – increased dependency from

36% to 66%– Mid-2000’s – predicted to be importing

more than 70% of needs• The location, quality, and availability of

resources will affect the pattern of world economic development and trade well into the 21st century

Roy Philip 3-25

3World Energy Consumption

Roy Philip

Exhibit 3.4

3-26

3World Energy Consumption

Roy Philip

Exhibit 3.4

3-27

3Dynamics of GlobalPopulation Trends

• Global population trends determine today’s demand for goods– Rural/urban population shifts– Rates of growth– Age levels– Population control

• Changes in population will profoundly affect future demand

• The most important deterrent to population control is cultural attitudes about the importance of large families

Roy Philip 3-28

3

World Population by Region – 2005-2050

Life Expectancy at Birth – 2005-2010 (millions)

Roy Philip

Exhibit 3.5

3-29

3Controlling Population Growth

• Procreation is one of the most culturally sensitive uncontrollable factors

• Perhaps the most important deterrent to population control is cultural attitudes about the importance of large families

• Family planning and all that it entails is by far the most universal means governments use to control birthrates, but some economists believe that a decline in the fertility rate is a function of economic prosperity and will come only with economic developmentRoy Philip 3-30

3Rural/Urban Migration

• Result of a desire for greater access to:– Sources of education– Health care– Improved job opportunities

Roy Philip 3-31

3Population Decline and Aging

• Population growth in many countries has dropped below the rate necessary to maintain present levels

• A nation needs a fertility rate of about 2.1 children per woman

• Not one major country has sufficient internal population growth to maintain itself

Roy Philip 3-32

3Age Density for World and Selected Countries

Roy Philip

Exhibit 3.6

3-33

3Worker Shortage and Immigration

• The free flow of immigration will help to ameliorate the dual problems of explosive population expansion in less-developed countries and worker shortage in industrialized regions

• Europe will need 1.4 billion immigrants over the next 50 years

• Japan and the U.S. will need 600 million immigrants between now and 2050

Roy Philip 3-34

3World Trade Routes• Progression of trade routes

– Overland– Sea routes– Air routes– The Internet

• Trade routes bind world together, minimizing:– Distance– Natural barriers – Lack of resources – Fundamental differences between and economies

• Trade routes represent attempts to overcome influence of geography causing economic and social imbalances

Roy Philip 3-35

3

Telegraph

Communication Links

Computer Internet

Television Satellites

Telephone

3-36

3Summary (1 of 2)

• A prospective international marketer should be reasonably familiar with the world, its climate, and topographic differences

• Geographic hurdles must be recognized as having a direct effect on marketing and the related activities of communications and distribution

Roy Philip 3-37

3Summary (2 of 2)

• Without a historical understanding of a culture, the attitudes within the marketplace may not be fully understood

• The study of history and geography is needed to provide the marketer with an understanding of why a country has developed as it has rather than as a guide for adapting marketing plans

Roy Philip 3-38