l1 scope & challeges of intl mktg

8/4/2019 L1 Scope & Challeges of Intl Mktg

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INTERNATIONALMARKETING

Scope and Challenges


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Global Perspective: Recent Events

Information technology boom of the late 1990s

Information technology boom of the late 1990s

Wars in Afghanistan and Iraq

Wars in Afghanistan and Iraq

September 11th attacks on the World Trade Centerand Pentagon

September 11th attacks on the World Trade Centerand Pentagon

Enron and WorldCom scandals

Enron and WorldCom scandals

The high-tech bust of 2001

The high-tech bust of 2001


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Global Perspective: Recent Events

2003 SARS outbreak in Asia

2003 SARS outbreak in Asia

Global terrorism, e.g., Indonesia, Israel,India, and Morocco

Global terrorism, e.g., Indonesia, Israel,India, and Morocco

Transcending these events, internationalcommerce continued

Transcending these events, internationalcommerce continued

International conflict among China,

Taiwan, and the United States

International conflict among China,

Taiwan, and the United States


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Globalization

Globalization refers to the shift toward amore integrated and interdependent worldeconomy

Globalization of Markets refers to themerging of historically distinct and separatenational markets into one huge globalmarketplace

Globalization of Production refers to thetendency among firms to source goods andservices from locations around the globe totake advantage of national differences in the

cost and quality of factors of production


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Global Business Trends

1. The rapid growth of the

World Trade Organizationand regional free trade

areas, e.g., NAFTA and the

European Union

1. The rapid growth of the

World Trade Organization

and regional free trade

areas, e.g., NAFTA and the

European Union

2. General acceptance of the

free market system amongdeveloping countries in Latin

America, Asia, and Eastern

Europe

2. General acceptance of the

free market system among

developing countries in Latin

America, Asia, and Eastern

Europe

3. Impact of the Internet andother global media on the

dissolution of national

borders, and

3. Impact of the Internet and

other global media on the

dissolution of national

borders, and

4. Managing global

environmental resources

4. Managing global

environmental resources


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Internationalization of U.S. Business

Increasing globalization of

markets

Increasing globalization of

markets

Firms face competition on

all fronts

Firms face competition on

all fronts

Many U.S. companies arenow foreign controlled:Carnation (Swiss),

Daimler-Chrysler (German)

Many U.S. companies arenow foreign controlled:Carnation (Swiss),

Daimler-Chrysler (German)

U.S. firms seeking foreign

markets to increase profits

U.S. firms seeking foreign

markets to increase profits


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Globalization: Prosperity orImpoverishment?

Discuss the Impact of Globalization on:

jobs

wages or incomes

working conditions or labor policies

the environment

national sovereignty


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AVP: McDonalds in India

What are the problems that McDonaldsCorporation faced upon entering India?Briefly explain each problem.

How did they solve each of theseproblems?

What other strategies did it adopt to

ensure global success? Discuss howthey maintained quality, service,friendliness and value.


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International Marketing: A Definition

International marketing is defined as the

performance of business activities designed to plan,price, promote, and direct the flow of a companys

goods and services to consumers or users in more

than one nation for a profit

International marketing is defined as the

performance of business activities designed to plan,price, promote, and direct the flow of a companys

goods and services to consumers or users in more

than one nation for a profit

Marketing concepts, processes, and principles are universallyapplicable all over the world

Marketing concepts, processes, and principles are universallyapplicable all over the world


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Marketing Decision Factors

Controllable: Firm characteristics, price,product, promotion, channels ofdistribution, research

Uncontrollable (domestic): political/legalfactors, economic climate, competitivestructure

Uncontrollable (foreign): political/legal

factors, economic forces, competitiveforces, cultural forces, geography andinfrastructure, structure of distribution,level of technology


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The International Marketing Task

7

3. Economy

Environmentaluncontrollablescountry market A

Environmentaluncontrollablescountry

market BEnvironmentaluncontrollablescountry

market C

1. Competition

1. Competition

2. TechnologyPrice Product

PromotionPlace orDistribution

6. Geography andInfrastructure

Foreign Environment(Uncontrollables)

7. Structure ofDistribution

3. Economy

5. Political-Legal

Domestic environment(Uncontrollables)

(Controllables)

2.Technolo

gy4.Culture

5. Political-Legal

4.

Culture

Target

Market


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Environmental Adaptation Needed

Differences are in the uncontrollable environment of international

marketing

Differences are in the uncontrollable environment of international

marketing

Firms must adapt to uncontrollable environment of international

marketing by adjusting the marketing mix (product, price,

promotion, and distribution)

Firms must adapt to uncontrollable environment of international

marketing by adjusting the marketing mix (product, price,

promotion, and distribution)

Adaptation(of Marketing Mix) Standardization(of Marketing Mix)

Continuum

INFLUENCED BY 7 ENVIRONMENTAL FACTORS


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Self-Reference Criterion (SRC)

and Ethnocentrism:Major Obstacles

SRC is an unconscious reference to ones owncultural values, experiences, and knowledge as abasis for decisions

Ethnocentrism refers to the notion that ones ownculture or company knows best how to do things

Both the SRC and ethnocentrism impede the abilityto assess a foreign market in its true light

Reactions to meanings, values, symbols, andbehavior relevant to our own culture are differentfrom those of foreign

Relying on ones SRC could produce anunsuccessful marketing program


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Avoiding the Self Reference Criterion

To avoid the SRC, the following steps are suggested:To avoid the SRC, the following steps are suggested:

1: Define the business problem or goal in home-country cultural traits, habits, or norms

2: Define the business problem or goal in foreign-country cultural traits, habits, or norms. Make novalue judgments

3: Isolate the SRC Influence in the problem and

examine it carefully to see how it complicates theproblem

4: Redefine the problem without the SRC influenceand solve for the optimum business goalsituation*


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Developing a Global Awareness

To be globally aware is to be:To be globally aware is to be:

1. Tolerant of Cultural Differences, and

2. Knowledgeable of:(a) Culture, (b) History, (c) World Market Potential,

(d) Global Economic, Social and Political Trends


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Stages of International Marketing

Involvement

In general, firms go through five different phases in going

international:

In general, firms go through five different phases in going

international:

Infrequent Foreign MarketingInfrequent Foreign Marketing

No Direct Foreign MarketingNo Direct Foreign Marketing

International MarketingInternational Marketing

Regular Foreign MarketingRegular Foreign Marketing

Global MarketingGlobal Marketing


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Strategic Orientation: EPRG Schema

Orientation EPRG Schema

DomesticMarketing

Extension

Multi-Domestic

Marketing

Global Marketing

(Ethnocentric)

(Polycentric)

(Regio/Geocentric)


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Generally, four distinctive approaches dominate strategic thinking in

international marketing:


1. Ethnocentric or Domestic Marketing Extension Concept:

2. Polycentric or Multi-Domestic Marketing Concept:

Opposite of ethnocentrism

Management of these multinational firms place importanceon international operations as a source for profits

Management believes that each country is unique and

allows each to develop own marketing strategies locally

Home country marketing practices will succeed elsewhere

without adaptation; however, international marketing is

viewed as secondary to domestic operations


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3. Regiocentric:

4. Geocentric:

Regiocentric and Geocentric are synonymous with a Global

Marketing Orientation where a uniform, standardized

marketing strategy is used for several countries, countries ina region, or the entire world

Sees the world as one market and develops a standardized

marketing strategy for the entire world

l1 scope & challeges of intl mktg

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