The Scope and Challenge of International MarketingChapter

1

Int’l Marketing and Global Marketing Int’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.

IIIInternational 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

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

Foreign Acquisitions of U.S. Companies

U.S. Companies Foreign OwnerBestfoods (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

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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

Computers7 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

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Top 10 U.S. Players in the Global Game

CompanyForeign

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

7

The International Marketing Task

Political/legalforces

Economicforces

1

2

Environmentaluncontrollablescountry market A

Environmentaluncontrollablescountrymarket B

Environmentaluncontrollablescountrymarket C

Competitivestructure Competitive

Forces

Level of Technology

Price Product

Promotion Channels of distribution

Geography and

Infrastructure

Foreign environment(uncontrollable)

Structure ofdistribution

Economic climate

Cultural forces

3

45

6

7Political/

legalforces

Domestic environment(uncontrollable)

(controllable)

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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.*

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Being Globally Aware

To be Globally Aware is to be: Objective Tolerant of Cultural Differences

Knowledgeable of:CulturesHistory World Market PotentialsGlobal Economic, Social and Political Trends

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Stages of International Marketing Involvement

1. No Direct Foreign Marketing

2. Infrequent Foreign Marketing

3. Regular Foreign Marketing

4. International Marketing

5. Global Marketing

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International Marketing Concepts

Domestic Market Extension (Ethnocentric)

Multi-Domestic Market (Polycentric)

Global Marketing (Regio/Geocentric)

Concept EPRG Schema1-9