International Marketing Introduction to International Marketing.

International Marketing

Introduction to International Marketing

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, July 24, 2000Irwin/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

Foreign Acquisitions of U.S. Companies

U.S. Companies Foreign OwnerBestfoods (foods) U.K.

Ben & Jerry’s (ice cream) U.K.

Alpo (pet food) Swiss

Pillsbury (food) U.K.

Burger King (fast food) U.K.

Random House (publishing) Germany

Chrysler (autos) 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

SOURCE: Adapted from Kuri Badenhausen. “Name Game”, Forbes. Jul 24, 2000Irwin/McGraw-Hill

1-2

Leading World Trading Countries, 1997 ($ billions)

EU-15 $2,723.5 $2,565.4 $5,289.9U.S.A. 948.6 1,058.8 2,007.4Germany 620.6 584.7 1205.3Japan 422.6 384.4 771.0United Kingdom 372.6 386.5 759.1France 377.2 339.0 716.2Italy 309.7 267.9 577.6Canada 248.2 240.2 488.4Netherlands 238.4 216.5 454.9Belgium/Luxembourg 268.0 196.5 406.5China 202.3 174.7 337.0Spain 158.0 156.0 314.0South Korea 156.3 114.9 271.2Mexico 121.7 121.9 243.6Switzerland 105.5 95.5 201.4

Country* Exports Imports Total

Irwin/McGraw-Hill

SOURCE: Statistic Report of Import and Export Trade 1999. Ministry of foreign Trade and Economic Cooperation, China and National Accounts, Foreign Trade by Commodities, OECD 2000.

3-12

Domestic Policy RepercussionsInfluences in the U.S.

1 out of every 3 U.S. farm acres is producing for export 1 of every 6 U.S. manufacturing jobs produces for export $1 of every $7 of U.S. sales goes abroad 1 of every 3 cars, 9 out of 10 TVs, 2 out of 3 suits, and

every VCR sold in the U.S. is imported. Travel and tourism is the #1 source of U.S. foreign

exchange. $1 of every $4 of U.S. bonds & notes is issued to

foreigners.

I. The Internationalization of U.S. Business

II. International MarketingInternational Marketing - is concerned

with planning and conducting transactions across international borders to satisfy the objectives of individuals and organizations.

The Scope and Challenge of International Marketing


- Q: Why Study International Marketing?

- A: There is a trend toward a global economy.

No longer enough to look at domestic marketMarkets across the world being sought after by more

competitorsExplosion of international tradeGlobal linkages become important

Global Linkages

Global linkages bind countries, institutions, and individuals more closely than ever.

World trade opens up entirely new business horizons. A freeze in Brazil and its effects on coffee production

are felt around the world as coffee becomes scarce and its price rises.

A decline in the value of the Mexican peso affected financial markets in all emerging economies and impacted Poland, Hungary, and the Czech Republic.

The Changing Face of Exporting

0%

50%

100%

150%

200%

250%

300%

350%

400%

% G

row

th (

1983

-199

8)

Australia Canada Germany Japan USA

Merchandise Exports Commercial Services Exports

Source: The World Bank, World Development Report, 1999.

New ChartNew ChartFig. 1.3Fig. 1.3

New ChartNew ChartFig. 1.3Fig. 1.3


“If we only distributed pictures in the U.S., we’d lose money. It takes the whole world now to make the economics of movie-making work”

- William Mechanic

President, 20th Century Fox


“Half the people in the world have yet to take their first picture. The opportunity is huge, and it’s nothing fancy. We just have to sell yellow boxes of film.”

- George M.C. Fisher

CEO, Eastman Kodak Company

4

Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Invented Here, 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

1-3

World Trade Flows( in billions of dollars )

WESTERN EUROPEIntra-Trade: 1,230

Exports: 481Imports: 473

AMERICASIntra-Trade: 221


ASIAIntra-Trade: 394


REST OF WORLDIntra-Trade: 57Exports: 255Imports: 303

160

253

191

143

160

162 128170

72

68

4440

1992Source: International Trade Statistics General Agreement on Tariffs and Trade Geneva 1993


III. Comparing Domestic and International Marketing

Similarity:

- Both carry out transactions that meet the needs of individuals and organizations

Differences:

- International markets have greater growth potential

- Some tasks associated with international marketing not included (or less intense ) than in domestic marketing (e.g., cultural research, political factors, exchange rates, trade laws, long distance distribution.)


Why U.S. Share of Trade is Declining: - Lack of awareness of importance of world markets - More intense foreign competition (more modern

production facilities and lower costs than in past)

How the U.S. Can Compete (given high labor costs):

- Modernization and automation (investment in R&D)

- Focus on high capital/labor ratio industries - Manage services - Use foreign labor in manufacturing industries - Do effective marketing research


IV. Being International

V. International Marketing Concepts

International Marketing Concepts

Domestic Market Extension (Ethnocentric)

Multi-Domestic Market (Polycentric)

Global Marketing (Regio/Geocentric)

Concept EPRG Schema


Figure 1.1: International and Global Marketing

Multi-Country Marketing Global Marketing


Figure 1.2: International and Global Marketing and Related Fields of Study

InternationalBusiness

InternationalMarketing

InternationalTrade

InternationalManagement

InternationalFinance


Figure 1.2: International and Global Marketing and Related Fields of Study

InternationalBusiness

InternationalMarketing International

Trade InternationalManagement

InternationalFinance

GlobalMarketing

International Marketing Introduction to International Marketing.

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