L1 Scope & Challeges of Intl Mktg
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Transcript of 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:
Strategic Orientation: EPRG Schema
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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Strategic Orientation: EPRG Schema
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