The Scope and Challenges of Int Marketing

8/13/2019 The Scope and Challenges of Int Marketing

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The Scope and Challenge of International Marketing


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Objectives

1. Definition of InternationalMarketing

2. The scope of the international

marketing task

3. The increasing importance of globalawareness

4. The importance of the self-referencecriterion (SRC) in international

marketing


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International Marketing: A Definition

International marketing is defined as theperformance of business activities designed to

plan, price, promote, and direct the flow of acompanys goods and services to consumersor users in more than one nation for a profit.


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Global Perspective: Recent Events

Citigroup Loses $9.8 Billion- 2008

Warsin Afghanistan and Iraq

September 11th attacks on the World Trade Centerand

Pentagon

Enronand WorldComscandals

The high-tech bustof 2001


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Global Perspective: Recent Events

2003 SARSoutbreak in Asia

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

Contaminated products from China - 2007


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World Trade Importance

World trade has grown from $200 billion to

more than $7 trillion in the past three

decades.

The Iron Curtain is gone and capitalism has

replaced the old economic doctrines.

Firms invest on a global scale.

Increasingly more difficult to define

where products come from.

New trading blocs are emerging.


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0%

2%

4%

6%

8%

10%

12%

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001 Year

Percentage ofGrowth

Trade and Domestic Growth Rates

Trade

Growth

Domestic Growth


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Global Business Trends

1. The rapid growth of the

World Trade Organizationand regional free trade

areas

2. General acceptance of the

free market system among

developing countries

3. Impact of the Internet and

other global media

4. Managing global

environmental resources


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Internationalization of U.S. Business

Increasing globalization of

markets

Firms face competition on

all fronts

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

Daimler-Chrysler (German)

U.S. firms seeking foreign

markets to increase profits


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The International Marketing Task

7

3. Economy

Environmentaluncontrollablescountry market A

Environmentaluncontrollablescountrymarket B

Environmentaluncontrollablescountrymarket C

1. Competition

1. Competition

2. TechnologyPrice Product

Promotion Place or

Distribution

6. Geography andInfrastructure

Foreign Environment(Uncontrollables)

7. Structure ofDistribution

3. Economy

5. Political-Legal

Domestic environment(Uncontrollables)

(Controllables)

2 .Technology

4.Culture

5. Political-Legal

4. Culture

Target

Market


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Major Obstacles to International Marketing

Self-Reference Criterion (SRC)

Ethnocentrism


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Ethnocentrism

Ethnocentrism leads us to make false assumptions about

cultural differences. We are ethnocentric when we use our

cultural norms to make generalizations about other

peoples' cultures and customs.

Such generalizations -- often made without a conscious

awareness that we've used our culture as a universal

yardstick -- can be way off base and cause us to misjudge

other peoples. Ethnocentrism can lead to cultural misinterpretation and it

often distorts communication between human beings.


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Xenocentrism

The opposite of ethnocentrism is xenocentrism

which means preferring ideas and things from

other cultures over ideas and things from your

own culture.

At the heart of xenocentrism is an assumption

that other cultures are superior to your own.


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Ethnocentrism in Business

These people are so dirty.

No wonder this country is third-world, theyre so lazy.

If stupid is as stupid does, then this nation is full of stupidpeople.

You can call such talk as racial slurs, national prejudice or just

plain bigotry. In anthropological circles its called ETHNOCENTRISM.


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Contd.

Ethnocentrism is not confined to any one nation

or people. I have seen the feeling of superiority

displayed among Koreans, Germans, Americans,

Russians, Kenyans and Guatemalans. We nolonger use the term primitive or third-world

but now use the term emerging nations or

cultures.

But no matter how we label people for political

correctness, the attitude of ethnocentrism remains.


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Impact of SRC on IM

In international marketing scenarios, we are talkingabout working in different cultural environmentsand hence a self referenced behavior may not be the"correct" behavior from the perspective target

culture. Hence, realization of this differences of culture andthe possibility of self reference criterion isimportant in international marketing.

This is not such a big issue in domestic marketingsince the cultural difference are not major.


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Developing a Global Awareness

To be globally aware is to have:

1. Tolerantof Cultural Differences, and

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

(d) Global Economic, Social and Political Trends


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Strategic Orientation: EPRG Schema

Orientation EPRG Schema

Domestic Marketing

Extension

Multi-Domestic

Marketing

Global Marketing

(Ethnocentric)

(Polycentric)

(Regio-centric)

(Geocentric)


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Ethnocentric Orientation

Domestic strategies, techniques, and personnel

are perceived as superior

International customers , considered secondary

International markets regarded as outletsfor surplus domestic production

International marketing plans developed in-house by

international division Example: Hero cycles and Atlas cycles


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Polycentric Orientation

Polycentric Orientation Multi-domestic market concept:

Focuses on importance and uniqueness of each

international market

May establish businesses in each target country

Fully decentralized, minimal coordination with

headquarters

Marketing strategies = specific to each country

Result: No economies of scale, duplicated functions,higher final product costs

Example: Ford Motors, Toyota, Suzuki, G.M


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Regio- Centric Orientation

Global marketing concept: World regions that share economic, political,

and/or cultural traits are perceived as distinct

markets Divisions are organized based on location

Regional offices coordinate marketing

activities Example: Pepsi & Coke


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Geocentric Orientation

Global marketing concept:

World is perceived as a total market with identifiable,

homogenous segments

Targeted marketing strategies aimed at market

segments, rather than geographic locations Achieve position as low-cost manufacturer &

marketer of product line

Provides standardized product or service throughoutthe world

Example: Pizza Hut, McDonalds


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Conclusion

Three major market forces today MNCs shouldunderstand

Globalisation (outsourcing)

The fortune at the bottom of the pyramid

The future of competition (co-creation value)

DART- Dialogue-Access-Risk benefits- Transparency

Dialogue implies interactivity, deep engagement, and

ability and willingness to act on customer and thefirm.

The Scope and Challenges of Int Marketing

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