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Part One: An Over View

Presented by:

Rodolfo S. Mendoza, Jr.

INTERNATIONAL MARKETING

CHAPTER LEARNING OBJECTIVES

1. The changing face of U.S. business

1. The changing face of U.S. business

2. The scope of the international marketing task

2. The scope of the international marketing task

3. The increasing importance of global awareness

3. The increasing importance of global awareness

4. The progression of becoming a global marketer

4. The progression of becoming a global marketer

5. The importance of the self-reference criterion (SRC) in international marketing

5. The importance of the self-reference criterion (SRC) in international marketing

THE SCOPE AND CHALLENGE OF INTERNATIONAL MARKETING

Global Commerce Causes Peace

EVENTS AND TRENDS AFFECTING GLOBAL BUSINESS TODAY

The Rapid Growth of the World Trade Organization (as well as NAFTA and EU)

The Trend toward the Acceptance of the Free Market System Among Developing Countries in Latin America, Asia and Eastern Europe

Burgeoning Impact of Technology and Global Media

The Mandate to Manage Properly Resources and Global Environment for the next Generations

THE INTERNATIONALIZATION OF US BUSINESS

Increasing Globalization of Markets

Firms Faced Competition from all fronts

Many US Companies are Now Foreign Controlled(ex. Carnation (Swiss), Daimler Chrysler (German)

US Firms Seeking Fpreign Markets to Increase Profit

INTERNATIONAL MARKETING DEFINED

International marketing is defined as theperformance ofbusiness activitiesdesigned to plan, price, promote, and directthe flow of a company’sgoods and services toconsumers or users inmore than one nation fora profit

Marketing concepts processes,

and principles are universal

all over the world

INTERNATIONAL MARKETING TASK

7

3. Economy

Environmentaluncontrollablescountry market A

Environmentaluncontrollablescountrymarket B

Environmentaluncontrollablescountrymarket C

1. Competition

1. Competition

2. TechnologyPrice Product

Promotion Place orDistribution

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

ENVIRONMENTAL ADAPTATION NEEDED

There are differences in the uncontrollable environment of international marketing

Firms must adapt to uncontrollableenvironment of Marketing It has to adjust the marketing mix

(product,price, promotion, and distribution)

Adaptation(of Marketing Mix)

Standardization(of Marketing Mix)

Continuum

INFLUENCED BY 7 ENVIRONMENTAL FACTORS

MAJOR OBSTACLES: THE SELF-REFERENCE CRITERION (SRC) AND ETHNOCENTRISM

SRC is an unconscious reference to one’s own cultural values, experiences and knowledge as a basis for decisions

Ethnocentrism refers to the notion that one’s own culture or company knows best how to do things

The key to a successful international marketing is adaptation to the environmental differences from one market to another. A primary obstacle is self reliance criterion.

MAJOR OBSTACLES: THE SELF-REFERENCE CRITERION (SRC) AND ETHNOCENTRISM Both the SRC and ethnocentrism

impede the ability to assess a foreign market in its true light

Reactions to meanings, values, symbols, and behavior relevant to our own culture are different from those of foreign

Relying on one’s SRC could produce an unsuccessful marketing program

SUGGESTIVE STEPS TO AVOID BUSINESS DECISION ERRORS 1. Define the business problems or goal in

home country cultural traits, habits, or norms. 2. Define the business problem or goal in a

foreign country cultural traits, habits, or norms through consultation with natives of the target country. Make no value judgement.

3. Isolate the SRC influence in the problem and examine it carefully to see how it complicates the problem.

4. Redefine the problem without the SRC influence and solve for the optimum business goal situation.

DEVELOPING A GLOBAL AWARENESS

To be globally aware is to have:(1) Tolerance of cultural differences

(2) Knowledge of cultures, history, world market potentials, and global economic, social and politial trends

STAGES OF INTERNATIONAL MARKETING INVOLVEMENT

Once the company decided to go international, it needs to decide the degree of marketing involvement and commitment it’s prepared to make:

No Direct Foreign Mrktg Infrequent Foreign Mrktg Regular Foreign Mrktg International Mrktg Global Mrktg

STRATEGIC ORIENTATION: EPRG SCHEMA

• EthnocentricDomestic Market Extension

Orientation

• PolycentricMulti-domestic Market

Orientation

• Regio/GeocentricGlobal Market

Orientation

Generally, four distinctive approaches dominate strategic thinking in international marketing

Ethnocentric or Domestic Marketing Extension Concept

Home country marketing practices will succeed elsewhere withoutadaptation; however, international marketing is viewed as secondary todomestic operations

2. Polycentric or Multi-Domestic Marketing Concept:

Opposite of ethnocentrism Management of these multinational firms place importance oninternational operations as a source for profits Management believes thateach country is unique and allows each to develop own marketingstrategies locally

Regio centric and Geocentric are synonymous with aGlobal Marketing Orientation where a uniform,Standardized marketing strategy is used for several countries, countries in a region, or the entire world

Generally, four distinctive approaches dominate strategic thinking in international marketing

3. Regiocentric:

Sees the world as one market and develops astandardized marketing strategy for the entireworld

4. Geocentric: