NTERNATIONAL MARKETING - · PDF fileNTERNATIONAL MARKETING ... The Factors That Create...
Transcript of NTERNATIONAL MARKETING - · PDF fileNTERNATIONAL MARKETING ... The Factors That Create...
NTERNATIONALMARKETING
DANIEL W. BAACK | ERIC G. HARRIS | DONALD BAACKUniversity of Denver Pittsburg State University Pittsburg State University
®SAGELos Angeles | London | New Delhi
Singapore | Washington DC
Detailed Contents
Preface
About the Authors
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PART I. ESSENTIALS OF INTERNATIONAL MARKETING
Chapter 1. Introduction to International Marketing
Opening Vignette: Facebook.com: Global MarketingOpportunities and Connectivity 3
Overview 6The Worldwide Marketplace 6Types of Global Businesses 7Company Orientation 7The Essence of Marketing 9
The Marketing Mix 10Markets, Needs, and Wants 11Segmentation, Target Markets, and Positioning (STP) 12
Marketing in an International Context 12The Drivers of Globalization 13
Channels of Communication 13Lower Transportation Costs 14Immigration and Emigration 14Governmental Actions 15
The Factors That Create International Marketing Complexity 15Culture 16Language 16Political and Legal Systems 17Economic Systems 18Infrastructure 19Implications 20
International Marketing in Daily Life 21Drivers of Globalization: An Illustration 22Factors That Create International Marketing Complexity:
An Illustration 23The International Marketing Context 24
The Organization of This Book 24Part I: Essentials of International Marketing 26Part II: International Markets and Market Research 26
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Part III: International Product Marketing 26Part IV: International Pricing and Finance 27PartV: International Place or Distribution 27Part VI: International Promotion and Personal Selling 28
Sustainability and the Bottom-of-the-Pyramid 28Sustainability 28Bottom-of-the-Pyramid 29
Ethical Decision-Making and International Marketing 30Strategic Implications 31Tactical Implications 31Operational Implications 31Terms 32Review Questions 32Discussion Questions 32Analytical and Internet Exercises 33Case 1. Carrefour: Retailing in an International
Marketplace 34
Chapter 2. Country Selection and Entry Strategies
Opening Vignette: Teens and Jeans: Clothing in Transition 37Overview 39Economic Systems 40
Market Economy 40Command Economy 41Mixed Economy 42
Economic Development 42Most-, Less-, and Least-Developed Economies 43Rostow Modernization Model 44Emerging Markets 45Newly Industrialized Countries 46Transition Economies 46Effects on International Marketing 48Stage of Development and Bottom-of-the-Pyramid 49
Global Competition and National Competitive Advantage 49Demand Conditions 50Related and Supporting Industries 50Firm Strategy, Structure, and Rivalry 50Factor Conditions 51Government 51
Industry-Level Competitive Advantage 52Threat of New Entrants 52Threat of Substitute Products 52Bargaining Power of Suppliers 53Bargaining Power of Consumers 53Rivalry Among Competitors 54
Economic Forces and International Marketing 54Sustainability and International Marketing 55Modes of Entry 57
Exporting 58Licensing 58Franchising 59
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Joint Ventures 60Strategic Alliances 60Wholly Owned Subsidiary 61Entry Mode Failure and Exit 63
Theories of Entry Mode Selection 63Internationalization Theory 63Internalization Theory 64Eclectic or OLI Theory 65Analysis 66
Strategic Implications 67Tactical Implications 67Operational Implications 67Terms 68Review Questions 68Discussion Questions 68Analytical and Internet Exercises 69Case 2. Mobile Communications: Entry Into Africa 70
Chapter 3. Global Trade and Integration
Opening Vignette: Kikkoman Soy Sauce:A Tradition of Trade 73
Overview 74Free Trade 75
Absolute Advantage 75Comparative Advantage 76The Benefits of Free Trade 79Governmental Policies Supporting Trade 80
Integration 81Levels of Integration 81Reasons for Integration Success 81Integration Trends 82
The World Trade Organization and Integration 83European Integration 86
The European Union 86Organization of the European Union 89Beefs Export in the European Union 90Other European Trade Organizations 91
Integration in the Americas 92North American Free Trade Agreement 92Southern Cone Common Market 93Andean Community 94Other Trade Organizations or Agreements 95
Integration in Asia, Africa, and the Middle East 96Association of Southeast Asian Nations Free Trade Area 96Asia-Pacific Economic Cooperation 97Trans-Pacific Strategic Economic Partnership Agreement 97South Asian Association for Regional Cooperation 98Beef Exports in Asia 99Integration in the Middle East and Africa 99
Protectionism vs. Free Trade 103Government Policies Limiting Trade 103
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Arguments for Protectionism 104The Future 106
Legal and Ethicallssues 106Strategic Implications 108Tactical Implications 108Operational Implications 108Terms 108Review Questions 109Discussion Questions 109Analytical and Internet Exercises 109Case 3. DHL and Facilitating Small Business Trade 111
PART II. INTERNATIONAL MARKETS AND MARKET RESEARCH
Chapter 4. Markets and Segmentation in an International Context
Opening Vignette: Musical Segmentation 115Overview 117Markets and Segmentation 118Culture 118
Origins of Culture 118Creating Cultural Consumption: Carnival 121
Culture and Values 122Applying Cultural Values to Marketing
Activities 122Value Levels 123
Culture and Behaviors 126Cultural Imperatives 126Cultural Electives 126Cultural Exclusives 127
Culture and Purchasing Behavior 127Aesthetics 127Religion 128Subcultures and Countercultures 130Cultural Change 130
The Nature of Markets 131The STP Approach 131
International Market Segmentation 131International Consumer Market Segments 132
Demographics 132Psychographics 134Geographic Area 135Geodemographic Segmentation 135Benefit Segmentation 135Consumer Types 136
Usage Segmentation 137International Business-to-Business
Market Segmentation 137Segmentation by Industry 138Segmentation by Size 138Geographic Location 138Product Usage 139
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Customer Value 139Dual Channel Marketing 139
Regional and National Segmentation 140Wants and Needs 140Money to Spend 140Willingness to Spend 141Language 141Regionally Based Market Segments 142
Segmentation and the Bottom-of-the-Pyramid 142Products 143Pricing 143Delivery 144Promotion 144
Green Marketing and Sustainability-Oriented Segments 145Consumer Preferences 145Green by Necessity 145
A Market Segment Analysis 145Assessing Market Potential 146Assessment Criteria 147
Ethical Issues in International Segmentation 147Strategic Implications 149Tactical Implications 149Operational Implications 149Terms 150Review Questions 150Discussion Questions 151Analytical and Internet Exercises 151Case 4. Electrolux: Refrigeration and Segmentation 153
Chapter 5. International Positioning
Opening Vignette: The Wide World of Tea 157Overview 159The Nature of International Product Positioning 160Positioning Statements and Approaches 160
Product Attributes 160Competitors 161Use or Application 161Price-Quality Relationships 161Product User 162Product Class 162Cultural Symbol 163
International Positioning Objectives 163Brand Equity 164Brand Parity 164
International Product Positioning Challenges 165Changes in Technology 165Country-of-Origin Effects 166Regulations 169Packaging and Labels 170
International Positioning Methods 170Identify Target Markets 170Analyze Competition Within the Target Market 171
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Identity Points of Difference 174Enhancing Position or Repositioning 177
Sustainability and International Positioning 180Ethical Issues in International Positioning 182Strategic Implications 183Tactical Implications 183Operational Implications 183Terms 184Review Questions 184Discussion Questions 185Analytical and Internet Exercises 185Case 5. TOTO: Positioning Plumbing
Products Globally 187
Chapter 6. Market Research in the International Environment
Opening Vignette: Focus on Cosmetics 191Overview 193Market Research 194The Scientific Method 194
Objectivity 194The Pace of Change 195
Types of International Market Research 195Product Research 195Pricing Research 196Promotion Research 196Distribution Research 197
The International Market ResearchProcess 197
Defining the Problem or Situation 198Complete a Cost/Benefit Analysis 198Develop a Research Design 199
Secondary Data 199Primary Data 200Reliability and Validity 201Micro-Level Analysis 202Macro-Level Analysis 202Qualitative and Quantitative Research 204Qualitative Methods 204Quantitative Methods 206Online Research: A Hybrid Approach 209
Develop a Sample 209Sampling Issues in International Research 210Calculating the Sample Size 211
Collect Data 212Analyze and Interpret Data 213
Linguistic Problems 213Metric Equivalence Issues 213Socially Desirable Responses 214
Formulating Conclusions and Writing Reports 215Ethics and International Market Research 215Bottom-of-the-Pyramid and International Market Research 216Control of the International Market Research Process 216Strategic Implications 218
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Tactical Implications 218Operational Implications 218Terms 218Review Questions 219Discussion Questions 219Analytical and Internet Exercises 220Case 6. The "Mobile You" Breathalyzer 221
PART III. INTERNATIONAL PRODUCT MARKETING
Chapter 7. International Product and Brand Marketing
Opening Vignette: A Good Night's Sleep 227Overview 229Types of Products 230Classifications of Products 230
Convenience Products 230Shopping Products 231Specialty Products 232
Product Dimensions 233International Product Mix Management 234
Product Lines and Mix 234Packaging 234Labeling 236
Sustainability and International Product Marketing 237International Business Products 237
Raw Materials 238Maintenance, Repair, and Operating Supplies 238Component Parts 238Accessory Equipment 239Business Services 239Process Materials 239Installations 239Distinctions Between Business and Consumer Products 239
Bottom-of-the-Pyramid International Product Marketing 240International Product Support Services 240
• International Services 241International Product Quality Standards 242
Quality Standards 243The Product Life Cycle 243
Development 244Introduction 245Growth 245Maturity 246Decline 246
Product Cycle Theory 247Market/Product Matrix 247
Market Penetration 248Product Development 248Diversification 248Market Development 248Implications 249
International Brand Management 249Family and Individual Branding 250
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Brand and Product Line Extensions 250Cobranding 250
Building Powerful International Brands 251Brand Awareness 251Brand Meaning 252Brand Loyalty 252Double Jeopardy 253Brand Valuation 253Implications for Managers 253
Ethical Issues in International Product Marketing 254Strategic Implications 256Tactical Implications 256Operational Implications 256Terms 257Review Questions 257Discussion Questions 257Analytical and Internet Exercises 258Case 7. Interface: Prize-Winning, Sustainable Modular Flooring 260
Chapter 8. International Product Standardization and Adaptation
Opening Vignette: McDonald's Global Expansion:Adaptation and Differences in Taste 263
Overview 265Legal Systems 266International Intellectual Property
Protection 266Intellectual Property Piracy 267Corporate Spying 267Reverse-Engineering 268Country Development 268
International Dispute Resolution 269Jurisdiction 270Methods of Dispute Resolution 270Marketing Implications 272
Standardization 272Service Standardization 274
Adaptation 274Laws and Adaptation 275
Adaptation of Services 277Service Quality 278Adaptation and Service Quality 279
Music: Legal Systems, Standardization, andAdaptation 279
Legal Adaptation 280Combining Standardization and Adaptation 282
The Product and Communication AdaptationModel 282
Sustainability and Adaptation 284Global Innovation 285
Types of Adopters 286Global Product Diffusion 287
New Product Development and the Bottom-of-the-Pyramid 288
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Ethical Issues in Standardization and Adaptation 288Ethics and Laws 288
Strategic Implications 289Tactical Implications 289Operational Implications 289Terms 290Review Questions 290Discussion Questions 290Analytical and Internet Exercises 291Case 8. AB InBev: Adapting Beer Products in Global Markets 292
PART IV. INTERNATIONAL PRICING AND FINANCE
Chapter 9. International Pricing
Opening Vignette: Wind Turbines in Finland:Pricing Sustainability and Economic Incentives 299
Overview 301The Nature of Price 302
International Prices 303Price and Perception 303
Value Considerations 303Emotional Factors 305Situational Factors 305
International Pricing Methods 306Cost-Based Pricing 307Demand-/Supply-Based Pricing 309Competition-Based Pricing 313Competition-Based Price Setting for New Products 314Profit-Based Pricing 315International Consideration in Pricing Goals 317Pricing to Bottom-of-the-Pyramid Consumers 319
International Pricing Discounts 321Loss Leader 321Seasonal Discounts 322Quantity Discounts 322Early-Payment Discounts 323Channel Discounts 323
Price Changes in International Markets 323Price Reductions 324Price Increases 324Weber's Law 325
Ethical Issues in International Pricing 326Collusion 326Predatory Pricing 326Deceptive Pricing 326Dumping 327
Strategic Implications 328Tactical Implications 328Operational Implications 328Terms 329Review Questions 329Discussion Questions 329
Analytical and Internet Exercises 330Case 9. LaPoste: Pricing Banking Services 332
Chapter 10. International Finance and Pricing Implications
Opening Vignette: Pricing ArcelorMitall Steel Globally:The Effects of Currency Changes 335
Overview 337International Products 338Money and Currency 338
Currency 338International Finance 341
Capital Markets 341The Financing of Transactions 342
The Nature of Currency Exchange 342Computing Exchange Rates 343
Factors That Affect Currency Movement 344Individual and Business Transactions 345Trade and Investment Activity 346Trade Deficits 348Inflation 349Interest Rates 350
The Law of One Price and Purchasing Power Parity 350Purchasing Power 351Purchasing Power Parity 351
Governmental Activity and International Finance 353Currency Regimes 353
Global Currency Institutions 355Managing Currency Risk 357
Predicting Currency Risk 357Hedging Currency Risk 358
The Basics of International Finance Funding 358Financing Ongoing Trade Operations 359Internal Pricing 361
International Finance and International Marketing 361Markets 361Products 362Prices 362Place (Distribution) 364Promotion 364
Strategic Implications 365Tactical Implications 365Operational Implications 365Terms 366Review Questions 366Discussion Questions 366Analytical and Internet Exercises 367Case 10. Microfinance and Bottom-of-the-Pyramid Consumers
PART V. INTERNATIONAL PLACE OR DISTRIBUTION
Chapter 11. International Marketing Channel Management
Opening Vignette: Fruit Around the World 373Overview 375
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International Marketing Channels 375International Marketing Channel Decisions 376Distribution Intensity 376Selection of Distribution Channels 377
Direct Marketing 378Indirect Channels 379Channel Length 381Selection Factors 381Standardization of Channel Structure 382Environmental Factors and International Marketing Channel Decisions 382Existing Channels 383Future Channels 383
Managing International Distribution Channels 384Establishing International Channel Strategies 385Selecting Intermediary Arrangements 386Gray Markets 387Making Channel Arrangements and Choosing Channel Partners 388Managing Channel Power 388Trust and Commitment in International Marketing Channels 390
Cross-Cultural Negotiation and International Marketing Channels 390Stages in the Negotiation Process 390Cultural Influences on Negotiations 392
International Marketing Channel Functions 394Research Market Needs 395Promote Products 395Order Processing 396Communicate With Channel Members 396Warehousing, Inventory Control, and Materials Handling 397Address Discrepancies of Assortment 397Secure Payment and Extend Credit 398Transportation 398
International Marketing Channel Structure 398Cost 398Coordination 399Coverage 399Cooperation 399Control 399
Strategic Implications 401Tactical Implications 401Operational Implications 401Terms 401Review Questions 402Discussion Questions 402Analytical and Internet Exercises 402Case 11. JDA Software Services 404
Chapter 12. International Distribution: Exporting and Retailing 406
Opening Vignette: Exporting and the Business-to-BusinessMarket: Alibaba.com 407
Overview 409Exporting Choices 409
Internal Reasons for Exporting 410External Reasons for Exporting 412
Market Selection 413Export Entry Modes 413
Home-Based Direct Exporting 414Foreign-Based Direct Exporting 414Indirect Exporting 415
Pricing Exports 416Exporting Documentation 416
Regulations and Documentation 417Export and Import Licenses 417Financing 417
Physical Distribution 419Materials Handling 419Inventory Location 419Inventory Control 420Order Processing 422Methods of Transportation 422Sustainability and International Distribution Systems 425Radio Frequency Identification Development and International
Transportation 425International Distribution and the Bottom-of-the-Pyramid 426Terrorism and International Marketing Channels 427
International Marketing Channels and Utility 427International Retailing 428Types of International Retail Outlets 429
Convenience Stores 429Supermarkets 429Hypermarkets 429Open Air Markets and Bazaars 430Department Stores 430Discount Stores 430Specialty Stores 431Online Retailing 431The Future 432
Strategic Implications 433Tactical Implications 433Operational Implications 433Terms 434Review Questions 434Discussion Questions 434Analytical and Internet Exercises 435Case 12. Tesco Targets China 436
PART VI . INTERNATIONAL PROMOTION AND PERSONAL SELLING 439
Chapter 13. Globally Integrated Marketing Communications
Opening Vignette: Advertising Jewelry 441Overview 443The Communication Process 444
Individual Interpersonal Communications 444Barriers to Communication 445Overcoming Barriers to Communication 450Communicating Marketing Messages 450
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International Advertising Management 451Establish International Advertising Objectives 452Create an International Advertising Budget 452Choose an Advertising Agency 453Oversee the Advertising Program 454Media Selection Factors 456Assess Advertising Effectiveness 457
Standardization or Adaptation 458International Law and Globally Integrated Marketing Communications 459Message Design: Types of Appeals 459
Cultural Paradoxes 462International Advertising Appeals 463
Advertising Executional Frameworks 466Traditional Executional Frameworks 467International Executional Frameworks 468
Alternative Marketing Programs 470Buzz Marketing 471Guerilla Marketing 472Product Placements and Branded Entertainment 473Lifestyle Marketing 473
Ethical Issues in International Advertising 474Strategic Implications 476Tactical Implications 476Operational Implications 476Terms 477Review Questions 477Discussion Questions 477Analytical and Internet Exercises 4/8Case 13. Mobile Phone Marketing 479
Chapter 14. International Sales Promotionsand Public Relations
Opening Vignette: Marketing Headaches 481Overview 483
Sales Promotions and the Communication Process 483International Sales Promotions 484
Push vs. Pull Strategies 484International Consumer Promotions 485
Coupons 487Premiums 488Bonus Packs 488Contests and Sweepstakes 489Rebates 490Price-off Promotions 490Sampling 491Social Media and Consumer Promotions 492Legal Issues in Consumer Promotions 493Types of Consumers and International Consumer Promotions 493Consumer Promotions and Bottom-of-the-Pyramid Consumers 494
International Trade Promotions 494Trade Shows 494Trade Allowances 495
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Cooperative Advertising 497Trade Contests 497Training Programs 497Point-of-Purchase Materials 497Challenges 498
International Sales Promotions Campaign Management 498Consumer Promotions 500Trade Promotions 501
International Public Relations 502Channel Members 502Addressing Negative Publicity and Events 502Positive Publicity and Image-Enhancing Events 503Social Media and Public Relations 505Marketing Implications 506
Strategic Implications 507Tactical Implications 507Operational Implications 507Terms 508Review Questions 508Discussion Questions 508Analytical and Internet Exercises 509Case 14. Nestle, S.A. 510
Chapter 15. International Personal Selling and Sales Management
Opening Vignette: International Personal Selling and Real Estate:Complications and Opportunities 513
Overview 515The Nature of Personal Selling 515
Retail Selling 516Business-to-Business Personal Selling 516
Culture and International Personal Selling 517Cultural Context 517Time and Cultural Context 518Individualism/Collectivism 518Transactions vs. Relationships 518Business Etiquette 519Cultural Adaptation 522
International Business-to-Business Selling 523Prospecting 523Preapproach 524Approach 525Presentation 526Negotiation 526Handling Objections 528Closing 528The Follow-Up 530
International Sales Force Composition 530Technology and International Sales
Force Composition 531Sales Teams 532
Foreign Language Skills and International Sales 532International Sales Force Management 533
Recruiting and Selection 533
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Training 534Motivation 535Evaluation 538
Compensation 540Salary 540Commissions 540Salary Plus Commission 541Bonuses 541Benefits and Allowances 541
Repatriation 542Repatriation Knowledge Acquisition 542Management Issues 542
Strategic Implications 544Tactical Implications 544Operational Implications 544Terms 545Review Questions 545Discussion Questions 545Analytical and Internet Exercises 546Case 15. Oriflame and the Indian Marketplace 547
Chapter 16. International Marketing Planning, Organization, and Control 548
Opening Vignette: Nintendo: Marketing Strategies in a TurbulentEnvironment 549
Overview 551International Marketing and Strategic Planning 551
International Marketing Efficiency and Effectiveness 552Planning Levels 552International Strategic Planning 553
International Marketing Organization 556Organizational Structures 556Internal Factors and Organizational Design 561External Factors and Organizational Design 563
International Marketing Tactics and the Marketing Plan 564The International Marketing Plan 565Planning Tactics and Strategic Plans 566
Internal Marketing Communications 566International Internal Communications 566Formal Communication in Global Companies 566Barriers to International Formal Communications 568Overcoming Barriers to Formal Communications 569
International Marketing Control 570Control Measures 571Corrections 571
Emerging Trends in International Marketing 573Technological Issues 573Cultural Issues 574Economic Issues 575Emerging Markets Ascending 577Bottom-of-the-Pyramid 578 :
Strategic Implications 579Tactical Implications 579Operational Implications 579
Terms 579Review Questions 580Discussion Questions 580Analytical and Internet Exercises 581Case 16. Virgin Galactic and Space Travel 582
Appendix A: Comprehensive Cases A-1
Case 1. Alpen Bank: Launching the Credit Card in Romania A-1
V! Kasturi Rangan and Sunru Yong
Case 2. United Cereal: Lora Brill's Eurobrand Challenge A-8
Christopher A. Bartlett and Carole Carlson
Case 3. Clayton Industries: Peter Arnell, Country Manager for Italy A-17
Christopher A. Bartlett and Benjamin H. Barlow
Case 4. Best Buy Inc.: Dual Branding in China A-29
R. Chandrasekhar
Case 5. La Hacienda del Sol A-43
Neeta Khera
Case 6. Dabur India A-50
Manish Khandelwal
Appendix B: Notes B-1
Appendix C: Glossary C-1
Credits D-1
Name Index E-1
Subject Index F-1
Country Index G-1