International Mktng Env

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8/8/2019 International Mktng Env

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International MarketingEnvironment

ALI AHMAD

Learning Objectives

Understand the nature of the marketing environment and why itis important to marketers.

Describe the major components of the social environment andhow trends in the social environment affect marketing.

Understand how the economic environment affects marketing. See how the political/legal environment offers opportunities and

threats to marketers.

Appreciate the importance of the technological environment tomarketers.

Understand differences in the competitive environment.

Know how changes in the institutional environment affectmarketers.

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The Marketing Environment

The marketing environment consists of all factors

external to an organization that can affect the

organization¶s marketing activities.

The Marketing Environment

Identifying Market Opportunities and Threats

Many firms use environmental scanning to identify important trendsand determine whether they represent present or future marketopportunities or threats.

An environmental scan of today¶s

marketplace

1.The Social Environment

The social environment includes all factors and trends

related to groups of people, including their number,characteristics, behavior, and growth projections.

SocialSocial

EnvironmentEnvironment

Number of Number of PeoplePeople

CharacteristicsCharacteristics

Behavior Behavior

GrowthGrowth

ProjectionProjection

The Social Environment

Social Factors that affect Marketing

Influence of Values on Buying Habits

Ranked Characteristics

of Product Quality

Reliability

Durability

Easy maintenance

Ease of use

Trusted brand name

Low price

Component Lifestyles

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Component

Lifestyles

Component

LifestylesThe practice of choosing goods

and services that meet one¶s

diverse needs and interests

rather than conforming to a

single, traditional lifestyle.

Growth of dual-income families results in

increased purchase power

Approximately 60% of work-age femalesare in the workforce

Women expect different things in life

purchase bulk of technology products

do most of the grocery shopping second largest group of home buyers

after couples

Single households outnumber married

households with kids

Changing Role of Women

Culture, Conventions & Etiquette

2. The Demographic Environment

DemographyDemography The study of people¶svital statistics, such as

their age, race, gender,

ethnicity and location.

2. The Demographic Environment

The demographic environment refers to the size,

distribution, and growth rate of groups of people with

different characteristics.

The demographic characteristics of interest to marketersrelate in some way to purchasing behavior, because

people from different countries, cultures, age groups, or

household arrangements often exhibit different

purchasing behaviors. A global perspective requires that marketers be familiar

with important demographic trends around the world as

well as within India.

Population Estimate ²Year 2025

Demographic Trends

- World and country population statistics are important,but most marketers target subgroups.

- Trends in population subgroups are typically the mostuseful to marketers, for example, the growth of theurban population.

- Another interesting trend is the aging of thepopulation. The aging of the population is especiallyevident in Italy, Japan, Britain, and the United States.

3. The Cultural Environment

The cultural environment refers to factors and trends

related to how people live and behave.

Cultural differences are important in both international and

domestic markets.

Much of the population and buying power growth in India is

and will be from multicultural groups.

CulturalCultural

FactorsFactors

ValuesValues

IdeasIdeas

Attitudes Attitudes

SubgroupSubgroup Activities Activities

BeliefsBeliefs

The Cultural Environment

Definition

Culture: ³Culture refers to - That complex whole

which includes knowledge, belief, art, morals,

custom, and any other capabilities and habits

acquired by man as a member of society.´

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Cultural Lessons

Diet Coke is named Light Coke in Japan--dieting was not well regarded

Red circle trademark was unpopular in Asiadue to its resemblance of Japanese flag

Packaging of products is more important insome countries than in U.S.

Advertisement featuring man and dog failed in Africa--dogs were not seem as man¶s bestfriend

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More Cultural Lessons...

Cologne ad featuring a man ³attacked´ by

women failed in Africa

Food demonstration did well in Chinesestores but not in Korean ones--older

women were insulted by being ³taught´ by

younger representatives

Pauses in negotiations

Level of formality

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Hofstede¶s Cultural Dimensions

Individualism vs. Collectivism

Power distance

Masculine vs. feminine

Strong vs. weak uncertainty avoidance

Short vs. long term orientation

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Negotiation Content

Non-task sounding

Task-related exchange of information

Persuasion

Concessions and agreements

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Some Issues in Culture

monochronic vs.

polychronic meanings

Personal space

preferred distance

territoriality

interaction

with/ignoring people

in close proximity

Symbols

colors

historicalassociations

Friendship and

acquaintance

Agreements

Etiquette

Eastern vs. Western Culture

Differences in

Values

Perceptions of

- Objects

- Reality

Stability vs. change

Control Perceived roles

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Tendencies

Westeners tend to rate themselves

More unique than average and what they are

³Above average´ in ability

Easteners tend to rate themselves Less unique than they really are

³Below average´

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Proverbs

Western: ³The early bird gets the worm´

Eastern:

³The first bird in the flock gets shot´

³A nail that stands out will be hammered down.´

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Values

Issue Western Value Eastern ValueDistinctiveness

of people

Want to be distinctive Not valued; emphasis

on tie to group

Perceived

control

Significant; values determine

choices

Modest³societal values

are already establishedEmphasis Success and achievement;

relationships may get in the

Best outcome for

relevant group (e.g.,

family, work group)

Self-esteem Strive to feel good;

assurances wanted

Tied to belonging with

Relationships Equality or superior position Clearly defined;

hierarchical

Rules Same rules apply to all Depend on context and

relationship

Source: Richard E. Nisbett, The Geography of Thoug ht: How Asians and

West eners Think Differently « and W hy, New York, 2003, The Free Press

Some implications

Thanking people²for things they are clearly

supposed to do?

Why the need for a choice between 40 different

brands of cereal?

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Contrasting Advertising Perspectives

Western ³Atomistic´²broken

down to smallestcomponent parts

³Unique selling

propositions´

³How to´

Positioning May be ³dull and boring´

³Copy focused´

Asian Holistic

³Everything relates

to everything else´

How things ³fit

together´ and ³relate´

Visual and oral

Jim Aitchison, How Asia Advertises,New York: Wiley, 2002.

Advertising Content Comparisons

American:

Individual benefit and pleasure

(e.g., ³Make your way through the crowd)

Korean/ Indian Collective values

(e.g., ³We have a way of bringing people together)

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Debate and Conflict

³The first person to raise his voice has lost the

argument.´ (Chinese proverb)

Use of indirection and projection

Face-to-face vs. anonymous comments

Western adversarial ³rule of law´ based on consistent

universal ideals vs. solution for the case at hand in

context

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Relationships, Education, and Work

Western Standing out; being ³better´

Self perceived favorably

Self-esteem building Work longer on successful job

Eastern Harmony

Must ³weed out´ personal characteristics that might annoyothers

Taught self-criticism

Not recognized in profession until after many years of practice

Work longer on unsuccessful job

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Country of Origin Effects

Perception of product

quality (e.g., Japan, Germany)

elegance and style (e.g., France, Italy)

Historical associations

Positioning strategies

Emphasis on origin (e.g., French wine)

De-emphasis/obfuscation of of country of

origin (e.g., French beer, American

products with French language labels)

The International Life Cycle

Market for older technology tends toexist in lessdeveloped countries

Manufacturing of older generation technology--e.g., Pentium I computers

Resale of capitalequipment²e.g., DC 8aircraft, old three part

canning machines

Some countries tendto be more receptiveto innovation thanothers

³Leap frogging´ Going directly from old

technology to the verynewest, skippingintermediate step (e.g.,wireless rather thanwired technology)

Shorteningof productlife

cycles

Changing Roles

As more women enter theworkforce and householdcompositions change,typical household roles arealtered.

Tremendous marketopportunities exist for firmsthat can develop effectivestrategies for appealing tothese changing roles.

Emphasis on Health & Fitness

The pursuit of a more healthful lifestyle includes:

eating more nutritious foods

exercising regularly participating in various sports activities

focusing on wellness.

This translates into potential market opportunities for

firms that provide products and services geared towardimproving health and fitness.

Consumerism

Consumerism is the movement to establish and

protect the rights of buyers.

One increasingly important consumer issue is

environmentalism.Successful marketers can respond by developing

environmentally safe products and communicating

their environmental contributions.

4. The Economic Environment

The economic environment includes factors and

trends related to income levels and the production of

goods and services.

Economic trends in different parts of the world can affect

marketing activities in other parts of the world.

The gross domestic product (GDP) represents the

total size of a country¶s economy measured in the

amount of goods and services produced.

5. The Political/Legal Environment

The political/legal environment encompasses factors

and trends related to governmental activities and specific

laws and regulations that affect marketing practice.

PPoliticaloliticalLegalLegal

EnvironmentEnvironment

GGloballobal

TrendsTrends

LLegislationegislationRRegulationegulation

The Political/Legal Environment

Global Political Trends

In today¶s world economy, international political events

greatly affect marketing activities. For example the

impact of the war on terrorism on the travel and security

industries.

A second important political trend is movement toward

free trade and away from protectionism. Studies show

that countries with the freest trade have the highest GDP

growth.

Legislation

Regulations and Regulatory AgenciesMost legislation in the United States is enforcedthrough regulations developed by a variety of agencies, and marketers must often work withregulatory authorities at the federal, state, and locallevels.

6. The Technological Environment

The technological environment includes

factors and trends related to innovations that

affect the development of new products or the

marketing process.

These technological trends can provide

opportunities for new product development,

affect how marketing activities are performed,

or both.

7. The Competitive Environment

The competitive environment consists of all the

organizations that attempt to serve similar customers.

ProductProduct

CompetitorsCompetitors

Offer different types of products to satisfy

the same general need. Domino¶s Pizza,

McDonald¶s, and Kentucky Fried Chicken

are product competitors.

BrandBrand

CompetitorsCompetitors

The most direct competition, offering the

same types of products as competing firms.For example, Nike is a brand competitor of

Reebok as both companies manufacture

shoes.

8. The Institutional Environment

The institutional environment consists of all the

organizations involved in marketing products and

services.

The Institutional Environment

MarketMarket

Research FirmsResearch Firms

Advertising Advertising

WholesalersWholesalers

RetailersRetailers

SuppliersSuppliers

CustomersCustomers

The Future

The only certainty about the future is that it will be

uncertain, and change will occur at an increasing

It will also be more complex.

Businesses and consumers now must operate in

an era of terrorism and lack of trust.

Thank You!!!

International Mktng Env

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