I n t e r n a t i o n a l M a r k e t i n g I n t e r n a t i o n a l M a r k e t i n g

History and Geography: The Foundations

of Culture

Chapter 3

1 4 t h E d i t i o nP h i l i p R. C a t e o r a

M a r y C. G i l l yJ o h n L . G r a h a m

McGraw-Hill/IrwinInternational Marketing 14/e

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

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What Should You Learn?What Should You Learn?

• The importance of history and geography in the understanding of international markets

• The effects of history on a country’s culture

• How culture interprets events through its own eyes

• How the United States moved west and how this more affected attitudes

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What Should You Learn?What Should You Learn?

• The effect of geographic diversity on economic profiles of a country

• Why markets need to be responsive to geography of a country

• Economic effects of controlling population growth versus aging population

• Communications are an integral part of international commerce

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Global PerspectiveBirth of a Nation – Panama in 67 Hours

Global PerspectiveBirth of a Nation – Panama in 67 Hours

• To understand a society’s actions and its points of view, you need to appreciate:

– The influence of historical events – The geographical uniqueness to which a culture has had to

adapt

• To interpret a culture’s behavior and attitudes, a marketer must have some idea of a country’s history and geography

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History Perspective in Global Business

History Perspective in Global Business

• History helps define a nation’s mission

– How it perceives its neighbors– How it perceives itself– Its place in the world

• Insights into history are important for understanding current attitudes

• It is necessary to study culture as it is now as well as to understand culture as it was

– A country’s history

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History and Contemporary BehaviorHistory and Contemporary Behavior

• Japanese history– Seven centuries under the shogun feudal system– The isolation before the coming of Admiral Perry in 1853– Threat of domination by colonial powers– Rise of new social classes– Western influences– Humiliation of World War II– Involvement in the international community

• Historically, loyalty and service, a sense of responsibility, and respect for discipline, training, and artistry were stressed to maintain stability and order

• A historical perspective gives the foreigner a basis on which to begin developing cultural sensitivity and a better understanding of contemporary Japanese behavior

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History is SubjectiveHistory is Subjective

• Historical events always are viewed from one’s own biases and SRC

• A crucial element in understanding any nation’s business and political culture is the subjective perception of its history

– Relationship between U.S. and Mexico► Monroe Doctrine

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Territorial Expansion of United States from 1783

Territorial Expansion of United States from 1783

Exhibit 3.1

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Manifest Destiny and the Monroe Doctrine

Manifest Destiny and the Monroe Doctrine

• Both accepted as the basis for U.S. foreign policy during much of the 19th and 20th centuries

• Manifest Destiny justified U.S. expansion

– Annexation of Texas, Oregon, New Mexico, and California

– U.S. involvement in Cuba, Alaska, Hawaii, and the Philippines

• Three basic dicta of the Monroe Doctrine

– No further European colonization in the New World

– Abstention of the U.S. from European political affairs

– Nonintervention of European governments in the governments of the Western Hemisphere

• Change in the Monroe Doctrine– 1881 – Roosevelt Corollary

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U.S. Intervention in Latin America Since 1945

U.S. Intervention in Latin America Since 1945

Exhibit 3.2

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Geography and Global MarketsGeography and Global Markets

• Geography – an element of the uncontrollable environment that confronts every marketer

– Affects a society’s culture and economy – Physical makeup limits a nation’s ability to supply its people’s

needs

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Climate and TopographyClimate and Topography

• Altitude, humidity, and temperature extremes

– South America– British resistance of the English Channel– Trade through the Alps

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Geography, Nature and Economic GrowthGeography, Nature

and Economic Growth• As countries prosper, natural barriers are

overcome

• Environmental issues

– Disruption of ecosystems– Relocation of people– Inadequate hazardous waste management– Industrial pollution

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Social Responsibility and Environmental Management

Social Responsibility and Environmental Management

• Environmental protection is not an optional extra

• Pollution is on the verge of getting completely out of control

• China has 16 of the world’s 20 most polluted cities

• Critical issue: the disposal of hazardous waste

• Sustainable development

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ResourcesResources

• The availability of minerals and the ability to generate energy are the foundations of modern technology

• The principal supplements to human energy

– Animals– Wood– Fossil fuel– Nuclear power– Ocean tides– Geothermal power– The sun

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ResourcesResources

• United States in perspective

– 1942 – nearly self-sufficient– 1950 – major importer– 1973-2000 – increased dependency from 36% to 66%– Mid-2000’s – predicted to be importing more than 70% of needs

• The location, quality, and availability of resources will affect the pattern of world economic development and trade well into the 21st century

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World Energy ConsumptionWorld Energy Consumption

Exhibit 3.3a

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World Energy ConsumptionWorld Energy Consumption

Exhibit 3.3b

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Dynamics of Population TrendsDynamics of Population Trends

• Global population trends determine today’s demand for goods– Rural/urban population shifts– Rates of growth– Age levels– Population control

• Changes in population will profoundly affect future demand

• The most important deterrent to population control is cultural attitudes about the importance of large families

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World Population by Region – 2005-2050Life Expectancy at Birth – 2005-2010 (millions)

World Population by Region – 2005-2050Life Expectancy at Birth – 2005-2010 (millions)

Exhibit 3.4

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Rural/Urban MigrationRural/Urban Migration

• Result of a desire for greater access to:

– Sources of education– Health care– Improved job opportunities

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Population Decline and AgingPopulation Decline and Aging

• Population growth in many countries has dropped below the rate necessary to maintain present levels

• A nation needs a fertility rate of about 2.1 children per woman

• Not one major country has sufficient internal population growth to maintain itself

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Age Density for World and Selected CountriesAge Density for World and Selected Countries

Exhibit 3.5

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Worker Shortage and ImmigrationWorker Shortage and Immigration

• The free flow of immigration will help to ameliorate the dual problems of explosive population expansion in less-developed countries and worker shortage in industrialized regions

• Europe will need 1.4 billion immigrants over the next 50 years

• Japan and the U.S. will need 600 million immigrants between now and 2050

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500 Years of Trade500 Years of Trade

Exhibit 3.6a

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500 Years of Trade500 Years of Trade

Exhibit 3.6b

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World Trade RoutesWorld Trade Routes

• Progression of trade routes– Overland– Sea routes– Air routes– The Internet

• Trade routes bind world together, minimizing:– Distance– Natural barriers – Lack of resources – Fundamental differences between and economies

• Trade routes represent attempts to overcome influence of geography– Causing economic and social imbalances

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Communication LinksCommunication Links

• Telegraph

• Telephone

• Television

• Satellites

• Computer

• Internet

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SummarySummary

• A prospective international marketer should be reasonably familiar with the world, its climate, and topographic differences

• Geographic hurdles must be recognized as having a direct effect on marketing and the related activities of communications and distribution

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SummarySummary

• Without a historical understanding of a culture, the attitudes within the marketplace may not be fully understood

• The study of history and geography is needed to provide the marketer with an understanding of why a country has developed as it has rather than as a guide for adapting marketing plans