Date post: | 17-Jul-2015 |
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Marketing |
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Learning Objectives:1. The benefits of
International markets2. The changing face of US
business3. The scope of international
marketing task4. The importance of SRC5. The increasing importance
of global awareness6. The progression of
becoming a global marketer
Definitions: International marketing, SRC, ethnocentrism, global marketing, skeptics
Questions: 1. “The marketer’s task is same
whether applied in Dimebox, Texas or Dar-es-Salam, Tanzania.” Discuss.
2. Discuss the phases of international marketing involvement
3. Discuss the conditions that have led to the development of global markets
4. Differentiate between global and multinational company
5. Differentiate among the three international marketing concepts
6. Discuss the factors necessary to achieve global awareness
7. Discuss the idea of global orientation
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Global Perspective: Recent Events
2003 SARS outbreak in Asia and Toronto 2003 SARS outbreak in Asia and Toronto
Wars in Afghanistan and IraqWars in Afghanistan and Iraq
Adulterated product scandals in China Adulterated product scandals in China
September 11th attacks on the World Trade Center and PentagonSeptember 11th attacks on the World Trade Center and Pentagon
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Global Perspective: Recent Events
International disagreements between the United States and its alliesInternational disagreements between the United States and its allies
2008 Global credit crisis and recession 2008 Global credit crisis and recession
Global terrorism in Indonesia, Pakistan,India, Spain, Morocco and UKGlobal terrorism in Indonesia, Pakistan,India, Spain, Morocco and UK
Despite these events, international commerce continuedDespite these events, international commerce continued
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Global Business Trends1. Growth of
WTO and regional trade
groups
2.. Global acceptance of
free market system
3. Impact of the Internet on global communications
4. Threats of terrorism and armed conflict
5. Rise of new producers and
consumers
6. Management of global
environmental resources
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Internationalization of Business
Increasing globalization ofmarketsIncreasing globalization ofmarkets
Firms face competition onall frontsFirms face competition onall fronts
Many Canadian companies are foreign controlled:Tim Hortons (US), Labatt (Belgian)
Many Canadian companies are foreign controlled:Tim Hortons (US), Labatt (Belgian)
Firms seeking foreignmarkets to increase profitsFirms seeking foreignmarkets to increase profits
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Company Industry Ownership
Hudson's Bay Company Retail USA
Tim Hortons Food service USA
Labatts Beer Belgium
MacMillan Bloedel Forestry USA
Seagram Distillery France
Corel Software USA
CP Ships Shipping Germany
Fairmont Hotels Hospitality USA/Saudi Arabia
Dofasco Steel Luxembourg
Noranda Mining Switzerland
ATI Technologies Computer chips USA
Stelco Steel USA
Alcan Aluminum Great Britain
Foreign Ownership of Canadian Companies
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Skeptics 1. Skepticism is generally any questioning attitude towards
knowledge, facts, or opinions/beliefs stated as facts, or doubt regarding claims that are taken for granted elsewhere.
2. Philosophical Skepticism is an overall approach that requires all information to be well supported by evidence.
3. A person who maintains a doubting attitude, as toward values, plans, statements, or the character of others.
Transformationalists or Hyperglobalist PerspectiveThe authors describe the hyperglobalist perspective as an
approach which sees globalization as a new epoch in human history. This new epoch is characterized by the declining relevance and authority of nation-states, brought about largely through the economic logic of a global market. Economies are becoming “denationalized.”
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International Marketing: A Definition
The activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and
society at large in more than one country.
The activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and
society at large in more than one country.
Marketing concepts, processes, and principles are universally applicable all over the world.
Marketing concepts, processes, and principles are universally applicable all over the world.
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The International Marketing Task
73.Firm Characteristics4.Research
3. Economy
Environmentaluncontrollablescountry market A
Environmentaluncontrollablescountrymarket B
Environmentaluncontrollablescountrymarket C
1. Competition
1. Competition
2. Technology1.Price 2.Product
5.Promotion 6.Place 6. Geography and
Infrastructure
Foreign Environment(Uncontrollables)
7. Structure ofDistribution
3. Economy
5. Political-Legal
Domestic environment(Uncontrollables)
(Controllables)
2 .Technology
4. Culture
5. Political-Legal
4. Culture
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Major Cultural Obstacles
Self-Reference Criterion (SRC)an unconscious reference to one’s own cultural values,
experiences, and knowledge as a basis for decisions
Risk of SRC:Prevent you from becoming aware of cultural differencesInfluence the evaluation of the appropriateness of a
domestically designed marketing mix for a foreign market
Ethnocentrism the notion that one’s own culture or company knows
best how to do things
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Cross-Cultural Analysis1. Define the business problem in home-country cultural traits,
habits, or norms.
2. Define the business problem in foreign-country cultural traits, habits, or norms. Make no value judgments.
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
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Developing a Global Awareness
To be globally aware is to be:To be globally aware is to be:
1. Tolerant of Cultural Differences, and
2. Knowledgeable of: (a) Culture, (b) History, (c) World Market Potential,(d) Global Economic, Social and Political Trends
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Stages of International Marketing Involvement
In general, firms go through five different phases in going international:In general, firms go through five different phases in going international:
Infrequent Foreign MarketingInfrequent Foreign Marketing
No Direct Foreign MarketingNo Direct Foreign Marketing
International MarketingInternational Marketing
Regular Foreign MarketingRegular Foreign Marketing
Global MarketingGlobal Marketing
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No Direct Foreign Marketing – Reactive
• Products “indirectly” reach foreign marketsTrading companiesForeign customers who contact firmDomestic wholesalers/distributorsWeb orders
• Foreign orders stimulate a company’s interest to seek additional international sales
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Infrequent Foreign Marketing – Reactive
Caused by temporary surpluses Sales to foreign markets are made as goods become
available
Firm has little or no intention of maintaining continuous market representation
Foreign sales activity declines and is withdrawn when domestic demand increases
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Regular Foreign Marketing – Proactive
Dedicated production capacity for foreign markets
Strategy:Firm employs domestic or foreign intermediariesUses its own sales force or sales subsidiaries
Products are adapted for foreign markets as domestic demand grows
Firms depend on profits from foreign markets
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International Marketing – Proactive
Fully committed and involved in foreign markets and international activities
Production takes place on foreign soil earning firms the MNC (Multinational Corporation) title
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Global Marketing – Proactive
The firm sees the world as one market!Market segmentation is now defined by income
levels, usage patterns, or other factors that span the globe
More than half of its revenues come from abroadThe firm has a global perspective
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The orientation of International Marketing
Three different strategic orientations are found among managers of international marketing operations:
Some see international marketing as ancillary to the domestic operations
A second kind of company sees international marketing as a crucial aspect of sales revenue generation but treats each market as separate entity
Finally a global orientation views the globe as the market-place and market segments are no longer based solely on national borders-common consumer characteristics and behaviors come into play as key segmentation variables applied across countries.