Webster University International Marketing MRKT 5980.

Webster University

International Marketing

MRKT 5980

04/20/2304/20/23 Webster University INTB 5000Webster University INTB 5000 Page Page 22

The World Economic Pyramid

*Bases on Purchasing power parity in U.S. $.SOURCE: U.N. World Development Reports

Less Than $1,500

$1,500-$20,000

More Than $20,000

Annual per Capita Income* Tiers Population in Millions

75-100

1,500-1,750

4,000


Major Industrialized Countries of the World


Market Characteristics

Population demographicsPopulation demographics

• Age distribution, life expectancies, Age distribution, life expectancies, household size, urbanization.household size, urbanization.

IncomeIncome

• Distribution of low, medium, and high Distribution of low, medium, and high incomes.incomes.

• Gross domestic product per capita.Gross domestic product per capita.• Purchasing power parity.Purchasing power parity.

Consumption patternsConsumption patterns

• Income spent on necessities and luxuries.Income spent on necessities and luxuries.• Product saturation or diffusion.Product saturation or diffusion.• Product form differences.Product form differences.


Market Characteristics (continued)

Availability and quality of infrastructureAvailability and quality of infrastructure

• Rail traffic networks for distribution capabilities.Rail traffic networks for distribution capabilities.• Communication systems for marketing.Communication systems for marketing.• Energy (electrical and fuel) consumption.Energy (electrical and fuel) consumption.

Foreign involvement in the economyForeign involvement in the economy

• Degree of foreign direct investment in country or in Degree of foreign direct investment in country or in a specific industry.a specific industry.

• Rules governing foreign investment.Rules governing foreign investment. Impact of the economic environment on social developmentImpact of the economic environment on social development

• Urbanization, life expectancy, literacy rates, etc.Urbanization, life expectancy, literacy rates, etc.• Physical Quality of Life Index (PQLI).Physical Quality of Life Index (PQLI).


Regional Economic Integration

Levels of economic integrationLevels of economic integration

• Free Trade AreaFree Trade Area Least restrictive.Least restrictive. Goods and services are freely trades among all members. Each Goods and services are freely trades among all members. Each

country maintains its own trade barriers for nonmembers.country maintains its own trade barriers for nonmembers.

• Customs UnionCustoms Union Members establish a common trade policy with respect to Members establish a common trade policy with respect to

nonmembers.nonmembers.

• Common MarketCommon Market Factors of production mobility is emphasized. A common external Factors of production mobility is emphasized. A common external

tariff is adopted.tariff is adopted.

• Economic UnionEconomic Union Integration and harmonization of economic and monetary policies Integration and harmonization of economic and monetary policies

is achieved leading to political union.is achieved leading to political union.


Free Trade Area

Eliminates tariff and quota Eliminates tariff and quota barriers among member barriers among member countries.countries.

Each country is free to set its Each country is free to set its own tariff and quota barriers own tariff and quota barriers against nonmember countries.against nonmember countries.

Can be formed for certain Can be formed for certain classes of goods or services classes of goods or services only.only.


Customs Union Area

Tariff and quota barriers among member Tariff and quota barriers among member countries are eliminated.countries are eliminated.

Member countries establish common tariff and Member countries establish common tariff and trade barriers against nonmember countries.trade barriers against nonmember countries.

Tariff revenues are shared among members Tariff revenues are shared among members according to a prescribed formula.according to a prescribed formula.


Common Market Area

No trade barriers among member nations.No trade barriers among member nations. No restriction on the movement of labor, capital, No restriction on the movement of labor, capital,

or technology across borders.or technology across borders. Member countries establish common tariff and Member countries establish common tariff and

trade barriers against nonmember countries.trade barriers against nonmember countries.


Economic Union

Has all the characteristics of a common market. Has all the characteristics of a common market. Harmonizes taxation.Harmonizes taxation. Harmonizes government spending.Harmonizes government spending. Harmonizes monetary policies.Harmonizes monetary policies. Establishes a common currency.Establishes a common currency.


European Integration Expected economic growth from:Expected economic growth from:

• Eliminating transaction costs.Eliminating transaction costs.• Economies of scale will be attained as Economies of scale will be attained as

production becomes concentrated.production becomes concentrated.• More intense competition from EU More intense competition from EU

companies.companies. Operations from one country can be freely expanded to Operations from one country can be freely expanded to

other countries.other countries. Products can be freely sold across borders to millions Products can be freely sold across borders to millions

of new consumers.of new consumers. There is a “Fortress Europe” fear.There is a “Fortress Europe” fear.


North America Integration

Is for purely economic reasons.Is for purely economic reasons. There are no constituencies for political There are no constituencies for political

integration.integration. NAFTA.NAFTA. ““Maquiladoras”.Maquiladoras”.


NAFTA

The North American Free Trade Agreement The North American Free Trade Agreement (NAFTA) created the world’s largest free market.(NAFTA) created the world’s largest free market.

• 390 million U.S., Canadian, and Mexican 390 million U.S., Canadian, and Mexican consumers and a total output of $10 consumers and a total output of $10 trillion.trillion.


Free Trade Area of the Americas

An agreement to form a regional An agreement to form a regional trading zone stretching from Point trading zone stretching from Point Barrow, Alaska to Patagonia, Argentina.Barrow, Alaska to Patagonia, Argentina.


Integration in Asia

Association of Southeast Asian Nations Association of Southeast Asian Nations (ASEAN)(ASEAN)

East Asia Economic GroupEast Asia Economic Group Asia-Pacific Economic Cooperation (APEC)Asia-Pacific Economic Cooperation (APEC) South Asian Association for Regional South Asian Association for Regional

Cooperation (SAARC)Cooperation (SAARC)


Integration in Africa and the Middle East

Economic Community of West African Economic Community of West African States (ECOWAS)States (ECOWAS)

Afro-Malagasy Economic UnionAfro-Malagasy Economic Union East Africa Customs UnionEast Africa Customs Union West African Economic CommunityWest African Economic Community Maghreb Economic CommunityMaghreb Economic Community Gulf Cooperation Council (GCC)Gulf Cooperation Council (GCC)


Political and Legal Environment

Home country political and legal environment•The Environmental Superfund•Intellectual property rights•Gray markets


Political and Legal Environment

Embargoes and sanctionsEmbargoes and sanctions

• “…“…government actions to distort the free government actions to distort the free flow of trade in goods, services, or ideas flow of trade in goods, services, or ideas for adversarial and political purposes.for adversarial and political purposes.


Export Control

U.S. export control systemsU.S. export control systems

• Export Administration Act (Commerce Export Administration Act (Commerce Department)Department)

• Munitions Control Act (State Department)Munitions Control Act (State Department)• Determinants for export controlsDeterminants for export controls

National security, foreign policy, short supply, National security, foreign policy, short supply, nuclear nonproliferation.nuclear nonproliferation.

Dual-Use ItemsDual-Use Items

• Goods used for both military and civilian Goods used for both military and civilian purposes.purposes.

• Controlled for other purposes.Controlled for other purposes. Export license Export license


The U.S. Export Control System

Determinants for Export Controls

•National Security

•Foreign Policy

•Short Supply

•Nuclear Nonproliferation

Should a Given Product Be Exported

To a Given Country

To a Given End-user?

For a Particular End-user?

Decision Steps in the Export Licensing Process


Export Controls New Environment

Foreign availability of high technology products.Foreign availability of high technology products. Export controls have moved from a “strategic Export controls have moved from a “strategic

balance” to a ‘tactical balance” approach.balance” to a ‘tactical balance” approach. Increase in the speed and dissemination of Increase in the speed and dissemination of

information and innovation.information and innovation. Issue of equipment size.Issue of equipment size. How much of the latest technology is required How much of the latest technology is required

before a country may engage in dangerous before a country may engage in dangerous activities.activities.

Loosening of mutual bonds between allied nations.Loosening of mutual bonds between allied nations.


Import Controls

TariffsTariffs Voluntary restraint agreementsVoluntary restraint agreements Quota systemsQuota systems

• Administrative problemsAdministrative problems Monetary and social costs to consumers Monetary and social costs to consumers

while benefiting protected groups.while benefiting protected groups. Downstream change in the composition Downstream change in the composition

of imports to circumvent narrowly defined of imports to circumvent narrowly defined protectionist measures.protectionist measures.

The failure of protected firms become The failure of protected firms become more efficient and competitive.more efficient and competitive.


International Business Behavior and Regulations

Regulating international business behaviorRegulating international business behavior

• Home countries may implement special laws and regulations to Home countries may implement special laws and regulations to ensure that the international business behavior of firms ensure that the international business behavior of firms headquartered within them is conducted within moral and ethical headquartered within them is conducted within moral and ethical boundaries considered appropriate.boundaries considered appropriate.

MethodsMethods

• BoycottsBoycotts• Antitrust LawsAntitrust Laws• Bribery and Corruption LawsBribery and Corruption Laws


Risk Political riskPolitical risk

• The risk of loss when investing in a given The risk of loss when investing in a given country caused by changes in a country’s country caused by changes in a country’s political structure or policies.political structure or policies.

Types of political riskTypes of political risk

• Ownership risk (property and life)Ownership risk (property and life)• Operating risk (ongoing operations interference)Operating risk (ongoing operations interference)• Transfer Risk (in shifting funds between Transfer Risk (in shifting funds between

countries)countries)

Go HomeForeigners


Political Risk


Forms of Host Country Controls

ExpropriationExpropriation

• Taking of private property with compensation.Taking of private property with compensation. ConfiscationConfiscation

• Taking of private property without Taking of private property without compensation.compensation.

DomesticationDomestication

• To gain control over foreign investment To gain control over foreign investment through demanding partial transfer of through demanding partial transfer of ownership and imposed regulations.ownership and imposed regulations.

• Raise tax rates.Raise tax rates.• Price controls.Price controls.


Legal Differences and Restraints

The two major legal systemsThe two major legal systems

• Common lawCommon law Based on tradition and less dependent on Based on tradition and less dependent on

statutes and codes than on precedent statutes and codes than on precedent and custom.and custom.

• Code lawCode law Based on a comprehensive set of written Based on a comprehensive set of written

statutes that spell out legal rules explicitly.statutes that spell out legal rules explicitly.


International Environment International PoliticsInternational Politics

• Political relations and conflicts between countries Political relations and conflicts between countries can have a profound impact on firms trying to do can have a profound impact on firms trying to do business internationally.business internationally.

• If relations between countries improve, business can If relations between countries improve, business can benefit.benefit.

International LawInternational Law

• No enforceable body of international law exists. No enforceable body of international law exists. Firms are subject to home and host-country laws.Firms are subject to home and host-country laws.

• Areas of cooperation among nationsAreas of cooperation among nations bilateral treaties guaranteeing fair treatmentbilateral treaties guaranteeing fair treatment patent and trademark protectionpatent and trademark protection


Defining the Issue

What is What is marketing researchmarketing research??

• Traditional viewTraditional view ““the function that links the consumer, customer, and the function that links the consumer, customer, and

public to the marketer through information.”public to the marketer through information.”

• Redefined viewRedefined view ““systematic and objective identification of information, systematic and objective identification of information,

collection, analysis and dissemination of information collection, analysis and dissemination of information for the purpose of improving decision making related to for the purpose of improving decision making related to the identification and solution of problems and the identification and solution of problems and opportunities in marketing.”opportunities in marketing.”


International versus Domestic Research

Similar but differentSimilar but different

• International research involves the use of International research involves the use of similar tools and techniques as in domestic similar tools and techniques as in domestic research, but the market environments research, but the market environments differ.differ.

The primary differencesThe primary differences

• New parametersNew parameters• New environments New environments • Number of factors involvedNumber of factors involved• Broader definition of competitionBroader definition of competition


The Need for Research

Reasons that firms may be reluctant to view international Reasons that firms may be reluctant to view international research as important:research as important:

• Lack of sensitivity to differences in consumer Lack of sensitivity to differences in consumer tastes and preferences.tastes and preferences.

• Limited appreciation for the different marketing Limited appreciation for the different marketing environments abroad.environments abroad.

• Lack of familiarity with national and international Lack of familiarity with national and international data sources and the inability to use them.data sources and the inability to use them.

• Actual but limited business experience in a Actual but limited business experience in a country or with a specific firm may be used as a country or with a specific firm may be used as a substitute for organized research.substitute for organized research.


Research Objectives

Research objectives vary from firm to firm Research objectives vary from firm to firm because of the views of management, the because of the views of management, the corporate mission, and the marketing situation.corporate mission, and the marketing situation.

Information needs are linked closely to the level Information needs are linked closely to the level of international expertise in the firm.of international expertise in the firm.


Opportunity Analysis

Foreign-market opportunity analysisForeign-market opportunity analysis

• Broad-brush approach to narrow down market Broad-brush approach to narrow down market possibilities.possibilities.

• Cursory analysis of general market variables- total Cursory analysis of general market variables- total and per capita GNP, mortality rates, and population and per capita GNP, mortality rates, and population data.data.

• Individual market data, product data,market trends, Individual market data, product data,market trends, and restrictions.and restrictions.

• Consideration of governmental restrictions.Consideration of governmental restrictions.


Going International


Secondary Data Sources

GovernmentsGovernments International organizationsInternational organizations Service organizationsService organizations Directories and NewslettersDirectories and Newsletters Electronic Information Electronic Information

ServicesServices Other firmsOther firms


Research Primary researchPrimary research

• Conducted to fill specific information needs.Conducted to fill specific information needs.• Essential to strategic marketing plan formation.Essential to strategic marketing plan formation.• Useful in international market segmentation.Useful in international market segmentation.

Determining information requirementsDetermining information requirements

• Formulate research questions to determine precisely Formulate research questions to determine precisely the information that is sought.the information that is sought.


Determining Research Administration

CentralizedCentralized

• The research specifications are designed by The research specifications are designed by the home office and forwarded to country the home office and forwarded to country operations for implementation.operations for implementation.

CoordinatedCoordinated

• An intermediary such as an outside research An intermediary such as an outside research agency brings headquarters and country agency brings headquarters and country operations together.operations together.

DecentralizedDecentralized

• Corporate headquarters establishes the broad Corporate headquarters establishes the broad thrust of research and delegates design and thrust of research and delegates design and implementation to the local countries.implementation to the local countries.


Research Techniques InterviewsInterviews

• Knowledge persons are a valuable information resource Knowledge persons are a valuable information resource (personal bias must be discounted).(personal bias must be discounted).

• Goal, obtain in-depth information instead of a wide Goal, obtain in-depth information instead of a wide variety of information.variety of information.

Focus groupsFocus groups

• Interaction within a group about a specific topic.Interaction within a group about a specific topic.• Ideal size, 7-10.Ideal size, 7-10.

ObservationObservation

• Observation results can be influenced by presence of Observation results can be influenced by presence of the observer.the observer.

SurveysSurveys

• Gather quantitative rather than qualitative information Gather quantitative rather than qualitative information through personal or remote contact with the subject through personal or remote contact with the subject population.population.


Designing the Survey Questionnaire• Question formatQuestion format

Structured or unstructured.Structured or unstructured. Direct or indirect.Direct or indirect. Ensure data equivalence.Ensure data equivalence.

• Question contentQuestion content Consider interviewee’s ability and willingness to answer.Consider interviewee’s ability and willingness to answer. Adapt questions to societal constraints.Adapt questions to societal constraints.

• Question wordingQuestion wording Use simple unambiguous words, terms and questions.Use simple unambiguous words, terms and questions. Check for errors using translation-re-translation approach Check for errors using translation-re-translation approach

and alternative wording for questions.and alternative wording for questions. Pretest the survey.Pretest the survey.


The Sampling Plan

System data must be:System data must be:

• RelevantRelevant• TimelyTimely• FlexibleFlexible• AccurateAccurate• ExhaustiveExhaustive• ConvenientConvenient


Environmental Scanning

One method consist of obtaining factual input.One method consist of obtaining factual input. Use of Content Analysis.Use of Content Analysis. Conducted by inside and outside corporate Conducted by inside and outside corporate

groups.groups.

Date post:	05-Jan-2016
Category:	Documents
Upload:	gyles-mosley
View:	220 times
Download:	5 times

Webster University International Marketing MRKT 5980.

Documents