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International MarketingEnvironment
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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.
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The Marketing Environment
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Identifying Market Opportunities and Threats
Many firms use environmental scanning to identify important trendsand determine whether they represent present or future marketopportunities or threats.
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An environmental scan of today¶s
marketplace
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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.
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SocialSocial
EnvironmentEnvironment
Number of Number of PeoplePeople
CharacteristicsCharacteristics
Behavior Behavior
GrowthGrowth
ProjectionProjection
The Social Environment
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Social Factors that affect Marketing
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The
Influence of Values on Buying Habits
Ranked Characteristics
of Product Quality
Reliability
Durability
Easy maintenance
Ease of use
Trusted brand name
Low price
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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.
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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
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Culture, Conventions & Etiquette
Source:Adapted from Mead (1990) Copyright 1990 © John Wiley & Sons Limited.
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2. The Demographic Environment
DemographyDemography The study of people¶svital statistics, such as
their age, race, gender,
ethnicity and location.
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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.
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Population Estimate ²Year 2025
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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.
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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.
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CulturalCultural
FactorsFactors
ValuesValues
IdeasIdeas
Attitudes Attitudes
SubgroupSubgroup Activities Activities
BeliefsBeliefs
The Cultural Environment
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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
Time
monochronic vs.
polychronic meanings
Personal space
preferred distance
territoriality
interaction
with/ignoring people
in close proximity
Symbols
colors
historicalassociations
Friendship and
acquaintance
Agreements
Etiquette
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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
way
Best outcome for
relevant group (e.g.,
family, work group)
Self-esteem Strive to feel good;
assurances wanted
Tied to belonging with
group
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
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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.
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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)
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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
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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.
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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.
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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.
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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.
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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.
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PPoliticaloliticalLegalLegal
EnvironmentEnvironment
GGloballobal
TrendsTrends
LLegislationegislationRRegulationegulation
The Political/Legal Environment
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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.
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Legislation
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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.
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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.
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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.
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8. The Institutional Environment
The institutional environment consists of all the
organizations involved in marketing products and
services.
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The Institutional Environment
MarketMarket
Research FirmsResearch Firms
Advertising Advertising
WholesalersWholesalers
RetailersRetailers
SuppliersSuppliers
CustomersCustomers
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The Future
The only certainty about the future is that it will be
uncertain, and change will occur at an increasing
rate.
It will also be more complex.
Businesses and consumers now must operate in
an era of terrorism and lack of trust.
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Thank You!!!