InternationalMarketingTheScopeandChallengeofInternationalMarketingChapter114thEditionPhilipR.CateoraMaryC.GillyJohnL.GrahamMcGraw-Hill/IrwinInternationalMarketing14/eCopyright?2009byTheMcGraw-HillCompanies,Inc.Allrightsreserved.WhatShouldYouLearn?ThechangingfaceofU.S.businessThescopeoftheinternationalmarketingtaskTheimportanceoftheself-referencecriterion(SRC)ininternationalmarketingTheprogressionofbecomingaglobalmarketerTheincreasingimportanceofglobalawareness2GlobalPerspective:

GlobalCommerceCausesPeaceGlobalcommerceduringpeacetimeCommercialaircraftandspacevehicleindustriesMobilephoneindustryIndividualsandsmallcompaniesInternationalmarketsareultimatelyunpredictableFlexibilitymeanssurvival3EventsandTrends

AffectingGlobalBusinessTherapidgrowthoftheWorldTradeOrganizationandregionalfreetradeareasThetrendtowardtheacceptanceofthefreemarketsystemamongdevelopingcountriesinLatinAmerica,Asia,andEasternEuropeTheburgeoningimpactoftheInternet,mobilephones,andotherglobalmediaonthedissolutionofnationalbordersThemandatetoproperlymanagetheresourcesandglobalenvironmentforthegenerationstocome4TheInternationalization

ofU.S.BusinessIncreasingglobalizationofmarketsIncreasingnumberofU.S.companiesareforeigncontrolled$16.3trillioninforeigninvestmentintheU.S.–$2.6trillionmorethanAmericanoverseasinvestmentIncreasingnumberofforeigncompaniesbuildingandbuyingmanufacturingplantsintheU.S.Increasingdifficultyfordomesticmarketstosustaincustomaryratesofgrowth5ForeignAcquisitions

ofU.S.CompaniesExhibit1.16SelectedU.S.Companies

andTheirInternationalSalesExhibit1.27InternationalMarketingPerformanceofbusinessactivitiesdesignedtoPlanPrice

Promote,andDirecttheflowofacompany’sgoodsandservicestoconsumersorusersinmorethanonenationforaprofit8TheInternationalMarketingTaskExhibit1.39EnvironmentalAdaptationAbilitytoeffectivelyinterprettheinfluenceandimpactofthecultureinwhichyouhopetodobusinessCulturaladjustmentsEstablishaframeofreferenceAvoidmeasuringandassessingmarketsagainstthefixedvaluesandassumptionsofyourownculture10TheSelf-ReferenceCriterion

andEthnocentrismThekeytosuccessfulinternationalmarketingisadaptationtotheenvironmentaldifferencesfromonemarkettoanotherPrimaryobstaclestosuccessininternationalmarketingSRCAssociatedethnocentrism11SRCandEthnocentrismSRCisanunconsciousreferencetoOne’sownculturalvalues,experiences,andknowledgeasabasisfordecisionsDangersoftheSRCFailingtorecognizetheneedtotakeactionDiscountingtheculturaldifferencesthatexistamongcountriesReactingtoasituationinanoffensivetoyourhostsEthnocentrismNotionthatone’sowncultureorcompanyknowsbest12EthnocentrismandtheSRCcaninfluenceanevaluationoftheappropriatenessofadomesticallydesignedmarketingmixforaforeignmarketThemosteffectivewaytocontroltheinfluenceofethnocentrismandtheSRCistorecognizetheireffectsonourbehaviorSRCandEthnocentrism13Framework

forCross-culturalAnalysisDefinebusinessproblemorgoalHome-countryvs.foreign-countryculturaltraits,habits,ornormsConsultationwithnativesofthetargetcountryMakenovaluejudgmentsIsolatetheSRCinfluenceExamineitcarefullytoseehowitcomplicatestheproblemRedefinetheproblemWithoutSRCinfluenceSolvefortheoptimumbusinessgoalsituation14DevelopingaGlobalAwarenessToleranceofculturaldifferences:UnderstandingculturaldifferencesandacceptingandworkingwithotherswhosebehaviormaybedifferentfromyoursKnowledgeofcultures,history,worldmarketpotential,andglobaleconomic,social,andpoliticaltrends15ApproachestoGlobalAwarenessSelectindividualmanagersspecificallyfortheirdemonstratedglobalawarenessDeveloppersonalrelationshipsinothercountriesHaveaculturallydiverseseniorexecutivestafforboardofdirectors16StagesofInternational

MarketingInvolvementNodirectforeignmarketingInfrequentforeignmarketingRegularforeignmarketingInternationalmarketingGlobalmarketing17NoDirectForeignMarketingProductsreachforeignmarketsindirectlyTradingcompaniesForeigncustomerswhocontactfirmWholesalersDistributorsWebsitesForeignorderspiqueacompany’sinteresttoseekadditionalinternationalsales18InfrequentForeignMarketingCausedbytemporarysurplusesVariationsinproductionlevelsIncreasesindemandFirmhaslittleornointentionofmaintainingcontinuousmarketrepresentationForeignsalesdeclinewhendemandorsurplusdecreasesMaywithdrawfrominternationalmarketsLittleornochangeincompanyorganizationorproductlines19RegularForeignMarketingFirmhasproductioncapacitydevotedtoforeignmarketsFirmemploysdomesticorforeignintermediariesUsesitsownsalesforceSalessubsidiariesinimportantmarketsProductsallocatedoradaptedtoforeignmarketsasdemandgrowsFirmdependsonprofitsfromforeignmarkets20GlobalMarketingCompanytreatsworld,includinghomemarketasonemarketMarketsegmentationdecisionsnolongerfocusedonnationalbordersDefinedbyincomelevels,usagepatterns,orotherfactorsMorethanhalfofrevenuescomefromabroadOrganizationtakesonglobalperspective21StrategicOrientationDomesticmarketextensionorientationMultidomesticmarketorientationGlobalmarketorientation22DomesticMarketOrientationInternationaloperationsviewedassecondaryPrimemotiveistomarketexcessdomesticproductionFirm’sorientationremainsbasicallydomesticMinimaleffortsaremadetoadaptproductormarketingmixtoforeignmarketsFirmswiththisapproachareclassifiedasethnocentric23MultidomesticMarketOrientationCompanieshaveastrongsensethatforeigncountrymarketsarevastlydifferentMarketsuccessrequiresanalmostindependentprogramforeachcountrySeparatemarketingstrategiesSubsidiariesoperateindependentlyofoneanotherinestablishingmarketingobjectivesandplansProductsareadaptedforeachmarketControlisdecentralized24GlobalMarketOrientationCompanyguidedbyglobalmarketingorientationMarketingactivityisglobalMarketcoverageistheworldFirmdevelopsastandardizedmarketingmixapplicableacrossnationalboundariesMarketsarestillsegmentedEachcountryorregionisconsideredsidebysidewithavarietyofothersegmentationvariablesFitstheregiocentricorgeocentricclassifications25TheOrientation

ofInternationalMarketingAnenvironmental/culturalapproachtointernationalstrategicmarketingIntendedtodemonstratetheuniqueproblemsofinternationalmarketingDiscussionofinternationalmarketingrangesfromthemarketingandbusinesspracticesofsmallexporterstothepracticesofglobalcompanies26ForeignPolicy’sGlobalTop20Exhibit1.427SummaryTheinternationalizationofAmericanbusinessisproceed