Chapter 3 History and Geography The Foundations of Culture

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The importance of history and geography in the understanding of international marketsThe effects of history on a countrys cultureHow culture interprets events through its own eyesHow the United States moved west and how this more affected attitudesThe effect of geographic diversity on economic profiles of a countryWhy markets need to be responsive to geography of a countryEconomic effects of controlling population growth versus aging populationCommunications are an integral part of international commerce

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<ul><li><p>Chapter 3</p><p>History and GeographyThe Foundations of Culture</p><p>3 - *</p><p>Chapter Learning ObjectivesThe importance of history and geography in the understanding of international marketsThe effects of history on a countrys cultureHow culture interprets events through its own eyesHow the United States moved west and how this more affected attitudesThe effect of geographic diversity on economic profiles of a countryWhy markets need to be responsive to geography of a countryEconomic effects of controlling population growth versus aging populationCommunications are an integral part of international commerce</p><p>3 - *</p><p>Impact of history and Geography on The International MarketerInternational marketers must know how the unique geographic characteristics will affect the marketing of their product.The marketer needs to ask himself/herself how geography will affect price, promotion, place, product, people, and politics, i.e, the 6 Ps. </p><p>3 - *</p><p>Historical Perspective In Global BusinessHistorical insights of a country are important for understandingAttitudes about the role of government and businessRelations between Managers and SubordinatesSources of Management AuthorityAttitudes toward Foreign Corporations</p><p>3 - *</p><p>History and Contemporary BehaviorHistorical events between nations influence business and historyWhy do the Japanese have such strong loyalty toward their companies?Why is a distribution system so difficult for an outsider to develop?Why are decisions made by consensus?</p><p>3 - *</p><p>Global PerspectiveBirth of a Nation Panama in 67 HoursTo fully understand a societys actions and its points of view, you must have an appreciation for the influence of historical events and the geographical uniqueness to which a culture has had to adapt.To interpret a cultures behavior and attitudes, a marketer must have some idea of a countrys history and geography.Culture is defined as a societys accepted basis for responding to external and internal events.</p><p>3 - *</p><p>History and Contemporary BehaviorJapanese History:Seven centuries under the shogun feudal systemThe isolation before the coming of Admiral Perry in 1853Threat of domination by colonial powersRise of new social classesWestern influencesHumiliation of World War IIInvolvement in the international communityHistorically, 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 in Japan a basis on which to begin developing cultural sensitivity and a better understanding of contemporary Japanese behavior.</p><p>3 - *</p><p>History is SubjectiveHistorical events always are viewed from ones own biases and SRC.A crucial element in understanding any nations business and political culture is the subjective perception of its history.Relationship between U.S. and MexicoMonroe Doctrine</p><p>3 - *</p><p>Territorial Expansion of United States from 1783Insert Exhibit 3.1</p><p>3 - *</p><p>Manifest Destiny and the Monroe DoctrineBoth accepted as the basis for U.S. foreign policy during much of the 19th and 20th centuries.The idea of Manifest Destiny was used to justify U.S. annexation of Texas, Oregon, New Mexico, and California and later, U.S. involvement in Cuba, Alaska, Hawaii, and the Philippines.Three basic dicta of the Monroe Doctrine:No further European colonization in the New WorldAbstention of the U.S. from European political affairsNonintervention of European governments in the governments of the Western HemisphereChange in the Monroe Doctrine:1881, Roosevelt Corollary</p><p>3 - *</p><p>U.S. Intervention in Latin America Since 1945Insert Exhibit 3.2</p><p>3 - *</p><p>GEOGRAPHY &amp; GLOBAL MARKETS</p><p>3 - *</p><p>Geography</p><p>The study of earths surface, climate, continents, countries, peoples, industries and resources</p><p>3 - *</p><p>Climate &amp; Topography</p><p>3 - *</p><p>TOPOGRAPHY</p><p>Topography is the study of earths surface, shape and features or those of planets</p><p>3 - *</p><p>Climate and TopographyClimatic conditions, such as altitude, humidity, and temperature, can have an effect on products.Within even a single national market, climate can be sufficiently diverse to require major adjustments.Topographical issues and geographic hurdles can have a deep effect on the distribution channels of the product and a countrys economy.</p><p>3 - *</p><p>Channel Tunnel: Between UK and France</p><p>3 - *</p><p>Oresund LinkSweden/Denmark built bridge and tunnel across the Baltic Strait to Continental Europe</p><p>3 - *</p><p>Geography, Nature and Economic Growth</p><p>Less-privileged (developing) countries suffer disproportionately from natural disasters over more economically stable countries</p><p>In more prosperous countries, the ability to prepare, plan and overcome natural disasters is much greater.</p><p>Environmental issues:Disruption of ecosystemsRelocation of peopleInadequate hazardous waste managementIndustrial pollution</p><p>3 - *</p><p>Geography, Nature and Economic Growth</p><p>Less-privileged (developing) countries suffer disproportionately from natural disasters over more economically stable countries</p><p>In more prosperous countries, the ability to prepare, plan and overcome natural disasters is much greater.</p><p>Environmental issues:Disruption of ecosystemsRelocation of peopleInadequate hazardous waste managementIndustrial pollution</p><p>3 - *</p><p>Social Responsibility and Environmental Management</p><p>The marketer must consider what are the environmental consequences of their product.This is especially true if the company is producing the product in the country that the product is being marketed.</p><p>3 - *</p><p>Social Responsibility and Environmental ManagementPollution is on the verge of getting completely out of control</p><p>China has 16 of the worlds 20 most polluted citiesCritical issue: the disposal of hazardous waste</p><p>3 - *</p><p>Social Responsibility and Environmental ManagementOrganizations that have formed to address this problem include:The Organization for Cooperation &amp; DevelopmentThe United NationsThe European UnionOther international activist groups</p><p>Many organizations and governmental agencies are governed by a concept called sustainable development</p><p>A joint approach among governmental agencies, organizations and environmentalists who seek economic growth with wise resource management, equitable distribution of benefits and reduction of negative effects on people and environment from the process of economic growth</p><p>3 - *</p><p>ResourcesThe availability of minerals and the ability to generate energy are the foundations of modern technology.</p><p>The principal supplements to human energy are:AnimalsWoodFossil fuelNuclear powerOcean tidesGeothermal powerThe sun</p><p>3 - *</p><p>ResourcesThe availability of natural resources has an impact on economic growth </p><p>Most countries are not self-sufficient, this becomes one of the most important imports and has a major impact on a countrys trade deficit or surplus.</p><p>Global interdependence of energy resources is increasingly important and has incredible political power</p><p>3 - *</p><p>World Energy ConsumptionInsert Exhibit 3.3</p><p>3 - *</p><p>Global Population Trends</p><p>3 - *</p><p>Global Population TrendsImportant to know about current population trends because people constitute markets for various categories of goodsNecessary to know about: (1) rural/urban population shifts(2) rates of growth (3) age levels, and (4) population control (5) rural-urban migration of world population(6) population decline and aging (7) worker shortage and immigration</p><p>3 - *</p><p>Controlling Population GrowthGlobal population trends determine todays demand for goodsRural/urban population shiftsRates of growthAge levelsPopulation controlChanges in population will profoundly affect future demandThe most important deterrent to population control is cultural attitudes about the importance of large families</p><p>3 - *</p><p>World Population by Region 2005-2050Life Expectancy at Birth 2005-2010 (millions)</p><p>3 - *</p><p>Rural and Urban Population, 2005-2030 (millions)</p><p>3 - *</p><p>Rural/Urban MigrationResult of a desire for greater access to:</p><p>Sources of educationHealth careImproved job opportunities</p><p>3 - *</p><p>Population Decline and AgingPopulation growth in many countries has dropped below the rate necessary to maintain present levelsA nation needs a fertility rate of about 2.1 children per womanNot one major country has sufficient internal population growth to maintain itself</p><p>3 - *</p><p>Age Density for World and Selected Countries</p><p>3 - *</p><p>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 regionsEurope will need 1.4 billion immigrants over the next 50 yearsJapan and the U.S. will need 600 million immigrants between now and 2050</p><p>Worker Shortage and Immigration</p><p>3 - *</p><p>500 Years of Trade</p><p>3 - *</p><p>500 Years of Trade</p><p>3 - *</p><p>World Trade Routes and Communication LinksProgression of trade routesOverlandSea routesAir routesThe InternetTrade routes bind world together, minimizing:DistanceNatural barriers Lack of resources Fundamental differences between and economiesTrade routes represent attempts to overcome influence of geographyCausing economic and social imbalances</p><p>3 - *</p><p>The Triad: Trade Between the United States and Canada, the European Community, and Japan ($ billions)EUROPEANCOMMUNITYUNITED STATES &amp; CANADAJAPAN195.466.3151.689.091.5141.7</p><p>3 - *</p><p>Communication Links</p><p>3 - *</p><p>Communication Links</p><p>3 - *</p><p>Communication Links</p><p>TelegraphTelephoneTelevisionSatellitesComputerInternet</p><p>3 - *</p><p>SummaryA 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.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.</p><p>**</p></li></ul>