international marketing chap01

8/3/2019 International Marketing Chap01

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M.N. Elahee

Chapter Learning Objectives

1. The Distinction between Domestic and Global

Marketing

1. The Distinction between Domestic and GlobalMarketing

2. The scope of the Global marketing task

2. The scope of the Global marketing task

3. US and the World - The increasing importance of

global awareness

3. US and the World - The increasing importance of

global awareness

4. The progression of becoming a global marketer

4. The progression of becoming a global marketer

5. Major Concerns of International Marketers

5. Major Concerns of International Marketers



M.N. Elahee

Preface

“Never before in American history have U.S. businesses, largeand small, been so deeply involved in and affected by

international business. A global economic boom, unprecedented

in modern economic history, has been under way as the drive for

efficiency, productivity, and open, unregulated markets sweeps

the world. Powerful economic, technological, industrial, political,

and demographic forces are converging to build the foundation of

a new global economic order on which the structure of a

one-world economic and market system will be built”

(Cateora and Graham)

“Never before in American history have U.S. businesses, large

and small, been so deeply involved in and affected by

international business. A global economic boom, unprecedented

in modern economic history, has been under way as the drive for

efficiency, productivity, and open, unregulated markets sweeps

the world. Powerful economic, technological, industrial, political,

and demographic forces are converging to build the foundation of a new global economic order on which the structure of a

one-world economic and market system will be built”

(Cateora and Graham)



M.N. Elahee

Global Perspective: Recent Events

Growing uncertainties and potential foreconomic growth

Growing uncertainties and potential foreconomic growth

Wars in Afghanistan and Iraq and growing anti-Americanism

Wars in Afghanistan and Iraq and growing anti-Americanism

September 11th attacks on the World Trade Center and Pentagon

September 11th attacks on the World Trade Center and Pentagon

Stalled Talks at the Doha Round of WTO

Stalled Talks at the Doha Round of WTO

The housing meltdown in the US and itsimpact on other countries

The housing meltdown in the US and itsimpact on other countries



M.N. Elahee

Global Business Trends

1. The rapid growth of the

World Trade Organizationand regional free trade

areas, e.g., NAFTA and the

European Union

1. The rapid growth of the

World Trade Organization

and regional free trade

areas, e.g., NAFTA and the

European Union

2. General acceptance of the

free market system amongdeveloping countries in Latin

America, Asia, and Eastern

Europe

2. General acceptance of the

free market system among

developing countries in Latin

America, Asia, and Eastern

Europe

3. Impact of the Internet andother global media on the

dissolution of national

borders, and

3. Impact of the Internet and

other global media on the

dissolution of national

borders, and

4. Managing global

environmental resources

4. Managing global

environmental resources



M.N. Elahee

Internationalization of U.S. Business

Increasing globalization of

markets

Increasing globalization of

markets

Firms face competition on

all fronts

Firms face competition on

all fronts

Many U.S. companies arenow foreign controlled:Carnation (Swiss)

Amoco (UK)

Seven-Eleven (Japan)

Many U.S. companies arenow foreign controlled:Carnation (Swiss)

Amoco (UK)

Seven-Eleven (Japan)

U.S. firms seeking foreign

markets to increase profits

U.S. firms seeking foreign

markets to increase profits



M.N. Elahee



M.N. Elahee

Top US Players in Int’l. Arena

ExxonMobil IBM General Electric

Boeing Dell Microsoft

Citigroup Goldman & Sachs



M.N. Elahee

International Marketing: A Definition

International marketing is defined as the

performance of business activities designed to plan, price, promote, and direct the flow of a company’s

goods and services to consumers or users in more

than one nation for a profit

International marketing is defined as the

performance of business activities designed to plan, price, promote, and direct the flow of a company’s

goods and services to consumers or users in more

than one nation for a profit

Marketing concepts, processes, and principles are universallyapplicable all over the world

Marketing concepts, processes, and principles are universallyapplicable all over the world



M.N. Elahee

The International Marketing Task

7

3. Economy

Environmentaluncontrollablescountry market A

Environmentaluncontrollablescountrymarket BEnvironmentaluncontrollablescountry

market C

1. Competition

1. Competition

2. TechnologyPrice Product

PromotionPlace orDistribution

6. Geography andInfrastructure

Foreign Environment(Uncontrollables)

7. Structure of Distribution

3. Economy

5. Political-Legal

Domestic environment(Uncontrollables)

(Controllables)

2.Technolo

gy4.Culture

5. Political-Legal

4.

Culture

Target

Market



M.N. Elahee

Developing a Global Awareness

To be globally aware is to have:To be globally aware is to have:

1. Tolerant of Cultural Differences, and

2. Knowledgeable of:(a) Culture, (b) History, (c) World Market Potential,

(d) Global Economic, Social and Political Trends



M.N. Elahee

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



M.N. Elahee

Strategic Orientation: EPRG Schema

Orientation EPRG Schema

Domestic Marketing

Extension

Multi-DomesticMarketing

Global Marketing

(Ethnocentric)

(Polycentric)

(Regio/Geocentric)



M.N. Elahee

Generally, four distinctive approaches dominate strategic thinking ininternational marketing:


1. Ethnocentric or Domestic Marketing Extension Concept:

2. Polycentric or Multi-Domestic Marketing Concept:

Opposite of ethnocentrism

Management of these multinational firms place importance

on international operations as a source for profitsManagement believes that each country is unique and

allows each to develop own marketing strategies locally

Home country marketing practices will succeed elsewhere

without adaptation; however, international marketing is

viewed as secondary to domestic operations



M.N. Elahee

Generally, four distinctive approaches dominate strategic thinking ininternational marketing:


3. Regiocentric & Geocentric:

4. Geocentric:

Regiocentric and Geocentric are synonymous with a Global

Marketing Orientation where a uniform, standardized

marketing strategy is used for several countries, countries ina region, or the entire world

Under regiocentric view, business people assess markets in

terms of regions while under geocentrism, marketers see

the world as one market and develops a standardized

marketing strategy for the entire world



M.N. Elahee

Major Exports

% of total

Capital goods 45.8

Industrial supplies 30.5

Consumer goods 14.3

Automotive Vehicles

And Parts & Supplies 11.8



M.N. Elahee

Major Imports

% of total

Industrial supplies 36.5

Consumer goods 26.1

Capital Goods 25

Automotive Vehicles

and Parts & Supplies 15.4



M.N. Elahee

US Trade Balance

The US trade balance has been worseningover the years. In 2006, the merchandisetrade deficit for the US was over $829 billion

dollars.



M.N. Elahee

Major Markets for the US

Canada

Mexico

Japan

China

UK

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