The Scope and Challenge of International Marketing Chapter 1

Global Brands

1. Ahmedabad – India 2. Gurgao – India 3. Chengdu - china 4. Changquing – china 5. Austin – US 6. Salt lake city – US 7. Vancouver – Canada 8.Doha - Qatar 9.Melbourne 10.Bogota 11.San José 12.Santiago – Chile 13.Lagos – Nigeria 14.Warsaw – Poland 15.Stockholm - Sweden

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 It is an approach of a company with truly global outlook, seeking its profit impartially around the world, on a planned and systematic basis. Marketing concepts, processes, and principles are universally applicable all over the world

Domestic Market constraint Competition Government Policies Monopoly Power Spin off benefits Profit Motive

The rapid growth of the World Trade Organization and regional free trade areas The trend toward the acceptance of the free market system among developing countries in Latin America, Asia, and Eastern Europe The burgeoning impact of the Internet, mobile phones, and other global media on the dissolution of national borders The mandate to properly manage the resources and global environment for the generations to come

 “… globalization must be taken for granted. There will be only one standard for corporate success: international market share. The winning corporations will win by finding markets all over the world.”  Jack Welch, CEO, GE (1994)

 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

 Domestic Foreign Policy  Economic Climate  Competition

 Bangladesh continue following bans and restrictions on Israel. 1. Whenever any Letter of Credit (L/C) is established from a Bangladeshi bank, there is a specific clause in the L/C document stating, the good to be imported by Bangladesh) cannot be carried in 'Israeli flag' vessels. 2. Bangladesh Postal Service does not accept any letter or postal materials bound Israel nor it delivers anything from Israel. 3. Bangladesh blocks telephone and fax communications with Israel. 4. Travel Ban: Bangladesh continues travel ban on Israel. In all Bangladeshi passports, issued to civilians it is clearly written, "Valid for all countries in the world, except Israel", 5. Trade Ban: Because of the mentioned point 1,2,3 and 4, there is no business relations between Dhaka and Jerusalem.

Bangladesh, Taiwan joint business council soon Ahmede Mainul Hussain- Reporting from Dhaka, Bangladesh Dhaka, 29 September, [Asiantribune.com]: Bangladesh and Taiwan will form a joint business council to increase investment and boost co- operation in a technology transfer. A Taiwanese business delegation will visit Bangladesh from October 2 and is expected to sign a deal to form a joint business body the next day. 'Taiwan is eager to invest in the Bangladeshi textile sector,' Awal told the “Asian Tribune”. ‘However, the issue of conducting business with Taiwan is a thorny one in the country. Dhaka allowed Taiwan to setup a business-centre in the country, but later backed off when China threatened the country with dire consequences. Amir Khasru Mahmud Chowdhury, the then commerce minister resigned after the government decided to cancel the permission. - Asian Tribune -

Understandi ng buyers needs Building Goodwill Research Developme nt Understandi ng buyers needs Building Goodwill Research Developme nt Political Entities Legal systems Cultural differences Different monetary systems Marketing infrastructure Trade Restrictions Procedures and documentations Highly unpredictable Political Entities Legal systems Cultural differences Different monetary systems Marketing infrastructure Trade Restrictions Procedures and documentations Highly unpredictable

 The key to successful international marketing is adaptation to the environmental differences from one market to another  Primary obstacles to success in international marketing  SRC  Associated ethnocentrism

 SRC is an unconscious reference to  One’s own cultural values, experiences, and knowledge as a basis for decisions  Dangers of the SRC  Failing to recognize the need to take action  Discounting the cultural differences that exist among countries  Reacting to a situation in an offensive to your hosts  Ethnocentrism  Notion that one’s own culture or company knows best

 Ethnocentrism and the SRC can influence an evaluation of the appropriateness of a domestically designed marketing mix for a foreign market  The most effective way to control the influence of ethnocentrism and the SRC is to recognize their effects on our behavior

1. Define business problem or goal Home-country vs. foreign-country cultural traits, habits, or norms Consultation with natives of the target country 2. Make no value judgments 3. Isolate the SRC influence Examine it carefully to see how it complicates the problem 4. Redefine the problem Without SRC influence Solve for the optimum business goal situation

 Objectivity  Tolerance of cultural differences:  Understanding cultural differences and accepting and working with others whose behavior may be different from yours  Knowledge of cultures, history, world market potential, and global economic, social, and political trends

 Select individual managers specifically for their demonstrated global awareness  Develop personal relationships in other countries  Have a culturally diverse senior executive staff or board of directors

 No direct foreign marketing  Infrequent foreign marketing  Regular foreign marketing  International marketing  Global marketing

 Products reach foreign markets indirectly  Trading companies  Foreign customers who contact firm  Wholesalers  Distributors  Web sites  Foreign orders pique a company’s interest to seek additional international sales

 Caused by temporary surpluses  Variations in production levels  Increases in demand  Firm has little or no intention of maintaining continuous market representation  Foreign sales decline when demand or surplus decreases  May withdraw from international markets  Little or no change in company organization or product lines

 Firm has production capacity devoted to foreign markets  Firm employs domestic or foreign intermediaries  Uses its own sales force  Sales subsidiaries in important markets  Products allocated or adapted to foreign markets as demand grows  Firm depends on profits from foreign markets

 Company treats world, including home market as one market  Market segmentation decisions no longer focused on national borders  Defined by income levels, usage patterns, or other factors  More than half of revenues come from abroad  Organization takes on global perspective

 Domestic market extension orientation  Multidomestic market orientation  Global market orientation

 International operations viewed as secondary  Prime motive is to market excess domestic production  Firm’s orientation remains basically domestic  Minimal efforts are made to adapt product or marketing mix to foreign markets  Firms with this approach are classified as ethnocentric

 Companies have a strong sense that foreign country markets are vastly different  Market success requires an almost independent program for each country  Separate marketing strategies  Subsidiaries operate independently of one another in establishing marketing objectives and plans  Products are adapted for each market  Control is decentralized

 Company guided by global marketing orientation  Marketing activity is global  Market coverage is the world  Firm develops a standardized marketing mix applicable across national boundaries  Markets are still segmented  Each country or region is considered side by side with a variety of other segmentation variables  Fits the regiocentric or geocentric classifications

 Coca Cola  Microsoft  IBM  GE  Intel  Nokia  Disney  McDonald’s  Marlboro  Mercedes

Global Marketing requires marketers to behave in a way that is global and local at the same time by responding to similarities and differences in world markets.

 Attempting to maintain core global brands  global positioning  modified where necessary  Local managers have autonomy to develop local brands for local reasons  MezzoMix and Berry Fanta in Germany  Pear drink in Turkey  Iced coffee in Japan

Strategic Orientation: EPRG Schema Orientation EPRG Schema Domestic Marketing Extension Multi-Domestic Marketing Global Marketing (Ethnocentric) (Polycentric) (Regio/Geocentric)

Generally, four distinctive approaches dominate strategic thinking in international marketing: Strategic Orientation: EPRG Schema 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 profits. Management 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.

Generally, four distinctive approaches dominate strategic thinking in international marketing: Strategic Orientation: EPRG Schema 3. Regiocentric and Geocentric: Regiocentric and Geocentric are synonymous with a Global Marketing Orientation where a uniform, standardized marketing strategy is used for several countries, countries in a region, or the entire world.

 In a group, discuss 3 products under each type of market orientation and discuss the pros and cons of global orientation from your point of view.