International Marketing LECTURE1 International Marketing Dr. Mohamed Hesham Mansour

Standards of Evaluation Attendance& Participation 10% Assignments Project Midterm 20% Final Exam 40%

Topics to be discussed The scope and challenge of international marketing The dynamic environment of international trade The cultural environment of global markets Assessing global market opportunities Developing global marketing strategies Implementing global marketing strategies

Defining Marketing

The Market

What is a Market? PEOPLE

What is a Market? BUT - not just ANY people, they have to have Willingness to buy Purchasing power (money) Authority to buy

Exercise Define Marketing

Meeting Needs Profitably

Marketing - Formal definition-1 Process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individuals and organizational objectives.

Marketing - Formal definition-2 Marketing consists of individual and organizational activities that facilitate and expedite satisfying exchange relationships in a dynamic environment through the creation, distribution, promotion and pricing of goods, services and ideas.

Marketing is an organizational function What is Marketing? Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

The Value Delivery process 15

What Marketing is all about ? Exchange

What Marketing is all about ? Conditions for exchange to take place: Two or more people or organizations having needs to be satisfied. Voluntarily involved Each party has something of value to contribute. Communications between parties.

HOW TO CREATE NEEDS?

We do not create Needs we Create Demands

The Marketing Concept Customer Orientation Coordinated Marketing Activities Customer Satisfaction Organization Success Organization's Performance Objectives

Alternative Approaches to the Market Place Recognition of market segments Mass Market Approach Segmented Market Approach Recognition of product differences Recognition of market mix

Exercise Define Marketing Management

What is Marketing Management? Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

The Scope and Challenge of International Marketing Chapter 1 The Scope and Challenge of International Marketing McGraw-Hill/Irwin International Marketing, 13/e © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.

Chapter Learning Objectives The changing face of U.S. business The scope of the international marketing task The importance of the self-reference criterion (SRC) in international marketing The progression of becoming a global marketer The increasing importance of global awareness

Global Perspective: Global Commerce Causes Peace Global commerce thrives during peace time Commercial aircraft and space vehicle industries 145 countries, 159000 employees, 11000 jets, 1 billion travelers/y Mobile phone industry 700 million phones connecting about ¼ of all people on the planet Individuals and small companies Peace Works and Moshe& Ali’s basil pesto International markets are ultimately unpredictable Flexibility means survival

Why International Marketing?

THE DISASTERS’ CHAIN Enron 2001 September 11-2001 Wars in Afghanistan& Iraq 2001 to go SARS 2003 Tsunami 2004 Oil at over $60 Recession 2008 to go

Events and Trends Affecting Global Business The rapid growth of the World Trade Organization and regional free trade areas - NAFTA The trend toward the acceptance of the free market system among developing countries in Latin America, Asia, and eastern Europe The rapidly increasing 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 (Sustained Development)

The Internationalization of U.S. Business Increasing globalization of markets Increasing number of U.S. companies that are foreign controlled $9.6 trillion in foreign investment in the U.S. – $2.6 trillion more than American overseas investment Increasing number of foreign companies building and buying manufacturing plants in the U.S. Increasing difficulty for domestic markets to sustain customary rates of growth

Foreign Acquisitions of U.S. Companies

Selected U.S. Companies and Their International Sales

International Marketing Defined International marketing is 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.

The International Marketing Task

Environmental Adaptation Needed Be able to interpret effectively the influence and impact of the culture in which you hope to do business Cultural adjustments (STARBUCKS IN CHINA) Establish a frame of reference Avoid measuring and assessing markets against the fixed values and assumptions of your own culture

The Self-Reference Criterion and Ethnocentrism 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 – personal space Associated ethnocentrism SRC is an unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions. Ethnocentrism is the notion that one’s own culture or company knows best how to do things.

The Self-Reference Criterion and Ethnocentrism (continued) Dangers of the SRC: Failing to recognize the need to take action Discounting the cultural differences that exist among countries. Social Distance Reacting to a situation in a way offensive to your hosts. Waiting time Ethnocentrism and the SRC can influence an evaluation of the appropriateness of a domestically designed marketing mix for a foreign market. Unilever detergent in Brazil- Mahraja Mac in India The most effective way to control the influence of ethnocentrism and the SRC is to recognize their effects on our behavior. Daily sales meetings in Japan

Framework for Cross-cultural Analysis Define the business problem or goal in home-country cultural traits, habits, or norms. Define the business problem or goal in foreign-country cultural traits, habits, or norms through consultation with natives of the target country. Make no value judgments. Isolate the SRC influence in the problem and examine it carefully to see how it complicates the problem. Redefine the problem without the SRC influence and solve for the optimum business goal situation.

Developing a Global Awareness 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 Approaches to global awareness: 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

Stages of International Marketing Involvement No direct foreign marketing Infrequent foreign marketing Regular foreign marketing International marketing Global marketing

Strategic Orientation Domestic market extension orientation Multidomestic market orientation Global market orientation

Global Corporate Strategies High Transnational Strategy Seeks to balance global efficiencies and local responsiveness Combines standardization and customization for product/advertising strategies Globalization Strategy Treats world as a single global market Standardizes global products/advertising strategies Need for Global Integration Export Strategy Domestically focused Exports a few domestically produced products to selected countries Multi-domestic Strategy Handles markets independently for each country Adapts product/advertising to local tastes and needs Low Low Need for National Responsiveness High

The Orientation of International Marketing An environmental/cultural approach to international strategic marketing. Intended to demonstrate the unique problems of international marketing. Discussion of international marketing ranges from the marketing and business practices of small exporters to the practices of global companies.

Foreign Policy’s Global Top 20

Summary The internationalization of American business is proceeding with increasing pace. The globalization of markets and competition necessitates all managers to pay attention to the global environment. International marketing is defined as the performance of business activities across national borders. Environmental differences such as laws, customs, and cultures must be taken into account if firms are to market products and services at a profit in other countries.

Summary (continued) Self-reference criteria and ethnocentrism limit the international marketer’s abilities to understand and adapt to differences prevalent in foreign markets. Solutions: Global awareness Sensitivity Strategic orientations found among managers of international marketing operations: Domestic market extension orientation Multidomestic market orientation Global market orientation

Assignment # 1 (Individuals) (29/04/2010) Search for other definitions for International Marketing Analyze and Criticize Define International Marketing in your own words and Justify

THANK YOU