Welcome to class of Stages of International Marketing and Strategic Orientation by Dr. Satyendra Singh University of Winnipeg Canada

The International Model

SRC: one’s own cultural values, experiences, and knowledge as a basis for decisions Ethnocentrism: one’s own culture or company knows best how to do things SRC and ethnocentrism impede the ability to assess a foreign market in its true light Culture: Self Reference Criterion (SRC) and Ethnocentrism

The Obstacle Meanings, values, symbols, and behavior relevant to our own culture are different from those of foreign cultures Relying on one’s SRC could produce an inadequately adapted marketing program

Avoiding the Obstacle Define the goal in foreign-country cultural traits, habits, or norms, with natives of the target country. Make no value judgments. Isolate the SRC influence on the goal. Redefine the goal without the SRC influence.

Developing a Global Mindset Tolerance of cultural differences –Understanding such differences and accepting and working with others Knowledge of –Cultures –History –Market potential –Economic, social, and political trends

Example of Cultural Difference

In Iran Saudi Arabia…, no controversy

May be unacceptable in some cultures  hampers creativity, standardization and profitability

The alternatives at the expense of creativity

More important in luxury

Stages of International Marketing… Infrequent Foreign Marketing No Direct Foreign Marketing International Marketing Regular Foreign Marketing Global Marketing

Stages of International Marketing… Stage 1: No Direct Foreign Marketing –Not active foreign customer seekers –Foreign markets via domestic wholesalers/distributors –Unsolicited orders –Internet Stage 2: Infrequent Foreign Marketing –Variation in production levels or demands –No commitment to foreign market representation –If domestic demand , foreign activity  –Foreign agents may approach –Managers’ own foreign contacts

Stages of International Marketing… Stage 3: Regular Foreign Marketing –Dedicated production capacity to foreign markets –Own sales force/subsidiaries in foreign markets –Domestic market is still the prime focus, but as the foreign demand , production/products are adapted to meet those customer needs –Depend on foreign sales to meet goal (vs. as a bonus) Stage 4: International Marketing –Fully committed and involved in international marketing –Planned productions for various foreign markets –Production of goods in foreign markets as well –At this stage, a firm is international or multi-national

Stages of International Marketing Stage 5: Global Marketing –Treats the world including home market as one –Market segments are defined by demographic and psychographic variables –Half of its revenue should come from foreign market –Global perspective is the focus

Strategic Orientations Orientation Domestic Marketing Extension Multidomestic Marketing Global Marketing EPRG Schema Ethnocentric Polycentric Regio/Geocentric

Strategic Orientations… Domestic Market Extension Orientation (Stage 1/2) –Extension of domestic products into foreign markets –International markets are secondary –Prime focus—market excess domestic products abroad –Firm’s orientation is domestic Multi-Domestic Market Orientation (Stage 2/3) –Realizes the difference b/w domestic & foreign markets –Different countries need different products –Separate marketing strategies for each country –Subsidiaries operate independent of one another –Products are adapted, advertising is localized –Might not standardize products

Strategic Orientations Regional/Global Orientation (Stage 4/5) –Truly global – single market –Emphasis on standardization—product/process –Strive for efficiencies of scale by standardizing market mix across national borders, whenever it is cost or culture effective –Pursue a global strategy for major brands or multi- domestic strategy for other brands