History and Geography: The Foundations of Culture Chapter 3 McGraw-Hill/Irwin© 2005 The McGraw-Hill Companies, Inc. All rights reserved. PowerPoint presentation prepared by: Professor Rajiv Mehta Associate Professor of Marketing New Jersey Institute of Technology Newark, N.J.

Chapter Learning Objectives 1. The Importance of History and Geography in the Understanding of International Markets 2. History and Contemporary Behavior 3. History is Subjective 4. Manifest Destiny and Monroe Doctrine

Chapter Learning Objectives 5. Geography and Global Markets 6. Products and Marketing 7. Dynamics of Global Population Trends 8. Trade Routes and Industrialization

Historical Perspective In Global Business Historical insights of a country are important for understanding: Attitudes about the role of government and business Relations between Managers and Subordinates Relations between Managers and Subordinates Sources of Management Authority Attitudes toward Foreign Corporations

History and Contemporary Behavior 1.Historical events between nations influence business and history 2.Why do the Japanese have such strong loyalty toward their companies? 3.Why is a distribution system so difficult for an outsider to develop? 4.Why are decisions made by consensus?

History and Contemporary Behavior 5.Why are the Japanese loyal to family, to country, to company, and to social group? 6.Why do the Japanese cooperate? 7.Answers found in Japanese history and Confucian philosophy in which loyalty is to country 8.In short, any nation’s business and political culture is shaped by history

Geography and Global Markets Study of geography is important in the evaluation of markets Study of geography is important in the evaluation of markets Need to be knowledgeable about the effects of geographic diversity on the economic profiles of various nations Need to be knowledgeable about the effects of geographic diversity on the economic profiles of various nations Climate and topography are examined as facets of the broader and more important elements of geography Climate and topography are examined as facets of the broader and more important elements of geography

Climate and Topography Knowledge about geography, the climate and physical terrain when appraising a market Influences marketing from product adaptation to more profound influences on the development of marketing systems Climatic features affect uses and functions of products and equipment

Climate and Topography Products may require special cooling or lubrication to function adequately in tropical zones Climate differences in Europe caused Bosch- Siemens to alter its washing machines Geographic terrain such as mountain ranges in a country can influence transportation of products, e.g., Bogotá to Medellín by road takes 10 to 12 hours

Geography, Nature, and Economic Growth Association between landlocked countries and level of economic development Countries with hostile climates associated with economic stagnation Countries that suffer the most from major calamities are among the poorest in the world, which influences ability to market products Linkage exists between geographic location and economic growth

Social Responsibility & Environmental Management Firms should comply regulations against environmental pollution and disposal of hazardous waste Sustainable development guides many governments and multinational companies today Economic development and protection for the environment can coexist Firms required to be socially responsible especially in foreign markets

Sustainable Development: Key Propositions Since environment problems pay no respect to borders, global and regional collaboration is sometimes needed to complement national and regional regions There is a crucial and potentially positive link between economic development and the environment The costs of inappropriate economic policies on the environment are very high Addressing environmental problems requires that poverty be reduced Economic growth must be guided by prices that incorporate environmental values

Natural Resources Supply of natural resources not endless Importance of oil and gas in world energy consumption Importance of oil and gas in world energy consumption Human labor provides the preponderance of energy in many countries Importance of natural resources especially to manufacturing of products Importance of natural resources especially to manufacturing of products

Global Population Trends Important to know about current population trends because people constitute markets for various categories of goods Important to know about current population trends because people constitute markets for various categories of goods Necessary 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

World Trade Routes and Communication Links Knowledge about trade routes over land, sea, and air important in making marketing decisions The majority of world trade is among the most industrialized and industrializing countries of Europe, North America, and Asia Need to be aware about communication links—the underpinning of all commerce Impact of the Internet revolution especially for global marketing of products

The Triad: Trade Between the United States and Canada, the European Community, and Japan ($ billions) EUROPEAN COMMUNITY UNITED STATES & CANADA JAPAN For additional figures see: “Indicators of Market Size for 115 Countries I” Crossborder Monitor, August, 1997, pp