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International Marketing. Trade policy Culture Consumer buying power Product strategies. Obstacles to Trade: Protectionism. Differing interests of consumers and manufacturers Benefits of trade tend to be more diffused than benefits to specific groups of protectionism .

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international marketing
International Marketing
  • Trade policy
  • Culture
  • Consumer buying power
  • Product strategies
obstacles to trade protectionism
Obstacles to Trade: Protectionism
  • Differing interests of consumers and manufacturers
  • Benefits of trade tend to be more diffused than benefits to specific groups of protectionism
approaches to protectionism
Approaches to Protectionism
  • Tariffs
  • Quotas
  • “Voluntary” export restrictions
  • Subsidies to domestic producers/exporters
  • Non-tariff barriers
    • legal obstacles
    • differential treatment
cultural lessons
Cultural Lessons
  • Diet Coke is named Light Coke in Japan--dieting was not well regarded
  • Red circle trademark was unpopular in Asia due to its resemblance of Japanese flag
  • Packaging of products is more important in some countries than in U.S.
  • Advertisement featuring man and dog failed in Africa--dogs were not seem as man’s best friend
more cultural lessons
More Cultural Lessons...
  • Cologne ad featuring a man “attacked” by women failed in Africa
  • Food demonstration did well in Chinese stores but not in Korean ones--older women were insulted by being “taught” by younger representatives
  • Pauses in negotiations
  • Level of formality
definitions
Definitions
  • Culture: “That complex whole which includes knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by man as a member of society.”

Alternative definition: “Meanings that are

shared by most people in a group”

[at least to some extent]. (Adapted from Peter and

Olson, 1994)

hofstede s cultural dimensions
Hofstede’s Cultural Dimensions

Based on interviews with

IBM executives throughout

the World--1980s

  • Individualism (vs. collectivism)
  • Power distance
  • Masculine vs. feminine
  • Strong vs. weak uncertainty avoidance
  • Short vs. long term orientation (Confucianist dynamics)
    • “The Foolish Old Man Who Moved the Mountain”
negotiation content
Negotiation Content
  • Non-task sounding
  • Task-related exchange of information
  • Persuasion
  • Concessions and agreements
geography surprisingly impactful
Geography--Surprisingly Impactful
  • U.S. and most Western European areas are highly generally accessible
  • Compare to areas in the developing World:
    • China
    • Russia
    • Latin America (even Mexico), Africa
  • Communication vs. shipping
climate and topography the case of latin america
Climate and Topography: The Case of Latin America
  • 4,500 by 3,000 miles (at widest)
  • 48% forests
  • West coast dominated by mountain ranges
  • 5% of land arable
  • Natural barriers inhibiting growth
  • Large proportion of residents in cities; people in rural areas often do not associate themselves with countries
climate and topography the case of latin america12
Climate and Topography: The Case of Latin America
  • 4,500 by 3,000 miles (at widest)
  • 48% forests
  • West coast dominated by mountain ranges
  • 5% of land arable
  • Natural barriers inhibiting growth
  • Large proportion of residents in cities; people in rural areas often do not associate themselves with countries
china geography
China: Geography
  • Very rapid progress on Shanghai infrastructure
  • Rural villages are difficult to access
  • Strong regional differences even within the country
some issues in culture
Time

monochronic vs. polychronic

meanings

Personal space

preferred distance

territoriality

interaction with/ignoring people in close proximity

Symbols

colors

historical associations

Friendship and acquaintance

Agreements

Etiquette

Some Issues in Culture
eastern vs western culture
Eastern vs. Western Culture
  • Differences in
    • Values
    • Perceptions of
      • Objects
      • Reality
        • Stability vs. change
        • Control
    • Perceived roles
perceived control over reality
Perceived Control Over Reality
  • World is not generally seen as predictable
    • Trends are not expected to continue
  • Individual has little control over the world
  • BUT
    • Outcome is believed to be tied to effort, not individual skill
more tendencies
More Tendencies
  • Westeners tend to rate themselves
    • More unique than average and what they are
    • “Above average” in ability
  • Easteners tend to rate themselves
    • Less unique than they really are
    • “Below average”
proverbs
Proverbs
  • Western: “The early bird gets the worm”
  • Eastern:
    • “The first bird in the flock gets shot”
    • “A nail that stands out will be hammered down.”
values

Source: Richard E. Nisbett, The Geography of Thought: How Asians and Westeners Think Differently … and Why, New York, 2003, The Free Press

Values
some implications
Some implications
  • Thanking people—for things they are clearly supposed to do?
  • Why the need for a choice between 40 different brands of cereal?
socialization
Socialization
  • Western textbook: “See Dick run. See Dick play. See Dick run and play.”
  • Chinese: “Big brother takes care of little brother. Big brother loves little brother. Little brother loves big brother.”
perception of people
Perception of People
  • Western: People have characteristics independent of the situation
    • Fundamental attribution error: People attribute their own behavior to the circumstances but that of others to innate characteristics.
  • Eastern: Person is connected; behavior is the result of specific roles played at the time
contrasting advertising perspectives aithison 2002
Western

“Atomistic”—broken down to smallest component parts

“Unique selling propositions”

“How to”

Positioning

May be “dull and boring”

“Copy focused”

Asian

Holistic

“Everything relates to everything else”

How things “fit together” and “relate”

Visual and oral

Contrasting Advertising Perspectives (Aithison 2002)

Jim Aitchison, How Asia Advertises, New York: Wiley, 2002.

advertising content comparisons
Advertising Content Comparisons
  • American:
    • Individual benefit and pleasure (e.g., “Make your way through the crowd)
  • Korean
    • Collective values (e.g., “We have a way of bringing people together)
debate and conflict
Debate and Conflict
  • “The first person to raise his voice has lost the argument.” (Chinese proverb)
  • Use of indirection and projection
  • Face-to-face vs. anonymous comments
  • Western adversarial “rule of law” based on consistent universal ideals vs. solution for the case at hand in context
relationships education and work
Relationships, Education, and Work
  • Western
    • Standing out; being “better”
    • Self perceived favorably
    • Self-esteem building
    • Work longer on successful job
  • Eastern
    • Harmony
    • Must “weed out” personal characteristics that might annoy others
    • Taught self-criticism
    • Not recognized in profession until after many years of practice
    • Work longer on unsuccessful job
consumer incomes and buying power
CONSUMER INCOMES AND BUYING POWER
  • Measuring country wealth
    • gross domestic product
    • “purchase parity” vs. nominal
  • Government role in the economy
    • Tax burden
    • Services provided by the Government—e.g., health care, education
country of origin effects
Country of Origin Effects
  • Perception of product
    • quality (e.g., Japan, Germany)
    • elegance and style (e.g., France, Italy)
  • Historical associations
  • Positioning strategies
    • Emphasis on origin (e.g., French wine)
    • De-emphasis/obfuscation of of country of origin (e.g., French beer, American products with French language labels)
nominal vs purchase parity adjusted gnps examples 2003
Nominal vs. Purchase Parity Adjusted GNPs—Examples (2003)

Source: World Bank (http://www.worldbank.org/data/databytopic/GNIPC.pdf)

market entry strategies
Exporting

Low investment

Low control of promotion

Licensing

Low investment

Low control of promotion, positioning, and quality

Able to benefit from existing distribution and market knowledge

Joint venture

Considerable investment

More control

Able to benefit from partner’s experience

Must work with partner

Direct investment

Large investment

Risky

Greater control

May lack knowledge of market

Market Entry Strategies
market positioning strategies across countries
Market Positioning Strategies Across Countries
  • Häagen-Dazs—U.S. vs. Japan
  • Corona Beer—Mexico vs. U.S.
  • Mercedes-Benz—Europe vs. U.S.
  • McDonald’s
    • U.S.
    • Europe
    • Developing countries—e.g., China
u s laws of interest to firms with u s involvement
U.S. Laws of Interest to firms with U.S. Involvement
  • Anti-trust
  • Foreign Corrupt Influences
  • Anti-boycott laws
  • Trading With the Enemy
the international life cycle
Market for older technology tends to exist in less developed countries

Manufacturing of older generation technology--e.g., Pentium I computers

Resale of capital equipment—e.g., DC 8 aircraft, old three part canning machines

Some countries tend to be more receptive to innovation than others

“Leap frogging”

Going directly from old technology to the very newest, skipping intermediate step (e.g., wireless rather than wired technology)

Shortening of product life cycles

The International Life Cycle