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INTERNATIONAL MARKETING CHAPTER 1. THE SCOPE AND CHALLENGE OF INTERNATIONAL MAKRKETING. Events and Trends Affecting Global Business. The rapid growth of the World Trade Organization (WTO) and NAFTA and EU

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International marketing chapter 1

INTERNATIONAL MARKETING CHAPTER 1

THE

SCOPE AND CHALLENGE OF INTERNATIONAL MAKRKETING


Events and trends affecting global business
Events and Trends Affecting Global Business

  • The rapid growth of the World Trade Organization (WTO) and NAFTA and EU

  • 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


Internationalization of u s business
Internationalization of U.S. Business

  • Foreign companies are here to stay in the U.S. and compete with U. S. companies

  • The great worldwide acquisitions both by U. S. and foreign companies

  • Global markets are a necessity

    • Foreign earnings a higher percentage of profits

    • Multinationals outperform domestic firms

    • Global value increased through global diversification

    • Intensifying domestic competition


Exhibit 1 2 selected u s companies and their international sales
Exhibit 1.2 Selected U.S. Companies and Their International Sales

Source: Compied from annual reports of listed firms, 2012

1-4


Internationalization of u s business1
Internationalization of SalesU.S. Business

  • Current interest in international marketing can be explained by changing competitive and demand situations in markets worldwide.

  • For example, McDonald’s is pulling out of international markets in Latin America and the Middle East due to poor economies, increasing competition and anti-Americanism.

  • We have foreign competition in our own county. Many foreign companies have acquired American interests.

  • Also, a significant proportion of all CD players, computers, apparel, and dinnerware sold in the US is foreign made. (Sony, Laura Ashley, Norelco, Samsung, Toyota, Nescafe).

  • Some foreign interests have built manufacturing plants here (Fuji Photo, Honda, Mercedes). We also buy foreign interests

    as well (Ford bought Jaguar, PacifiCorp bought

    Energy Group).

  • US Multinationals abroad are nothing new. They have been out there since the end of WWII.


The internationalization of u s businesses
The Internationalization of U.S. Businesses Sales

Exhibit 1.1 Foreign Acquisitions of U.S. Companies, Sources: Compiled from annual reports of listed forms, 2012.

1-6


1- Sales7


Definition of international marketing
Definition of International Marketing Sales

  • 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 major difference between international and domestic marketing is that domestic marketing occurs in one country.


The international marketing task
The International Marketing Task Sales

  • The major issue in international vs domestic marketing is that in international marketing, there are additional layers of uncontrollable elements to deal with.

Uncontrollable Events

Additional Layers of Uncontrollable Events

Controllable Events


The international marketing task continued
The International Marketing Task Continued Sales

o

Foreign

Economic

Political/Legal

Domestic

Price

Product

Place

Promotion

Research

Competitive

Political/Legal

Competitive

Culture

Economic

Technology

Geography and Infrastructure

Distribution


The international marketing task continued1
The International Marketing Task Continued Sales

  • To adjust and adapt a marketing program to foreign markets, marketers must be able to effectively interpret the influence and impact of each of the uncontrollable environmental elements on the marketing plan for each foreign market in which they hope to do business.

  • This is hard since we do not know the culture. We take our culture for granted.

  • How do we overcome this ethnocentric view of the world?


The self reference criterion
The Self-Reference Criterion Sales

  • The primary obstacles to success in international marketing are a person’s self-reference criterion.

  • The SRC is an unconscious reference to one’s own cultural values, experience and knowledge as a basis for everyday decision making.

  • We can encounter problems if we do not understand the SRC of other countries (animal treatment in Fiji, the way biscuits should be packaged in Japan, the acceptable distance between two people).


How to avoid errors in international business decisions
How to Avoid Errors in International Business Decisions Sales

  • 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, 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.


Global awareness
Global Awareness Sales

  • Tolerance for cultural differences

  • Knowledge of cultures, history, world market potential, and global economic, social, and political trends.


What degree of international marketing involvement
What Degree of International Marketing Involvement? Sales

  • No direct foreign marketing.

  • Infrequent foreign marketing.

  • Regular foreign marketing.

  • International marketing.

  • Global marketing.


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