International Marketing

1
International Marketing (MAR 4156)
2
The Scope and Challenge of International Marketing
Chapter
1
Why is international marketing important to our
society? Why is it important to you?
3
The Interconnectedness of Markets
Revenue from international sales
Free Trade Areas
Partnerships
Ownership
Competition
Technology
Trade
Media
4
Top 10 U.S. Players in the Global Game
Foreign Revenues ( Mil)
Foreign Revenues ( of Total)
Foreign Profits ( of Total)
Foreign Assets ( of Total)
Company
ExxonMobil IBM Ford Motor General Motors General
Electric Texaco Citigroup Hewlett-Packard Wal-Mart
Stores Compaq Computer
115,464 50,377 50,138 46,485 35,350
32,700 28,749 23,398 22,728 21,174
71.8 57.5 30.8 26.3 31.7
77.1 35.1 55.2 13.8 55.0
62.7 49.6 N/A 55.3 22.8
54.1 N/A 58.0 8.2 101.4
63.9 43.7 44.2 38.0 47.4
45.2 41.0 51.5 36.0 28.2
1-4
SOURCE Adapted from Brian Zajac, Global
Giants. Forbes, July 24, 2000
5
Foreign Acquisitions of U.S. Companies
U.S. Companies Foreign Owner Bestfoods
(foods) U.K. Ben Jerrys (ice
cream) U.K. Alpo (pet food) Swiss Pillsbury
(food) U.K. Burger King (fast food) U.K. Random
House (publishing) Germany Chrysler
(autos) Germany TV Guide (magazine) Australia Ne
w York Post (newspaper) Australia LA Dodgers
(sports) Australia Arco (gasoline)
U.K. CompUSA (retailing) Mexico Seagram
(alcoholic beverages) France
1-2
SOURCE Adapted from Kuri Badenhausen. Name
Game, Forbes. Jul 24, 2000
6
The International Marketing Task
7
Foreign environment (uncontrollable)
1
Economic forces
Political/legal forces
Domestic environment (uncontrollable)
2
7
Competitive structure
Political/ legal forces
1-5
Competitive Forces
(controllable)
Cultural forces
Environmental uncontrollables country market A
Price
Product
3
Channels of distribution
Promotion
Environmental uncontrollables country market B
6
Level of Technology
Geography and Infrastructure
Economic climate
Environmental uncontrollables country market C
4
5
Structure of distribution
7
The Importance of Culture
8
Obstacles to the International Marketer
Adaptation
Self-Reference Criterion
Ethnocentrism
Adaptation
9
The Good

• Product adaptation to reflect local needs
• Taco Bell in Costa Rica
• McDonalds in India
• Packaging adaptations for goods
• Johnson baby powder was marketed in Japan but it
  failed on its first try. Japanese homes are very
  small and neatness is paramount. Consumers could
  not tolerate the dust that collected everywhere
  when the box was shaken. JJ later adopted a wipe
  on pad.
• Sensitivity to other customs
• When traveling to India, President and Mrs.
  Kennedy planned to present signed photos, encased
  in hand-tooled leather frames. They were intended
  as a presentation of American craftsmanship to
  the leaders. But just before the trip, someone
  pointed out the significance of the sacred cow in
  India. Sterling silver frames were quickly
  substituted, just in time to avert insult to the
  hosts and embarrassment to the guests.

10
The Bad

• When Gerber started selling baby food in Africa,
  they used the same packaging as in the US, with
  the beautiful Caucasian baby on the label. Later
  they learned that in Africa, companies routinely
  put pictures on the label of what's inside, since
  most people can't read English.
• One company printed the "OK" finger sign on each
  page of its catalog. In many parts of Latin
  America that is considered an obscene gesture.
  Six months of work were lost because they had to
  reprint all the catalogs.
• A golf ball manufacturing company packaged golf
  balls in packs of four for convenient purchase in
  Japan. Unfortunately, pronunciation of the word
  "four" in Japanese sounds like the word "death"
  and items packaged in fours are unpopular.
• A telephone company tried to market its
  products/services to Latinos by showing a
  commercial in which a Latino wife tells her
  husband to call a friend, telling her they would
  be late for dinner." The commercial bombed since
  their use of time would not require a call about
  lateness.

11
The Ugly

• In Italy, a campaign for Schweppes Tonic Water
  translated the name into "Schweppes Toilet
  Water".
• Pepsodent tried to sell its toothpaste in
  Southeast Asia by emphasizing that it "whitens
  your teeth." They found out that the local
  natives chew betel nuts to blacken their teeth
  which they find attractive. Some were also
  offended by the slogan, "Wonder where the yellow
  went..." interpreting it as a racial slur.
• Coors put its slogan, "Turn it loose," into
  Spanish, where it was read as "Suffer from
  diarrhea".
• Scandinavian vacuum manufacturer Electrolux used
  the following in an American campaign Nothing
  sucks like an Electrolux.
• Clairol introduced the "Mist Stick," a curling
  iron, into Germany only to find out that "mist"
  is slang for manure. Not many people had use for
  the "Manure Stick."

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Cross Cultural Analysis to Isolate the SRC
Influences
Step 1 Define the business problem or goal in
home- country cultural traits, habits, or
norms. Step 2 Define the business problem or
goal in foreign-country cultural traits,
habits, or norms. Make no value
judgements. Step 3 Isolate the SRC Influence in
the problem and examine it carefully to see
how it complicates the problem. Step 4
Redefine the problem without the SRC influence
and solve for the optimum business goal
situation.
1-6
James A. Lee, Cultural Analysis in Overseas
Operations, Harvard Business Review,
March-April 1996, p.106-11.
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Being Globally Aware
? To be Globally Aware is to be ? Objective ?
Tolerant of Cultural Differences ?
Knowledgeable of ? Cultures ? History
? World Market Potentials ? Global Economic,
Social and Political Trends
1-7
14
Stages of International Marketing Involvement
1. No Direct Foreign Marketing 2. Infrequent
Foreign Marketing 3. Regular Foreign
Marketing 4. International Marketing 5.
Global Marketing
1-8
15
International Marketing Strategies
Concept
EPRG Schema
Domestic Market Extension (Ethnocentric) Multi-D
omestic Market (Polycentric) Global
Marketing (Regio/Geocentric)
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