International marketing exam 1

Why is international trade important?

lack of consistent and predictable trade policies can lead to tension

What world events affect trade?

• company scandals and layoffs

• wars and political unrest

• natural disasters and pandemics

• financial and economic disruptions

• populist developments, like Trump election

Four Trends Affecting Global Business

1. Growth of the world trade organization (WTO) and open trade agreements

2. Developing countries moving toward free trade

3. The Internet, cellular, and networked communication

4. A mandate to manage the global environment for the future

What does an increase in globalization of markets mean?

• more foreign customers, competitors, suppliers

• competition comes from domestic and foreign firms

Why do American brands have a global reach?

• important for US business to thrive

• foreign sales exceed domestic sales

• foreign investments generate a lot of revenue

What makes international marketing unique from domestic marketing?

many unfamiliar problems require unique strategies to cope with problems

• there is a level of uncertainty in foreign markets

Uncontrollable uncertainty

created by uncontrollable elements in business environments

• each international market has own set of factors

Marketing decision factors

• a marketing program is designed for optimal adjustment to uncertainty

• controllable elements in domestic environment

• can alter elements if needed

• uncontrollable elements in domestic environment

Domestic and foreign environment uncontrollables

• political and legal forces

• economic climate

• competition

• level of technology

• structure of distribution

• geography and infrastructure

• cultural forces

What is the most challenging and important task?

cultural adjustment

Duties of international marketers

• interpret influence of each uncontrollable element on market

• adjust marketing efforts to cultures in which they are not attuned

• be aware of own frame of reference when evaluating markets

Self-Reference Criterion (SRC)

unconscious reference to own cultural values, experiences, knowledge

• problematic when used as basis for decisions

impedes ability to accurately assess foreign market

Ethnocentrism

one’s own country, culture, or country is best

• most problematic when affluent countries work with less affluent

How to avoid business errors

1. Define the business problem or goal in home-country cultural traits, habits, or norms.

2. Define the business problem or goal in foreign-country cultural traits, habits, or norms through consultation with natives of the target country. Make no value judgments.

3. Isolate the SRC influence in the problem and examine it carefully to see how it complicates the problem.

4. Redefine the problem without the SRC influence and solve for the optimum business goal solution.

Main components of developing global awareness

• tolerance of and willingness to learn about cultural differences

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