International Business Marketing

Factors affecting Business

• Natural disaster and pandemics

• company scandals and lay offs

• wars and national conflict

• advancement in information technology

• financial and economic disruptions

International Marketing Goals

Companies have to:

• deal with foreign customers, competitors, & suppliers

• face competition from domestic and foreign firms

Goals:

• to plan

• to price

• to promote

• to direct goods and services to consumers in several nationals for a profit

Environment of an International marketer: 3 levels

• The inner circle: controllable elements

- 4 P’s, companies’ characteristics, research

• the second circle: uncontrollable domestic elements

- Political and legal forces, economic climate and competition

• the third (outer) circle: uncontrollable elements of the foreign environment

- political/legal forces, compeptitive forces, level of technology, geography infrastructure, structure of distribution, economic forces, cultural forces

The self reference criterion (SRC)

an unconscious reference to to ones own cultural values, experiences, and knowledge as a basis for decisions

Ethnocentrism

The notion that people in one’s own company, culture, or country know best how to do things

Global awareness = cultural intelligence (CQ)

To be globally aware:

• tolerance of cultural differences

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

International Marketing involvement

• No direct foreign marketing

• infrequent foreign marketing

• regular foreign marketing

• international marketing

• global marketing

No direct foreign marketing

companies don’t actively cultivate customers outside the country

Infrequent Foreign marketing

• companies with temporary surpluses

Regular foreign marketing

• company with permanent productive capacity = production for foreign markets

International marketing

• Company committed to international sales

Global marketing

• companies treat the world as one market

What are the 3 levels of the international marketing environment?

• The inner circle: controllable elements

• The second circle: uncontrollable domestic elements

• The third (outer) circle: uncontrollable elements of the foreign environment

What does Self-Reference Criterion mean?

an unconscious reference to to ones own cultural values, experiences, and knowledge as a basis for decisions

Historical events

Relationships between countries

Historical perspective in global business

• role of government

• sources of management authority

• attitudes toward foreign corporations

How does geography influence a country relationships with foreign partners?

• study of earth surface, climate, continents, countries, peoples, industries, and resources

includes a understanding of':

• how economy and culture are affected

• how society supplies its people’s needs

Geography

• Climate and topography

• nature and economic growth

• social responsibility and environmental management

• resources

Climate and Topography

• impacts on countries’ ability to supply needs, transport products, access customers

Nature and economic growth

• resources (money and technology)/ability to prepare, plan and overcome natural disasters

• maintaining economic growth + protecting environment

Resources

• Availability of natural resources: impact on economic growth

- countries self sufficiency

- global interdependence

Population: Decline and aging

• almost all growth: underdeveloped regions

85% of population will be concentrated in these regions

• birthrates in western europe and japan: decrease

• global life expectancy has grown more in the past 50 years than over the previous 5,000 years

Population impacts Demand

Growth and decline of populations throughout the world => effects on supply and demand

Quota

A specific unit or dollar limit applied to a type of good

Important licenses

To regulate flow of exchange and quantity of an imported commodity

Difference between quotas and import licenses

greater flexibility of import licenses over quotas

Voluntary export restraints (VERs)

the exporting country sets the limits

Boycott

an absolute restriction against the purchase and importation of goods and/or services from other countries

Embargo

a refusal to sell to a specific country

Standards

• To protect health, safety, and product quality

• used to restrict trade

Culture

• Behaviors, thoughts, values, the seen and unseen

• learned, shared and transmitted by people

• not constant

Socialization

the lifelong process through which individuals learn, internalize, and adopt the norms, values, behaviors, and social skills of their society or group

Acculturation

the process of cultural modification, psychological change, and adaptation that occurs when individuals or groups from one culture come into direct, sustained contact with another, usually dominant, culture

Planned cultural Change

Which cultural factors conflict with the new product/service

→ from conflicting factors to stimulants for change

Cultural Congruence

• introduction of products

• with similarities/ market-competitors

• as congruent as possible/cultural norms

Unplanned cultural change

• steps for unplanned change:

- introduction of new product. service and wait for changes to occur

Functional vs Dysfunctional

• A dysfunctional innovation': the effects within the social system are undesirable

Most accepted innovations

The greatest interest & least disruptive

Marketer as change agent:

gain acceptance for their innovations

Cultural Borrowing

• learn from others’ cultures

• different solutions/problems & opportunities

• Culture: learned, borrowed

Cultural sensitivity and tolerance

Successful foreign marketing: cultural sensitivity

• reduce conflict

• improve communications

• increase in success in collaborative relationships

Differences in cultures through 4 dimensions (Hofstede)

• individualism/collective index (IDV): self- orientation

• power distance index (PDI): authority orientation

• uncertainty avoidance index (UAI0: risk orientation

• Masculinity/Femininity index (MAS): assertiveness and achievement

Rituals

Patterns of behavior, interaction learned and repeated

different expectations

Symbols and Beliefs

• Learning to interpret symbols: key part of socialization

• myths, beliefs, superstitions: differences from culture to culture

Origins of Culture

• Geography: Climate, topography, flora, fauna, resources

• Impact of geography on: history, technology and economics

• history impact on: technology, social institutions, cultural values, consumer behavior