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TRANSCRIPT
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The Scope and
Challenge ofInternational Marketing
McGraw-Hill/Irwin
International Marketing, 13/e 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
Chapter
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Chapter Learning Objectives
The changing face of U.S. business
The scope of the international marketing task
The importance of the self-reference criterion(SRC) in international marketing
The progression of becoming a globalmarketer
The increasing importance of globalawareness
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Global Perspective:
Global Commerce Causes Peace
Global commerce during peace time
Commercial aircraft and space vehicle industries
Mobile phone industry
Individuals and small companies
International markets are ultimatelyunpredictable
Flexibility means survival
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Events and Trends Affecting Global
Business
The rapid growth of the World TradeOrganization and regional free trade areas
The trend toward the acceptance of the free
market system among developing countries inLatin America, Asia, and eastern Europe
The burgeoning impact of the Internet, mobilephones, and other global media on thedissolution of national borders
The mandate to properly manage the resourcesand global environment for the generations to
come
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The Internationalization of U.S. Business
Increasing globalization of markets
Increasing number of U.S. companies are foreigncontrolled
$9.6 trillion in foreign investment in the U.S. $2.6trillion more than American overseas investment
Increasing number of foreign companies building andbuying manufacturing plants in the U.S.
Increasing difficulty for domestic markets to sustaincustomary rates of growth
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Foreign Acquisitions of U.S. Companies
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Selected U.S. Companies and Their
International Sales
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International Marketing Defined
d
International marketing is the performance of
business activities designed to plan, price,promote, and directthe flow of a companys
goods and services to consumers or users in more
than one nation for a profit.
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The International Marketing Task
Insert Exhibit 1.3
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Environmental Adaptation Needed
Be able to interpret effectively the influenceand impact of the culture in which you hopeto do business
Cultural adjustments
Establish a frame of reference
Avoid measuring and assessing markets
against the fixed values and assumptions ofyour own culture
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The Self-Reference Criterion and
Ethnocentrism
The key to successful international marketingis adaptation to the environmentaldifferences from one market to another.
Primary obstacles to success in internationalmarketing:
SRC
Associated ethnocentrism
SRC is an unconscious reference to
ones own cultural values,
experiences, and knowledge as a basis
for decisions.
Ethnocentrism is the notion that
ones own culture or company knows
best how to do things.
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The Self-Reference Criterion and
Ethnocentrism (continued)
Dangers of the SRC:
Failing to recognize the need to take action
Discounting the cultural differences that exist
among countries Reacting to a situation in a way offensive to your
hosts
Ethnocentrism and the SRC can influence anevaluation of the appropriateness of adomestically designed marketing mix for aforeign market.
The most effective way to control the
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Framework for Cross-cultural Analysis
1. Define the business problem or goal in home-countrycultural traits, habits, or norms.
2. Define the business problem or goal in foreign-countrycultural traits, habits, or norms through consultation withnatives of the target country. Make no value judgments.
3. Isolate the SRC influence in the problem and examine itcarefully to see how it complicates the problem.
4. Redefine the problem without the SRC influence andsolve for the optimum business goal situation.
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Developing a Global Awareness
Tolerance of cultural differences:
Understanding cultural differences and accepting andworking with others whose behavior may be differentfrom yours
Knowledge of cultures, history, world market potential,and global economic, social, and political trends
Approaches to global awareness:
Select individual managers specifically for theirdemonstrated global awareness
Develop personal relationships in other countries
Have a culturally diverse senior executive staff orboard of directors
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Stages of International Marketing
Involvement
No direct foreign marketing
Infrequent foreign marketing
Regular foreign marketing
International marketing
Global marketing
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Strategic Orientation
Domestic market extension orientation
Multidomestic market orientation
Global market orientation
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The Orientation ofInternational
Marketing An environmental/cultural approach to
international strategic marketing.
Intended to demonstrate the unique problems
of international marketing.
Discussion of international marketing rangesfrom the marketing and business practices of
small exporters to the practices of globalcompanies.
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Foreign Policys Global Top 20
Insert Exhibit 1.4
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Summary
The internationalization of American businessis proceeding with increasing pace.
The globalization of markets and competition
necessitates all managers to pay attention tothe global environment.
International marketing is defined as the
performance of business activities acrossnational borders.
Environmental differences such as laws,
customs, and cultures must be taken into
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Summary (continued) Self-reference criteria and ethnocentrism limit the
international marketers abilities to understand and adaptto differences prevalent in foreign markets. Solutions:
Global awareness
Sensitivity
Strategic orientations found among managers ofinternational marketing operations:
Domestic market extension orientation
Multidomestic market orientation
Global market orientation