International Marketing Overview

International Marketing

• Study begins with understanding how marketing operates internationally.
• International marketing is a multinational process, where the scope is broadened to multiple countries.
• International marketing involves the exchange of products across national borders to satisfy consumer needs and wants.

Scope of International Marketing

• Firms move into global markets.

Exporting and Importing

• Exporting: Selling goods and services to a foreign company.
• Importing: Purchasing goods from a foreign company.
• Direct Importing/Exporting: The company handles all paperwork and directly deals with foreign suppliers/purchasers.
• Indirect Importing/Exporting: The company uses a middleman to handle paperwork and negotiate with suppliers or customers.

Contract Manufacturing

• A company hires a manufacturer to handle full production operations.

Licensing

• A corporation (licensor) grants a license to another company (licensee) to use its brand, patents, trademarks, technology, etc.

Franchising

• A contractual agreement granting the use of technology, trademarks, and patents in exchange for payment.

Joint Venture

• Two or more businesses collaborate for a common goal, with mutual benefits.

Wholly Owned Subsidiary

• A foreign company establishes a business unit or acquires full stake in a domestic company.

International Business

• Connects economies, creating global economic interdependence.

Cultural Differences

• Misunderstanding local cultures can hurt business.

Legal Barriers

• Navigating foreign laws can be tricky and time-consuming.

Currency Risks

• Fluctuations in exchange rates impact profits.

Logistics

• Managing supply chains across borders is complicated.

Culture

• A society's accepted basis for responding to internal or external events.

Global Perspectives

• History informs a nation's mission, interactions with neighbours, and self-perception.
• Understanding a country's history can improve business interactions.

History

• Subjective perceptions of history shape a country's business and political culture.

Geography

• Study of Earth's surface, climate, continents, countries, industries, and resources.

Climate

• Long-term weather patterns in a region.

Topography

• Study of Earth's surface shape and features of planets.

Environmental Protection

• Essential aspect of global business; affects humankind.

Rural/Urban Migration

• People move from rural to urban areas for education, healthcare, and jobs.

Immigration

• Balances high birth rates with low ones, often facing opposition.

Culture (2)

• Human-made part of a human environment, encompassing knowledge, beliefs, morals, laws, customs, and human capabilities.
• Learned collectively by people within a shared environment.

Knowledge of Cultures

• Factual knowledge: Easily observable traits.
• Interpretive knowledge: Understanding and appreciating nuances of cultural traits.

Origins of Culture

• Material culture: Technology and production of goods, economics.
• Social institutions: Family, status, age, education, political structures impact business.

Beliefs System

• Shapes product acceptance and promotion. Business customs are often culturally specific.

Cultural Values

• Hofstede's seminal work identified individualism/collectivism, power distance, and uncertainty avoidance as key dimensions.

Rituals

• Learned and repeated patterns of behavior.

Language

• Crucial for effective international communication.

Aesthetics

• Symbolic systems (arts, folklore, music, etc.) with cultural meaning.

Beliefs

• Often stem from religious training; vary across cultures.
• Frame of reference: Individual's way of interpreting the world.
• Cultural change: Changes in cultural conditions.
• Planned change: Deliberate attempt to impact aspects of culture.

Cultural Congruence

• Strategy to align with existing cultural norms to ensure success.

Resistance to Change

• Characteristic of culture; involves knowing what is familiar and comfortable. 

Ethnocentricity

• Tendency to view one's own culture as superior; this can lead to problems in international businesses.

Business Custom

• Practices and techniques commonly accepted for conducting business.
• Understanding these customs is vital.

Required Adaptation

• Adjusting business strategies to foreign market practices.

Cultural Imperatives

• Essential customs and practices that companies in a foreign market must recognize and accommodate.

Cultural Adiaphora

• Optional customs; acknowledging them is a good gesture.

Cultural Exclusives

• Customs strangers should avoid; engaging can be inappropriate.

Cultural Considerations

• Adapting communications and operations to align with cultural values.

Time Perception (M-Time/P-Time)

• M-Time: Linear, structured time perception.
• P-Time: Flexible, relational time perception.

Legal and Regulatory Differences

• Variations in laws and regulations across countries impact business operations.

Marketing Mix

• Product, Price, Place, Promotion: Key elements in achieving marketing goals.

Corporate Social Responsibility (CSR)

• Moral and social obligations companies have to contribute to society.

Business Ethics

• Ethical and social principles guiding business activity.

Business Ethics Fundamentals

• Fairness, Respect, Honesty, Accountability, Loyalty, Integrity

International Political Environment

• Interactions and relationships between states on the global stage.

Legal Environment

• Rules and regulations governing international interactions.

Political Environment

• Relations between governments and businesses on a global level.

Four Political Systems (Examples)

• Democracy, Dictatorship, Monarchy, Communism

Legal Environment (2)

• Systems of laws, rules, and organizations affecting individuals, businesses, and governments.

Four Types of Legal Systems (Examples)

• Religious Law, Customary Law, Common Law, Civil Law