International Marketing Chapter 1 PDF

Chapter 1 The Scope and Challenge of International Marketing ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written International Marketing...

Chapter 1 The Scope and Challenge of International Marketing ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written International Marketing Defined The Plan, price, promote, direct flow of goods performance and services for profit of business For consumers or users in more than one activities nation Unique from Many unfamiliar problems require unique domestic strategies to cope with problems marketing Level of uncertainty and uncontrollables in foreign markets  Global Marketing Global Marketing: The scope of activities outside the home market "Global" is a word that is used to refer to issues and concerns of the entire world while "international" is a term that is used to refer to issues and concerns of two or more countries. 1-3  The Importance of Going Global For U.S. companies, 75% of total market for goods and services is outside the country For Japanese companies, 90% of market is outside the country 94% of market potential is outside of Germany for its companies even though it is the largest EU market 1-4 Exhibit 1.2 Selected U.S. Companies and Their International Sales Company Global Revenues Percent Revenues (billions of dollars) from Outside the U.S. Apple 215.1 60.0 Amazon 136.0 33.6 Boeing 94.6 59.0 Dow Chemical 48.2 65.5 Exxon 197.5 73.5 Ford 151.8 38.5 General Electric 119.7 70.3 Intel 59.4 78.2 Johnson & Johnson 71.9 47.4 Procter & Gamble 65.3 58.7 Walmart 482.2 24.5 S&P 500, 2016: Global Sales Year in Review (July 2017). Exhibit 1.1 Foreign Acquisitions of U.S. Companies 1 of 2 U.S. Companies/Brands Foreign Owner 7-Eleven Japan Ben & Jerry’s (ice cream) U.K. Budweiser Belgium Chrysler Italy Chrysler Building (NYC) Abu Dhabi Church’s Chicken Bahrain CITGO Venezuela Columbia Pictures (movies) Japan Compiled from annual reports of listed firms, 2018. French’s Mustard U.K. Firestone (tires) Japan Frigidaire Sweden Genentech Switzerland The International Marketing Task Uncontrollable uncertainty Comprised of uncontrollable elements in business environments Each international market has own set of factors Figure 1.3 The International Marketing Task Jump to long image description. Aspects of the Foreign Environment Foreign Environment Uncontrollables Political/legal forces Economic forces Competitive forces Level of technology Structure of distribution Geography and infrastructure Cultural forces Environmental Adaptation Needed Cultural adjustment: the most challenging and important task Duties of international marketers Interpret influence of each uncontrollable element on market  Standardization Vs. Adaptation Globalization (Standardization) – Developing standardized products marketed worldwide with a standardized marketing mix – Essence of mass marketing Global localization (Adaptation) – Mixing standardization and customization in a way that minimizes costs while maximizing satisfaction – Essence of segmentation – Think globally, act locally 1-11 Stages of International Involvement Main characteristics of companies that internationalize quickly: High-technology and/or marketing-based resources Smaller home markets and larger production capacities Mangers who are well-networked internationally Stages of International Marketing Involvement More reactive 1. No direct foreign marketing and less 2. Infrequent foreign marketing strategic More involved in 3. Regular foreign marketing strategic 4. Multidomestic or planning international marketing 5. Global marketing Figure 1.4 The KOF Globalizatio n Index (top ten plus selected other countries) Jump to long image description. Savina Gygli, Florian Haelg, and Jan-Egbert Strum, Gygli, Savina, Florian Haelg and Jan-Egbert Sturm (2018): The KOF Globalisation Index – Revisited, International Commerce Causes Peace Global commerce thrives during peacetime Economic boom in North America in late 1990s The end of the Cold War Opening former communist countries to world trading system At the same time, you may argue that it could lead to economic and bloody wars!!!