International Marketing PDF

⚫ International marketing - study should begin with understanding of how marketing operates at international level. ⚫ International Marketing - is the multinational process wherein, the word multinational increased the scope of marketing to several countries. ⚫ SCOPE OF INTERNATIO...

⚫ International marketing - study should begin with understanding of how marketing operates at international level. ⚫ International Marketing - is the multinational process wherein, the word multinational increased the scope of marketing to several countries. ⚫ SCOPE OF INTERNATIONAL MARKETING - It refers to the way in which international firms move into (enter) Global markets, to exchange of products across national boundaries for satisfying the needs and wants of consumers. ⚫ Exporting - Selling goods and services to a company in a foreign country ⚫ Importing - Purchasing goods from a foreign company ⚫ Direct Importing/ Exporting - The Company handles all of the necessary paperwork for the shipment and financing of goods and services and deals directly with foreign suppliers or purchasers. ⚫ Indirect Importing/ Exporting - The Company uses a middleman to handle all the paperwork and negotiate with foreign suppliers or customers. The firm’s involvement is limited ⚫ Contract manufacturing - is a process that involves hiring a manufacturer to handle the full production operations for a company ⚫ LICENSING - When a corporation from one country (the Licensor) grants a license to a company from another country (the Licensee) to use its brand, patent, trademark, technology, copyright, marketing skills; etc ⚫ Franchising - is a contractual agreement that involves the grant of rights by one party to another for the use of technology, trademarks, and patents in return for the agreed payment for a certain period of time. ⚫ Joint Venture - is formed when two or more businesses decide to work together for a common goal and mutual benefit. ⚫ WHOLLY OWNED SUBSIDIARY - When a foreign company establishes a business unit or acquires a full stake in any 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 can impact profits. ⚫ Logistics - Managing supply chains across borders is complicated ⚫ Culture - a society’s accepted basis for responding to internal or external events ⚫ Global Perspective - History helps define a nation’s “mission”, how it views its neighbours, how it views itself in the world, how it sees itself ⚫ James Day Hodgson - suggests anyone doing business in another country should understand their history as a matter of politeness, if not persuasion. ⚫ History is Subjective - Subjective perception of a culture’s history helps to understand a nation’s business and political culture ⚫ Geography - is the study of Earth’s surface, climate, continents, countries, peoples, industries, resources ⚫ Climate - refers to the long-term weather patterns in a region ⚫ Topography - is the study of earth’s surface, shape and features or those of planets. ⚫ Environmental protection - is an essential part of doing business, as it is a global issue that affects all of humankind ⚫ Rural/Urban Migration - People move from low-density rural areas to high-density cities in search of education, healthcare, and job opportunities. ⚫ Immigration - is a way to balance high birth rates with low ones, unfortunately, there is heavy political and cultural opposition to immigration around the world ⚫ CULTURE - is the human – made part of a human environment – the sum total of knowledge, beliefs, arts, morals, laws, customs and any other capabilities and habits acquired by humans as members of society. ⚫ According to Hofstede, culture is always a collective phenomenon, because it is at least partially shared with people who live or lived within the same environment, which is where it was learned. 2 KINDS OF KNOWLEDGE ABOUT CULTURES ⚫ Factual knowledge - it is usually obvious and must be learned. Different meanings of color, different tastes and other traits indigenous to a culture are facts that a marketer can anticipate, study and absorb ⚫ Interpretive knowledge - an ability to understand and to appreciate fully the nuances of different cultural traits and patterns ORIGINS OF CULTURE 1. MATERIAL CULTURE TECHNOLOGY – the techniques and know- how of producing material goods ECONOMICS – the employment of capabilities and the result 2. SOCIAL INSTITUITION SOCIAL ORGANIZATIONS – family life, status, age EDUCATION - literacy and intelligence and how informed the public is. POLITICAL STRUCTURES – control over business 3. BELIEFS SYSTEM – how do these affect product and promotion acceptance ELEMENTS OF A CULTURE 1. CULTURAL VALUES - The most useful information on how cultural values influence various types of business and market behavior comes from seminal work by Geert Hofstede. Three Best Dimensions Are As Follows: 1. Individualism/Collective Index (IDV) - which focuses on self orientation; 2. Power Distance Index (PDI) - which focuses on authority orientation; 3. Uncertainty Avoidance Index (UAI) - which focuses on risk orientation 2. RITUALS - life is filled with rituals, patterns of behavior that are learned and repeated. 3. LANGUAGE - the successful international marketer must achieve expert communication, which requires a thorough understanding of the language as well as the ability to speak it. 4. AESTHETICS AS SYMBOLS - as we acquire our culture, we learn the meaning of this wonderful symbolic system represented in its aesthetics, that is, its arts, folklore, music, drama, dance, dress, and cosmetics. 5. BELIEFS – which mainly stem from religious training, vary from culture to culture. ⚫ FRAME OF REFERENCE - structure of concepts, views, customs, and so on, through which an individual interprets the world ⚫ CULTURAL CHANGE - change in cultural conditions ⚫ UNPLANNED CHANGE – introduce a product and hope for the best ⚫ PLANNED CHANGE – deliberately set out to change those aspect of culture offering resistance to predetermined marketing goals. ⚫ CULTURAL CONGRUENCE - this strategy involves marketing products similar to ones already on the market in a manner as congruent as possible with existing cultural norms ⚫ Cultural borrowing - is a responsible effort to learn from others’ cultural ways in the quest for better solutions to a society’s particular problems ⚫ RESISTANCE TO CHANGE - A characteristic of human culture is that change occurs. ⚫ Ethnocentric - intense identification with the known and the familiar of a particular culture, and a tendency to devalue the foreign and unknown of other cultures. ⚫ Ethnocentrism - when we behave in an ethnocentric way, there is an exaggerated tendency to believe that our own values/norms/culture are superior to those of others ⚫ Business Custom - is any practice or technique that is generally accepted as a proper way to conduct a business. Different customs usually exist in different cultures and countries ⚫ Required adaptation - in business customs and practices in international marketing refers to the adjustments and modifications that companies must make to their strategies, operations, and behaviors to effectively engage with and succeed in foreign markets ⚫ Cultural Imperatives - These are business customs and practices that must be recognized and accommodated to ensure successful interactions. ⚫ Cultural Adiaphora - These are customs where adaptation is optional. While not essential, following these practices can be seen as a gesture of goodwill and respect towards the local culture. ⚫ Cultural Exclusives - These are customs and practices that outsiders should not participate in. Engaging in these can be seen as inappropriate or disrespectful ⚫ Different business practices - refer to the various strategies and methods companies use to operate, compete, and achieve their goals. ⚫ Cultural Considerations - The awareness and adaptation of a business' operations, communication, and strategies to align with the values, beliefs, customs, and behaviors of different cultures. ⚫ M-Time & P-Time: Refers to different cultural attitudes toward time management and scheduling ⚫ M-time (Monochronic time): This approach emphasizes a linear and structured perception of time ⚫ P-time (Polychronic time): This approach reflects a more flexible and relational understanding of time. ⚫ Legal and Regulatory Differences: Variations in laws and regulations that govern business operations across different countries or regions ⚫ Marketing Mix ❖ Product: Goods or services offered by the business. ❖ Price: The amount charged for the products or services. ❖ Place: The distribution channels and locations where products or services are offered. ❖ Promotion: Includes advertising, public relations, sales promotion, personal selling, etc ⚫ Corporate Social Responsibility (CSR) - The ethical and social obligations that businesses have to contribute positively to society while conducting the operations. ⚫ Business ethics - is the moral principles, policies, and values that govern the way companies and individuals engage in business activity 6 Fundamentals of Business Ethics: 1. Fairness - Treating all stakeholders (employees, customers, suppliers, shareholders) equitably and without exploitation. 2. Respect - Valuing the rights, dignity, and opinions of all individuals, including employees, customers, and partners. 3. Honesty - Being open and clear about company operations, decisions, and policies, especially regarding financial practices and customer relations. 4. Accountability - Taking responsibility for the company’s actions, ensuring that they contribute positively to society and do not harm others. 5. Loyalty - Fostering trust and staying committed to ethical business practices and relationships with stakeholders. 6. Integrity - Acting honestly and adhering to moral and ethical principles in all business dealings. ⚫ International Political Environment - refers to the interactions and relationships between states on the global stage ⚫ Legal Environment - pertains to the rules and regulations that govern these interactions ⚫ POLITICAL ENVIRONMENT - It refers to the relations between governments, political institutions, and businesses on a global scale. FOUR POLITICAL SYSTEM 1. Democracy - A political system where citizens participate in major government decisions. 2. Dictatorship - Where the president rules with violence and controls all major government institutions. 3. Monarchy - Where the president inherits the government from the ruling family. 4. Communism - is a political and economic system based on the idea of shared ownership and control of wealth and resources. ⚫ LEGAL ENVIRONMENT - refers to the system of laws, rules, and legal organizations that have an impact on individuals, businesses, and governments in a specific jurisdiction. FOUR TYPES OF LEGAL SYSTEM THE FOUR TYPES OF LEGAL SYSTEM 1. Religious Law - It includes ethical and moral codes taught by religious traditions. Different religious systems hold sacred law in a greater or lesser degree of importance to their belief systems. 2. Customary Law - It refers to international obligations arising from established international practices, as opposed to obligations arising from formal written conventions and treaties. 3. Common Law - It is a body of unwritten laws based on legal precedents established by the courts 4. Civil Law - Also known as private law, regulates disputes between private individuals or entities. ⚫ Government policies and regulations - are rules and laws implemented by a governing body to control various aspects around the world that directly impact international operations. ⚫ Political stability - is vital for economic growth, social development, and the overall well-being of a country. ⚫ Political Risk - refers to the potential disruption or instability caused by political factors such as changes in government, policy shifts, civil unrest, and corruption. ⚫ Geopolitical Relations - analysis of the geographic influences on power relationships in international relations. ⚫ International trade law - is a set of rules and regulations that govern the exchange of goods and services across international borders. ⚫ Treaties - establish legal obligations between countries and influence areas like trade, security, and human rights. ⚫ Intellectual Property - law deals with laws to protect and enforce rights of the creators and owners ⚫ Contractual Law - It refers to the body of law that governs agreements between parties across different countries.