© The McGraw-Hill Companies, Inc., 1999 1- 0 Irwin/McGraw-Hill.
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©The McGraw-Hill Companies, Inc., 1999
1-2
Irwin/McGraw-Hill
Chapter 1
The Scope and Challenge of International Marketing
©The McGraw-Hill Companies, Inc., 1999
1-3
Irwin/McGraw-Hill
Foreign Acquisitions of U.S. Companies
U.S. Company Foreign Owner
J. Walter Thompson (Advertising) Britain
Spiegel (Catalog retailing) Germany
Mack Trucks (Automotive) France
Giant Food Stores (Supermarkets) Netherlands
Pillsbury, Hueblein (Food, Drink) Britain
CBS Records (Music and Entertainment) Japan
Magnavox (Television) Netherlands
Carnation (Coffee-Mate, Friskies pet food) Switzerland
Chesebrough-Pond’s (Vaseline) Netherlands
Vermont American (Garden Tools) Germany
Northwest Airlines (Travel) Netherlands
SOURCE: Adapted from “Soon to Be Extinct: American TV Brands.,” U.S. News & World Report,July 31, 1995, p. 13, and Gustavo Lombo, “Creating American Jobs,” Forbes, July 28, 1997. P.222.
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Invented Here, Made Elsewhere
U.S. Invented Technology
Phonographs
Color TVs
Audiotape Recorders
Videotape Recorders
Machine Tools
Telephones
Semiconductors
Computers7 4%
9 8%6 4%
8 9%2 5%
9 9%3 5%
9 9%1%
1 0%0%
4 0%1 0%
9 0%1%
9 0%
0 20 40 60 80 100
1 9 7 0
N O W
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Some of the Big U.S. Players in the Global Game*
Company Foreign Revenues% of Total
Foreign Profits% of Total
Foreign Assets% of Total
Ei du Pont de Nemours 43.1 28.9 40.6
Proctor & Gamble 50.1 36.9 40.5
Coca-Cola 67.1 67.8 37.7
Intel 58.4 38.4 20.2
Motorola 45.0 92.4 37.7
Johnson & Johnson 49.6 46.1 45.3
Sara Lee 39.7 53.8 51.3
Colgate-Palmolive 71.6 83.6 60.4
Gillette 63.1 41.1 62.6
Compaq Computer 46.5 51.7 31.4
McDonald’s 57.0 49.6 55.0
Avon Products 65.3 58.9 59.0
RJR Nabisco 36.2 53.8 20.2
*1996 data.SOURCE: Adapted from Brian Zajac, “Buying American,” July 28, 1997, p218.
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7
The International Marketing Task
Political/legalforces
Economicforces
1
2
Environmentaluncontrollablescountry market A
Environmentaluncontrollablescountrymarket B
Environmentaluncontrollablescountrymarket C
Competitivestructure Competitive
Forces
Level of Technology
Price Product
Promotion Channels of distribution
Geography and
Infrastructure
Foreign environment(uncontrollable)
Structure ofdistribution
Economic climate
Cultural forces
3
45
6
7Political/
legalforces
Domestic environment(uncontrollable)
(controllable)
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Cross Cultural Analysis to Isolatethe SRC Influences
Step 1: Define the business problem or goal in home-country cultural traits, habits, or norms.
Step 2: Define the business problem or goal in foreign-country cultural traits, habits, or norms. Make no value judgements.
Step 3: Isolate the SRC Influence in the problem and examine it carefully to see how it complicates the problem.
Step 4: Redefine the problem without the SRC influence and solve for the optimum
business goal situation.*
*James A. Lee, “Cultural Analysis in Overseas Operations, “Harvard Business Review, March-April 1996, p.106-11.
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Being Globally Aware
To be Globally Aware is to be: Objective Tolerant of Cultural Differences
Knowledgeable of:CulturesHistoryWorld Market PotentialsGlobal Economic, Social and Political Trends
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Stages of International Marketing Involvement
1. No Direct Foreign Marketing
2. Infrequent Foreign Marketing
3. Regular Foreign Marketing
4. International Marketing
5. Global Marketing
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International Marketing Concepts
Domestic Market Extension (Ethnocentric)
Multi-Domestic Market (Polycentric)
Global Marketing (Regio/Geocentric)
Concept EPRG Schema
©The McGraw-Hill Companies, Inc., 1999
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Trends in Global Business
Internationalization of U.S. Markets
Internationalization of U.S. Business
Growth of Regional Trade Areas
EU, NAFTA, AFTA, APEC
Move toward free market system by countries in
Latin America, Asia, Eastern Europe
Large Emerging Markets such as
Argentina, China, South Korea, Poland, India
Evolving global middle income households
GATT and World Trade Organization
The TRIAD
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New and Future (Possible) Multinational Market Groups or Trading Blocks of the 21st Century
European Union
European Economic Area (EC and EFTA)
North American Free Trade Area
Southern Cone-Mercosur
Asean Free Trade Area (AFTA)
Commonwealth of Independent States (CIS)
Central European Free Trade Area (CEFTA)
©The McGraw-Hill Companies, Inc., 1999
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New and Future (Possible) Multinational Market Groups or Trading Blocks of the 21st Century
Western Hemisphere Free Trade Areas (WHFTA) Canada to Argentina
Asia-Pacific Economic Cooperation (APEC) Pacific Rim Countries including U.S.
U.S./ Canada/Mexico/Japan
South American Free Trade Area (SAFTA) Andean Pact and Mercosur
Chinese Economic Area (CEA) Hong Kong, Taiwan, Coastal Provinces of So. China
U.S./European Union
Many possibilities of Republics of Russia, Baltic States
Possible Regional Trade Groups
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