Introduction to International Marketing Vasily Erokhin
School of Economics and Management Harbin Engineering University
International Marketing Course #
Module
Hours
1
Introduction to International Marketing
4
1.1. 1.2.
Foundations of International Marketing Dynamic Environment of International Trade
2 2
2
Cultural Environment of Global Markets
8
2.1. 2.2. 2.3. 2.4.
Historical and Geographical Foundations of Culture Cultural Dynamics in Assessing Global Markets Culture, Management Style, and Business Systems International Legal Environment
2 2 2 2
3
Global Market Opportunities
10
3.1. 3.2. 3.3. 3.4. 3.5.
Marketing Research and Global Vision Economic Development in Asia Pacific Region Economic Development in the Americas Economic Development in Europe Economic Development in Africa and the Middle East
2 2 2 2 2
4
Global Marketing Strategies
10
4.1. 4.2. 4.3. 4.4. 4.5.
Global Marketing Management Products and Services for Consumers and Businesses International Marketing Channels International Marketing Communications and Advertising Pricing for International Markets
2 2 2 2 2
Total
32
Course Objectives The course is designed to provide students with up-to-date knowledge of international marketing issues.
The course focuses on analyzing the cultural environment of global markets, assessing global market opportunities and developing global marketing strategies. Key topics of study include: the dynamic environment of international trade; the impact of international environment on firm’s global marketing standardization versus local adaptation strategy; developing global marketing strategies, including planning and organizing marketing strategies; implementing global marketing strategies.
Student Learning Outcomes Analyzing the dynamic of cultural environment of
global marketing. Developing global-local vision through marketing research. Understanding how to formulate and implement global-local marketing strategies in international markets.
Attributes Applied research. Situational exploration. Problem resolution. Argument and reasoning. Disciplinary and multidisciplinary perspective.
Course Resources Cateora, Philip R. International Marketing ⁄ Philip R. Cateora, Mary C. Gilly, John L. Graham. — 15th ed.
Additional Reading Warren J. Keegan and Mark C. Green (2011). Global Marketing, 6th Edition, Pearson.
Michael R. Czinkota and Ilkka A. Ronkainen (2010). Principles of International Marketing, 9th Edition, South Western, Cengage Learning. Masaaki Kotabe and Kristiaan Helsen (2008). Global Marketing Management, 4th Edition, John Wiley and Sons. Gerald Albaum, Edwin Duerr, and Jesper Strandskov (2008). International Marketing
and Export Management, 6th Edition, Essex, England, Prentice Hall.
Module 1, Lecture 1: Foundations of International Marketing International marketing task Self-reference criterion in international marketing
Developing a global awareness Stages of international marketing involvement Strategic orientation of international marketing
International Marketing Task
Marketing Organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. Marketing deals with identifying and meeting human and social needs. Marketing is about meeting needs profitably.
Basic model of marketing
Marketing is about meeting needs profitably
International marketing Performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit. The difference between domestic and international marketing is the environment within which marketing plans must be implemented.
The major challenge: how to mold controllable elements of
marketing decisions within the framework of the uncontrollable elements of the marketplace in such a way that marketing objectives are achieved.
International marketing task
Marketing decision factors (controllable) Price Product Promotion Channels of distribution Research activities
Domestic environment (uncontrollable factors) Home-country elements that can have a direct effect on the success of a foreign venture:
political and legal forces
economic climate competition
Foreign environment (uncontrollable factors) External elements that can have a direct effect on the success of a foreign venture:
political and legal forces
economic forces competitive forces level of technology structure of distribution
geography and infrastructure cultural forces
Self-reference criterion in international marketing
Self-reference criterion Unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for
decisions.
Ethnocentrism Notion that one’s own culture or company knows best
Dangers of self-reference criterion Failing to recognize the need to take action Discounting the cultural differences that exist among countries
Reacting to a situation in an offensive to your hosts Understanding and dealing with the SRC are two of the most important facets of international marketing
SRC and ethnocentrism Ethnocentrism and the SRC can influence an evaluation of the appropriateness of a domestically designed marketing mix for a foreign market.
The most effective way to control the influence of ethnocentrism and the SRC is to recognize their effects on our behavior.
Cross-cultural analysis Definition of the business problem or goal in home-country cultural traits, habits, or norms.
Definition of the business problem or goal in foreign-country cultural traits, habits, or norms through consultation with natives of the target country. Isolation of the SRC influence in the problem and their examination to see how it complicates the problem. Redefinition of the problem without the SRC influence and solution of the problem for the optimum business goal situation.
Adaptation Conscious effort on the part of the international marketer to anticipate the influences of both the foreign and domestic uncontrollable factors on a marketing mix and then to adjust the marketing mix to minimize the effects
Adaptation: Coca Cola case
Developing a global awareness
Global awareness Tolerance of cultural differences and knowledge of cultures, history, world market potential, and global economic, social, and political trends
Tolerance Understanding cultural differences and accepting and working with others whose behaviors may be different from yours.
You do not have to accept as your own the cultural ways of another, but you must allow others to be different and equal.
Knowledge Knowledge of cultures is important in understanding behavior in the marketplace. A globally aware person must continuously monitor the changes which take place in the market potentials in almost every region of the world.
Approaches to global awareness Select individual managers specifically for their demonstrated global awareness. Develop personal relationships in other countries. Have a culturally diverse senior executive staff or board of directors.
Stages of international marketing involvement
Why firms go international? Proactive stimuli
Reactive stimuli
Profit advantage
Competitive pressures
Unique products
Overproduction
Technological advantages
Stable or declining domestic sales
Exclusive information
Excess capacity
Economies of scale
Saturated domestic markets
Market size
Proximity to customers and ports / transportation hubs
Stages of international marketing involvement No direct foreign marketing Infrequent foreign marketing Regular foreign marketing
International marketing Global marketing.
No direct foreign marketing Products reach foreign markets indirectly Trading companies
Foreign customers who contact firm Wholesalers Distributors Web sites
Foreign orders pique a company’s interest to seek additional international sales
Infrequent foreign marketing Caused by temporary surpluses Variations in production levels Increases in demand
Firm has little or no intention of maintaining continuous market representation Foreign sales decline when demand or surplus decreases
May withdraw from international markets
Little or no change in company organization or product lines
Regular foreign marketing Firm has production capacity devoted to foreign markets Firm employs domestic or foreign intermediaries Uses its own sales force Sales subsidiaries in important markets
Products allocated or adapted to foreign markets as demand grows Firm depends on profits from foreign markets
International marketing Companies are fully committed to and involved in international marketing activities. Seeking markets all over the world.
Planning entails not only the marketing but also the production of goods outside the home market.
Global marketing Orientation of the company toward markets and associated planning activities. The world = one market. Market segmentation decisions are no longer focused on national borders, but defined by income levels, usage patterns, or other factors that often span countries and regions.
Strategic orientation of international marketing
Approaches to strategic orientation in international marketing Domestic market extension orientation Multidomestic market orientation
Global market orientation
Domestic market orientation International operations viewed as secondary Prime motive is to market excess domestic production Firm’s orientation remains basically domestic Minimal efforts are made to adapt product or marketing mix to foreign markets Firms with this approach are classified as ethnocentric
Multidomestic market orientation Companies have a strong sense that foreign country markets are vastly different Market success requires an almost independent program for each country Separate marketing strategies
Subsidiaries operate independently of one another in establishing marketing objectives and plans Products are adapted for each market
Control is decentralized
Global market orientation Company guided by global marketing orientation Marketing activity is global Market coverage is the world
Firm develops a standardized marketing mix applicable across national boundaries Markets are still segmented Each country or region is considered side by side with a variety of other segmentation variables
Fits the regiocentric or geocentric classifications
Orientation of international marketing An environmental/cultural approach to international strategic marketing Intended to demonstrate the unique problems of international marketing Discussion of international marketing ranges from the marketing and business practices of small exporters to the practices of global companies
Foreign Policy ‘s Global Top 20
Summary The globalization of markets and competition necessitates all managers to pay attention to the global environment International marketing is defined as the performance of business activities across national borders Environmental differences must be taken into account if firms are to market products and services at a profit in other countries
Summary Self-reference criteria and ethnocentrism limit international marketer’s abilities to understand and adapt to differences prevalent in foreign markets Solutions to SLC and ethnocentrism Global awareness Sensitivity
Summary Strategic orientations found among managers of international marketing operations Domestic market extension orientation Multidomestic market orientation
Global market orientation
Thank you for your attention! Vasily Erokhin School of Economics and Management Harbin Engineering University Email:
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