...International Marketing 14th Edition P h i l i p R. C a t e o r a M a r y C. G i l l y John L. Graham The Scope and Challenge of International Marketing Chapter 1 McGraw-Hill/Irwin International Marketing 14/e Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. What Should You Learn? • The changing face of U.S. business • The scope of the international marketing task • The importance of the self-reference criterion (SRC) in international marketing • The progression of becoming a global marketer • The increasing importance of global awareness 1-2 Global Perspective: Global Commerce Causes Peace • Global commerce during peace time – Commercial aircraft and space vehicle industries – Mobile phone industry – Individuals and small companies • International markets are ultimately unpredictable – Flexibility means survival 1-3 Events and Trends Affecting Global Business • • The rapid growth of the World Trade Organization and regional free trade areas The trend toward the acceptance of the free market system among developing countries in Latin America, Asia, and Eastern Europe The burgeoning impact of the Internet, mobile phones, and other global media on the dissolution of national borders The mandate to properly manage the resources and global environment for the generations to come 1-4 • • The Internationalization of U.S. Business • Increasing globalization of markets • Increasing number of U.S. companies are foreign...
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...International Marketing The Scope and Challenge of International Marketing Chapter 1 1 Thursday, 27 February 14 What Should You Learn? • LO1: The benefits of international markets • LO2: The changing face of U.S. business • LO3: The scope of the international marketing task • LO4: The importance of the self-reference criterion (SRC) in international marketing • LO5: The increasing importance of global awareness • LO6: The progression of becoming a global marketer 2 Thursday, 27 February 14 LO1 Global Perspective: Global Commerce Causes Peace • Global commerce during peace time – Commercial aircraft and space vehicle industries – Mobile phone industry – Individuals and small companies • International markets are ultimately unpredictable – Flexibility means survival 3 Thursday, 27 February 14 LO1 Global Perspective: Global Commerce Causes Peace Basil pesto from Israel + raw materials and glass jars from Arab partner = Moshe & Ali’s Gourmet Foods http://www.peaceworks.com/press/libraryArticleMakingPeaceByMakingPastaSauces.html COOPERATION NEVER TASTED SO GOOD!™ 4 Thursday, 27 February 14 LO1 Events and Trends Affecting Global Business • The rapid growth of the World Trade Organisation and regional free trade areas • The trend toward the acceptance of the free market system among developing countries in Latin America, Asia, and Eastern Europe • The burgeoning impact of the Internet, mobile phones, and other global media on the dissolution of national borders • The...
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...Chapter 01 The Scope and Challenge of International Marketing True / False Questions 1. (p. 3) Global commerce thrives during peacetime. TRUE Difficulty: Easy Type: Knowledge 2. (p. 4) To date, the lesson for international commerce in the 21st century is "expect the unexpected." TRUE Difficulty: Easy Type: Knowledge 3. (p. 5) Today, every American business is international. TRUE Difficulty: Moderate Type: Comprehension 4. (p. 5) One event that will influence the shape of international business as the future unfolds is the rapid growth of the World Trade Organization, NAFTA, and the European Union. TRUE Difficulty: Moderate Type: Comprehension 5. (p. 5) One event that will influence the shape of international business as the future unfolds is the unprecedented acceptance of communism and socialism in Latin America. FALSE Difficulty: Moderate Type: Comprehension 6. (p. 5) A trend that will impact international business in the future is a mandate to properly manage the resources and global environment. TRUE Difficulty: Moderate Type: Comprehension 7. (p. 5) Today, most business activities are local or regional in scope. FALSE Difficulty: Moderate Type: Knowledge 8. (p. 6, Crossing Borders 1.1) What do French farmers, Chinese fishermen, and Russian hackers have in common--they can all receive subsidy payments from the U.S. government. FALSE Difficulty: Moderate Type: Knowledge 9. (p. 6) Foreign-made products remain a small...
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...ORGANIZATIONAL BEHAVIOR ACROSS CULTURES Conditions affecting multinational operations The people of the world are organized into communities and nations, each in its own way according to its resources and cultural heritage. Some nations are economically developed others are just now developing their natural and human resources. The conditions of work are different because of different attitudes, values, and expectations from participants. Understanding these differences and how they influence international organizational behavior is aided by examination of key social, legal, ethical, political, and economic conditions. • Social Conditions In many countries the social condition is poorly developed, there are major shortages of managerial personnel, scientists and technicians and these deficiencies limit the ability to employ local labor. Needed skills must be imported from other countries while the local workers will be prepared. • Legal and ethical conditions In judicial system, some countries practice rapid disposition of cases, in other countries cases may drag on for years. Some countries condone the practice of bribery as way of obtaining and retaining businesses others strictly prohibit it. Managers need to be aware of the possible differences in both laws and ethical values that define acceptable and unacceptable behaviors in foreign countries. The managers in foreign countries need to become familiar with local customs and practices. Applying...
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...Case #3 1. What factors contributed to EuroDisney’s poor performance during its first year of operation? What factors contributed to Hong Kong Disney’s poor performance during its first year? The biggest factors that contributed to EuroDisney’s poor performance during its first year of operation were: a poor understanding of the marketplace, the cultural differences between the two countries, and the different approaches to business and life. One major factor was the ethnocentrism, or the viewing of a foreign culture through the lens of your own culture, displayed by American leaders offset by French national insecurities. But, the problems spanned beyond arrogant leadership. Disney assumed people would travel from all over the Europe to visit the park, but really did not cater to the diversity of the guests. Even though the countries are united as the European Union, they are distinct and sovereign culturally. Put simply, EuroDisney was marketed poorly. Disney built, promoted, and communicated EuroDisney as a piece of America in Europe. Cultural differences were neglected. In the case, we see that Fresh culture also has its own cartoon characters such as Asterix, who has a theme park not far from EuroDisney. Furthermore, Disney banned alcohol in a culture that has a deep appreciation for wine. Disney failed to understand French national character, their insecurities over cultural invasion, and their deep commitment to maintaining their identity. Hong Kong Disney faces...
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...Integration Paper Cultural Concepts Introduction Eight Strangers With Nothing in Common, Except Each Other It was Saturday morning February 4, 2012 the first day of Managing in a Diverse and Global World. Ironically, the class of eight students metaphorically resembled the 1985 John Hughes movie the Breakfast Club “five strangers with nothing in common, except each other” about high school students from completely different backgrounds serving Saturday morning detention and their quest to connect on some level as equals. In a graduate class that will focus on cultural diversity in business our classroom was comprised of eight students that resembled just that. The differences were visibly apparent to everyone immediately. We represented more than 5 countries and spanned multiple continents. The three Americans in the classroom were cross sections of American culture; an African American female working in the private sector, a Caucasian American female working in the government sector, and a Caucasian American male working in the non-profit sector. The next seven weeks showed promise for revealing and stimulating conversation that centered on our individual perspectives and approaches in life and business each one of us equally contributing our narrow perspective of the world. All sharing our ideas, our ideals, and our idiosyncrasies. The first day immediately revealed how much I did not know about other cultures. I was very unaware of the breadth of differences...
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...Jacob Skinner Case 2-1: Disney MARK4050 1. Factors that contributed to EuroDisney's poor performance during its first year of operation: * French visitor's stayed away. They were expected to make up 50% of attendance figures. "The French see EuroDisney as American imperialism-plastics at its worst." The case mentions that French culture has "its own loveable cartoon characters" one of which (Asterix) has a theme park located near EuroDisney. Initial advertising of the park also aggravated the local populous, many of them felt that Disney was emphasizing glitz and size rather than the amenities they offered. * Initial construction of the park also facilitated the financial burden of Disney. Expensive trams were built to take guests from the hotels to the park, but visitors preferred walking, these additional add-ons cost Disney an additional $340 million. * Economic impact, external factors, and competition: High interest rates and the devaluation of several currencies against the franc. The 1991 Gulf War crisis limited vacation travel for the rest of that year. In 1992, the opening of EuroDisney also had to contend with European's desire to travel to the World's Fair in Seville and the 1992 Olympics in Barcelona. Factors that contributed to Hong Kong Disney's (HKD) poor performance during its first year: * Perhaps being overly cautious of making the same mistakes as EuroDisney, HKD was developed to be a much smaller amusement park. Chinese consumers felt...
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...Literature Review International Marketing is the performance of business activities designed to plan, price, promote, and direct the flow of the company’s goods and services to consumers or users in more than one nation for a profit. (Philip R. Cateora et al, 2008). International marketer’s task becomes more complicated that of the domestic marketer as it operates entirely in different business environments. A firm operating in a domestic market undoubtedly feels comfortable in adjusting the business decisions in line with the environmental changes at domestic level. However, the process in an international marketing effort often involves substantial doses of cultural, political and economic shock. To adjust and adapt a marketing program to international market, marketers should be able to interpret the effect and the influence of the uncontrollable environmental factors on their marketing plan for each and every foreign market in which they intend to do businesses. The uncontrollable factors/ elements constitute the culture and the task of cultural adjustment is the most challenging and vital one confronting international marketers. International marketers are responsible for adjusting their marketing efforts to cultures to which they are not attuned. In dealing with unknown markets, marketers must be aware of the framework they use in evaluating the potential of a market. In any system of different people, their political and economic structures, religions and other elements...
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...20/03/2014 Week 3 Lecture Understanding Culture Chapter 3 from Deresky (2011) Understanding Culture Topic Objectives: • Define culture • To understand how culture affects all aspects of international management • To be able to distinguish the major dimensions which define cultural differences among societies or groups • To emphasize the need for international managers to have cultural intelligence in order to interact successfully in international environment • Know how to use culture to define attitudes and behaviours at work • Be aware of the interaction between culture and internet. 2 Culture “A set of shared values, understandings, assumptions, and goals that are learned from earlier generations, imposed by present members of a society, and passed on to succeeding generations.” Examples: – Evidence of culture is in peoples language, music, food, beliefs etc. • Related concept: – Culture shock • A state of confusion of not knowing how to behave in a foreign unfamiliar culture. Copyright ©2011 Pearson Education, Inc. publishing as Prentice Hall 3 1 20/03/2014 Culture and its importance Studies show multinationals face major management issues for poor intercultural skills of international managers. Research shows that cross cultural differences are cause of failed negotiations and interactions, resulting in losses to major multinationals of over billions of dollars! Furthermore, examples can be drawn from historical failures of Daimler-Chrysler...
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...merchantable at the price we expected to charge. The only way we were able to dispose of the meat without a total loss was to reduce the price. You owe us a price allowance of US$1,000.’ The American refused to reduce the price. The determined resistance may have been partly in reaction to the implied insult to the taste of the American consumer: ‘If pork livers, whatever the sex of the animal, are palatable to Americans, they ought to be good enough for anyone,’ the American thought. It looked as if the buyer and seller could never agree on eating habits. (Source: Dun and Bradstreet Corporation.) Questions 1. What does ‘customary merchandisable quality’ mean? Where? In which language and cultural context? 2. Discuss how ethnocentrism and SRC (self-reference criterion) are at work in this case. 3. In this dispute, which country’s law would apply, that of the...
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...Chapter1 Quiz | 1 INCORRECT | | __________ is the 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. | | | A) | Global strategy | | | B) | Marketing | | | C) | Marketing concept | | | D) | Regional marketing concept | | | E) | International marketing | | | | | | | | 2 INCORRECT | | Which of the following is the most critical difference between domestic marketing and international marketing? | | | A) | The environment in which marketing plans must be implemented | | | B) | The different concepts of marketing | | | C) | The change in marketing goals | | | D) | The difference in technological standards | | | E) | The change in corporate objectives | | | | | | | | 3 CORRECT | | Dylan is planning to take his successful fast food venture global. Which of the following is the reason why his task could be more complicated than that of the domestic marketer? | | | A) | The international marketer must change his marketing goals in the various countries of operation. | | | B) | The international marketer must deal with at least two levels of uncontrollable uncertainty instead of one. | | | C) | Technological standardization could challenge effective customization in different markets. | | | D) | International trade regulations still do not allow free trade...
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...CASE 2-1 Ali Zein Kazmi February 1, 1999 THE NOT-SO-WONDERFUL-WORLD OF EURODISNEY -THINGS ARE BETTER NOW AT PARIS DISNEYLAND- 1. What are the factors contributed to EuroDisney’s poor performance during its first year of operation? Walt Disney overestimated the magic that was to be in introducing Europe's most lavish and extravagant theme park in April of 1992. The fiscal year 1992-1993 brought EuroDisney a loss of nearly $1 billion. Mickey, a major promotion tool of Disney management did not create reason or attraction enough for the European community, unlike at the sister theme park Tokyo Disneyland. European families found EuroDisney to be an “over-rated” promotion of American culture and lifestyle, contrary to what was seen by Disney's management as a family affair. In the initial years of operation this led to an overestimation of expected revenue and audience figures. Advertising messages had been miscommunicated, “emphasizing glitz and size…not the rides or attractions”. Disney remained unsuccessful in attracting customers just by vigorous brand name promotion communicated through Mickey and his friends. Moreover, families were reluctant to pay hefty price tags on accommodation and entertainment needed to enjoy the attractions of the park. Disney failed to manage a healthy relationship with partner organizations in the host country, which most importantly alienated them from their number one ally, the French government. Regional affairs in Eastern...
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...CASE 2-1 Ali Zein Kazmi February 1, 1999 THE NOT-SO-WONDERFUL-WORLD OF EURODISNEY -THINGS ARE BETTER NOW AT PARIS DISNEYLAND- 1. What are the factors contributed to EuroDisney’s poor performance during its first year of operation? Walt Disney overestimated the magic that was to be in introducing Europe's most lavish and extravagant theme park in April of 1992. The fiscal year 1992-1993 brought EuroDisney a loss of nearly $1 billion. Mickey, a major promotion tool of Disney management did not create reason or attraction enough for the European community, unlike at the sister theme park Tokyo Disneyland. European families found EuroDisney to be an “over-rated” promotion of American culture and lifestyle, contrary to what was seen by Disney's management as a family affair. In the initial years of operation this led to an overestimation of expected revenue and audience figures. Advertising messages had been miscommunicated, “emphasizing glitz and size…not the rides or attractions”. Disney remained unsuccessful in attracting customers just by vigorous brand name promotion communicated through Mickey and his friends. Moreover, families were reluctant to pay hefty price tags on accommodation and entertainment needed to enjoy the attractions of the park. Disney failed to manage a healthy relationship with partner organizations in the host country, which most importantly alienated them from their number one ally, the French government. Regional affairs...
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...CASE 2-1 Ali Zein Kazmi February 1, 1999 THE NOT-SO-WONDERFUL-WORLD OF EURODISNEY -THINGS ARE BETTER NOW AT PARIS DISNEYLAND- 1. What are the factors contributed to EuroDisney’s poor performance during its first year of operation? Walt Disney overestimated the magic that was to be in introducing Europe's most lavish and extravagant theme park in April of 1992. The fiscal year 1992-1993 brought EuroDisney a loss of nearly $1 billion. Mickey, a major promotion tool of Disney management did not create reason or attraction enough for the European community, unlike at the sister theme park Tokyo Disneyland. European families found EuroDisney to be an “over-rated” promotion of American culture and lifestyle, contrary to what was seen by Disney's management as a family affair. In the initial years of operation this led to an overestimation of expected revenue and audience figures. Advertising messages had been miscommunicated, “emphasizing glitz and size…not the rides or attractions”. Disney remained unsuccessful in attracting customers just by vigorous brand name promotion communicated through Mickey and his friends. Moreover, families were reluctant to pay hefty price tags on accommodation and entertainment needed to enjoy the attractions of the park. Disney failed to manage a healthy relationship with partner organizations in the host country, which most importantly alienated them from their number one ally, the French government. Regional affairs...
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...1) The cultural environment of a country is best defined by which characteristics? C) attitudes, beliefs, and values 2) Suppose you have a friend from India who is a lifelong vegetarian and who does not like McDonald's because the company sells hamburgers in many countries. Which of the following describes your friend? A) "vegetarianism" represents a value, "dislike McDonald's" represents an attitude 3) There is nothing inherently "good" or "bad" about any color of the spectrum and all associations and perceptions regarding color arise from culture. Which of the following statements is not true: D) Red color is highly preferred in some African countries. 4) Cultural influences are also quite apparent in food preparation and consumption patterns and habits. Domino's Pizza, the world's largest pizza-delivery company, pulled out of Italy because: C) Italians perceived its products to be "too American." 5) While some food preferences remain deeply embedded in culture, there is plenty of evidence that global dietary preferences are converging. Examples of such a change can be predicted from: C) the growing number of McDonald's restaurants globally. 6) American Nancy McKinstry recently became the new CEO at Dutch publisher Wolters Kluwer. As Ms. McKinstry noted, she had to drop the word "aggressive" in describing her strategic plan to company managers. She said, "I learned that the word has a negative connotation to a lot of Europeans. I was coming...
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