LECTURE 1

International Trade and Marketing:

Scope, Challenge and Environment
International Marketing
P. R. Cateora and J. L. Graham
14th Edition (or newer)
Chapter 1 & 2

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
Chapter Learning Objectives
• The scope of the international marketing task
• The importance of the SRC in international marketing
• The increasing importance of global awareness
• The effects of protectionism on world trade

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
Global Perspective: Global Commerce Promotes
Effective International Relationships
• Global commerce requires knowledge about different markets
• Economic situation
• Demographic characteristics
• Political situation
• Long-term conditions
• Emerging trends
• Regional interests and global democratic values must be considered
• Political considerations and government expectations are key inputs into
effective relationship building.

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
Events and Trends Affecting Global Business
1. The rapid growth of the World Trade Organization (WTO) and
regional free trade areas.
2. The trend towards the acceptance of the free market system among
developing countries in Latin America, Asia, and Eastern Europe.
3. The burgeoning impact of the internet, mobile phones, and other
global media on the dissolution of national borders.
4. The mandate to properly manage the resources and global
environment for the generations to come.

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
International Marketing Defined
• International marketing
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.

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
The International Marketing Task

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
Environmental Adaptation Needed
• Be able to interpret effectively the influence and impact of the culture
in which you hope to do business
• Cultural adjustments
• Establish a frame of reference
• Avoid measuring and assessing markets against the fixed values and
assumptions of your own culture

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
The Self-Reference Criterion and Ethnocentrism
• The key to successful international marketing is adaptation to the
environmental differences from one market to another.
• Primary obstacles to success in international marketing
• Self Reference Criterion
• Ethnocentrism

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
The Self-Reference Criterion and Ethnocentrism

Self Reference
Ethnocentrism
Criterion
is an unconscious
reference to one’s own is the notion that one’s
cultural values, own culture or
experiences, and company knows best
knowledge as a basis how to do things.
for decisions.

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
The Self-Reference Criterion 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

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
Framework for Cross-cultural Analysis
1. Define the business problem or goal in home-country cultural traits,
habits, or norms.
2. Define the business problem or goal in foreign-country cultural
traits, habits, or norms through consultation with natives of the
target country. Make no value judgments.
3. Isolate the SRC influence in the problem and examine it carefully to
see how it complicates the problem.
4. Redefine the problem without the SRC influence and solve for the
optimum business goal situation.

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
Developing a Global Awareness
• Dangers of the SRC
• Failing to recognize the need to take action
• Discounting the cultural differences that exist among countries
• Reacting to a situation in a way offensive to your hosts
• 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.

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
Developing a Global Awareness
• Tolerance of cultural differences
• Understanding cultural differences and accepting and working with others
whose behavior may be different from yours.
• Knowledge of cultures, history, world market potential, and global
economic, social, and political trends.

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
Stages of International Marketing Involvement

No Direct Regular
Foreign Foreign Global
Marketing Marketing Marketing

Infrequent International
Foreign Marketing
Marketing

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
Strategic Orientation
• Domestic market extension orientation
• International operations an extension of domestic operations.
• Multidomestic market orientation
• Marketing is carried out on country-by-country basis.
• Global market orientation
• Use of standardized marketing mix across national borders.

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
International Trade: A Global Perspective
• Barriers to trade, both tariff and nontariff, are one of the major issues
confronting international marketers.
• If the benefits of the social, political, and economic changes now
taking place are to be fully realized, free trade must prevail
throughout the global marketplace.
• Countries are pushing for speedier removal of quotas on textiles and
clothing while the WTO examines cuts in agricultural support.

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
The Twentieth to the Twenty-First Century:
Developing Country’s Perspective
• Period following Second World War provided economic growth driven
by expansive investment, cooperation and immigration policy
• Growth in demand for goods locally and abroad
• Growth in demand for manufacturing

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
The Twentieth to the Twenty-First Century:
Developing Country’s Perspective
• Growth fueled by
• Increased investment from abroad
• Government policy of import replacement
• Opportunity for foreign companies operating locally
• The economies of the developing world will grow at faster rates from
an annual rate of 4% in the past quarter century to a rate of 6% for
the next 25 years.

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
The First Decade of the Twenty-First Century and Beyond
• The level of intensity of competition will change as companies focus
on gaining entry or maintaining their position in:
• Emerging markets
• Regional Trade Areas
• Established markets in Europe, Japan, and the U.S.

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
Protectionism: Logic and Illogic
Arguments
1. Protection of infant industry
concerning
protectionism
on trade 2. Protection of the home market

3. Need to keep money at home

4. Encouragement of capital accumulation

5. Maintenance of the standard of living and real wages

Global Marketing/ International Marketing & Brand Management Saiful Islam
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EMBA Program, Spring 2021 Dept. of International Business
Protectionism: Logic and Illogic
Arguments 6. Conservation of natural resources
concerning
protectionism 7. Industrialization of a low-wage nation
on trade
8. Maintaining employment level

9. National defense

10. Increase of business size

11. Retaliation and bargaining

Global Marketing/ International Marketing & Brand Management Saiful Islam
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EMBA Program, Spring 2021 Dept. of International Business
Trade Barriers
• Trade barriers are used to encourage and protect existing domestic
industry
• Tariffs
• Increase
• Weaken
• Restrict
• Quotas
• Voluntary Export Restraints (VERs) or Orderly Market Agreements (OMAs)
• Boycotts and Embargoes

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
Trade Barriers
• Trade barriers are used to encourage and protect existing domestic
industry (contd.)
• Monetary Barriers
• Blocked currency
• Differential exchange rate
• Government approval
• Standards
• Anti-dumping Penalties

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
Easing Trade Restrictions
• General Agreement on Tariffs and Trade (GATT)
• World Trade Organization (WTO)
• International Monetary Fund (IMF)
• World Bank Group

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
Protests Against Global Institutions
• The basic complaint against the WTO, IMF and others is the amalgam
of unintended consequences of globalizing:
• Environmental concerns
• Worker exploitation and domestic job losses
• Cultural extinction
• Higher oil prices
• Diminished sovereignty of nations
• “Anti-sweatshop” campaigns

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business
 End of Lecture 1

Global Marketing/ International Marketing & Brand Management Saiful Islam

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EMBA Program, Spring 2021 Dept. of International Business