International Marketing

18th edition

Philip R. Cateora, Mary C. Gilly, and John L. Graham

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INTENDED LEARNING OUTCOMES

1. Define International marketing and the benefits of

international markets .
2. Recognize the events and Trends Affectting
Global Business
3. Discuss the different factors of controllable and
uncontrollable international marketing.
4. Enumerate and explain the different international
marketing stages.

COLLEGE OF BUSINESS EDUCATION

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Presentation Outline
 Marketing as an exchange function.
 International Marketing defined.
Events and Trends affecting Global
Business
Different International Marketing Tasks.
 International Marketing Stages
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MARKETING defined….

• Consists of all the activities designed to

generate and facilitate any exchange
intended to satisfy human needs and
wants.

• Human activity directed at satisfying needs

and wants through exchange processes.

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MARKETING defined….

• Total system of a business activities

designed to plan, price, promote,
and distribute want satisfying
products, services and ideas to
target markets in order to achieve
organizational objectives.

5
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Marketing ….

• The essence of marketing is a

transaction – an exchange –
intended to satisfy human needs
and wants.

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The Benefits of International Markets

• Provides higher standard of living

• Benefits of comparative cost
• Ensures rational & optimum utilization
of resources
• Better utilization of surplus production
Marketing as an Exchange Process 1
(Firm Level)
 Events and Trends 1
Affecting Global Business
• The rapid growth of the World Trade
Organization (WTO), NAFTA, ASEAN and EU

159 Members 28 Members

Brunei,
Burma (Myanmar),
Cambodia,
Timor-Leste,
Indonesia,
Laos,
Malaysia,
the Philippines,
Singapore,
Thailand and
Vietnam.
US, Canada and Mexico 11 Members

As of November 26, 2021 5:58am

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 Events and Trends 1
Affecting Global Business
The trend toward the acceptance of the free
market system among developing countries in:
- Latin America - Guatemala, Honduras, El Salvador, Nicaragua,
Costa Rica and Panama in North America; Colombia,
Venezuela, Ecuador, Peru, Bolivia, Chile, French Guiana,
Paraguay, Brazil, Argentina and Uruguay
- Eastern Europe (Russia, Czech Republic, Poland, Croatia,
Slovakia, Hungary, Romania, Moldova, Serbia, Lithuania, Latvia
and Estonia, Slovenia, Bulgaria, Ukraine and Belarus,
Montenegro, Bosnia and Herzegovina, Albania, Kosovo, and
Macedonia
- Asia – Singapore, Thailand, China, Japan, Indonesia, Malaysia

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 Events and Trends 1
Affecting Global Business
• The burgeoning impact of the Internet, mobile
phones, and other global media on the
dissolution of national borders

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 Events and Trends 1
Affecting Global Business
• The mandate to properly manage the resources
and global environment for the generations to
come

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 Events and Trends 1
Affecting Global Business
China in global POLITICS

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INDIA in Information Technology/Manufacturing

The Tata Nano was released in

India for the price of $2,000 US
Dollars Update: in 2021, it
looks like the Tata Nano price
is about $3,243 USD for the
base Nano GenX XE model).

Roy Philip 14
 Events and Trends 1
Affecting Global Business
• China in global economy

2020 – GDP 18.33%

Exports 27.1% - USD 300.22 billion
in October 2021

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 Events and Trends 1
Affecting Global Business
• China in MILITARY POWER

915,000 Active Soldiers – 10/29/21

Anti-Satellites

355 warships – 11/03/21

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 Events and Trends 1
Affecting Global Business
The most recent……
• Pandemic:

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 Events and Trends 1
Affecting Global Business

Affecting the economic activity of

214 Countries and Territories
As of Nov. 25, 2021(11:59PM) :
Cases: 260,212,372
Deaths 5,197,735
Recovered: 235,171,827
Source: Worldometers.info/coronavirus/

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 Internationalization of 1

U.S. Business
• Foreign companies are here to stay in the U.S.
and compete with U. S. companies
• The great worldwide acquisitions both by U. S.
and foreign companies
• Global markets are a necessity:
– Foreign earnings a higher percentage of profits
– Multinationals outperform domestic firms
– Global value increased through global
diversification
– Intensifying domestic competition

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 International Marketing 1

• International marketing is defined as 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 nations
for a profit.
• The difference is the “environment”
– Competition, legal restraints, government controls,
weather, fickle consumers, economic conditions,
technological constraints, infrastructure concerns,
culture, and political situations.

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The International Marketing Task

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Environmental Adaptation

• Ability to effectively interpret 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

1-22
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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 SRC
– Associated Ethnocentrism

1-23
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SRC and Ethnocentrism
SRC is an unconscious reference to
– One’s own cultural values, experiences, and
knowledge as a basis for decisions
• 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 an offensive to your hosts
Ethnocentrism
– Notion that one’s own culture or company knows best

1-24
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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

1-25
 Cross-Cultural Analysis 1

1. Define business problem or goal in home-

country cultural traits, habits, or norms
2. Define business problem or goal in foreign-
country cultural traits, habits, or norms
through consultation with natives of target
country
3. Isolate the SRC influence and examine it
carefully to see how it complicates the problem
4. Redefine the problem without SRC influence
and solve for the optimum business goal
situation
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 Developing a Global Awareness 1

• 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

1-27
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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

1-28
International Marketing 1

Involvement - Stages
No Direct Infrequent Foreign
Foreign Marketing Marketing

Regular Foreign International

Marketing Marketing

Global
Marketing
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 No Direct Foreign 1

Marketing – Reactive
• Products “indirectly” reach foreign markets
• Trading companies
• Foreign customers who contact firm
• Domestic wholesalers/distributors
• Web orders
• Foreign orders stimulate a company’s interest
to seek additional international sales

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 Infrequent Foreign 1

Marketing – Reactive
• Caused by temporary surpluses
– Sales to foreign markets are made as goods
become available
• Firm has little or no intention of maintaining
continuous market representation
• Foreign sales activity declines and is
withdrawn when domestic demand increases

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 Regular Foreign 1
Marketing – Proactive
• Dedicated production capacity for foreign
markets
• Strategy:
– Firm employs domestic or foreign intermediaries
– Uses its own sales force or sales subsidiaries
• Products are adapted for foreign markets as
domestic demand grows
• Firms depend on profits from foreign markets

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 International Marketing – 1
Proactive
• Fully committed and involved in foreign markets
and international activities
• Production takes place on foreign soil earning
firms the MNC (Multinational Corporation) title
• Fedders being “proactive:”
– Looked to Asia for future growth after stymied
U.S. sales
– Designed new types of air conditioner unit for the
Chinese market
– Plan to introduce new product in the U.S!
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 Global Marketing – 1

Proactive
• The firm sees the world as one market!
• Market segmentation is now defined by income
levels, usage patterns, or other factors that span
the globe
• More than half of its revenues come from abroad
• The firm has a global perspective

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Global Market Orientation 1

• This orientation entails operating as if all the

country markets in a company’s scope of operations
(including the domestic market) were approachable
as a single global market and standardizing the
marketing mix where culturally feasible and cost
effective.
• Depending on the product and market, firms may
pursue a global market strategy for one product
(global market orientation – P&G diapers) but a
multidomestic strategy for another product
(international market orientation = P&G
detergents).
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AUDIO VIDEO PRESENTATION
•https://www.youtube.com/watch?v=vRTuaTg
0V5c
•https://www.youtube.com/watch?v=v6coDUD
CJ10
•https://www.youtube.com/watch?v=c-KKy-
03O5A

COLLEGE OF BUSINESS EDUCATION

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REFERENCES
• Cateora, P. R., Gilly, M.C., Graham, J.L. (2020)
International Marketing. USA : McGraw-Hill/Irwin
• https://www.youtube.com/watch?v=UdCcbT23Qkk
• https://www.youtube.com/watch?v=vRTuaTg0V5c
• https://www.youtube.com/watch?v=_FGUkxn5kZQ
•https://www.youtube.com/watch?v=v6coDUDCJ10
• https://www.youtube.com/watch?v=c-KKy-03O5A

COLLEGE OF BUSINESS EDUCATION