INTERNATIONAL

MARKETING

Ho thi hai thuy

F o r e i g n t r a d e u n i v e r s i t y,
ho chi minh city campus
CHAPTER 2:
THE INTERNATIONAL
MARKETING ENVIRONMENT
INTERNATIONAL MARKETING ENVIRONMENT
 MODELS TO ANALYZE INTERNATIONAL
MARKETING ENVIRONMENT

CAGE PEST PESTLE

•Culture •Political •Political

•Administration •Economic •Economic
•Geography •Socio-Cultural •Socio-Cultural
•Economy •Technology •Technology
•Legal
•Environmental
ADMINISTRATIVE/POLITICAL/LEGAL FACTOR
 ADMINISTRATIVE/POLITICAL/LEGAL FACTOR
Home-Country Environment
• Promotional activities
(sponsored by governmental
organizations)
• Financial activities
• Information services
• Export-facilitating activities
• Promotional by private
organisations
• State trading
Host-Country Environment
• Political risks (Ownership risk,
Operating risk, Transfer risk)
• Causes:
• Import restrictions
• Local-content laws
• Exchange controls
• Market control
• Price controls
• Tax controls.
• Labour restrictions
• Change of government party
• Nationalization
• Domestication
 ADMINISTRATIVE/POLITICAL/LEGAL FACTOR

Trade barriers from home

country to host country

•Tariffs
•Non-tariffs
•Quotas
Why
•Import quotas
•Export quotas
•Embargoes
•Administrative delays
•Local-content requirements
 ADMINISTRATIVE/POLITICAL/LEGAL FACTOR

Trade barriers from home

country to host country

•Tariffs
•Non-tariffs
•Quotas
Why
•Import quotas 1. To protect domestic producers
•Export quotas 2. To generate revenue
•Embargoes
•Administrative delays
•Local-content requirements
ADMINISTRATIVE/POLITICAL/LEGAL FACTOR

Laws that affect International Marketing

Laws Tariffs and quotas

affecting the
entry of
goods
Anti-dumping A firm cannot export at a lower price than what it
laws
charges in its home market.

Food safety Sanitary and phytosanitary (SPS) regulations

laws
govern the safety of exported foodstuffs from
Australia and New Zealand.
Laws
prohibiting
deceptive
advertising
ECONOMIC FACTOR

Exchange Classification
rate by income

Regional
Economic
Integration
ECONOMIC FACTOR

Exchange rate

•Devaluation
•Revaluation
ECONOMIC FACTOR

Classification by income

•GDP
•GNP
•GNP per capita
•Less developed countries (LDC’s)
•Newly industrialised countries (NIC’s)
•Advanced industrialised countries
ECONOMIC FACTOR
Regional Economic Integration
ECONOMIC FACTOR
European Union
ECONOMIC FACTOR
BRIC – the new growth markets of the world

The emerging markets where we

will see high future growth.
CULTURAL FACTOR
Characteristics of culture

learned interrelated

shared
CULTURAL FACTOR
Parts of culture
CULTURAL FACTOR
Elements of culture

Language:
Manners and Social
Verbal +Non-
customs institutions
verbal

Values and
Education Aesthetics
attitudes

Religion
CULTURAL FACTOR
Layers of culture
CULTURAL FACTOR
High- and low-context cultures
CULTURAL FACTOR
Hofstede’s model on national cultures (the ‘4 + 2’ dimensions model)

Power distance Uncertainty

(PDI) avoidance (UAI)

Individualism Vs Masculinity Vs
Collectivism (IDV) Femininity (MAS)

Long term
orientation VS
Indulgence
Short term
Orrientation (LTO)
 GEOGRAPHICAL FACTOR

Physical remoteness Common border Sea/river access

Transportation/communicat
Size of country Climates
ion links
 CAGE MODEL - DIFFERENCES BETWEEN COUNTRIES
INTERNATIONAL DISTANCE (GHEMAWAT, 2001)

Cultural Distance Administration Distance

Geographical Distance Economic Distance

file://localhost/Users/macos/Desktop/A HIEU 71532 CUU 15-2-17/Documents/marketing/mkt quoc te/CAGE model.pdf

HTTPS://WWW.HOFSTEDE-
INSIGHTS.COM/PRODUCT/COMPARE-
COUNTRIES/
PESTLE
 CONTENT

Trade distortion and

marketing barriers
Trade theories and
economic cooperation

Country notebook