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CHAPTER 6
CONSUMER, INDUCTRIAL, AND GOVERNMENT MARKETS
Chapter Outline
A. Drivers of the Global Consumer
B. The Global Consumer
C. Influences on the Global Consumer
1. Economic Status
2. Technology Level
3. Personal Motives
4. Culture
5. Social Factors
6. Situational Factors
D. Country-of-Origin Effects
E. The Industrial Buyer
F. Influences on the Global Industrial Buyer
1. Culture
2. Stage of Economic Development
3. National Situational Factors
G. The Government Buyer
H. Marketing to Global Consumers
1. Targeting Global Customers
2. Country-of-Origin Challenges
3. Global Customer Relationship Management
4. Selling to Governments
Chapter Objectives
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© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
This chapter begins with a discussion on the drivers of the global consumer. It then helps us
understand the characteristics of the global consumer. Next, it helps us recognize the
influences on the global consumer. It then discusses the country-of-origin effects. Next, it
highlights the characteristics of the industrial buyer. It then outlines the characteristics of the
government buyers. Finally, it concludes with an examination of the managerial
requirements for marketing success with global consumers.
• The instructor could ask the students to discuss how their economic status influences their
buying decision.
• The students could be asked to apply Maslow’s “hierarchy of needs” to themselves and
identify at least two products they have bought to fulfill the individual need level.
• If there are multi ethnic and racial students in the class, the instructor could ask such students
to describe how their culture influences their buying decision. They could be asked to inform
the class whether their culture is conservative or materialistic.
• The instructor could ask the students to identify their reference groups and discuss how these
groups influence their buying decision.
• The instructor could ask the students to discuss the situational factors that influence them
while buying a product.
• The students could be asked to identify the countries that have a positive and the countries
that have a negative influence on their buying decision. Why do the countries have such an
effect on them? Do they consider themselves to be consumer ethnocentric or do they have a
world mindedness?
• If there are students from different countries, the instructor could ask them to identify the
stage of economic development their country is in.
• The students could be asked to design a positioning strategy for a product that they would
like to launch in their home country and in one foreign country of their choice.
Chapter Summary
Exhibit 6.1 displays three levels of factors that shape the world of consumers today. At the
outermost level are supranational factors, which transcend national borders and affect the global
consumer at a macro, international level. Trade institutions and policy refer to global entities such
as the WTO, IMF, and others that influence the evolution of trade and investment at a global
level. In terms of national-level factors (the middle circle in the exhibit), consumers everywhere
are affected by the economic, political, legal, technological, infrastructural, and cultural
conditions that characterize the nations where they live. The inner circle in the exhibit represents
the consumer, whose preferences are determined to a large extent by personality traits, personal
situational factors, and other conditions that exist at the individual level.
The emergence of the global consumer coincides with two important driving trends:
• Globalization
• Advancing information and communications technologies
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© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Globalization refers to the growing interconnectedness of nations, the organization of life
on a global scale, and the consolidation of world society. It is characterized by a
combination of falling trade barriers and the industrialization and modernization of nations
worldwide. It reflects the spread of free-market capitalism, which both fosters and is
fostered by massive growth in international trade and investment.
The past few decades have seen the emergence of the global consumer. Global consumers
are individuals or organizational buyers that exhibit similar needs and tastes worldwide.
Global market segments are groupings of consumers that exist in multiple countries and
display similar characteristics regarding preferences and consumption of specific product
or service categories. Globalization and global diffusion of media give rise to a desire by
people everywhere to participate in an idealized and relatively universal consumer culture.
Multinational firms seek to capitalize on world culture by developing global products and
positioning their brands in the global consumer culture.
Industrial markets in virtually every economic sector have acquired global characteristics.
The rise of multinational corporations has stimulated widespread competitive pressures on
firms to reduce costs and seek customers wherever they can be found. Increasingly,
companies internationalize their value chains, offering products and services to the world.
Many firms cut costs by minimizing the variety of parts, components, and other inputs used
to produce finished products and services. Using standardized parts results in economies of
scale and the ability to minimize variety in factory inventories.
In the United States, consumerism is practiced with much conviction, and Americans tend
to judge their friends and neighbors based on the products they own. Based on its “winner
takes all” and “growth at all costs” approach, the marketing discipline has on occasion led
individuals and society astray.
In international marketing, certain factors are known to influence the preferences and
buying behavior of consumers. These factors are summarized in Exhibit 6.2.
1. Economic Status
The ability to purchase goods and services is strongly influenced by income level.
Comparisons can be based on the level of each nation’s per-capita gross domestic
product (GDP).
Historically, international marketers targeted the developed markets and their high-
income consumers. Increasingly, firms are also targeting the emerging markets.
Numerous companies are now also targeting the developing markets. For such
markets, firms usually must devise novel business strategies, which usually include
offering low-cost products via innovative marketing communications and distribution
approaches.
Countries in the developed and emerging markets often have numerous highly
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© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
profitable firms. High income at the individual and corporate levels implies a superior
ability to purchase products and services.
Income levels are related to the size of the middle class, the people located in the
middle of each country’s economic hierarchy. The size of the middle class reflects
how wealth is distributed.
2. Technology Level
3. Personal Motives
A motive is an internal force that orients a person’s activities toward satisfying a need
or achieving a goal. Perhaps the most recognized explanation on the formation of
motives is that of the psychologist Abraham Maslow. Maslow’s “hierarchy of needs”
suggests that people are motivated to fulfill basic needs before moving on to other
needs, all of which motivate ultimate behavior.
• Physiological needs describe the needs vital to survival, such as the need for food,
water, and sleep.
• Safety needs refer to people’s need for safety and security. They include the desire
for steady employment, health care, safe neighborhoods, and shelter from the
environment.
• Love and belonging needs are basic to everyone and represent the desire for
friendships, romantic attachments, and families, fulfilling a need for acceptance
and companionship.
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formulæ of Lorentz. That is the foundation of Einstein’s Special
Relativity.
Hence the two immediate possible explanations of the negative result
of the Michelson experiment are:
1. Moving objects are contracted in the stationary
ether, the fixed substratum of all phenomena. This
contraction is real, and it increases with the velocity of the
body relatively to the ether. That is Lorentz’s explanation.
2. Moving objects are contracted relatively to any
observer whatsoever. This contraction is only apparent,
and is due to the laws of the propagation of light. It
increases with the velocity of the moving body relatively
to the observer. That is Einstein’s explanation.
From the agnostic, the sceptical, point of view this is a fine and
strong attitude. But in the course of this volume we have so much
admired Einstein’s powerful theoretical synthesis and the surprising
verifications to which it led that we are now entitled to make some
reserves. It is legitimate to call into question even the denials of
doubters, because, after all, they are really themselves affirmations.
We believe that in face of this philosophic attitude of the Einsteinians
—in face of what I should like to call their absolute relativism—we are
justified in rebelling a little and saying something like this:
“Yes, everything is possible; or, rather, many things are possible, but
all things are not. Yes, if I go into a strange house, the drawing-room
clock may be round, square, or octagonal. But once I have entered the
house and seen that the clock is square, I have a right to say: ‘The clock
is square. It has the privilege of being square. It is a fact that it is neither
round nor octagonal.’
“It is the same in nature. The physical continuum which contains,
like a vase, all the phenomena of the universe, might have, relatively to
me—and as long as I have not observed it—any forms or movements
whatever. But as a matter of fact, it is what it is. It cannot be different
things at the same time. The drawing-room clock cannot at one and the
same time be composed entirely of gold and entirely of silver.
“There is therefore one privileged possibility amongst the various
possibilities which we imagine in the external world. It is that which has
been effectively realised: that which exists.”
The complete relativism of the Einsteinians amounts to making the
universe external to us to such an extent that we have no means of
distinguishing between what is real and what is possible in it, as far as
space and time are concerned. The Newtonians, on the other hand, say
that we can recognise real space and real time by special signs. We will
analyse these signs later.
In a word, the pure Relativists have tried to escape the necessity of
supposing that reality is inaccessible. It is a point of view that is at once
more modest and much more presumptuous than that of the Newtonians,
the Absolutists.
It is more modest because according to the Einsteinian we cannot
know certain things which the Absolutist regards as accessible: real time
and space. It is more presumptuous because the Relativist says that there
is no reality except that which comes under observation. For him the
unknowable and non-existent are the same thing. That is why Henri
Poincaré, who was the most profound of Relativists before the days of
Einstein, used to repeat constantly that questions about absolute space
and time have “no meaning.”
One might sum it up by saying that the Einsteinians have taken as
their motto the words of Auguste Comte: “Everything is relative, and
that is the only absolute.”
Newton, whose spatio-temporal premises Henri Poincaré vigorously
refused to admit, and classical science take up an attitude, on the
contrary, which Newton himself well described when he wrote: “I am but
a child playing on the shore, rejoicing that I find at times a well-polished
pebble or an unusually fine shell, while the great ocean of truth lies
unexplored before me.” Newton says that the ocean is unexplored, but he
says that it exists; and from the features of the shells he found he
deduced certain qualities of the ocean, especially those properties which
he calls absolute time and space.
Einsteinians and Newtonians are agreed in thinking that the external
world is not in our time entirely amenable to scientific research. But their
agnosticism differs in its limits. The Newtonians believe that, however
external to us the world may be, it is not to such an extent as to make
“real time and space inaccessible to us.” The Einsteinians hold a
different opinion. What separates them is only a question of degree of
scepticism. The whole controversy is reduced to a frontier quarrel
between two agnosticisms.
CHAPTER IX
EINSTEIN OR NEWTON?
Recent discussion of Relativism at the Academy of Sciences—
Traces of the privileged space of Newton—The principle of
causality the basis of science—Examination of M. Painlevé’s
objections—Newtonian arguments and Relativist replies—M.
Painlevé’s formulæ of gravitation—Fecundity of Einstein’s
theory—Two conceptions of the world—Conclusion.
Footnotes:
[1] Albert Einstein, born in 1879, is a German Jew of Würtemberg. He
studied in Switzerland, and was an engineer there until 1909, when he
became professor at Zurich University. In 1911 he passed to Prague
University, in 1912 to the Zurich Polytechnic, and in 1914 to the Prussian
Academy of Science. He refused to give his name to the manifesto in which
ninety-three professors of Germany and Austria defended Germany’s war-
action.—Trans.
[2] Physics, bk. iv, ch. xiv.
[3] De Natura Rerum, bk. i, vv. 460 ff.
[4] It is assumed that the ship is not rolling or pitching, and that there is no
vibration in the train.
[5] The best definition of the second that can be given is the following: it is
the time which light takes to cover 186,000 miles in empty space and far
from any strong gravitational field. This definition, the only strict definition,
is further justified by the fact that there is no better means of regulating
clocks than luminous or Hertzian (which have the same speed) signals.
[6] In the geometrical calculus or representation that may be substituted for
this the hypotenuse of the triangle is the distance in time, each second being
represented by 300,000 kilometres.
[7] As an example of an identical force acting during periods of time
successively equal to 1, 2, or 3, we may take three guns of the same calibre,
but of lengths equal to 1, 2, and 3, and of which the charges, or rather, their
propulsive forces, are identical and constant. It is found that the initial
velocities of the shells are, in relation to each other, 1, 2, and 3.
[8] De Natura Rerum, bk. ii, vv. 235-40.
[9] It is obvious that we assume the projectile to be without rotation: that is to
say, the Columbia cannon must not, in our hypotheses, be rifled. This is
indispensable, for if the projectile turned, there would be centrifugal effects
which would greatly complicate both the phenomena and our argument.
[10] It goes without saying that in all this we assume that the luminous ray
travels in a homogeneous medium.
[11] We are, of course, imagining the earth as perfectly circular, without
irregularities.
[12] It goes without saying that we assume the observer to have a retina with
instantaneous impressions.
Transcriber’s Notes:
The cover image was created by the transcriber, and is in the public domain.
Typographical and punctuation errors have been silently corrected.
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