The International

Environment:
Culture
Economic Forces
Competition
Political and Legal Forces
Revisiting complexities of international
marketing
• Multitude of environments – Domestic vs. international
• Culture and socio-culture factors affect the type, design, color
and styles
• Economic and technological advancement also forces
variations in product and marketing
• Differences in networking, negotiation, business practices and
communication styles
• Some domestic markets with high immigration rate also work
like international markets
Cultural intelligence

• Command of cultural knowledge

• Practice mindfulness
• Repertoire of behavioral skills
Managing multiculturalism
The nature of culture

• Anthropological definition: Way of life of a people, for the sum

of their learned behavior patterns, attitude and material
things
•Human made
•Learned
•Not right or wrong
•Shared in groups
•Communicated from one generation to another
Indicators of a person’s culture
• Concepts, values and assumptions about life that guide behavior
• Person-made part of environment
• Transmitted through generations without explicit instructions
• If a group of 18-20 years old is observed by respected elders, then the ones judged
“one of us” are those who learned the culture
• Culture is not talked about by the people who practice it, so they are generally ill
prepared to discuss or defend it
• Cultural practices are generally not questioned for their correctness
• Give people the convenience of “you know what I mean” and “all that sort of
thing”
• Some manifestations of a culture can be summarized in very sharp contrast such
as: Individualism-collectivism, punctuality, spatial orientation, theory vs empiricism
• To understand culture one has to understand its origin
• Culture doesn’t change rapidly unless there is an external influence
• Self-reference criterion
Cultural dimensions
• Values and attitudes about
•Time, work, risk taking, wealth, change, achievement
• Education
•Formal education, literacy level, vocational training, human resource planning
• Language
•Spoken, written, mass media, linguistic pluralism
• Religion
•Beliefs and norms, taboos, sacred objects, philosophical system, prayers, rituals
• Law
•Common law, antitrust policy, foreign law, home country law
• Social organization
•Interest groups, kinship, social mobility, authority structures, social institutions
• Politics
•Nationalism, sovereignty, imperialism, ideologies
• Technology and material culture
•Communications, inventions, science
Selected value orientations
Selected value orientations
Economic forces
• Economic forces affect international marketer by the impact
that they have on market potential
• Economic factors are influenced by infrastructure
• Communication
• Energy
• Transportation
Economic forces
• Economic factors affecting a market
• Population- density and urbanization
• Income and wealth of people
• Distribution of wealth
Economic classification of countries
• On the basis of GNI
• Lower income economies
• Lower middle-income economies
• Upper middle-income economies
• Upper income economies
• Other classification factors
• Credit risk
• Quality of life
• Political stability
• Executive confidence
• Business environment
• Operational risks
Competition
• The most dynamic force affecting environment
• Pursuit of differential advantage
• Shift form ‘harder’ efficiency sources to ‘softer’
effectiveness sources
• Information as a tactical differential advantage
• Magnet and filter analogy
• Unfair competition (Aerospace industry)
Nature of competition

• Structure of competition – Number and types of

competitors
• The actions of competitors – use of marketing tools by
competitors
Factors influencing competition

• Product homogeneity
• Costs
• Laws or government regulations
Competition and coopetition

Search of global reach, expansion and profit

•Contending
•Isolating
•Partnering
•Adapting
Roles of government interventions

• Promote
• Impede
• Compete
Government controls

• License requirements
• Tariffs – Protective or revenue
• Quotas – absolute quotas, tariff quotas, voluntary quotas
• Extra taxes
• Qualitative controls
• Exchange controls
Other legal/regulatory activities

• Environment
• Labor rights
• Human rights
• Intellectual property
• Antitrust
• Corruption
Promotional activities

• State trading
• Granting subsidies
• Financial activities
• Information services