International Marketing Environment

ALI AHMAD

Learning Objectives 
     

Understand the nature of the marketing environment and why it is important to marketers. Describe the major components of the social environment and how trends in the social environment affect marketing. Understand how the economic environment affects marketing. See how the political/legal environment offers opportunities and threats to marketers. Appreciate the importance of the technological environment to marketers. Understand differences in the competitive environment. Know how changes in the institutional environment affect marketers.

ALI AHMAD

The Marketing Environment
The marketing environment consists of all factors external to an organization that can affect the organization¶s marketing activities.

The Marketing Environment

Identifying Market Opportunities and Threats
Many firms use environmental scanning to identify important trends and determine whether they represent present or future market opportunities or threats.

An environmental scan of today¶s marketplace .

including their number. The Social Environment The social environment includes all factors and trends related to groups of people. . behavior. characteristics. and growth projections.1.

The Social Environment Number of People Growth Projection Social Environment Behavior Characteristics .

Social Factors that affect Marketing .

The Influence of Values on Buying Habits Ranked Characteristics of Product Quality Reliability Durability Easy maintenance Ease of use Trusted brand name Low price .

traditional lifestyle. ALI AHMAD .Component Lifestyles Component Lifestyles The practice of choosing goods and services that meet one¶s diverse needs and interests rather than conforming to a single.

Changing Role of Women  Growth of dual-income families results in increased purchase power  Approximately 60% of work-age females are in the workforce  Women expect different things in life  purchase bulk of technology products  do most of the grocery shopping  second largest group of home buyers after couples  Single households outnumber married households with kids .

Conventions & Etiquette Source: Adapted from Mead (1990) Copyright 1990 © John Wiley & Sons Limited. .Culture.

gender.2. The Demographic Environment Demography The study of people¶s vital statistics. ethnicity and location. such as their age. . race.

distribution. The Demographic Environment The demographic environment refers to the size. or household arrangements often exhibit different purchasing behaviors. and growth rate of groups of people with different characteristics. The demographic characteristics of interest to marketers relate in some way to purchasing behavior. . cultures. age groups. A global perspective requires that marketers be familiar with important demographic trends around the world as well as within India.2. because people from different countries.

Population Estimate ²Year 2025 .

Britain.World and country population statistics are important. . .Another interesting trend is the aging of the population.Trends in population subgroups are typically the most useful to marketers. for example. and the United States.Demographic Trends . . but most marketers target subgroups. the growth of the urban population. The aging of the population is especially evident in Italy. Japan.

  . Cultural differences are important in both international and domestic markets.3. Much of the population and buying power growth in India is and will be from multicultural groups. The Cultural Environment The cultural environment refers to factors and trends related to how people live and behave.

The Cultural Environment Values Subgroup Activities Cultural Factors Attitudes Ideas Beliefs .

belief. art. morals. custom.Definition ‡ Culture: ³Culture refers to .´ ALI AHMAD .That complex whole which includes knowledge. and any other capabilities and habits acquired by man as a member of society.

‡ Advertisement featuring man and dog failed in Africa--dogs were not seem as man¶s best friend ALI AHMAD .S.Cultural Lessons ‡ Diet Coke is named Light Coke in Japan-dieting was not well regarded ‡ Red circle trademark was unpopular in Asia due to its resemblance of Japanese flag ‡ Packaging of products is more important in some countries than in U.

More Cultural Lessons... ‡ Cologne ad featuring a man ³attacked´ by women failed in Africa ‡ Food demonstration did well in Chinese stores but not in Korean ones--older women were insulted by being ³taught´ by younger representatives ‡ Pauses in negotiations ‡ Level of formality ALI AHMAD .

Hofstede¶s Cultural Dimensions ‡ Individualism vs. feminine ‡ Strong vs. weak uncertainty avoidance ‡ Short vs. long term orientation ALI AHMAD . Collectivism ‡ Power distance ‡ Masculine vs.

Negotiation Content ‡ Non-task sounding ‡ Task-related exchange of information ‡ Persuasion ‡ Concessions and agreements ALI AHMAD .

Some Issues in Culture ‡ Time  ‡ Symbols    monochronic vs. polychronic meanings colors historical associations ‡ Personal space    preferred distance territoriality interaction with/ignoring people in close proximity ‡ Friendship and acquaintance ‡ Agreements ‡ Etiquette .

change Control  Perceived roles ALI AHMAD .Eastern vs.Objects . Western Culture ‡ Differences in   Values Perceptions of .Reality Stability vs.

Tendencies ‡ Westeners tend to rate themselves   More unique than average and what they are ³Above average´ in ability ‡ Easteners tend to rate themselves   Less unique than they really are ³Below average´ ALI AHMAD .

´ ALI AHMAD .Proverbs ‡ Western: ³The early bird gets the worm´ ‡ Eastern:   ³The first bird in the flock gets shot´ ³A nail that stands out will be hammered down.

emphasis on tie to group Significant. The Geography of Thought: How Asians and Westeners Think Differently « and Why. hierarchical Depend on context and relationship Self-esteem Relationships Rules Source: Richard E. 2003. work group) Tied to belonging with group Clearly defined. The Free Press . New York. values determine Modest³societal values choices are already established Success and achievement.Values Issue Distinctiveness of people Perceived control Emphasis Western Value Want to be distinctive Eastern Value Not valued. family. assurances wanted Equality or superior position Same rules apply to all Best outcome for relevant group (e.g. relationships may get in the way Strive to feel good.. Nisbett.

Some implications ‡ Thanking people²for things they are clearly supposed to do? ‡ Why the need for a choice between 40 different brands of cereal? ALI AHMAD .

2002. How Asia Advertises. New York: Wiley.Contrasting Advertising Perspectives ‡ Western  ‡ Asian        ³Atomistic´²broken down to smallest component parts ³Unique selling propositions´ ³How to´ Positioning May be ³dull and boring´ ³Copy focused´   Holistic ³Everything relates to everything else´ How things ³fit together´ and ³relate´ Visual and oral Jim Aitchison. .

.g.Advertising Content Comparisons ‡ American:  Individual benefit and pleasure (e. ³Make your way through the crowd) ‡ Korean/ Indian  Collective values (e. ³We have a way of bringing people together) ALI AHMAD .g..

Debate and Conflict ‡ ³The first person to raise his voice has lost the argument. anonymous comments ‡ Western adversarial ³rule of law´ based on consistent universal ideals vs.´ (Chinese proverb) ‡ Use of indirection and projection ‡ Face-to-face vs. solution for the case at hand in context ALI AHMAD .

being ³better´ Self perceived favorably Self-esteem building Work longer on successful job Harmony Must ³weed out´ personal characteristics that might annoy others Taught self-criticism Not recognized in profession until after many years of practice Work longer on unsuccessful job ALI AHMAD ‡ Eastern      .Relationships. and Work ‡ Western     Standing out. Education.

. Germany) elegance and style (e.g. French wine) De-emphasis/obfuscation of of country of origin (e. France.Country of Origin Effects ‡ Perception of product   quality (e.g. Italy) ‡ Historical associations ‡ Positioning strategies   Emphasis on origin (e. Japan... French beer.g.g. American products with French language labels) ..

The International Life Cycle ‡ Market for older technology tends to exist in less developed countries  ‡ ³Leap frogging´   Manufacturing of older generation technology-e..g. old three part canning machines Going directly from old technology to the very newest.g..g.. skipping intermediate step (e. wireless rather than wired technology) ‡ Shortening of product life cycles ‡ Some countries tend to be more receptive to innovation than others . Pentium I computers Resale of capital equipment²e. DC 8 aircraft.

Changing Roles   As more women enter the workforce and household compositions change. typical household roles are altered. Tremendous market opportunities exist for firms that can develop effective strategies for appealing to these changing roles. .

This translates into potential market opportunities for firms that provide products and services geared toward improving health and fitness. .Emphasis on Health & Fitness The pursuit of a more healthful lifestyle includes:     eating more nutritious foods exercising regularly participating in various sports activities focusing on wellness.

Consumerism Consumerism is the movement to establish and protect the rights of buyers. Successful marketers can respond by developing environmentally safe products and communicating their environmental contributions. One increasingly important consumer issue is environmentalism. .

The gross domestic product (GDP) represents the total size of a country¶s economy measured in the amount of goods and services produced. . Economic trends in different parts of the world can affect marketing activities in other parts of the world.4. The Economic Environment The economic environment includes factors and trends related to income levels and the production of goods and services.

The Political/Legal Environment The political/legal environment encompasses factors and trends related to governmental activities and specific laws and regulations that affect marketing practice. .5.

The Political/Legal Environment Global Trends Political Regulation Legal Environment Legislation .

international political events greatly affect marketing activities. Studies show that countries with the freest trade have the highest GDP growth. .Global Political Trends In today¶s world economy. A second important political trend is movement toward free trade and away from protectionism. For example the impact of the war on terrorism on the travel and security industries.

Legislation .

Regulations and Regulatory Agencies Most legislation in the United States is enforced through regulations developed by a variety of agencies. . and marketers must often work with regulatory authorities at the federal. state. and local levels.

6. affect how marketing activities are performed. The Technological Environment The technological environment includes factors and trends related to innovations that affect the development of new products or the marketing process. . or both. These technological trends can provide opportunities for new product development.

McDonald¶s. and Kentucky Fried Chicken are product competitors. The Competitive Environment The competitive environment consists of all the organizations that attempt to serve similar customers. offering the same types of products as competing firms. Offer different types of products to satisfy the same general need. Product Competitors . For example. Domino¶s Pizza. Brand Competitors The most direct competition. Nike is a brand competitor of Reebok as both companies manufacture shoes.7.

.8. The Institutional Environment The institutional environment consists of all the organizations involved in marketing products and services.

The Institutional Environment Market Research Firms Advertising Retailers Suppliers Wholesalers Customers .

The Future    The only certainty about the future is that it will be uncertain. . Businesses and consumers now must operate in an era of terrorism and lack of trust. and change will occur at an increasing rate. It will also be more complex.

Thank You!!! ALI AHMAD .

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