Introduction to International Marketing

Objectives
. .

To Understand the Nature of Global Markets and International Marketing To Analyze the Environmental Forces Affecting International Marketing Efforts To Learn About Methods of Involvement in International Marketing Activities To Recognize that International Marketing Strategies Fall Along a Continuum from Customization to Globalization
2

3

. Human Resources Marketing & Sales Corporation & Business Lines Management internationalization philosophy affects all functional areas of the corporation. Manufacturing & Distribution Finance 4 .International Philosophy .

Goods & Services Marketer Money Consumer 5 . more concretely. ‡ Marketing is an exchange process between the consumer and the producer ± benefits are exchanged for profits.What is Marketing ? . . goods and services exchanged for money.

and services across national boundaries in order to create exchanges that satisfy individual and organizational objectives 6 . .International Marketing . pricing. promotion. and distribution of ideas. goods. ‡ Process of planning and executing the conception.

and direct the flow of a company¶s goods and services to consumers or users in more than one nation for a profit. promote. price.International Marketing Defined d International marketing is the performance of business activities designed to plan. 7 .

International Marketing: Conducting marketing activities in more than one country.. . 8 .

± Over 6 billion people (1.2 billion people in China) ± Goods and services need to be adapted to meet needs in developing countries ± Urban population increasing faster than a rural ± As a nation develops.The International Marketplace ‡ Market Size . an increasingly affluent. educated. and cosmopolitan middle-class emerges ± Marketers in developing countries may face infrastructure challenges 9 . .

10 . October 21. in The Christian Science Monitor. Source: Scott Pendleton. .World Population Growth Projections . 1992.

North America Pacific Asia 11 .Major World Marketplaces . Europe .

12 .

The Middle East 13 .

Global Consumption Patters Gross Domestic Product 14 .

CONSUMERISM: The Other Meaning ‡ ³The belief that goods give meaning to individuals and their roles in society« Americans define themselves and their relationships with others through the exchange and use of goods«Consumerism is a more powerful worldview than political ideologies. or class and ethnic distinctions.´ -.Gary Cross 15 . religions.

16 . ‡ It can extend the product life. ‡ It allows each country to maximize strengths and offset weaknesses.Benefits of International Marketing . . ‡ It enables countries to optimize comparative advantages.

the artificial fibre in the thread comes from Portugal and the material in the dyes from at least six other countries. cutting and sewing from Germany.What is Globalization? ‡ This morning I went out and bought a shirt«. the collar linings come from Brazil. The cotton was grown in India from seeds developed in the United States.(and was bought in the UK). the shirt itself was made up in Malaysia««. and the machinery for the weaving.. Princeton University Press (2004) 17 ..the shirt I bought represents a triumph of international cooperation. From Paul Seabright The Company of Strangers: A Natural History of Economic Life.

--Thomas Friedman. and it shrank the world from a size large to a size medium. from the late 1800's to World War I. NYT 3/4/04 18 . lasted from the 1980's to 2000.0. Now we've entered Globalization 3. and it is shrinking the world from size small to a size tiny.The first era.0. was based on falling telecom costs and the PC. and shrank the world from a size medium to a size small. The second big era. was driven by falling transportation costs. thanks to the steamship and the railroad. That was Globalization 1.0. Globalization 2.

using Brazilian medicines! And this is sent to you by an American. hijacked by Indonesians. treated by an American doctor. using Bill Gates' technology Which he enjoyed stealing from the Japanese. ‡ That. driven by a Belgian who was drunk on Scottish whiskey. on Japanese motorcycles. driving a German car with a Dutch engine. transported by lorries driven by Indians.(The True) DEFINITION OF GLOBALIZATION ‡ ‡ ‡ ‡ Question: What is the truest definition of Globalization? Answer: Princess Diana's death. and Korean-made monitors. And you are probably reading this on one of the IBM clones that use Taiwanese-made chips. unloaded by Sicilian longshoremen. followed closely by Italian Paparazzi. trucked by Mexican illegal aliens. assembled by Bangladeshi workers in a Singapore plant. is Globalization! anonymous 19 . my friend. and finally sold to you. Question: Why? Answer: An English princess with an Egyptian boyfriend crashes in a French tunnel.

20 .

cultural. political and technological interdependence among national institutions and economies Globalization of production Dispersal of production activities worldwide to minimize costs or maximize quality Globalization of markets Convergence in buyer preferences in markets around the world 21 .Globalization Trend toward greater economic.

Globalization of production 22 .

Global competitors attack! Higher profit opportunities Shrinking domestic markets More customers for economies of scale Diversify Customers expand into global markets 23 .Why Go Global? . ‡ ‡ ‡ ‡ ‡ ‡ .

We just have to sell yellow boxes of film. Fisher CEO.George M. Eastman Kodak Company 24 .C.³Half the people in the world have yet to take their first picture. The opportunity is huge.´ . and it¶s nothing fancy.

´ . 20th Century Fox 25 .³If we distributed pictures only in the United States.William Mechanic President. It takes the whole world now to make the economics of movie-making work. we¶d lose money.

Born Global Global from Day One Diagnostica Business: diagnosing of infectious diseases       Customers: hospitals. clinics and labs 98% exports to 100 countries Distributor networks ISO 9001 Expansion through acquisition 26 .

Selected U. Companies and Their International Sales 27 .S.

28 . .Going Global .

‡ The simplest measure of globalization is the ratio of exports to GDP. 29 .Measuring Globalization ‡ Globalization is the term used to convey the idea that international factors are becoming a more important part of the world economy. ± Countries with a high ratio of exports to GDP are generally more open to the world economy than countries with a low ratio.

5% 38.3% 91.6% (Table continued) 30 .4% 72.5% 98. 2002 Country Singapore Hong Kong.3% 52.9% 124.6% 46.1% 47. China Philippines Austria Exports as a Percentage of GDP 143.Measuring Globalization Exports as a Percentage of GDP for Selected Countries.6% 58. China Malaysia Belgium Ireland Netherlands Thailand Hungary Taiwan.5% 54.

Measuring Globalization Exports as a Percentage of GDP for Selected Countries. Sweden Indonesia Denmark. Rep.9% 330. Switzerland Germany Russian Federation Chile South Africa Israel China Exports as a Percentage of GDP 34.8% 28.0% 32.6% 28.1% 34.0% 33.7% 31 .1% 33.5% 25. 2002 Country Finland Korea.5% 28.9% 30.8% 33.

1975-2002 32 .World Exports as a Percentage of World Output.

Indicators of Globalization Foreign Policy Magazine ‡ ‡ ‡ ‡ Economic Integration Technological Connectivity Personal Contact Political Engagement 33 .

Foreign Policy¶s Global Top 20 34 .

35 .

How They Stack Up Comparing revenue of the world's 10 most global firms to the gross domestic product of nations 36 .

Japan. China.) ± ~30% of world GDP ‡ The same 200 corporations employed < 0. and that percentage is shrinking. California . France. Germany.3% of the world's population. UK.Globalization and MNC Wealth ‡ Total sales of the top 200 MNCs were bigger than the combined GDP of 182 countries ± of all except the top nine nations ‡ US. 37 .

Globalization: Two Viewpoints ‡ Positive view ± worldview toward multicultural and intercultural exchange and respect for local cultures ± Globalism IS good ‡ Negative view ± Or largely synonymous with cultural imperialism. controlled. limited. wherein (to the detriment of local cultures) the free aspects of global interdependency are dominated. 38 . or otherwise shaped by the profit-driven interests of multinational corporations.

the third world. which they say undermines the environment. and other concerns. 39 . labor rights. national sovereignty.Anti-Globalization perspective ‡ Some are in opposition to the political power of large corporations.

the united stockholders of America. and Niketown were attacked in Seattle protests.S. 40 . A protest flag signifying the alleged corporate control over the U. The Gap. 1999) Stocks and Stripes flag. Old Navy. Nov. accused of environmental and human rights abuses (Seattle.Corporate monoliths McDonalds.

± The World¶s 10 Most Valuable Brands . 41 . .

Share of Cars Sold in the U. 2006) 90 80 70 60 50 40 30 20 10 0 1970 1975 1980 1985 1990 1995 2000 2005 U. Japan Europe 42 . ± By Origin of Company ± (Source: Train and Winston.S.S.

. ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Item: Motor car Name: Datsun 3X Designed in: Boston Funded from: Frankfurt Prototype from: France Fabricated in: Korea Assembled in: Japan Company¶s name: Nissan 43 .What is the country of origin of this car? .

Korea Tires: Windshield: Battery: S. U.The GM Pontiac Le Mans Design: Sheetsteel: Stamping of body parts: Engines: 1. Korea Wiring harness: S.S.6 liter 2. U. Korea S.S.S. Korea Radio: Assembly: Marketing & distribution: N.S. America Singapore S. Korea S.S. Korea Australia U.S. Korea S. S. U. Korea 44 . Canada & U. U.0 liter Fuel injection: Fuel pump: Transmission: Rear axle: Steering: Germany (by Opel) Japan S. Brakes: France.

The Marketing Mix: Four P¶s of International Marketing . ‡ Product: how to develop the firm¶s products. . how to develop tangible and intangible product features that meet customer needs in diverse markets ‡ Pricing: how to price the products. how to develop pricing policies that bring in revenues and strategically shape the firm¶s competitive environment 45 .

‡ Promotion: how to sell the products. . how to get the products into the hands of customers via transportation and merchandising . 46 . how to devise ways to enhance the desirability of the product in the eyes of potential and actual buyers ‡ Place (distribution): how to distribute the product to customers.

Marketing Mix Product Pricing Promotion Place 47 . .The Elements of the Marketing Mix for International Firms .

The Environment Facing International Marketers . Technological Environment Production and measurement systems Advances International Marketing Decisions Political and Legal Environment Nationalism Government stability Trade restrictions Trade agreements/ economic communities Economic Environment Standard of living GDP Stage of economic development Stability of currency 48 . Cultural Environment Standards of behavior Language Lifestyles Goals .

± A nation¶s size.‡ International Economic Environment . per-capita income. and stage of economic development determine its desirability for international expansion ± Other considerations include: ‡ Country infrastructure ‡ Exchange rate implications ± Soft currencies 49 . .

Paul Samuelson. 50 .³Teach a parrot to say µsupply´ and µdemand´ and you have a learned economist!´ .

religious attitudes. must be considered ± Examples: ‡ Movies must often be adapted for foreign markets ‡ Restaurant menus are often printed in several languages ± The use of pictures can also help when language is a problem 51 . . ± A nation¶s culture. including language. and social values. education.‡ International Social-Cultural SocialEnvironment .

. 52 .± The World¶s Most Frequently Spoken Languages .

businesses impacted by International Law. Commerce. ± Marketers must know the current laws and regulations for each country in which they operate ± U. Law. and Host country Laws ± Political conditions often influence international marketing ± Political risk assessment (PRA) ± Friendship.‡ International Political-Legal PoliticalEnvironment .S. .S. U. and Navigation (FCN) treaties ± ISO certification requirements 53 .

reaching into every corner of the Globe ± It is critical to understand how the Web is reshaping social and cultural values ± Other challenges: ‡ Genetic reengineering ‡ Genetically modified organisms (GMOs) 54 .‡ International Technological Environment . economic. . and cultural barriers. ± The Internet transcends political.

Frankenfoods 55 .

The International Marketing Task ‡ Insert Exhibit 1.3 56 .

the international marketing strategy should: . culture. . competition.In each case. exchange rates. polycentric. focus) ‡ Be consistent with the firm¶s managerial philosophy (ethnocentric. geocentric) ‡ Be sensitive to local conditions in the host country: economic conditions. income. laws 57 . ‡ Support the firm¶s overall business strategy (differentiation. cost leadership.

. ‡ Firm¶s choice of international marketing strategy should be consistent with its overall business strategy 58 .International Marketing and Business Strategy .

product differences can justify a higher price. A differentiation strategy is based on perceived quality. reliability. 59 . International marketing should emphasize brand name image. so that in the eyes of the customer.Business Strategy #1: Differentiation . stress high fashion. . fashion. use upscale distribution outlets.

lower profit margins or both. International marketing should emphasize low prices. A cost leadership strategy is achieved through systematic reductions in costs (production. look for ways to coordinate advertising campaigns across markets. 60 . . sales. use low cost distribution channels.Business Strategy #2: Cost Leadership . materials).

61 . An international marketing strategy should be tailored for each niche market.Business Strategy #3: Focus . . A focus strategy concentrates on a market niche or segment or particular geographic segments.

62 .International Marketing and Managerial Philosophy . ‡ International marketing should be consistent with the firm¶s managerial philosophy. .

finance. but may lose sales because it ignores national differences. production. An ethnocentric firm uses the same approach abroad as it does at home. So the international marketing mix is the same as the domestic marketing mix. etc. This is the simplest choice. . in terms of marketing.Managerial Philosophy #1: Ethnocentric . 63 .

64 . ‡ With this approach. the firm simply markets its goods in international markets using the same marketing mix it uses domestically ‡ They avoid the expense of developing new marketing techniques to serve foreign customers ‡ When some firms first internationalize.The Ethnocentric Approach . believing that a marketing mix that worked at home should be as successful abroad . they adopt this approach.

in U.S. friendly and chatty. in the U.K.Examples: .. ‡ Land¶s End . ‡ Amazon ± ± ± ± ± U. ± Clothing retailer ± One-size-fits-all approach to marketing ± Folksy.K. Germany Japan France Canada 65 . in Germany.

Managerial Philosophy #2: Polycentric . 66 . This is more expensive but customization may generate more revenues. so the marketing mix is tailored to each market. A polycentric firm customizes its operations for each foreign market that it serves. Multidomestic firms normally adopt a polycentric approach to international marketing. .

67 . ‡ This approach is far more costly ‡ International marketers attempt to customize the firm¶s marketing mix in each market it enters in order to meet the idiosyncratic needs of customers in that market ‡ Customization may increase the firm¶s revenues if its marketers are successful in this task .The Polycentric Approach .

A customer entering this domino parlor in Egypt encounters no language barriers in knowing that the establishment serves Coke . 68 ..

Insight Think Global Act Local 69 .

Absolut Vodka: think global, act local
70

Ethnocentric vs. Polycentric
.

‡ Ethnocentric
.

± ± ± ± ±

reduces costs centralized R&D economies of scale global market & brands

‡ Polycentric relates to differences in:
± ± ± ± use laws buyer behavior initiatives

71

Standardization vs. Customization
. .

‡ Use domestic approach world-wide? (ethnocentric) ‡ Customize product to meet needs of local market? (polycentric) ‡ Use a standardized approach world-wide? (one sight, one sound, one sell) (geocentric)

72

Why customize? ‡ Reflects varying conditions of product use ‡ Allows for local legal differences ‡ Takes account of differences in buyer¶s behavioral patterns ‡ Promotes local initiative and motivation in implementing a marketing program ‡ Allows for closer adherence to the needs of individual markets ‡ Efficiency in R&D ‡ EOS in production ‡ Promotes lower marketing costs ‡ Allows centralized control of the marketing program ‡ Reflects the trend to a single world market 73 . Why standardize? .Standardize or Customize? .

Product . 74 . credit terms) that make up the characteristics of a product in the eyes of the consumer. warranties. .Four P¶s of International Marketing: #1 . Product refers to the set of tangible factors (physical product and its packaging) and intangible factors (image.

Three Levels of Product Augmented Product More customer value (Support services) Installation Packaging Delivery & Credit Brand Brand Name Quality Quality Level Core Benefit or Service Features Features AfterSale Service Design Design Warranty Actual Product Added value for customer (Packaging component) Core Product (Product platform) 75 .

. . Brand names are often standardized to capture synergies and for EOS reasons. nature of target customers (industrial. 76 .Product policy at the international level is affected by: ‡ The standardization/customization choice: Should products be standardized across markets or customized within individual markets? Depends partly on local needs. household).

‡ Cultural influences: Products must be adapted for differences in language. environmental awareness. regulate product design. local tastes. quality consciousness. Products must be adapted as a result. technical standards. quality of infrastructure. 77 . health standards.‡ Legal forces: Governments impose labeling and packaging requirements. ‡ Economic factors: Product choice can be affected by differences in income levels. . .

S. ‡ Mecca Cola ‡ U. boycotts of French & German products . Mercedes ‡ Germans boycott Coca-Cola (bottled in Germany) and drink Afri-Cola (British product) 78 ..Downside of Brands.Negative Images and Politically Motivated Boycotts . ± Wine ± BMW.

± The success of Mecca Cola is proven by looking at the growth of distribution. it was initially sold in Muslim districts of France. it then was sold throughout France and eventually spread throughout countries in Europe such as Belgium.´ ± Unfortunately for Coke.Case Study 1: Mecca Cola ‡ Mecca Cola was developed by French entrepreneur Tawfik Mathlouthi. with the slogan ³No more drinking stupid. 79 . it will most probably be beaten by local µDavids¶. who directly attacks the idea of drinking famous American brand ± Coke. Germany. Italy. launched in November 2001. Spain and many more! ± Although criticized for riding the anti-American sentiment. it proves that no matter how µGoliath¶ the brand ± if its values don¶t correspond with the people. drink with commitment. this has been a huge success.

80 .

. 81 . .

regardless of where they are sold. (2) two-tier price.. ± products are highly visible so price comparisons can be easily made (e.g. Three possible international pricing strategies are: (1) standard price. 82 .Pricing . (3) market price. minerals) in competitive markets..Four P¶s of International Marketing: #2 . Boeing) ± firm sells commodity goods (e. Reasons: . crude oil. ‡ Standard price policy The firm adopts a standard price for its products.g.

Since the domestic price was set so as to cover overhead costs (share of R&D. export sales can be priced at marginal costs. ± Two-tier pricing may lead to dumping charges being levied in the foreign market.‡ Two-Tiered Pricing (ethnocentric) ± The firm sets one price for domestic sales and a second price for international sales. ± Two-tiered pricing is often used by firms that are new to international markets. . . 83 . Implicitly treats foreign sales as marginal sales. administrative & capital costs).

the firm charges the profit-maximizing price in each market. . that is. 84 .‡ Market Pricing (pricing to market) Under market pricing. the firm sets: Marginal Revenue = Marginal Cost in each market very polycentric approach .

otherwise will be gray market (legal imports but outside normal distribution channels). ‡ May damage brand name (due to lower price) . 85 . ‡ May have dumping complaints in importing country.Problems: ‡ The firm must be able to segment markets and prevent arbitrage between them. .

Gray Market . (This phenomenon is also know as parallel importing) 86 . . A gray market is a market that results when products are imported into a country legally but outside the normal channels of distribution authorized by the manufacturer.

± Consumer products ± Automobiles ± Watches ‡ New Areas: ± Internet shopping ± ³Gadget envy´ 87 . ‡ Traditional .Gray Markets .

are not safe .Canadian Pharmaceuticals . 88 . ‡ Canadian nationalized health care can offer prescriptions drugs at significantly lower prices than can US pharmacies (Canadian Patented Medicine Prices Review Board) ‡ So«US consumers are buying Canadian drugs ‡ US pharmaceutical manufacturers claim that imported drugs are not under FDA supervision and. therefore.

89 .Four P¶s of International Marketing: #3 . sales promotion. Promotion: All efforts by the firm to enhance the desirability of its product to potential buyers. The promotion mix includes: advertising. so is most culture-bound of the four P¶s. personal selling.Promotion . Involves communication with host country audiences. and public relations. .

90 . .(1) Advertising ‡ Message firm wants to convey ‡ Medium: Types of media (communication channels) available to convey message ‡ Extent firm wants to globalize its advertising effort (global or local or regional strategy?) .

for example: . Heavy restrictions on advertising aimed at children. ± TV / radio ads may not directly ask children to buy or consume anything ± TV / radio ads may not interrupt children's programs ± Any ads shown before or after children¶s programs may not promote any product that has been shown in the program ± No advertisement should allow children and adolescents to believe that the product is priced within reach of every family budget 91 . ‡ In Germany.Examples of Advertising Restrictions .

. 92 .Benetton Ads ./ Case Study (2).

a dying AIDS patient and bloody victims of war. Past campaigns have shown a priest and nun kissing. 93 .Benetton Ads . ‡ Benetton is known for its provocative ads aimed at sparking awareness of controversial social issues. .

In this way. to evoke a feeling of compassion on the part of the consumer. through its depiction of the intense suffering of living things. 94 . .Benetton Ads . Benetton tries to enhance its name in the mind of the consumer. ‡ Benetton is trying. and to suggest that it is sympathetic.

Benetton advertising campaigns 95 .

Benetton Ads
.

‡ David Leroy Skaggs One of a half-dozen images for Benetton's new ''We, On Death Row'' campaign, this ads shows David Leroy Skaggs, 49, who has been on death row since December 1983, awaiting electrocution for two counts of first-degree murder. The campaign began appearing on billboards and major news publications worldwide.
96

.

Benetton Ads
.

‡ Kosovo Part of an ad campaign in the spring of 1999 focused on peace and in support of humanitarian action for Kosovars. This ad shows a bloodstain on a white field. Said photographer Oliviero Toscani, ³This mark will stain the pages of our newspapers alongside advertising that wishes to gloss over and wipe such images from our consciences.´
.

97

Benetton Ads
.

‡ Priest and Nun This photo of a priest and a nun kissing was released by Benetton in its autumn/winter 1991 campaign. It was banned by the Italian Advertising Authority. The message: Love surmounts all conventional taboos.

.

98

. . How do you define ³family´? 99 .

Who is the angel? Who is the devil? How did you arrive at that conclusion? 100 . ..

Who is the policeman? 101 .. .

.. What do the red ribbons signify to you? What do the condoms signify? 102 .

. . Do ³universal themes´ encounter cultural barriers? 103 .

. . Artistic allusion? 104 .

105 . ..

‡ A German Court Bans Shocking Benetton Ads: Panel labels as 'immoral' the clothier's campaigns on HIV.Were the messages effective? . . oil slicks and child laborers. ‡ A German appeals court ruled that three of the Italian clothing company's commercial images could not be published in this country. ‡ What could/should Benetton executives have done? 106 .

(2) Personal Selling ‡ Making sales on the basis of personal contacts through sales representatives. easier to get market information. Can hire local sales reps. may need regional office to provide support personnel. . close contact with customers. Advantages: know local culture. Disadvantages: relatively high cost. . 107 .

. coupons.(3) Sales Promotion ‡ Specialized marketing efforts such as instore promotions. direct mail campaigns. . attending trade fairs. convince public that the firm is a ³good corporate citizen. See as ³insider´ in foreign market. 108 .´ Need to win political allies and lobby governments. samples. (4) Public Relations ‡ Efforts to enhance firm¶s reputation and image with the general public.

109 . Place/distribution refers to (1) the problem of physically transporting products from where they are made to where they are sold.Place . . and (2) selecting the means by which the firm will merchandise its products in those markets.Four P¶s of International Marketing: #4 .

and the length of the international order cycle time (from placing an order to customer taking delivery). packaging requirements.higher cost. .(1) Selection of Transportation Mode(s) ‡ Tradeoff of time versus money: faster modes . exposure to damage. Choice influenced by perishability of product. . 110 . ‡ Choice affects stock of inventory that must be held.

.customer ± mfg .customer 111 .(2) Distribution Channels ‡ Choice of which steps in value chain to internalize within the firm .import agent .import agent .retailer .import agent .wholesaler .wholesaler .customer ± mfg .how long should be the channel length? Should it be in-house or contracted out (to a foreign distributor)? . ± mfg .

CASE STUDY (3) WalMart¶s International Presence 112 .

Wal-Mart Around the World
.

Country Argentina
.

# of stores 11 25 236 34 92 400 15 640 53 272

# of employees 4,000 7,000 62,000 18,000 14,000 30,000 3,000 100,000 12,500 125,000
113

Brazil Canada China Germany Japan Korea Mexico Puerto Rico United Kingdom

Source: ³Wal-Mart International Operations,´ Wal-Mart, www.walmartstores.com (accessed July 29, 2004).

WalMart¶s International Presence
.

700

.

600

500

400

300

200

100

0

a az

c

ea e
 ¤ ¦

c

a

a

ex

a

a   

£ 

£ 

Ch na

 

o es

n e na ona

o ea

e

an

U

© ¨

£§

£

¡¥

£

¢

Mex o
¡

ue o

o

Canada

gen na

a

 

 

¤

 

e

e

a

114

WalMart«Expansion and Acquisitions
.

Mexico Puerto Rico
.

1991 1992 1994 (A) 1995 1995 1996 1997-8 (A) 1998 (A) 1999 (A) 2002 (A)

Majority ownership

Canada Argentina Brazil China Germany Korea U.K. Japan

Woolco

Majority ownership Joint venture Wertkauf, Interspar Makro, Kim¶s Club Asda Seiyu (37.8% ownership, options for up to 69%)
115

In 1997 it acquired the 21-store Wertkauf chain. ‡ In 1999 Wal-Mart entered the UK by buying the Asda retailing chain.Wal-Mart Courts European Shoppers . which operates more than 230 stores ‡ Because other British retailers are accustomed to higher profit margins. and Sainsbury and given smaller stores even bigger headaches ‡ Wal-Mart adopted an acquisition strategy to attack the German market as well. 116 . the Wal-Mart formula of low-markup pricing has put pressure on rival chains such as Tesco. Safeway. and a year later bought other chain stores .

117 . but the other acquisition (Interspar) was a dog ‡ Other retailers compete on low prices (Aldi) ‡ Have had to introduce more European merchandise ‡ Union problems ‡ Limited opening hours (no Sunday. which it had been selling below cost (anti-trust law) . ‡ Wertkopf was a strong chain. cooking oil. legally limited to 80 hours) ‡ Growth limited by zoning & planning limits ‡ Culture issues ‡ The German Cartel Office has warned the company to raise its prices on loss-leaders like flour.But«Has it Been A Success? . and butter.

The Results . ‡ July 2006 «WalMart pulls out of Germany . 118 . ‡ As of spring 2005. only 2% market share ‡ Analysts estimate Wal-Mart lost between $120 and $150 million there in 1999 ‡ Estimates for 2000 are similar ‡ Layoffs in 2003 ‡ A ³positive cash flow´ reported (by WalMart) for 2004«.

WalMart in Asia ‡ Korea ± Sold out in Spring 2006 ± get add¶l info ‡ China ± A major supplier ± So far. some success 119 .

120 .Summary ‡ The internationalization of American business is proceeding with increasing pace. customs. ‡ Environmental differences such as laws. ‡ International marketing is defined as the performance of business activities across national borders. and cultures must be taken into account if firms are to market products and services at a profit in other countries. ‡ The globalization of markets and competition necessitates all managers to pay attention to the global environment.

Session Insight! International marketing requires a delicate balance: «while maintaining strategic brand consistency Adapting brand messages to local cultures« 121 .

TO REVIEW: YOU SHOULD . . . . . Understand the Nature of Global Markets and International Marketing Be Able to Analyze the Environmental Forces Affecting International Marketing Efforts Have Learned About Methods of Involvement in International Marketing Activities Recognize that International Marketing Strategies Fall Along a Continuum from Customization to Globalization 122 .

.. THANK YOU THE END 123 .

Sign up to vote on this title
UsefulNot useful