International Marketing

01/11/2016

Class 1
Marketing is an organizational function and a set of processes for
creating, communicating and delivering value to customers and for
managing customer relationships in ways that benefit the organization
and its stakeholders.
International marketing be careful with culture differences.
Crossing borders, crossing cultures.
Marketing focusing on a domestic market
The process
Market segmentation (identify and describe market segments)
Market targeting (evaluate segments and decide which to go after)
Market positioning
Marketing Mix overview. Product, price, place, promotion
(perception can be called positioning all around of the 4ps)
Cultural differences:
- social structure
- language
- religion
- education

Most important: the impact of tradition

3 distribution systems:
retail concentration
channel length
Pricing strategy:
price discrimination different prices, diff countries, same product
arbitrage charging different prices in different countries for same
product
income level and competitive conditions determine elasticity
Communications strategy (promotion)
- cultural barriers need to develop cross-cultural literacy
- source and country of origin effects receiver of the message
evaluates it based upon the status of the sender
- country of origin effects emphasizes/ de-emphasize foreign
origin
- noise levels tends to reduce the effectiveness of a message
- push versus pull push emphasizes personal selling pull
depends on mass media advertising
the self reference criterion and ethnocentrism (p.15&16) read it for
next class
The key to successful international marketing is the adaptation to
the environmental differences
SRC is an unconscious reference to (ones own cultural values,
experiences, and knowledge as a basis for decisions)

Dangers of the SRC :

- Failing to recognize the need to take action
- discounting the cultural differences that exist among countries
- reacting to a situation in an offensive to your hosts
Ethnocentrism
- notion that ones culture or company knows best, the notion of
ones own company, culture, or country knows best.
SRC and ethnocentrism
- ethnocentrism and the SRC can influence an evolution of the
appropriateness of a domestically designed marketing mix for a foreign
market
- the most effective way to control the influence of ethnocentrism
and the SRC is to recognize their effects on our behavior
Stages of International Marketing Involvement
- no direct foreign marketing
- infrequent foreign marketing
Protectionism
- tarrifs, quotas, and non-tarrif barriers are designed to protect
markets from intrusions by foreign countries
- nations utilize barriers to restrain entry of :
why is management style important

knowledge of the management style existing in a country and a

willingness to accommodate the differences are important to success in an
international market
-business culture
- management values
-business methods
- behaviors
adaptation is a key concept in international marketing
ten basic criteria for adaptation
- open tolerance
- flexibility
- humility
- justice / fairness
- ability to adjust to varying tempos
- curiosity/interest
- knowledge of the country
- liking for others
- ability to command respect
- ability to integrate oneself into the environment

the western focus on bribery

- 1970s bribery became a national issue with public disclosure of
political payoffs to foreign recipients by US firm
- the decision to pay a bribe creates a major conflict between what
is ethical and proper and what is profitable and sometimes necessary for
business
- OECD convention on combating the bribery of foreign public
officials in international business transactions
- transparency international (TI)
Class 4
- How do IPR infringements affect a business? Products are being
copied and sold underpriced, thus the business gets affected by not being
able to compete with these copied products prices. Affects business,
brand image,
- How can Chinese companies under cut the prices of western made
products ? they underdo same products than foreign companies. I believe
that since they do not have to make the market researches and
everything a business must undergo before getting on a market have big
costs which Chinese do not go through since they simply copy the
product. Thus costs are les high for them therefore it undercuts their
costs thus are able to sell their products for much less than a foreign
company. Labor is much cheaper in China.
- How can a company protect itself? By protecting the image of
what you do. Not to show everything make pictures for example with less
information. Also, get in contact with a professional in IPR in China.

Marketing Laws
All countries have laws regulating marketing activities
- promotion
- product development
- labeling
- pricing

- channels of distribution
Discrepancies across markets cause problems for trade negotiators
particularly for managers and their firms
- US does not allow the buying or selling of human organs
- some countries only have a few marketing laws with lax
enforcement
- others have detailed, complicated rules that are strictly enforced
there are often are vast differences in enforcement and
interpretation among countries having laws covering the same activities
- laws governing sales promotions in the European community
Censorship : not allowed (censored to swear in the radio in
America)
U.S. laws Apply in Host countries
Class 5
Economic Risk
Exchange controls
Stem from shortage of exchange held by country

Local-content laws
Import restrictions
Tax controls
Low taxes is incentive for foreign investment, vice versa
Price control
Essential products that command considerable public interest
Pharmaceuticals
Foods
Gasoline
Political risk of Global Business
Political sanctions( history indicate that sanctions are often
unsuccessful in researching desired goals), boycotts, embargo etc.
Political and social activists and nongovernmental organizations
Violence Terrorism and war
Cyber terrorism and cybercrime
Confiscation, Expropriation, and domestication:

Confiscation is the most severe political risk, which means that all
the company assets are seized (US: fidel castro, iran revolution)
Expropriation is where the governments seizes an investment but
makes some reimbursement for the assets. Often the expropriated
investment is nationalized.
Domestication happens when a host country gradually cause the
transfer of foreign investments to national control and ownership through
a series of government decrees that mandate local ownership and great
national involvement in a companys management. The ultimate goal is to
force foreign investors to share more of the ownership, management, and
profits with nationals than was the case before.
Assessing Political Vulnerability
Politically sensitive Products and Issues
Forecasting political risk (very hard)
Lessening Political Vulnerability
Joint venture
Expanding the investment base
Licensing
Planning domestication
Political bargaining
Political payoffs
Government Dis/encouragement

Some businesses may fall prey to politically induced harassment,

while others may be placed under a government umbrella of protection
and preferential treatment. The difference lies in the evaluation of a
companys contribution to the nations interest.

Chapter 7
Protection of Intellectual Property Rights- A special Problem
Counterfeiting and Piracy
Lost sales from unauthorized use of patents, trademarks, and
copyrights (100 b annually)
Piracy industry has grown so sophisticated (cant distinguish from
original)
Counterfeit pharmaceuticals (2% percent of drugs sold)
Piracy can serve companies (rare cases)
Marketing Laws
All countries have laws regulating marketing
-four P s
Discrepancies across markets cause problems for trade negotiatorsparticularly for managers and their firms
Often vast differences in enforcements
Censorship

Class 5
What should you learn ?
- multicultural sampling and its problems in less developed
countries
- how to analyze and use research information
types of information needed by research
- general information about the country, area, and /or market
- information to forecast future marketing requirements
+ by anticipating social, economic, consumer, and industry trends
within specific markets or countries
- specific market information used to make and develop marketing
plans
+product
+promotion
+distribution
+price decision
breadth and scope of international marketing research
1. economic
Growth, inflation, biz trends, population

2. cultural, sociological and political climate

non economic ecology, safety, and leisure time and their potential
impact
3. overview of market conditions
+by biz segment
+ summary of the technological environment
4. competitive situation
competitors sales revenues, methods of market segmentation,
products, and strategies on an international scope
the research process
1. define the research problem and establish research objectives
2. determine the sources of informstion to fulfill the research
objectives
3. consider the costs and benefits of the research effort
4. gather relevant data from secondary or primary sources , or both
5. analyze , interpret, and summarize the results
6. effectively communicate the results
defining the problem and establishing research objectives
- the major difficulty is converting a series of often ambiguous
business problems into tightly drawn and achievable research objectives
the world factbook /oxford analytica / export GREAT WEBS TO FIND
INFORMATION

Problems of gathering primary data

Hinges on the ability of the researcher to get correct and truthful
information that addresses research objectives
- problems in international marketing research
1. stem from differences among countries
2. range from inability or unwillingness of respondents to
communicate their opinions
3. inadequacies in questionnaire translation

Language and comprenhension

- the most universal survey research problem in foreign countries is
the language barrier
- -literacy poses yet another problem
- marketers use three different technques to help ferret out
translation errors ahead of time
- back translation + the questionnaire is translated from one
language to another , and then a second party translates it back into
the original, and the two original language versions are compared
- parallel translation
accepting information at face in foreign markets is imprudent
the foreign market researcher must posses three talents to generate
meaningful marketing information

1. the researcher must posses a high degree of cultural understanding

of the market in which research is being conducted
2. a creative talent for adapting research methods is necessary
3. a skeptical attitude in handling both primary and secondary data is
helpful
a company in need of foreign market research can rely on an outside
foreign-based agency or domestic company with a branch in that country
a trend toward decentralization of the research function is apparent
- local analysts appear to be able to provide information more rapidly
and accurately + control rests in hands closer to the market
- disadvantage lies in ineffective communications with home-office
executives