INTERNATIONAL MARKETING

CHAPTER 3-5 REVIEWER

CHAPTER 3: International Cultural Forces

2 important certification:
1.) Halal
- Certification for Muslim culture
- Translated as lawful/ permissible
- Pork is the only meat that is fully forbidden
- Halal Compliance:
1. Identification of Animal
2. Method of Slaughter
3.

2.) Kosher
- For Jewish
- Kosher food conforms to the “koshnot” Jewish Dictary law based on “Halakha”
MGA BAWAL:
- Bawal unclean animals/ not slaughtered properly
- Mixing meat, milk, wine, grape juice
- Produce from the lands of Israel that has not been tithed

Culture includes:
1. Religion
2. Family
3. Education
4. Attitude toward time
5. Language and communication
6. Social relationships

Six mother religions

1. Islam – koran
2. Taoism – yin & yang
3. Hinduism – lotus
4. Christianity – cross
5. Buddhism
6. Judaism

1.) Religion
- Salvation patterns (we can summarize their teachings based on how to save them after life)
 Universal
 Selective
 Exclusive

- Numbers
 Christianity = 2.0 billion people
 Islam = 1.1 billion
 Hinduism = 300m
 Buddhism = 325m
 Judaism = 13m
 Taoism
 Christians
o Popular Christians
 Pope Francis
 Martin Luther – founder of Protestants

o Catholic – Protestant – Adventist

o Those who revolve around the life of Christ
o Originated in Palestine in the 1st Century AD
o Originally developed as part of Judaism
o Monotheistic – believe in 1 God

o Important days
 Ash Wednesday – lent
 Palm Sunday
 Maundy Thursday
 Good Friday
 Easter

o Breakdown
 Roman Catholics = 85%
 Protestant Christians Lutheran = 10%
 Adventist/ Mormon/ Prysbetarian = 4%
 Others = 2%
*Philippines 100M strong population is 87%

o Characteristics
 Roman Catholics
- Neutral buyers, rarely sensitive, independent thinkers,
rational behavior
- Strong convention gatherers
- Often susceptible to switching
- Difficult to control and analyze because freedom and
independence is seen as God/s gift. Most times being
used beyond intentions and lead to bad behaviors

 Protestant – Lutherans
- Often take strong stands when it comes to controversies.
They disregard that and prefer candor to fight their
beliefs
- Excellent states men as they have high learning towards
diplomacy and social relationships
- Selective salvation is practices which manifests

 Adventist and Prysbetarian

- Extremely inclined towards academics and intellectual
learning
- Has a scientific approach towards most things in life
- Perhaps the most refined in terms of behavior because
rigorous training of tact and approaches
- Labelled as rigid and stem
- Originated in America
  Iglesia ni Cristo
- Exclusive salvation
- Extremely fraternal, living a strict code of conduct based
on fraternization and unity
- Exhibited strong block movements and member loyalty
- Most complicated market to address due to strict
preferential bias for businesses owned by their religious
fellow
- Can be easily analyzed because of their predictable
pattern of behavior
- Has powerful kingmaker powers whose influence

 Judaism
o Monotheistic
o The oldest and smallest of the world’s greatest religions
o Exclusive salvation
o The Jewish holy day or Sabbath (Shabbat) starts at sunset on Friday and
continues until sunset on Saturday
o During the Sabbath, Jews do not work (drives, cook, etc.); no
exemptions
o Menorah – sinisindihan pag pasok
o Extremely conservatice
o Do not transact during weekends

 Islam
o World’s 2nd most followed religion
o Began around 14,000
o Islam’s 3 holiest places, the cities of Mecca, Medina and Jerusalem are
all in Middle East

o Largest Islamic population

 Indonesian = 170M
 Pakistan = 136M
 Bangladesh = 105M
 India = 103M

o Islam’s Law
 Selective Salvation
 Food Law

o Characteristics of Muslims
 Extremely prayerful; praying up to 6x a day
 Extremely territorial and they always treat lands as sacred areas
 They love humility
 Very enterprising yet very frugal and very good hagglers
 May gender preference
 It is best for you to wait for a muslim customer to initiate
transaction
 Do not perform COLD CALLS – text before call

 Hinduism
o Very individualistic but a big part of a person’s everyday life
o Has no founder
o Hindu has a cycle of birth
  Buddhism
o They are among the most peaceful transaction with them

Consumption patterns
- The way food is eaten by a population tells a lot about their culture

 When a person eats with chopsticks, they are:

1. Patient
2. Hardworking
3. Every grain is valuable
4. Every grain deserves attention

 Top countries using chopsticks

1. Japan
2. China
3. South korea
4. Taiwan

 Good plating/ Fine dining

1. We are sophisticated
2. Our time is precious and so is our food
3. We work to eat so we eat good food

 Burger / tacos – tired to eat nicely

CULTURE
- The collective programming of the mid that distinguished the members of one category of people
from another

High trust vs. Low trust Societies

- In many countries, such as Turkey, the traditional modern co-exist presenting the marketers with
both challenges and opportunities
- High trust = gullible
- Low trust = trust issues charot

Levels of Participation
- Impact of marketing activities on consumers and employees
- Trust that has been transformed into cash (measured by high-low participation)

*the world is viewed as in-groups and out-groups

4 Types of Culture
1. Clan Culture
2. Adhocracy Culture
3. Market Culture
4. Hierarchy Culture

1.) Clan culture

 “family type” – strong family ties
 China and Japan
 2.) Adhocracy Culture
 “Ad Hoc” or as needed
 Very utilitarian
 Very manggagamit
 Singapore, nation of professionals (have no cultural chenes)
 Canada

3.) Market culture

 Consumption centric

4.) Hierarchy culture

 Adheres to a strong discrimination system
 Adhere to caste system
 India

*Louis Vuitton is advertised by an animated character in Japan

*Standardization is not always the case, culture is still superior

The Japanese “Kawaii” Marketing Style (Cultural Analysis Supplement)

 Kawaii
- Originally means “radiant face”
- Commonly referred to as blushing face
- Purity and innocence
- Kawaii emerged as means to combat loneliness

 Kamikaze
- Japanese will sacrifice their lives by making based with other planes/suicide

 Iyasareru
- Popular word that is comforting anf calming and healing to one spirit

 Tomoyuki Sugiyama
- Author of “Cool Japan” who believes cute is noted in Japan’s harmony-loving culture

 In 2015, census states Japan median age is 51 and mean age is 47

 Japanese see value in youth
 Japan’s cute offering is now commanding the same respect of luxury goods
 Japan is a low trust society
- Corps don’t hire non-japanese executives
- Honor if naimbitahan ka to do professional work in Japan
 Japan is an in-group “clan type culture”
- They are very much into family bonding kahit hindi nila kamag-anak
 Japan’s culture integrated in the production industry
CHAPTER 4: LEGAL AND REGULATORY ENVIRONMENTS OF INTERNATIONAL MARKETING

A. Top Legal Issues of International Exchange

B. Property Seizures
C. International Legal Dynamics
D. International Trade Agreements
E. Cases

TOP LEGAL ISSUES AFFECTING INTERNATIONAL EXCHANGE

 Dumping
 Price suppression
 Price depression
 Hoarding and cartel

1. Dumping
- Occurs when a foreign producer sell as product into another country (foreign market) at a
price that is below the producer’s sales price in the country of origin (home market) or at a
price that is lower than the cost of production
- In short pag binenta ng mas mababa sa orig price

 Effects of dumping:
 Price depression (negative)
- Extent by which the domestic producer reduces its selling price in order
to compete with the allegedly dumped product
 Price suppression (positive)
- Dumped products prevent the domestic producer from increasing the
selling price of its own like product

 Anti Dumping Law for Non-Food Trade

 PH – Republic Act No. 7845 “Anti-Dumping Act of 1994)
 World – Agreement on Implementation of Article VI of the General Agreement
on Tariffs and Trade 1994

 Techniques to remedy dumping:

 Dumping is sometimes necessary

 Trans-shipment – using a third country as filtering mechanism to avoid

detection

 Re-branding – changing a part of a product’s attribute/appearance or name

Ex. Honda Fit from Japan to Honda Jazz in the PH
Export exclusive – products are exclusive in a particular country

 Special permits – government allows certain types of products to be exempted

from dumping laws
Ex. Medicine, textbooks (products that are highly needed in the society)

 Donation/Humanitarian Aid – very much illegal

91% of all bulk RTW shipments exchanged globally are labeled as “for
humanitarian aid” under purpose of shipment
 2. Smuggling
- Any form of international goods transfer that is not
 Importation
 Exportation
 Personal use

- Penalties include:
 Seizures (kinukuha ng gov’t)
 Auctions (binebent ng gov’t)

SEIZURE OF ASSETS

Inherent power of state:

1. Police power
2. Taxation
3. Eminent domain

a. Expropriation – gov’t action to possess a foreign company or investor (pag good yung gagawin
may compensation)

b. Confiscation – action to levy ownership over foreign properties as allowed by a country’s law (pag
you broke the law wala compensation)

o Expropriation is rarely done because it damages the economy of a nation

o Expo – you haven’t done anything yet the gov’t is after your property
o Confi - you broke the law so the gov’t is going to take what’s yours

o Why gov’t confiscate?

 Transporting banned goods
 Non-payment of tariffs/taxes
 Lack of documents

c. Nationalization – a gov’t takes control of some or all of the enterprise

d. Creeping expropriation – limits economic activities of foreign firms

o May include: limits or repatriation

POLITICAL ACTION AD RISKS

1. Commercial risks
2. Country risks
3. Economic risks
4. Unexpected risks

1.) Commercial risk

 Poor quality risk
Solution: Big companies hire independent quality inspection company

 Credit risk
- Wrong test of buyers’ credit worthiness due to extended distance
  Logistics and Contractual dispute risk
- Risk related to non fulfillment or miscommunicated in terms on the buyer/ seller
agreement

2.) Country risk

 When disputes can be isolated in a country

 Political risk

 Legal risk
Ex. Calcium chloride

 Involves bribery and corruption

o Bribery – using money to avail and expedite gov’t service that is supposed to be free
o Corruption – misuse of gov’t funds and non-fulfillment of paid obligations

Financial lubrication – greasing the wheels to make things run fast using very minimal cash

 Effects of bribes
o Devious cycle – need na lagi meron
o Compounding demand – abusado gusto pa more

3.) Economic risk

 Exchange rate risk – risk that involves fluctuation of foreign currencies

 How to protect?
o Hedging – the goods will be paid according to what is the current and prevailing
conversion rate at the time of the buyer’s port arrival

4.) Unexpected risk

 Transportation risk – events that can occur during transit of manmade
 Unforeseen risk – without the control of man

INFRINGEMENT OF INTELLECTUAL PROPERTY (DUPLICATION THREAT)

 Counterfeiting – unauthorized copying and production of a product
 Associative counterfeit/imitation – product name differs slightly from a well known brands
 Piracy –

Licensing and Trade Secrets

 License – operation (the way you run and do things)
 Patent – formulas, ingredients
 Copyright – recording (sounds, images, book)
CHAPTER 5: CONSUMER, INDUSTRIAL & GOVERNMENT MARKETS IN INTERNATIONAL
MARKETING

Ethnic Locale Market Profits

 Consumer level
 Industrial level
 Government level

*To boost local appeal Uniqlo employed Brand Ambassadors

LEVEL 1: Consumer Market

- Treating every individual foreigners as your own target market

 COO – Country of Origin effect

- The country of origin’s reputation is linked to the quality perception of the goods that came
from them
- Ex. China products

LEVEL 2: Industrial Market

- When you cater to the needs of a full corporation or a business entity overseas

 Subject to principles of:

o Derived demand
- If you supply raw materials for a company overseas, then you are catering on their
“derived demand”
- Their need for you depends on their demand of the product that uses your raw material
- Ex. Myphone – pag mababa ang benta, mababa din order sa China

o Cost-performance
- Emphasizes on maximization of profits
- The initiative to buy something from an overseas
- (maximization of profits, decreases in cost, increase revenue)
- Ex. North Edsa Solar panels – Solar PH – Sun tech

LEVEL 3: Government Market

- When participating in a bid to cater to government need of other countries
Ex. Subway in Manila project
- The biggest opportunity for big profit among all 3 levels
- Biggest risk of bankruptcy
Ex. Dalian Locomotive Incorporated from China (train for LRT)

 Discriminatory Bids
o Bidding is required for government projects
o If you are a foreigner, you can only be entertained if you can prove that local providers are
incapable of rendering the demand of the government
o You will be discriminated bidding risk
Part 2: DYNAMICS OF TARGET MARKET MIGRATION

Kinds of Migration
1.) Push Migration
- Persecution (SYRIA)
- You are forces

2.) Pull Migration

- Benefit oriented, they are naming for something
- Acceptance (CANADA)

3.) Benefits Migration

- Acceptance, possible work, education, health
- Benefit sa taong dadating/magmimigrate

4.) Cost Migration

- Leaving home, family and friends
- New language and culture

Levels of Migrant Nationals:

 Permanent migrant
- Change of national status is involved
- Waiving of past nationality and naturalization

 Temporary migrant
- No change of nationality
- Work related contracts, extended vacations

*Migrant Nationals serves as “cushion”

*In the eyes of the consumer level ethnic market, it boils down on how they view the country (COO)

Cross Country Subsidization

- Use of profits from country to subsidize competitive actions in another country

- Ex. Uber – may pa free rides dahil may budget from another country