Slide 1Slide 2Slide 3Slide 4Slide 5Slide 6Slide 7Slide 8Slide 9Slide 10Slide 11Slide 12Slide 13Slide 14Slide 15Slide 16Slide 17Slide 18Slide 19Slide 20The Scope and Challenge of International MarketingChapter 1McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.PowerPoint presentation prepared by:Professor Rajiv MehtaAssociate Professor of MarketingNew Jersey Institute of TechnologyNewark, N.J.Chapter Learning Objectives1. The changing face of U.S. business1. The changing face of U.S. business2. The scope of the international marketing task2. The scope of the international marketing task3. The increasing importance of global awareness3. The increasing importance of global awareness4. The progression of becoming a global marketer4. The progression of becoming a global marketer5. The importance of the self-reference criterion (SRC) in international marketing5. The importance of the self-reference criterion (SRC) in international marketingPreface“Never before in American history have U.S. businesses, largeand small, been so deeply involved in and affected byinternational business. A global economic boom, unprecedentedin modern economic history, has been under way as the drive forefficiency, productivity, and open, unregulated markets sweepsthe world. Powerful economic, technological, industrial, political,and demographic forces are converging to build the foundation ofa new global economic order on which the structure of a one-world economic and market system will be built” (Cateora and Graham)“Never before in American history have U.S. businesses, largeand small, been so deeply involved in and affected byinternational business. A global economic boom, unprecedentedin modern economic history, has been under way as the drive forefficiency, productivity, and open, unregulated markets sweepsthe world. Powerful economic, technological, industrial, political,and demographic forces are converging to build the foundation ofa new global economic order on which the structure of a one-world economic and market system will be built” (Cateora and Graham)Global Perspective: Recent EventsInformation technology boom of the late 1990sInformation technology boom of the late 1990sWars in Afghanistan and Iraq Wars in Afghanistan and Iraq September 11th attacks on the World Trade Center and PentagonSeptember 11th attacks on the World Trade Center and PentagonEnron and WorldCom scandals Enron and WorldCom scandals The high-tech bust of 2001The high-tech bust of 2001Global Perspective: Recent Events2003 SARS outbreak in Asia 2003 SARS outbreak in Asia Global terrorism, e.g., Indonesia, Israel,India, and MoroccoGlobal terrorism, e.g., Indonesia, Israel,India, and MoroccoTranscending these events, international commerce continuedTranscending these events, international commerce continuedInternational conflict among China, Taiwan, and the United States International conflict among China, Taiwan, and the United StatesGlobal Business Trends1. The rapid growth of theWorld Trade Organizationand regional free tradeareas, e.g., NAFTA and theEuropean Union1. The rapid growth of theWorld Trade Organizationand regional free tradeareas, e.g., NAFTA and theEuropean Union2. General acceptance of thefree market system amongdeveloping countries in LatinAmerica, Asia, and EasternEurope2. General acceptance of thefree market system amongdeveloping countries in LatinAmerica, Asia, and EasternEurope3. Impact of the Internet andother global media on thedissolution of nationalborders, and 3. Impact of the Internet andother global media on thedissolution of nationalborders, and 4. Managing globalenvironmental resources4. Managing globalenvironmental resourcesInternationalization of U.S. BusinessIncreasing globalization ofmarketsIncreasing globalization ofmarketsFirms face competition onall frontsFirms face competition onall frontsMany U.S. companies arenow foreign controlled:Carnation (Swiss), Daimler-Chrysler (German)Many U.S. companies arenow foreign controlled:Carnation (Swiss), Daimler-Chrysler (German)U.S. firms seeking foreignmarkets to increase profitsU.S. firms seeking foreignmarkets to increase profitsInternational Marketing: A DefinitionInternational marketing is defined as theperformance of business activities designed to plan,price, promote, and direct the flow of a company’sgoods and services to consumers or users in morethan one nation for a profitInternational marketing is defined as theperformance of business activities designed to plan,price, promote, and direct the flow of a company’sgoods and services to consumers or users in morethan one nation for a profitMarketing concepts, processes, and principles are universally applicable all over the worldMarketing concepts, processes, and principles are universally applicable all over the worldThe International Marketing Task73. EconomyEnvironmentaluncontrollablescountry market AEnvironmentaluncontrollablescountrymarket BEnvironmentaluncontrollablescountrymarket C1. Competition1. Competition2. TechnologyPrice ProductPromotionPlace orDistribution6. Geography andInfrastructure Foreign Environment(Uncontrollables)7. Structure ofDistribution3. Economy5. Political-LegalDomestic environment(Uncontrollables)(Controllables)2 .Technology4. Culture5. Political-Legal4. CultureTarget MarketEnvironmental Adaptation NeededDifferences are in the uncontrollable environment of internationalmarketingDifferences are in the uncontrollable environment of internationalmarketingFirms must adapt to uncontrollable environment of internationalmarketing by adjusting the marketing mix (product, price,promotion, and distribution)Firms must adapt to uncontrollable environment of internationalmarketing by adjusting the marketing mix (product, price,promotion, and distribution)Adaptation(of Marketing Mix)Standardization(of Marketing Mix)ContinuumINFLUENCED BY 7 ENVIRONMENTAL FACTORSSelf-Reference Criterion (SRC) and Ethnocentrism:Major Obstacles•SRC is an unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions•Ethnocentrism refers to the notion that one’s own culture or company knows best how to do things •Both the SRC and ethnocentrism impede the ability to assess a foreign market in its true light•Reactions to meanings, values, symbols, and behavior relevant to our own culture are different from those of foreign •Relying on one’s SRC could produce an unsuccessful marketing programAvoiding the