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Scope Concepts andDriversofInternationalMarketing Dana NicoletaLascuChapter1 ChapterObjectives Defineinternationalmarketingandidentifythedifferentlevelsofinternationalinvolvement Describethedifferentcompanyorientationsandphilosophiestowardinternationalmarketing Identifyenvironmentalandfirm specificdriversthatdirectfirmstowardinternationalmarkets Identifyobstaclespreventingfirmsfromsuccessfulinternationalventures ImportanceofInternationalMarketing Internationalmarketinghelpscompaniesreachtheirfullpotentialandthemaximumreturnfortheirstockholders Manycompaniesfindthat tokeepupwithcompetition theymustreachfornewinternationalconsumers Formanycompanies aninternationalpresenceisessentialtotheirsuccess Exxon GeneralMotors MicrosoftandMitsubishiearnprofitshigherthanthegrossdomesticproductofmanylow incomecountries Manysmallbusinessescanattributetheirsuccessandevensurvivaltointernationalmarkets CompanieswithproductsinlatestagesoftheproductlifecyclefindthatemergingmarketsofferthemnewlifePrivatizationincountrieswheregovernmentmonopolieshaddominatedfordecadeshasmadeitpossibleformultinationalstocompeteforlocalenergy airline railway andtelecommunicationsindustries Domesticmarketing ThefirmhastheleastcommitmenttointernationalmarketingFocusondomesticconsumersandonthehome countryenvironment Exportmarketing Thefirmisindirectlyordirectlyinvolvedinexporting Thefirmconsiderstheinternationalmarketasanextensionofthedomesticmarket Internationalmarketing Thefirmfocusesoninternationalconsumersinoneormorecountries Firm ssalesoffices subsidiaries jointventuresareindifferentcountries Internationalactivitiesarenotcoordinatedacrossdifferentcountries Globalmarketing Thefirmcoordinatesitsmarketingactivitiesacrossdifferentcountrieswithoutfocusingprimarilyonnationalorregionalsegmentation Thestrategyispossibleduetotheemergenceofuniformglobalconsumersegments Thestrategyentailsanefficientglobalallocationofcompanyresources LevelsofInternationalMarketingInvolvement LevelsofInternationalMarketingInvolvement summarized InternationalizationPhilosophies HumanResources Finance Managementinternationalizationphilosophyaffectsallfunctionalareasofthecorporation Impactonresourceallocation responsetoglobalthreats opportunities EthnocentricOrientation Guidedbydomesticmarketextensionconcept Domesticstrategies techniques andpersonnelareperceivedassuperior Internationalmarketsaresecondary regardedprimarilyasoutletsforsurplusdomesticproduction Internationalmarketingplansaredevelopedin housebytheinternationaldivision DisneylandResortParisemphasizesaU S domestic theme MainStreetUSA PolycentricOrientation Guidedbythemultidomesticmarketingconcept Focusesontheimportanceanduniquenessofeachinternationalmarket Firmsestablishindependentbusinessesineachtargetcountry Fullydecentralized minimalcoordinationwithheadquarters MarketingstrategiesarespecifictoeachcountryOutcomes noeconomiesofscale duplicatedfunctions higherfinalproductcosts RegiocentricOrientation Guidedbytheglobalmarketingconcept Considersworldregionsthatshareeconomic political and orculturaltraitsasdistinctmarkets Divisionsareorganizedbasedonlocation Regionalofficescoordinatemarketingactivities usingaregion widemarketingapproach Example RegionalbrandssuchasUnilever sDomestos householdcleaningagentcontainingbleach soldinCentralEurope GeocentricOrientation Guidedbytheglobalmarketingconcept Marketingstrategiesaimedatmarketsegments ratherthangeographiclocations Maximizesefficienciesworldwideandprovidesstandardizedproductorservicethroughouttheworld Example Visa Visaisomnipresentinworldmarkets ThisadsuggeststoFrenchconsumersthatVisaiswidelyused InternationalExpansion DriversintheBusinessEnvironment Theprimarydriversinthebusinessenvironmentare CompetitionRegionalEconomicandPoliticalIntegrationTechnologyImprovementsinTransportationandTelecommunicationEconomicGrowthTransitiontoaMarketEconomyConvergingConsumerNeeds DriversintheBusinessEnvironment contd CompetitionCompetitivepressurefrominternationalcompanieswillforcethecompanytoexpandtonewmarkets evenlessprofitableones Example McCannErickson theadvertisingagency followedlongtimeclient CocaCola Inc toallcountrieswhereCokewaspresent untilrecently DriversintheBusinessEnvironment contd Integrationfacilitatesinternationaltradeforcompaniesinmembercountries andforcompaniesfromcountriesoutsideofthearea Example RegionalagreementssuchasNAFTA MERCOSUR andtheEuropeanUnionlowerandeliminatebarriersandpromotetradewithinthesemarkets Subsidiariescanbeestablishedinthesemarketstotakeadvantageoffreetradewithintheregion RegionalEconomicandPoliticalIntegration DriversintheBusinessEnvironment contd TechnologyExamples Mediadevelopmentexposesconsumersworldwidetoforeignprogramming Consumersworldwideareexposedtosimilarproducts services andentertainment andmarketingcommunications TheInternetofferssmallandmediumenterprisesinbothhigh andlow incomecountriesunlimitedinternationalexposure Technologyoffersabroadreachtothesebusinesseswhoseadvertisingbudgetcannotcoverthehighcostofinternationalbroadcastandprintadvertising DriversintheBusinessEnvironment contd Lowercostandhigherqualitycommunicationduetosatellitetechnology teleconferencing ande mail Allowforfrequentinteractionbetweensubsidiariesinforeigncountriesandtheheadquarters Allowforoutsourcingofcustomerservice Theintroductionofcontainersinintermodaltransportationandelectroniccommunicationbetweensuppliersandcustomersgreatlyfacilitatesthetransportationofphysicalgoods TransportationandTelecommunications ContainershipintheportofRotterdam DriversintheBusinessEnvironment contd Economicgrowthcreatedmarketsofhighpotentialforinternationalbrands whilealsoopeningpreviouslyclosedmarkets EmergingmiddleclasswithincreasingbuyingpowerinbigemergingmarketssuchasthoseofBrazilandIndia Openingofnewmarketsthatwerepreviouslyclosed suchasthoseofChinaandVietnam andthoseoftheformerEasternBloc EconomicGrowth DriversintheBusinessEnvironment contd Transitiontoamarketeconomycreatedimportantnewmarketsandopportunitiestotransforminefficientgovernment ownedcompaniesintosuccessfulenterprises Poland theCzechRepublic Slovakia Slovenia Hungary Romania andBulgariaaremembersoftheEuropeanUnion SloveniaisalreadyamemberoftheEuropeanMonetaryUnion ChinaandVietnamareopeningdoorstomultinationals TransitiontoaMarketEconomy DriversintheBusinessEnvironment contd Consumers exposure throughmedia travel toglobalbrandscreateddemandforglobalproductsandworldwideloyaltytointernationalbrands Theemergenceofuniformconsumersegmentsfacilitatesmarketingstrategiesworldwide Examplesofconsumersegmentsworldwide globalteenagersglobalelite ConvergingConsumerNeeds Firm SpecificDriversofInternationalExpansion Theprimaryfirmdriversforinternationalexpansionare ProductLifeCycleHighNewProductDevelopmentCostsStandardizationEconomiesofScaleCheapLaborExperienceTransfers Firm SpecificDrivers contd ProductLifeCycleConsiderations Companiesprolongtheproductlifecycleoftheirlate maturitybrandsbyenteringgrowthmarkets Firm SpecificDrivers contd HighNewProductDevelopmentCosts New product developmentcostsarerapidlyincreasingandproductlifecyclesaredecreasing Asaresult firmsmustlookbeyondthehome countrymarkettofullyrecoverthehighproductdevelopmentcostsandtomakeaprofit Pricecompetitionduringthematuritystageoftheproductlifecycledrivesfirmtonewinternationalmarketsinsearchofcheaplabor Thefirmlowerscosts andprices asittakesadvantageof EconomiesofscaleStandardization andCheaplabor Firm SpecificDrivers contd Standardization ScaleEconomies CheapLabor Firm SpecificDrivers contd ExperienceTransfers Companiesbenefitfromlessonstheylearnindifferentpartsoftheworldandtransfertheirknowledgetoothermarketstheyserve ObstaclestoInternationalization Theprimaryobstaclestointernationalizationaretheself referencecriterion governmentbarriers andcompetitivebarriers Self referenceCriterionConsciousandunconsciousreferencetoownnationalcultureandhome countrynormswhileoperatinginthehostcountry whichcanpreventfirmsfromadaptingtolocalbusinessenvironmentsandservingtheneedsoflocalconsumers Tocountertheimpactoftheself referencecriterion thecorporationmust Selectadaptablepersonnelforinternationalassignments Sensitizeexpatriatestothelocalculture ObstaclestoInternationalization contd GovernmentBarriersRestrictionsplacedoninternationalcorporationsbyimposing TariffsImportquotasOtherlimitations suchasrestrictiveimportlicenseawards Obstaclest
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