Chapter 1 PDF

International Marketing
15th edition
Philip R. Cateora, Mary C. Gilly, and John L. Graham

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
International Marketing 1
• International marketing is defined as the

performance of business activities designed to
plan, price, promote, and direct the flow
of a company’s goods and services to
consumers or users in more than one nations
for a profit.
• The difference is the “environment”
– Competition, legal restraints, government controls,
weather, fickle consumers, economic conditions,
technological constraints, infrastructure concerns,
culture, and political situations.
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1
The International Marketing Task
Exhibit 1.3
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1
The International Marketing Task
Marketing Decision Domestic Environment Foreign Environment
• Firm • Political forces • Political forces

Characteristics • Legal forces • Legal forces
• Product • Economic forces • Economic forces
• Price • Competition • Competition
• Place • Level of
• Promotion technology
• Research • Geography
• Culture
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Environmental Adaptation 1
• The most challenging and important adaptation

international marketers must make is cultural
adjustments.
• Must establish a frame of reference
– Time-conscious Americans vs. Time-is-not-an-
asset thinking Latin Americans
– Hand gestures vary between countries
• “Cultural Conditioning” – be aware of home
cultural references before making decisions
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Obstacles to Adaptation 1
• Adaptation is a conscious effort on the part of

the international marketer to anticipate the
influences of both the foreign and domestic
uncontrollable factors on a marketing mix and
then to adjust the marketing mix to minimize
the effects.
• Two primary obstacles are:
– Self-Reference Criterion (SRC)
– Ethnocentrism
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Self-Reference Criterion 1
(SRC)
• Self-Reference Criterion (SRC) is an
unconscious reference to one’s own cultural
values, experiences, and knowledge as a basis
for decision.
• Risk of SRC:
– Prevent you from becoming aware of cultural
differences
– Influence the evaluation of the appropriateness
of a domestically designed marketing mix for a
foreign market
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Ethnocentrism 1
• The notion that people in one’s own company,

culture, or country know best how to do things.
• Risk of Ethnocentrism:
– Impedes the ability to assess a foreign market in
its true light
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Beyond Obstacles 1
to Adaptation
• The most effective way to control the influence

of SRC and Ethnocentrism is:
– To recognize the effects on our behavior
– To recognize that there may be more similarities
than differences between countries
– To conduct cross-cultural analysis
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Cross-Cultural Analysis 1
1. Define business problem or goal in home-

country cultural traits, habits, or norms
2. Define business problem or goal in foreign-
country cultural traits, habits, or norms
through consultation with natives of target
country
3. Isolate the SRC influence and examine it
carefully to see how it complicates the problem
4. Redefine the problem without SRC influence
and solve for the optimum business goal
situation
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Developing 1
Global Awareness
• Tolerance of cultural differences

– You do not have to accept as your own the
cultural ways of another, but you must allow
others to be different and equal
• Knowledge of cultures, history, world market
potential, and global economic, social, and
political trends
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Approaches to 1
Global Awareness
• Select individual managers that express a

global awareness orientation
• Develop personal relationships in foreign
countries
• Must have the support of a culturally diverse
senior executive staff or board of directors
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International Marketing 1
Involvement - Stages
No Direct Infrequent Foreign

Foreign Marketing Marketing
Global
Marketing
Regular Foreign International
Marketing Marketing
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No Direct Foreign 1
Marketing – Reactive
• Products “indirectly” reach foreign markets
• Trading companies
• Foreign customers who contact firm
• Domestic wholesalers/distributors
• Web orders
• Foreign orders stimulate a company’s interest
to seek additional international sales
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Infrequent Foreign 1
Marketing – Reactive
• Caused by temporary surpluses
– Sales to foreign markets are made as goods
become available
• Firm has little or no intention of maintaining
continuous market representation
• Foreign sales activity declines and is
withdrawn when domestic demand increases
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Regular Foreign 1
Marketing – Proactive
• Dedicated production capacity for foreign
markets
• Strategy:
– Firm employs domestic or foreign intermediaries
– Uses its own sales force or sales subsidiaries
• Products are adapted for foreign markets as
domestic demand grows
• Firms depend on profits from foreign markets
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International Marketing – 1
Proactive
• Fully committed and involved in foreign markets

and international activities
• Production takes place on foreign soil earning
firms the MNC (Multinational Corporation) title
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Global Marketing – 1
Proactive
• The firm sees the world as one market!

• Market segmentation is now defined by income
levels, usage patterns, or other factors that span
the globe
• More than half of its revenues come from abroad
• The firm has a global perspective
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Global Market Orientation 1
• This orientation entails operating as if all the

country markets in a company’s scope of operations
(including the domestic market) were approachable
as a single global market and standardizing the
marketing mix where culturally feasible and cost
effective.
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International Marketing

Philip R. Cateora, Mary C. Gilly, and John L. Graham

• International marketing is defined as the

Roy Philip 1-2

Roy Philip 1-3

Marketing Decision Domestic Environment Foreign Environment

• Firm • Political forces • Political forces

Roy Philip 1-4

• The most challenging and important adaptation

Roy Philip 1-5

• Adaptation is a conscious effort on the part of

Roy Philip 1-6

Roy Philip 1-7

• The notion that people in one’s own company,

Roy Philip 1-8

• The most effective way to control the influence

Roy Philip 1-9

1. Define business problem or goal in home-

• Tolerance of cultural differences

Roy Philip 1-11

• Select individual managers that express a

Roy Philip 1-12

No Direct Infrequent Foreign

Roy Philip 1-13

Roy Philip 1-14

Roy Philip 1-15

Roy Philip 1-16

• Fully committed and involved in foreign markets

Roy Philip 1-17

• The firm sees the world as one market!

Roy Philip 1-18

• This orientation entails operating as if all the

Roy Philip 1-19

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