CHAPTER 1: The Scope and Challenge of International Marketing

Events and Trends Affecting Global BusinessThe rapid growth of the World Trade Organization and regional free trade areas. The trend toward the acceptance of the free market system among developing countries in Latin America, Asia, and Eastern Europe. The burgeoning impact of the Internet, mobile phones, and other global media on the dissolution of national borders. The mandate to properly manage the resources and global environment for the generations to come
 
The Scope and Challenge of International Marketing 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 nation for a profit

Stages of International Marketing Involvement

1. No direct foreign marketing
2. Infrequent foreign marketing
3. Regular foreign marketing
4. International marketing
5. Global marketing

No Direct Foreign Marketing
- Products reach foreign markets indirectly :-

• Trading companies
• Foreign customers who contact firm
• Wholesalers
• Distributors
• Web sites

- Foreign orders pique a company’s interest to seek additional international sales

Infrequent Foreign Marketing
- Caused by temporary surpluses :-

• Variations in production levels
• Increases in demand

- Firm has little or no intention of maintaining continuous market representation :-

• Foreign sales decline when demand or surplus decreases
• May withdraw from international markets

- Little or no change in company organization or product lines

Regular Foreign Marketing
- Firm has production capacity devoted to foreign markets
- Firm employs domestic or foreign intermediaries

• Uses its own sales force
• Sales subsidiaries in important markets

- Products allocated or adapted to foreign markets as demand grows
- Firm depends on profits from foreign markets

Global Marketing
- Company treats world, including home market as one market
- Market segmentation decisions no longer focused on national borders

• Defined by income levels, usage patterns, or other factors

- More than half of revenues come from abroad
- Organization takes on global perspective

Strategic Orientation

1. Domestic market extension orientation
2. Multidomestic market orientation
3. Global market orientation

Domestic Market Orientation
- International operations viewed as secondaryPrime motive is to market excess domestic
production
- Firm’s orientation remains basically domestic
- Minimal efforts are made to adapt product or marketing mix to foreign markets
- Firms with this approach are classified as ethnocentric

Multidomestic Market Orientation
- Companies have a strong sense that foreign country markets are vastly different
- Market success requires an almost independent program for each country

• Separate marketing strategies
• Subsidiaries operate independently of one another in establishing marketing objectives and plans
• Products are adapted for each market

- Control is decentralized

Global Market Orientation
- Company guided by global marketing orientation

• Marketing activity is global
• Market coverage is the world

- Firm develops a standardized marketing mix applicable across national boundaries

• Markets are still segmented
• Each country or region is considered side by side with a variety of other segmentation variables
• Fits the regiocentric or geocentric classifications

The Orientation of International Marketing
- An environmental/cultural approach to international strategic marketing
- Intended to demonstrate the unique problems of international marketing
- Discussion of international marketing ranges from the marketing and business practices of
small exporters to the practices of global companies

Summary
- Environmental differences must be taken into account if firms are to market products and
services at a profit in other countries :-

• Laws
• Customs
• Cultures

- Self-reference criteria and ethnocentrism limit international marketer’s abilities to understand
and adapt to differences prevalent in foreign markets.