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.
Introduction
3
• To understand a society’s actions and its points
of view, you need to appreciate:
– The influence of historical events
– The geographical uniqueness to which a culture
has had to adapt
• Culture can be defined as society's accepted basis
for responding to external and internal events
• To interpret a culture’s behavior and attitudes, a
marketer must have some idea of a country’s
history and geography
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Overview
3
• Historical perspective in global business
• Geography and global markets
– Climate and topography, geography, nature, and
economic growth, social responsibility and
environmental management, and resources
• Dynamics of global population trends
– Controlling population growth, rural/urban
migration, population decline and aging, and
worker shortage and immigration
• World trade routes
• Communication links
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Global Perspective
Birth of a Nation – Panama in 67 Hours
3
• History and geography can affect public and
political attitudes of a nation in the present and
far into the future
• The Panama Canal is but one example of the
many U.S. intrusions during the early 20th
century that have tainted U.S. - Latin American
relationships
• A Chinese-company has operational control of
both the Pacific and Atlantic ports making the
control of the Canal a sensitive issue
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Panama Canal
3
www.pancanal.com
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History Perspective
in Global Business
3
• History helps define a nation’s mission
– How it perceives its neighbors
– How it perceives itself
– Its place in the world
• Insights into history are important for
understanding current attitudes
• It is necessary to study culture as it is now as
well as to understand culture as it was
– A country’s history
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History and
Contemporary Behavior
3
• Japanese history
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Seven centuries under the shogun feudal system
The isolation before the coming of Admiral Perry in 1853
Threat of domination by colonial powers
Rise of new social classes
Western influences
Humiliation of World War II
Involvement in the international community
• Historically, loyalty and service, a sense of responsibility, and
respect for discipline, training, and artistry were stressed to
maintain stability and order
• A historical perspective gives the foreigner a basis on which to
begin developing cultural sensitivity and a better
understanding of contemporary Japanese behavior
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History is Subjective
3
• Historical events always are viewed from one’s
own biases and SRC
• A crucial element in understanding any nation’s
business and political culture is the subjective
perception of its history
– Relationship between U.S. and Mexico
• Monroe Doctrine
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Territorial Expansion
of United States from 1783
3
Exhibit 3.1
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Manifest Destiny
and the Monroe Doctrine
3
• Both accepted as the basis for U.S. foreign policy during
much of the 19th and 20th centuries
• Manifest Destiny justified U.S. expansion
– Annexation of Texas, Oregon, New Mexico, and California
– U.S. involvement in Cuba, Alaska, Hawaii, and the
Philippines
• Three basic dicta of the Monroe Doctrine
– No further European colonization in the New World
– Abstention of the U.S. from European political affairs
– Nonintervention of European governments in the
governments of the Western Hemisphere
• Change in the Monroe Doctrine
– 1881 – Roosevelt Corollary
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U.S. Intervention
in Latin America Since 1945
3
Exhibit 3.2
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Geography and Global
Markets
3
• Geography – an element of the uncontrollable
environment that confronts every marketer
– Affects a society’s culture and economy
– Physical makeup limits a nation’s ability to supply
its people’s needs
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Climate and Topography
3
• Altitude, humidity, and temperature extremes
– South America
– British resistance of the English Channel
– Trade through the Alps
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http://www.msnbc.msn.com/id/19248748/
3-19
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Geography, Nature
and Economic Growth
3
• As countries prosper, natural barriers are
overcome
• Environmental issues
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Disruption of ecosystems
Relocation of people
Inadequate hazardous waste management
Industrial pollution
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Social Responsibility
3
and Environmental Management
• Environmental protection is not an optional extra
• Pollution is on the verge of getting completely out of
control
• China has 16 of the world’s 20 most polluted cities
• Critical issue: the disposal of hazardous waste
• Sustainable development
• http://www.time.com/time/specials/2007/0,28757,1661
031,00.html
• http://www.forbes.com/2006/03/21/americas-mostpolluted-cities-cx_rm_0321pollute.html
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A Comparison of Green-House Gas
Emission Rates and Pledges for Reductions
3
Exhibit 3.3
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Resources (1 of 2)
3
• The availability of minerals and the ability to
generate energy are the foundations of modern
technology
• The principal supplements to human energy
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Animals
Wood
Fossil fuel
Nuclear power
Ocean tides
Geothermal power
The sun
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Resources (2 of 2)
3
• United States in perspective
– 1942 – nearly self-sufficient
– 1950 – major importer
– 1973-2000 – increased dependency from 36% to
66%
– Mid-2000’s – predicted to be importing more
than 70% of needs
• The location, quality, and availability of
resources will affect the pattern of world
economic development and trade well into the
21st century
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World Energy Consumption
3
Exhibit 3.4
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World Energy Consumption
3
Exhibit 3.4
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Dynamics of Global
Population Trends
3
• Global population trends determine today’s demand
for goods
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Rural/urban population shifts
Rates of growth
Age levels
Population control
• Changes in population will profoundly affect future
demand
• The most important deterrent to population control
is cultural attitudes about the importance of large
families
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World Population by Region – 2005-2050
Life Expectancy at Birth – 2005-2010
(millions)
3
Exhibit 3.5
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Controlling
Population Growth
3
• Procreation is one of the most culturally
sensitive uncontrollable factors
• Perhaps the most important deterrent to
population control is cultural attitudes about the
importance of large families
• Family planning and all that it entails is by far
the most universal means governments use to
control birthrates, but some economists believe
that a decline in the fertility rate is a function of
economic prosperity and will come only with
economic development
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Rural/Urban Migration
3
• Result of a desire for greater access to:
– Sources of education
– Health care
– Improved job opportunities
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Population Decline and Aging
3
• Population growth in many countries has
dropped below the rate necessary to maintain
present levels
• A nation needs a fertility rate of about 2.1
children per woman
• Not one major country has sufficient internal
population growth to maintain itself
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Age Density for World
and Selected Countries
3
Exhibit 3.6
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Worker Shortage
and Immigration
3
• The free flow of immigration will help to
ameliorate the dual problems of explosive
population expansion in less-developed
countries and worker shortage in industrialized
regions
• Europe will need 1.4 billion immigrants over the
next 50 years
• Japan and the U.S. will need 600 million
immigrants between now and 2050
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World Trade Routes
3
• Progression of trade routes
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Overland
Sea routes
Air routes
The Internet
• Trade routes bind world together, minimizing:
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Distance
Natural barriers
Lack of resources
Fundamental differences between and economies
• Trade routes represent attempts to overcome influence
of geography causing economic and social imbalances
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Communication Links
Telegraph
Telephone
Television
Satellites
Computer
Internet
3
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Summary (1 of 2)
3
• A prospective international marketer should be
reasonably familiar with the world, its climate,
and topographic differences
• Geographic hurdles must be recognized as
having a direct effect on marketing and the
related activities of communications and
distribution
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Summary (2 of 2)
3
• Without a historical understanding of a culture,
the attitudes within the marketplace may not be
fully understood
• The study of history and geography is needed to
provide the marketer with an understanding of
why a country has developed as it has rather
than as a guide for adapting marketing plans
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