1-0
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Chapter 1
1-1
The Scope and Challenge
of International Marketing
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Foreign Acquisitions of
U.S. Companies
1-2
U.S. Company
Foreign Owner
J. Walter Thompson (Advertising)
Britain
Spiegel (Catalog retailing)
Germany
Mack Trucks (Automotive)
France
Giant Food Stores (Supermarkets)
Netherlands
Pillsbury, Hueblein (Food, Drink)
Britain
CBS Records (Music and Entertainment)
Japan
Magnavox (Television)
Netherlands
Carnation (Coffee-Mate, Friskies pet food)
Switzerland
Chesebrough-Pond’s (Vaseline)
Netherlands
Vermont American (Garden Tools)
Germany
Northwest Airlines (Travel)
Netherlands
SOURCE: Adapted from “Soon to Be Extinct: American TV Brands.,” U.S. News & World Report,
July 31, 1995, p. 13, and Gustavo Lombo, “Creating American Jobs,” Forbes, July 28, 1997. P.222.
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Invented Here, Made Elsewhere
1-3
U.S. Invented Technology
Phonographs
9 0%
1%
9 0%
Color TVs
1 0%
1970
4 0%
Audiotape Recorders
0%
NOW
1 0%
Videotape Recorders
1%
9 9%
Machine Tools
3 5%
Telephones
9 9%
2 5%
8 9%
Semiconductors
6 4%
9 8%
Computers
7 4%
0
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20
40
60
80
100
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Some of the Big U.S. Players
in the Global Game*
1-4
Foreign Revenues
% of Total
Foreign Profits
% of Total
Foreign Assets
% of Total
Ei du Pont de Nemours
43.1
28.9
40.6
Proctor & Gamble
Coca-Cola
Intel
Motorola
Johnson & Johnson
Sara Lee
Colgate-Palmolive
Gillette
Compaq Computer
McDonald’s
Avon Products
50.1
67.1
58.4
45.0
49.6
39.7
71.6
63.1
46.5
57.0
65.3
36.2
36.9
67.8
38.4
92.4
46.1
53.8
83.6
41.1
51.7
49.6
58.9
53.8
40.5
37.7
20.2
37.7
45.3
51.3
60.4
62.6
31.4
55.0
59.0
20.2
Company
RJR Nabisco
*1996 data.
SOURCE: Adapted from Brian Zajac, “Buying American,” July 28, 1997, p218.
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The International Marketing Task
Foreign environment
(uncontrollable)
1-5
1
Political/legal
forces
7
Cultural
forces
Domestic environment
(uncontrollable)
Political/
legal
forces
(controllable)
Price
Promotion
6
Geography
and
Infrastructure
2
Competitive
structure Competitive
Forces
Product
Channels of
distribution
7
4
Structure of
distribution
3
Level of
Technology
Economic climate
5
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Economic
forces
Environmental
uncontrollables
country market A
Environmental
uncontrollables
country
market B
Environmental
uncontrollables
country
market C
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Cross Cultural Analysis to Isolate
the SRC Influences
1-6
Step 1: Define the business problem or goal in homecountry cultural traits, habits, or norms.
Step 2: Define the business problem or goal in
foreign-country cultural traits, habits, or
norms. Make no value judgements.
Step 3: Isolate the SRC Influence in the problem and
examine it carefully to see how it complicates
the problem.
Step 4: Redefine the problem without the SRC
influence and solve for the optimum business
goal situation.*
*James A. Lee, “Cultural Analysis in Overseas Operations, “Harvard Business Review,
March-April 1996, p.106-11.
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Being Globally Aware
1-7
 To be Globally Aware is to be:
Objective
 Tolerant of Cultural Differences

 Knowledgeable of:




Cultures
History
World Market Potentials
Global Economic, Social and Political
Trends
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Stages of International Marketing
Involvement
1-8
1. No Direct Foreign Marketing
2. Infrequent Foreign Marketing
3. Regular Foreign Marketing
4. International Marketing
5. Global Marketing
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International Marketing Concepts
1-9
Concept
EPRG Schema
Domestic Market
Extension
(Ethnocentric)
Multi-Domestic Market
(Polycentric)
Global Marketing
(Regio/Geocentric)
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Trends in Global Business
1-10
Internationalization of U.S. Markets
Internationalization of U.S. Business
Growth of Regional Trade Areas
EU, NAFTA, AFTA, APEC
Move toward free market system by countries in
Latin America, Asia, Eastern Europe
Large Emerging Markets such as
Argentina, China, South Korea, Poland, India
Evolving global middle income households
GATT and World Trade Organization
The TRIAD
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New and Future (Possible) Multinational Market
Groups or Trading Blocks of the 21st Century
1-11

European Union

European Economic Area (EC and EFTA)

North American Free Trade Area

Southern Cone-Mercosur

Asean Free Trade Area (AFTA)

Commonwealth of Independent States (CIS)

Central European Free Trade Area (CEFTA)
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New and Future (Possible) Multinational Market
Groups or Trading Blocks of the 21st Century
1-12
Possible Regional Trade Groups

Western Hemisphere Free Trade Areas (WHFTA)
Canada to Argentina

Asia-Pacific Economic Cooperation (APEC)
Pacific Rim Countries including U.S.

U.S./ Canada/Mexico/Japan

South American Free Trade Area (SAFTA)
Andean Pact and Mercosur

Chinese Economic Area (CEA)
Hong Kong, Taiwan, Coastal Provinces of So. China

U.S./European Union

Many possibilities of Republics of Russia, Baltic States
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