The Global Marketing Environment
International Marketing Management
Anna Zarkada
Agenda
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Marketing in the socio-economic system
The complexities of marketing across borders
FOCUS: Culture and Competition
Finding information about the marketing
environment: Overview of Market Research
The Competitive Environment: Review
Five Competitive Forces
(Model by Porter 1980)
New Entrants
Threat of new entrants
Industry
Competitors
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry
Bargaining
power of
buyers
Threat of substitutes
Substitutes
Buyers
Competition and International Marketing
• Foreign Entry: reliance on middlemen
• Is there a FSA?
•Local Marketing Abroad: reliance on local staff
• consumer demand and preference shifts
• competitive response
•Global Management: reliance on HQ
• synchronisation and coordination of strategies
across countries, regions and modes of entry
The Marketing Environment
B1
B2
Business
Legal
Economic
Political
Cultural
The complexities of cross-border business
Bb
1
Country A
Ba
1
Bb
2
Ba
2
Country B
Environmental Forces
“Macro” Environment (external forces)
- demographic, economic, political, legal,
technological, competitive, social and cultural
“Micro” Environment (company-specific forces)
- buyers (intermediaries), suppliers
- ‘external’ customers and stakeholders
- production, finance, HR, IT, R&D
- ‘internal’ customers (= employees & shareholders)
Σχέσεις Β1&Β2 – IMP (1990)
Interacting parties
◦ Individual
aims & experience
◦ Organisation:
Technology, structure &
strategy
Interaction process
◦ Exchange episodes -Shortterm
(a) product/service
(b) information
(c) financial
(d) social exchanges
◦ Relationships–Long-term
(a) institutionalisation
(b) adaptation
Atmosphere
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(a) power/dependence
(b) closeness
(c) expectations
(d) cooperation
Environment
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(a) market structure
(b) dynamism
(c) internationalisation
(d) the social system
 Ford, D. (1990). Introduction: IMP and the
interaction approach. Understanding
Business Markets: Interaction, Relationships
and Networks. D. Ford. London, Academic
Press: 1-3.
 IMP Group (1990). An interaction approach.
Understanding Business Markets:
Interaction, Relationships and Networks. D.
Ford. London, Academic Press: 7-26.
Culture: the black box?
Sri Lankan bowler Ravindra Pushpackumara,
right, successfully
appeals for the
wicket of Zimbabwe's Neil Johnson, center,
on the first day of the third test match at the
Harare Sports Club Saturday December 4, 1999.
(AP Photo/Rob Cooper)
Real Madrid's Savio, fights for the ball with Dynamo’s
Yuri Dmytrulin, during the UEFA Champions League,
second group soccer match in Kiev, Ukraine, Wednesday,
Nov. 24, 1999. (AP Photo/Efrem Lukatsky)
Understanding
Using
….Ignoring
• Language
• Rules
• Institutions
Ozeki Konishiki,. (AP Photo/Paul Sakuma San Jose,
Calif., June 5, 1993 )
Definition of culture
A set of Rules or Standards shared by
members of a society,
which when acted upon by the
members, produce Behaviour
that falls within a range of variation the
members consider
Proper and Acceptable
Culture is
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shared
learned
dynamic
adaptive but resilient
Culture provides
• identity
• context
• cohesion
Dimensions of Culture
Material Culture
• Artefacts
• Materialism
• Technology
• Economics
– Production, distribution &
consumption
– Wealth creation, accumulation &
distribution
– Migration, Colonisation &
Imperialism
Language & Communication
• Verbal
• Non-verbal (‘silent’ languages)
Social Structure
• Stratification
• Mobility
• Organisations
– Association
– Kinship
Religion
• Beliefs
• Practice
• Morality
Aesthetics
• Beauty
• Good taste
• Form, Shape and Colour
• Art
• Humour
Behaviours,
Artefacts &
Products
Norms & Values
Basic Assumptions
Stereotyping
Kluckhohn and Strodtbeck: Five Basic Problems
– Relational - individual to others
– Temporal focus - time
– Modality - activity
– Nature - individual to nature
– Human nature - good and evil
Classification
Variables
Hofstede: Dimensions
– Power Distance
– Masculinity / Femininity
– Uncertainty Avoidance
– Individualism / Collectivism
– Long-term Orientation
Trompenaars: Relational Orientations
– Universalism VS Particularism - rules over
relationships
– Achievement VS Ascription - how status is awarded
– Neutral VS Emotional - range of feelings expressed
– Diffuse VS Specific - range of involvement
– Communitarianism VS Individualism - group
• Hall: High / Low Context
– High: little information coded, implied,
economical
– Low: mass of information coded, explicit,
wysiwyg.
• Hofstede: 2-dimensional scales
Classification
• Mole: Systemic / Organic
Systems
– Systemic:
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organisation viewed as a machine,
loyalty to organisation not members,
rules and procedures - red tape
planning
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organisation viewed as social organism
develops according to members’ needs
informal structures and role descriptions
trust, obligation, improvisation - influence and power
– Organic:
Classifying cultures: an example
Hall
Remember that each system has
a specific purpose and ideology.
None of them was created with
marketing in mind.
Hofstede
• den
• sin
• gbr
• ind
• nzl
• phil
• usa
• saf
• fin
• aus
• ita
• ger
• fra
• jap
• isr
• gre
• mex
Mole
• FRA
• USA
• SPA
• GER
• LUX
• GRE
• UK
• ITA
• DEN
• JAP
• HOL
Culture and Marketing
Three basic and universal tenets:
• All behaviour is rational to the actor
• There is a reason behind every action
• Motivation is not always conscious
• Motivation is rarely articulated
Issues that need to be explored
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Means-ends relationships & Hidden Motivators
Function of Emotional Appeals
Perceived Risk & Cognitive Dissonance (probability and fear)
Materialism (relative vs absolute income)
Consumer Ethnocentrism
Culture and International Marketing
• Foreign Entry: cultural sensitivity
•way of doing business
•Local Marketing Abroad: acceptance and adaptation
•consumer demand
•managerial behaviour
•Global Management: dynamic acculturation
•malleability and changeability of cultural forces
Market Research
Market Research Outline: What
Country selection
• approach
– vision and strategy
– mostly based on secondary data
• process
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screening
evaluating potential
calculating resource demands
forecasting sales
Buyer behaviour
Four Environmental Dimensions &
 Research Methods: How
1. Physical  libraries, observation, stats
climate, topography, space, population density
2. Socio-cultural  news, literature, informants, ‘feel’
social stratification, interaction patterns, hierarchies, reference groups
3. Economic  national accounts, reports, analyses
income, employment, prices, level of development
4. Regulatory  libraries, embassies, lawyers, agents
government agencies & systems, laws, institutions
Country Attractiveness Criteria:
Why/not
• Political Risk:
unforeseeable change that
negatively affects the value of
an investment
–FDI or export/license?
–insurance
• Customers
needs, attitudes, readiness
•Competitors
– presence
– signalling
– attack
• Leading Markets
–strong at the high end of
the of the product line
–free from protectionism
and regulation
–strong competitors
–demanding customers
–not necessarily the
largest but mature
LEARNING & TESTING
Political Risk Factors
Factor
• Level 1 - General Instability
• Level 2 - Expropriation
• Level 3 - Operations
• Level 4 - Finance
Examples
•Revolution, External aggression
Terrorism, Kidnapping and
Assassination
•Nationalisation, Contract
revocation, Confiscation
•Import restrictions, Local content
rules, Taxes, Export requirements
•Repatriation restrictions,
Exchange rates
Stages of country evaluation
1. Country
Identification
2. Preliminary
Screening
3. In-depth
Screening
4. Final Selection
Potential candidates are
identified using easily
available statistical data.
Involves rating the identified
countries on macro level
indicators, such as political
stability, geographic distance
and economic development.
Analyses data specific to the
industry and product markets
and segments.
Company objectives are
brought to bear for a match.
Focus: In-Depth Screening
• The core of the attractiveness evaluation
• Data specific to
– industry
– product
– segments
• Resource constraints revisited
• Commonly used indicators
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market size
market growth
competition intensity
trade barriers