International Marketing
CHAPTER 1
The Scope and Challenge
of International Marketing
Top 10 U.S. Players in the Global Game
Company
ExxonMobil
1-4
Foreign
Revenues
($ Mil)
Foreign
Foreign
Foreign
Revenues
Profits
Assets
(% of Total) (% of Total) (% of Total)
115,464
71.8
62.7
63.9
IBM
50,377
57.5
49.6
43.7
Ford Motor
50,138
30.8
N/A
44.2
General Motors
46,485
26.3
55.3
38.0
General Electric
35,350
31.7
22.8
47.4
Texaco
32,700
77.1
54.1
45.2
Citigroup
28,749
35.1
N/A
41.0
Hewlett-Packard
23,398
55.2
58.0
51.5
Wal-Mart Stores
22,728
13.8
8.2
36.0
Compaq Computer
21,174
55.0
101.4
28.2
Irwin/McGraw-Hill
SOURCE: Adapted from Brian Zajac, “Global Giants”. Forbes, July 24, 2000
Foreign Acquisitions of
U.S. Companies
U.S. Companies
1-2
Foreign Owner
Bestfoods (foods)
Ben & Jerry’s (ice cream)
Alpo (pet food)
Pillsbury (food)
Burger King (fast food)
Random House (publishing)
Chrysler (autos)
TV Guide (magazine)
New York Post (newspaper)
LA Dodgers (sports)
Arco (gasoline)
CompUSA (retailing)
Seagram (alcoholic beverages)
Irwin/McGraw-Hill
U.K.
U.K.
Swiss
U.K.
U.K.
Germany
Germany
Australia
Australia
Australia
U.K.
Mexico
France
SOURCE: Adapted from Kuri Badenhausen. “Name Game”, Forbes. Jul 24, 2000
Leading World Trading Countries,
1997 ($ billions)
3-12
Country*
Exports
Imports
Total
EU-15
U.S.A.
Germany
Japan
United Kingdom
France
Italy
Canada
Netherlands
Belgium/Luxembourg
China
Spain
South Korea
Mexico
Switzerland
$2,723.5
948.6
620.6
422.6
372.6
377.2
309.7
248.2
238.4
268.0
202.3
158.0
156.3
121.7
105.5
$2,565.4
1,058.8
584.7
384.4
386.5
339.0
267.9
240.2
216.5
196.5
174.7
156.0
114.9
121.9
95.5
$5,289.9
2,007.4
1205.3
771.0
759.1
716.2
577.6
488.4
454.9
406.5
337.0
314.0
271.2
243.6
201.4
Irwin/McGraw-Hill
SOURCE: Statistic Report of Import and Export Trade 1999. Ministry of
foreign Trade and Economic Cooperation, China and National Accounts,
Foreign Trade by Commodities, OECD 2000.
Domestic Policy Repercussions
 Influences in the U.S.






1 out of every 3 U.S. farm acres is producing for export
1 of every 6 U.S. manufacturing jobs produces for export
$1 of every $7 of U.S. sales goes abroad
1 of every 3 cars, 9 out of 10 TVs, 2 out of 3 suits, and
every VCR sold in the U.S. is imported.
Travel and tourism is the #1 source of U.S. foreign
exchange.
$1 of every $4 of U.S. bonds & notes is issued to
foreigners.
The Scope and Challenge of
International Marketing
I.
II.
The Internationalization of U.S.
Business
International Marketing
International Marketing - is concerned
with planning and conducting transactions
across international borders to satisfy the
objectives of individuals and organizations.
The Scope and Challenge of
International Marketing
- Q: Why Study International Marketing?
- A: There is a trend toward a global economy.
 No longer enough to look at domestic market
 Markets across the world being sought after by
more competitors
 Explosion of international trade
 Global linkages become important
The Scope and Challenge of
International Marketing
“If we only distributed pictures in the
U.S., we’d lose money. It takes the whole
world now to make the economics of
movie-making work”
- William Mechanic
President, 20th Century Fox
The Scope and Challenge of
International Marketing
“Half the people in the world have yet to
take their first picture. The opportunity is
huge, and it’s nothing fancy. We just have to
sell yellow boxes of film.”
- George M.C. Fisher
CEO, Eastman Kodak Company
Invented Here, Made Elsewhere
U.S. Invented Technology
Phonographs
1-3
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
Irwin/McGraw-Hill
20
40
60
80
100
World Trade Flows
( in billions of dollars )
WESTERN EUROPE
160
162
AMERICAS
Intra-Trade: 221
Exports: 364
Imports: 455
40
Source: International Trade
Statistics General Agreement
on Tariffs and Trade Geneva
1993
44
Intra-Trade: 1,230
Exports: 481
Imports: 473
143
253
128
170
ASIA
160
191
Intra-Trade: 394
Exports: 491
Imports: 360
72
REST OF WORLD
Intra-Trade: 57
Exports: 255
Imports: 303
68
1992
The Scope and Challenge of
International Marketing
III. Comparing Domestic and
International Marketing
 Similarity:
- Both carry out transactions that meet the needs of
individuals and organizations
 Differences:
- International markets have greater growth potential
- Some tasks associated with international marketing not
included (or less intense ) than in domestic marketing (e.g.,
cultural research, political factors, exchange rates, trade
laws, long distance distribution.)
The Scope and Challenge of
International Marketing
 Why U.S. Share of Trade is Declining:
- Lack of awareness of importance of world markets
- More intense foreign competition (more modern
production facilities and lower costs than in past)
 How the U.S. Can Compete (given high
labor costs):
-
Modernization and automation (investment in R&D)
Focus on high capital/labor ratio industries
Manage services
Use foreign labor in manufacturing industries
Do effective marketing research
The Scope and Challenge of
International Marketing
IV. Being International
V.
International Marketing Concepts
International Marketing Concepts
Concept
EPRG Schema
Domestic Market
Extension
(Ethnocentric)
Multi-Domestic Market
(Polycentric)
Global Marketing
(Regio/Geocentric)
The Scope and Challenge of
International Marketing
Figure 1.1: International and Global Marketing
Multi-Country Marketing
Global Marketing
The Scope and Challenge of
International Marketing
International
Business
International
Marketing
International
Management
International
Trade
International
Finance
Figure 1.2: International
and Global Marketing and
Related Fields of Study
The Scope and Challenge of
International Marketing
International
Business
Figure 1.2: International
and Global Marketing and
Related Fields of Study
International
Marketing International
Global
Marketing
Trade
International
Finance
International
Management