The Scope and Challenge of International Marketing: Mcgraw-Hill/Irwin

The Scope and Challenge of
International Marketing
Chapter 1
McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
LO1 The benefits of international markets
LO2 The scope of the international marketing task
LO3 The importance of the self-reference criterion
(SRC) in international marketing
LO4 The increasing importance of global awareness
LO5 The progression of becoming a global marketer
1-2
ICE BREAKING QUESTIONS
 Why do entrepreneur have to go international?
 What is international marketing? Does it concern

your business?
1-3
1. The definition of international marketing
 International marketing is the 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.
1-4
2. Why countries need international business
 Availability: productivity overcomes domestic

demand
 Cost: to save production cost where it is lower than
domestic one
 Comparative advantages
 Globalization:
• Technological development
• Rising income
• Free movements
• Cooperation among countries
1-5
3. The task of international marketing
Home
country
Four One
elements
Three Two
1-6
3. The task of international marketing (cont’d)
 Make a profit by promoting, pricing, distributing

products for which there is a market.
 Design optimal marketing program to adjust to the
uncertainty of the business climate
 Adapt to business environment changes and
differences
What make international marketing different from

domestic marketing?
1-7
4. Self-Reference Criterion & Ethnocentrism
 Self-Reference Criterion (SRC) is an unconscious

reference to one’s own cultural values, experiences,
and knowledge as a basis for decisions.
 Ethnocentrism is the notion that people in one’s own
company, culture, or country know best how to do
things. Ethnocentrism is generally a problem when
managers from affluent countries work with
managers and markets in less affluent countries.
 Both the SRC and ethnocentrism impede the ability
to assess a foreign market in its true light.
1-8
1-9
5. Developing Global Awareness
To be globally aware is to have:

 tolerance of cultural differences and
 knowledge of cultures, history, world market
potential, and global economic, social, and political
trends
 => Accept, appreciate and adapt to differences
1-10
6. Stages of International Marketing
Involvement
 No Direct Foreign Marketing
 Infrequent Foreign Marketing
 Regular Foreign Marketing
 International Marketing
 Global Marketing
1-11
Involvement
 No Direct Foreign Marketing:
• does not actively cultivate customers outside national
boundaries; however, products still reach foreign markets.
• Products may reach foreign markets via domestic
wholesalers or distributors who sell abroad without the
explicit encouragement or even knowledge of the
producer.
1-12
Involvement

• Temporary surpluses caused by variations in production
levels or demand may result in infrequent marketing
overseas.
• As domestic demand increases and absorbs surpluses,
foreign sales activity is reduced or even withdrawn.

1-13
Involvement
 Regular Foreign Marketing:

• the firm has permanent productive capacity devoted to
the production of goods and services to be marketed in
foreign markets. A firm may employ foreign or domestic
overseas intermediaries, or it may have its own sales
force or sales subsidiaries in important foreign markets.
1-14
Involvement
 International Marketing:
• fully committed to and involved in international marketing
activities.
• Seek markets all over the world and sell products that are
a result of planned production for markets in various
countries. This planning generally entails not only the
marketing but also the production of goods outside the
home market.
1-15
Involvement
 Global Marketing:
• companies treat the world as one market, including their
home market,
• Often this transition from international marketing to global
marketing is catalyzed by a company’s crossing the
threshold at which more than half its sales revenues come
from abroad
• Highly standardized product
1-16
7. Factors Favoring Faster Internationalization
 Companies with either high technology and/or

marketing-based resources are better equipped to
internationalize than more traditional manufacturing
companies (Tseng et. al., 2007)
 Smaller home markets and larger production
capacities favor internationalization (Fan & Phan,
2007) and
 Firms with key managers well networked
internationally are able to accelerate the
internationalization process (Freeman and Cavusgil,
2007)
1-17
8.The Orientation of International
Marketing
 Environmental/cultural approach
 Relate the foreign environment to the marketing
process
 Illustrate how culture influences the marketing task
 The cultural environment within which the marketer
must implement marketing plans can change
dramatically from country to country
1-18
Key takeout
 International marketing (IM): marketing in more than
one nation.
 IM needs sustainable environment adaption

especially SRC and ethnocentrism
 Stages of international marketing involvement
1-19

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The Scope and Challenge of

 Why do entrepreneur have to go international?

 What is international marketing? Does it concern

 International marketing is the performance of

 Availability: productivity overcomes domestic

 Make a profit by promoting, pricing, distributing

What make international marketing different from

 Self-Reference Criterion (SRC) is an unconscious

To be globally aware is to have:

 => Accept, appreciate and adapt to differences

 Infrequent Foreign Marketing

 Regular Foreign Marketing

 Regular Foreign Marketing:

 Companies with either high technology and/or

 IM needs sustainable environment adaption

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