Controllable and uncontrollable elements of the marketing environment Controllable: As & research. Alter long/short term goals adjust with change market conditions, consumer tastes or corporate objectives uncontrollable: 3 Co’s factors over which the marketer has no control or influence Domestic environmental: direct effect of success of foreign venture 0 political/legal forces, competitive structure, economic climate Foreign environmental: factors that are a change to the homeland country.
Research must be done 0 political/legal, cultural, economic, competitive, technology, structure of distribution, geography & Infrastructure Self-reference criterion and ethnocentrism Self-Reference: Automatic self reference to culture as a basis for decision Ethnocentrism: thinking that your culture is the best. Can learn to recognize, control, and minimize What does “being globally aware” mean?
Knowledge of other culture, world market potentials; global economic, social, political, trends. Tolerance of cultural differences Influential trends in Global Marketing 1 . Free trade areas: agreement between countries to reduce/laminate customs duties and annotation trade barriers 2. WTFO: oversee rules and regulations; arbitrates trade disputes 3. Acceptance of the free market system . Mobile technology 5. Green management of resources 6.
Increased protectionism: use by nations of legal barriers, exchange barriers & psychological barriers to restrain entry of goods from other countries CHAPTER 2 Balance of payments: current and capital accounts System of accounts that records a nation’s international financial transactions Current Account: record of all merchandise exports, imports, and services plus unilateral transfer of funds Capital Account: record of direct investment, portfolio investment, and short-term capital movements to and from countries upward and downward pressures on a country currency Upward: Exports Foreign tourists in the US Dividends on investment abroad Downward: Imports US tourists overseas Dividends on foreign investments Surplus 0 currency appreciates Deficit 0 current depreciates 2.
Interest rates: central banks loan money out for a certain % to relieve pressures in areas of the economy 3. State of national economy: currency appreciates if economy booming ad vicar versa Protectionism; LEGITIMATE reasons for protectionist policies Nations utilize legal barriers, exchange barriers, and psychological barriers to strain the entry of unwanted goods 1 . Protection of infant industry and home market 2. Industrialization 3. National Defense Trade barriers Trade Barriers: encourage development of domestic industry and protect existing industry Annotation barriers: quotas, boycotts, monetary barriers, and market barriers 1 . Tariffs: tax on import/export 2.
Quota: unit or dollar limit applied too particular type of good; put an absolute restriction on the quantity of a specific item that can be imported 3. Import licenses: Regulating the flow of exchange and the quantity of a particular imported commodity a. Difference from Quota: means of controlling imports is the greater flexibility of import licenses over quotas, quotas permit importing until the quota is filled; licensing limits quantities of on a case-by-case basis. 4. Boycotts: absolute restriction against the purchase/importation of certain goods/services from other countries 5. Embargoes: is a refusal to sell to a specific country 6. Standards: stringent or discriminating way to restrict trade, but the sheer volume of regulations in this category is a problem in itself a. NONFAT)- requires that you must contain a percentage of local content to gain admission to their markets. . Antiquating fees: selling product for price lower than production cost as a way of keeping foreign goods out of a market to undermine the competition and take control of the market a. “Predatory pricing” The Omnibus Trade and Competitiveness Act Helps keep US export/trading fair Occurs if there is unfair restrictions on US products correcting perceived injustice in trade practices Designed to deal with trade deficits, protectionism, and the overall fairness of our trading partners World Trade Organization Encompasses the GATE (General Agreement on Tariffs and Trade) GATE was in agreement while WTFO is an institution
MIFF and World Bank MIFF: combat global trade problems, stabilize currencies, and have these currencies flux freely Step in during hyper inflation (money gets cheap quickly) World Bank: reduction of poverty, increase in development/living standards, loans for infrastructure CHAPTER 3 History as a key to understanding culture and consumers Knowledge of history gives clues for marketing Manifest Destiny, the Monroe Doctrine, the Roosevelt Corollary Manifest Destiny: Notion that Americans were a chosen people ordained by God to create a model society Monroe Doctrine: cornerstone of US foreign-policy which proclaimed three Asia dicta: 1. No further European colonization in the New World 2. Abstention of United States from European political affairs 3.
Non-intervention of European governments and the governments of the Western Hemisphere Roosevelt Corollary: US prohibit non-American intervention in Latin American affairs; also police the area and guarantee that Latin American nations met their international obligations Geography influence on marketing: Climate and topography Altitude, humidity & temperature extremes Human capital and labor Availability of minerals and the ability to generate energy foundations to modern genealogy Environment “Green energy’ & international recognition of being environmentally friendly Aging populations: remedies for drying pension systems 1. Raise age of retirement 2. Increase taxes 3. Europeans allowing young immigrants to work and pay taxes Infrastructure and technology Infrastructure: determines distribution network ‘e.
Small country 0 truck distribution Technology: shortens distance between people and managing people CHAPTER 4 Culture Symbols, rituals, traditions, learned and passed down Points of difference across countries Elements of culture: Individualism/Collectivism Index ropes; fit in rather than excel individually – East Asia Power Distance Index Tolerance of social inequality between superiors and subordinates High: hierarchy system Low: value equality, include many individuals in decision process, more creative Uncertainty Avoidance Index Tolerance of uncertainty and ambiguity Rituals Patterns of behavior learned and repeated Symbols (language, aesthetics) Language: linguistic distance; relationship between language and international marketing Aesthetics: insensitivity can offend, create a negative impression, and render efforts ineffective or damaging Beliefs Trust, faith, or confidence in someone or something; Superstitions play a large role in society’s belief system Thought processes Difference in perception across cultures (focus vs.. Gig picture) Differences in values, preferences, and expectations about future events Cultural change (cultural borrowing, the concept of similar-but-different) Adjusting to the environmental and historical components of human existence; dynamic in nature Cultural Borrowing: societies learn of other countries ways and borrow ideas to solve problems or improve conditions Culture sensitivity- being attuned to the nuances of ultra so that a new culture can be view objectively, evaluated, and appreciated. CHAPTER 5 Cultural imperatives, electives, and exclusives Business customs in foreign countries: Imperative: that must be recognized and accommodated Elective: adoption is helpful but not necessary Exclusive: an outsiders excluded Important ideas characteristic of US culture which impact US management style (p. 129) 1.
Manifest Destiny: you can do anything if you work for it 2. Personal selection & reward based on merit 3. Decisions based on objective analysis 4. Competition producing efficiency Communication styles Low- vs.. High-context Tempo: haste and impatience most common mistakes Low: communication based on spoken word, facial expression and body language (being very direct – Germans) High:being overly respectful Tempo, M-time vs.. P-time units and are concerned with promptness; most low-context cultures operate on M- time Polychrome time: dominant in high-context cultures, simultaneous occurrence of many things; allows for relationships to build and time constraints are more relaxed Colonization vs..
Acculturation Colonization: external influences learning your environment Acculturation: adopting rats of foreign cultures of your own Business ethics Types of bribery Bribery: voluntarily offered payment by someone seeking unlawful advantage to a private business 1 . Extortion: payments are obtained through force from someone in authority by a person seeking only what he or she is lawfully entitled 2. Lubrication: paying small sums of cash to get tasks done quicker 3. Subordination: large sums of money, not properly accounted for, designed to entice an official to commit an illegal act Foreign Corrupt Practices Act Prohibits US businesses from paying bribes to officials or foreign governments, using dilemma as conduits for a bride when US officials knows that the middleman’s payment will be the bride “Communitarian” vs.. Individualistic” capitalism Difference is cooperation among government, management, and labor Communitarian: Japan & Germany; High cooperation lead to more stable sales Individualistic: British-American; each side takes care of itself leads to more volatile performance and increased competition CHAPTER 6 Sovereignty and sovereign state Sovereignty: powers exercised by a state in relation to other countries and the supreme powers over its own members Sovereign state: independent and free from al external control Chooses its own system Treaties with other nations Stability of government policies Some forms of government seem to be inherently unstable Changes in political parties during elections can have major effects on trade conditions Nationalism Hostility targeted toward specific countries Trade disputes themselves Nationalism: political and economic Nationalism: intense national pride which can cause an anti-foreign business bias Political: Unpredictable and drastic shifts in government policies deter investments, whatever the cause of the shift Three attitudes to look for in political parties Nationalism Targeted fear and/or animosity (hostility/hatred) Economic: National interest insecurity are more important than international relations Perceptions of foreign investment + prevarication Threat to sovereignty Raise concern if it is a monopoly Increased competition Political risks in doing business internationally: 1. Mandating local ownership 2. Greater national involvement in a company’s management 3. Less sovereignty Confiscation, expropriation, and domestication Confiscation: seizing of a company’s assets without payment Expropriation: government seizes an investment but makes some reimbursement for the assets
Domestication: host countries gradually cause the transfer of foreign investments to national control and ownership through a series of government decrees Economic Risks: Local-content laws, price controls, labor problems Local content laws: countries often require a portion of any product sold within the country to have local content Price controls: Essential products that command considerable public interest. Pharmaceuticals, food, gasoline Labor Problems: Labor unions have strong government support that they use effectively in obtaining special concessions from business Lessening political vulnerability 1 . Joint venture and licensing 2. Risk assessment An attempt to forecast political instability To help management identify and evaluate political events To predict their potential influence on current and future international business detections CHAPTER 7 Common vs.. Code Law Common: Seeks interpretation through past decisions of higher courts.