Transcript International Marketing

International Marketing
Trade policy
Culture
Consumer buying
power
Product strategies
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
1
Obstacles to Trade:
Protectionism
Differing interests of consumers and
manufacturers
Benefits of trade tend to be more
diffused than benefits to specific
groups of protectionism
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Approaches to Protectionism
Tariffs
Quotas
“Voluntary” export
restrictions
Subsidies to domestic
producers/exporters
Non-tariff barriers
legal obstacles
differential treatment
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Cultural Lessons
Diet Coke is named Light Coke in Japan-dieting was not well regarded
Red circle trademark was unpopular in Asia
due to its resemblance of Japanese flag
Packaging of products is more important in
some countries than in U.S.
Advertisement featuring man and dog failed
in Africa--dogs were not seem as man’s best
friend
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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More Cultural Lessons...
Cologne ad featuring a man “attacked” by
women failed in Africa
Food demonstration did well in Chinese
stores but not in Korean ones--older
women were insulted by being “taught”
by younger representatives
Pauses in negotiations
Level of formality
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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The Whole vs. Parts
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Definitions
Culture:
“That complex
whole which includes
knowledge, belief, art, morals,
custom, and any other
capabilities and habits
acquired by man as a member
of society.”
Alternative definition: “Meanings that are
shared by most people in a group”
[at least to some extent]. (Adapted from Peter and
Olson, 1994)
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Hofstede’s Cultural
Based on interviews with
Dimensions
IBM executives throughout
Individualism (vs.
the World--1980s
collectivism)
Power distance
Masculine vs. feminine
Strong vs. weak uncertainty
avoidance
Short vs. long term
orientation (Confucianist
dynamics)
“The Foolish Old Man Who
Moved the Mountain”
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Negotiation Content
Non-task sounding
Task-related exchange of information
Persuasion
Concessions and agreements
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Geography--Surprisingly
Impactful
U.S. and most Western European areas
are highly generally accessible
Compare to areas in the developing
World:
China
Russia
Latin America (even Mexico), Africa
Communication vs. shipping
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Climate and Topography: The
Case of Latin America
4,500 by 3,000 miles (at widest)
48% forests
West coast dominated by mountain ranges
5% of land arable
Natural barriers inhibiting growth
Large proportion of residents in cities;
people in rural areas often do not associate
themselves with countries
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Climate and Topography: The
Case of Latin America
4,500 by 3,000 miles (at widest)
48% forests
West coast dominated by mountain ranges
5% of land arable
Natural barriers inhibiting growth
Large proportion of residents in cities;
people in rural areas often do not associate
themselves with countries
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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China: Geography
Very rapid progress
on Shanghai
infrastructure
Rural villages are
difficult to access
Strong regional
differences even
within the country
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Some Issues in Culture
Time
Symbols
monochronic vs.
polychronic
meanings
Personal space
preferred distance
territoriality
interaction
with/ignoring people
in close proximity
MKTG 370
colors
historical
associations
Friendship and
acquaintance
Agreements
Etiquette
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Eastern vs. Western Culture
pain mana
Differences in
Values
Perceptions of
• Objects
• Reality
– Stability vs. change
– Control
Perceived roles
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Perceived Control Over Reality
World is not generally seen as
predictable
Trends are not expected to continue
Individual has little control over the
world
BUT
Outcome is believed to be tied to effort,
not individual skill
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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More Tendencies
Westeners tend to rate themselves
More unique than average and what they
are
“Above average” in ability
Easteners tend to rate themselves
Less unique than they really are
“Below average”
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Proverbs
Western: “The early bird gets the
worm”
Eastern:
“The first bird in the flock gets shot”
“A nail that stands out will be hammered
down.”
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Source: Richard E. Nisbett, The Geography of Thought: How Asians and
Westeners Think Differently … and Why, New York, 2003, The Free Press
Values
Issue
Western Value
Eastern Value
Distinctiveness of
people
Want to be distinctive
Not valued; emphasis on
tie to group
Perceived control
Significant; values determine
choices
Modest—societal values
are already established
Emphasis
Success and achievement;
relationships may get in the
way
Best outcome for
relevant group (e.g.,
family, work group)
Self-esteem
Strive to feel good; assurances
wanted
Tied to belonging with
group
Relationships
Equality or superior position
Clearly defined;
hierarchical
Rules
Same rules apply to all
Depend on context and
relationship
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Some implications
Thanking people—for things they are
clearly supposed to do?
Why the need for a choice between 40
different brands of cereal?
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Socialization
Western textbook: “See Dick run. See
Dick play. See Dick run and play.”
Chinese: “Big brother takes care of
little brother. Big brother loves little
brother. Little brother loves big
brother.”
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Perception of People
Western: People have characteristics
independent of the situation
Fundamental attribution error: People
attribute their own behavior to the
circumstances but that of others to innate
characteristics.
Eastern: Person is connected; behavior
is the result of specific roles played at
the time
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Contrasting Advertising
Perspectives (Aithison 2002)
Western
Asian
“Atomistic”—broken
down to smallest
component parts
“Unique selling
propositions”
“How to”
Positioning
May be “dull and boring”
“Copy focused”
Holistic
“Everything relates
to everything else”
How things “fit
together” and
“relate”
Visual and oral
Jim Aitchison, How Asia Advertises,
New York: Wiley, 2002.
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Advertising Content Comparisons
American:
Individual benefit and pleasure (e.g.,
“Make your way through the crowd)
Korean
Collective values (e.g., “We have a way of
bringing people together)
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INTERNATIONAL MARKETING
Lars Perner, Instructor
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Debate and Conflict
“The first person to raise his voice has
lost the argument.” (Chinese proverb)
Use of indirection and projection
Face-to-face vs. anonymous comments
Western adversarial “rule of law”
based on consistent universal ideals vs.
solution for the case at hand in context
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INTERNATIONAL MARKETING
Lars Perner, Instructor
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Relationships, Education, and Work
Western
Standing out; being “better”
Self perceived favorably
Self-esteem building
Work longer on successful job
Eastern
Harmony
Must “weed out” personal characteristics that might annoy
others
Taught self-criticism
Not recognized in profession until after many years of
practice
Work longer on unsuccessful job
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Physical Product vs.
Communication Adaptations
Communication
adaptations not
needed
(extension)
Product
Some industrial
adaptations not equipment; some
needed
electrical
(extension)
equipment
Product
Gasoline; laundry
adaptations
detergent
needed
Communication
adaptations
needed
Bicycle; fast food;
chewing gum
Greeting cards
Domestic
Compass-equipped prayer rug; hand
equivalent does powered washing machine
not exist
(product
invention)
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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CONSUMER INCOMES AND
BUYING POWER
Measuring country wealth
gross domestic product
“purchase parity” vs. nominal
Government role in the economy
Tax burden
Services provided by the Government—
e.g., health care, education
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Country of Origin Effects
Perception of product
quality (e.g., Japan, Germany)
elegance and style (e.g., France, Italy)
Historical associations
Positioning strategies
Emphasis on origin (e.g., French wine)
De-emphasis/obfuscation of of country of
origin (e.g., French beer, American
products with French language labels)
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Nominal vs. Purchase Parity
Adjusted GNPs—Examples (2003)
Country
Nominal GNP PPA
United States
37,610
37,610
Japan
34,510
28,640
Argentina
3,650
10,920
Czech Republic
6,740
15,650
Mexico
6,230
8,950
Russia
2,610
8,920
Source: World Bank (http://www.worldbank.org/data/databytopic/GNIPC.pdf)
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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The Hamburger Standard (from
the Economist)
Country
U.S.
Local Price in US$ Buying power
relative to U.S.
$2.71
1.00
Britain
3.14
.75
Egypt
1.35
2.00
Mexico
2.18
1.24
China
1.20
2.26
Switzerland
4.59
0.59
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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Market Entry Strategies
Exporting
Joint venture
Low investment
Low control of
promotion
Considerable investment
More control
Able to benefit from
partner’s experience
Must work with partner
Licensing
Low investment
Low control of
promotion, positioning,
and quality
Able to benefit from
existing distribution and
market knowledge
MKTG 370
Direct investment
INTERNATIONAL MARKETING
Large investment
Risky
Greater control
May lack knowledge of
market
Lars Perner, Instructor
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Market Positioning Strategies
Across Countries
Häagen-Dazs—U.S. vs. Japan
Corona Beer—Mexico vs. U.S.
Mercedes-Benz—Europe vs. U.S.
McDonald’s
U.S.
Europe
Developing countries—e.g., China
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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U.S. Laws of Interest to firms
with U.S. Involvement
Anti-trust
Foreign Corrupt Influences
Anti-boycott laws
Trading With the Enemy
MKTG 370
INTERNATIONAL MARKETING
Lars Perner, Instructor
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The International Life Cycle
Market for older
technology tends to
exist in less developed
countries
Manufacturing of older
generation technology-e.g., Pentium I
computers
Resale of capital
equipment—e.g., DC 8
aircraft, old three part
canning machines
Some countries tend
to be more receptive
to innovation than
others
MKTG 370
“Leap frogging”
Going directly from
old technology to the
very newest, skipping
intermediate step
(e.g., wireless rather
than wired
technology)
Shortening
of product
life
cycles
INTERNATIONAL MARKETING
Lars Perner, Instructor
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