Transcript International Terrorism and Marketing

International Terrorism and
Marketing: managing the
unthinkable
Prof. Michael R. Czinkota
Georgetown University
[email protected]
Part I: Definition and Concerns

International terrorism is the systematic threat
or use of violence across borders to attain a
political goal or communicate a political
message through fear, coercion, or intimidation
of particular persons or the general public
(Czinkota,Knight and Liesch, 2004)

A key distinction from other disasters:
Terrorists respond to preventive measures
Measurement Concerns
1. Terrorism has direct and indirect effects


immediate consequence
subsequent actions, regulations, new
policies
2. Analyses at three levels:



primary –individual and firm
micro- industry, value chain
macro- global environment
Measurement Concerns (cont.)
3. Ongoing uncertainties about:


meaning of terms
clarity of data
4. Different threats and perceptions
REQUIRE A RESEARCH TEAM
marketing, music, physics, psychology…
Part II
Why Marketing ?
1. Marketing deals with consumers and markets

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Terrorists disrupt consumer demand
Terrorism affects supply
2. Marketers are the first responders
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Imports and exports
Distribution and logistics
Communication with buyers and suppliers
Administration of pricing shifts
Why Marketing ? (cont.)
3. Marketers are trained to develop empathy

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Practice of Professions
Understand unintended consequences
4. Marketers are well trained to cope with
cultural issues


Use of Language
Power of Persuasion
Part III
Some Research Propositions
based on a Meta Analysis
Firms may increasingly consider
terrorism when evaluating foreign
markets
Terrorism may Become the Next
Segmentation Base
■
The more a country or region is affected by
terrorism, the less foreign firms may be likely
to purchase from that area
■
Firms may make essential inputs themselves
rather than buy them from suppliers in
terrorism threatened environments abroad
■
Firms may diversify their base of suppliers in
order to assure greater flexibility and
continuity
■
To reduce their exposure to terrorism, firms
may decrease their foreign direct investment
activities and substitute exports
■
■
■
■
Terrorists want
“bang” for the buck
(Rich) governments
can protect targets
(Rich) companies
can change
business models
Protection leads to
softer targets
IV. SOME EARLY
RESEARCH RESULTS
Facts
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633 survey and interview responses
Firms from US, EU, Asia, and Latin America
Mostly International and Global Firms
1/3 large, 1/3 medium, and 1/3 small in size
¾ have 10+ years of international business
experience
½ sell more than 20% of production abroad.
Chief Concerns
 Fluctuating Exchange Rates
 Rising Oil Prices
 Effects and Threats of
Terrorism
Direct Threats
-0.93
-1
-0.8
-0.6
-0.4
-0.2
0
Expectation of Future Threats
-0.4
US
EU
-0.5
-0.4
-0.3
-0.2
-0.1
0.21
0
0.1
0.2
0.3
Shareholders Reward Investment
in Preparation
-0.46
US
-0.61
-0.8
-0.6
EU
-0.4
-0.2
0
Costs Have Risen
0.37
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
Prices Have Risen
-0.01
-0.012
-0.01
-0.008
-0.006
-0.004
-0.002
0
More Cautious Expansion
-0.74
-0.8
-0.7
-0.6
-0.5
-0.4
-0.3
-0.2
-0.1
0
Terrorism Contingency Plans
NEUTRAL
Terrorism Influencing Supply Chain Design
-0.23
-0.25
-0.2
-0.15
-0.1
-0.05
0
Terrorism Influencing Marketing Strategy Design
-0.25
-0.3
-0.25
-0.2
-0.15
-0.1
-0.05
0
Terrorism Insurance
0.33
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Allocation of Terrorism Premiums
-0.24
-0.3
-0.25
-0.2
-0.15
-0.1
-0.05
0
Government Has Slowed Us Down
-0.25
US
EU
-0.3
-0.25
-0.2
-0.15
-0.1
-0.05
0.05
0
0.05
0.1
Safety Stock Increases
-0.38
US
EU
-0.55
-0.6
-0.5
-0.4
-0.3
-0.2
-0.1
0
We Can Track Anti-Terrorism Expenditures
-0.21
US
-0.47
-0.5
EU
-0.4
-0.3
-0.2
-0.1
0
We Have Intensified Investment Abroad
-0.24
US
EU
-0.3
-0.25
-0.2
-0.15
-0.1
-0.05
0.1
0
0.05
0.1
0.15
We Have Shifted to an Export Orientation
-0.5
US
-0.19
-0.6
-0.5
-0.4
-0.3
-0.2
EU
-0.1
0
Some Early Conclusions
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How quickly we forget
We are still unprepared
We do not plan sufficiently
Cost/Price tension
Cost components cannot be isolated
The Good News
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We are not terrified
More similarities than differences
Trade relations are strong
Continued interest in international
activities
Cultural convergence is the
direction