International Marketing

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International Marketing
2
Introduction to International Marketing
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Top 10 U.S. Players in the Global Game
Foreign Revenues ( Mil)
Foreign Revenues ( of Total)
Foreign Profits ( of Total)
Foreign Assets ( of Total)
Company
ExxonMobil IBM Ford Motor General Motors General
Electric Texaco Citigroup Hewlett-Packard Wal-Mart
Stores Compaq Computer
115,464 50,377 50,138 46,485 35,350
32,700 28,749 23,398 22,728 21,174
71.8 57.5 30.8 26.3 31.7
77.1 35.1 55.2 13.8 55.0
62.7 49.6 N/A 55.3 22.8
54.1 N/A 58.0 8.2 101.4
63.9 43.7 44.2 38.0 47.4
45.2 41.0 51.5 36.0 28.2
1-4
SOURCE Adapted from Brian Zajac, Global
Giants. Forbes, July 24, 2000
Irwin/McGraw-Hill
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Foreign Acquisitions of U.S. Companies
U.S. Companies Foreign Owner Bestfoods
(foods) U.K. Ben Jerrys (ice
cream) U.K. Alpo (pet food) Swiss Pillsbury
(food) U.K. Burger King (fast food) U.K. Random
House (publishing) Germany Chrysler
(autos) Germany TV Guide (magazine) Australia Ne
w York Post (newspaper) Australia LA Dodgers
(sports) Australia Arco (gasoline)
U.K. CompUSA (retailing) Mexico Seagram
(alcoholic beverages) France
1-2
Irwin/McGraw-Hill
SOURCE Adapted from Kuri Badenhausen. Name
Game, Forbes. Jul 24, 2000
5
Leading World Trading Countries, 1997 (
billions)
Country Exports Imports Total
EU-15 2,723.5 2,565.4 5,289.9 U.S.A. 948.6 1,0
58.8 2,007.4 Germany 620.6 584.7 1205.3 Japan 422.
6 384.4 771.0 United Kingdom 372.6 386.5
759.1 France 377.2 339.0 716.2 Italy 309.7 267.9 5
77.6 Canada 248.2 240.2 488.4 Netherlands 238.4 21
6.5 454.9 Belgium/Luxembourg 268.0 196.5 406.5 Ch
ina 202.3 174.7 337.0 Spain 158.0 156.0 314.0 Sout
h Korea 156.3 114.9 271.2 Mexico 121.7 121.9 243.6
Switzerland 105.5 95.5 201.4
3-12
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.
Irwin/McGraw-Hill
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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.

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The Scope and Challenge of International Marketing

• I. The Internationalization of U.S. Business
• II. International Marketing
• International Marketing - is concerned with
  planning and conducting transactions across
  international borders to satisfy the objectives
  of individuals and organizations.

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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

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Global Linkages

• Global linkages bind countries, institutions,
  and individuals more closely than ever.
• World trade opens up entirely new business
  horizons.
• A freeze in Brazil and its effects on coffee
  production are felt around the world as coffee
  becomes scarce and its price rises.
• A decline in the value of the Mexican peso
  affected financial markets in all emerging
  economies and impacted Poland, Hungary, and the
  Czech Republic.

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The Changing Face of Exporting
New ChartFig. 1.3
Source The World Bank, World Development Report,
1999.
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The Scope and Challenge of International
Marketing

• If we only distributed pictures in the U.S.,
  wed lose money. It takes the whole world now to
  make the economics of movie-making work
• - William Mechanic
• President, 20th Century Fox

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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
  its nothing fancy. We just have to sell yellow
  boxes of film.
• - George M.C. Fisher
• CEO, Eastman Kodak Company

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Invented Here, Made Elsewhere
U.S. Invented Technology
9 0
Phonographs
1
9 0
1-3
Color TVs
1 0
1 9 7 0
4 0
Audiotape Recorders
0
N O W
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
20
40
60
80
100
Irwin/McGraw-Hill
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World Trade Flows( in billions of dollars )
WESTERN EUROPE Intra-Trade 1,230 Exports
481 Imports 473
160
128
162
170
143
AMERICAS Intra-Trade 221 Exports 364 Imports
455
ASIA Intra-Trade 394 Exports 491 Imports 360
253
160
191
72
40
44
REST OF WORLD Intra-Trade 57 Exports
255 Imports 303
68
1992
Source International Trade Statistics General
Agreement on Tariffs and Trade Geneva 1993
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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.)

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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
  RD)
• - Focus on high capital/labor ratio industries
• - Manage services
• - Use foreign labor in manufacturing industries
• - Do effective marketing research

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The Scope and Challenge of International Marketing

• IV. Being International
• V. International Marketing Concepts

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International Marketing Concepts
Concept
EPRG Schema
Domestic Market Extension (Ethnocentric) Multi-D
omestic Market (Polycentric) Global
Marketing (Regio/Geocentric)
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The Scope and Challenge of International Marketing
Figure 1.1 International and Global Marketing
Multi-Country Marketing Global
Marketing
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The Scope and Challenge of International Marketing
International Business
Figure 1.2 International and Global Marketing
and Related Fields of Study
International Marketing
International Management
International Trade
International Finance
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The Scope and Challenge of International Marketing
International Business
Figure 1.2 International and Global Marketing
and Related Fields of Study
International Marketing
International Trade
International Management
Global Marketing
International Finance