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1 -0 Irwin/Mc. Graw-Hill ©The Mc. Graw-Hill Companies, Inc. , 1999 1 -0 Irwin/Mc. Graw-Hill ©The Mc. Graw-Hill Companies, Inc. , 1999

Chapter 1 1 -1 The Scope and Challenge of International Marketing Irwin/Mc. Graw-Hill ©The Chapter 1 1 -1 The Scope and Challenge of International Marketing Irwin/Mc. Graw-Hill ©The Mc. Graw-Hill Companies, Inc. , 1999

Foreign Acquisitions of U. S. Companies 1 -2 U. S. Company Foreign Owner J. Foreign Acquisitions of U. S. Companies 1 -2 U. S. Company Foreign Owner J. Walter Thompson (Advertising) Britain Spiegel (Catalog retailing) Germany Mack Trucks (Automotive) France Giant Food Stores (Supermarkets) Netherlands Pillsbury, Hueblein (Food, Drink) Britain CBS Records (Music and Entertainment) Japan Magnavox (Television) Netherlands Carnation (Coffee-Mate, Friskies pet food) Switzerland Chesebrough-Pond’s (Vaseline) Netherlands Vermont American (Garden Tools) Germany Northwest Airlines (Travel) Netherlands SOURCE: Adapted from “Soon to Be Extinct: American TV Brands. , ” U. S. News & World Report, July 31, 1995, p. 13, and Gustavo Lombo, “Creating American Jobs, ” Forbes, July 28, 1997. P. 222. Irwin/Mc. Graw-Hill ©The Mc. Graw-Hill Companies, Inc. , 1999

Invented Here, Made Elsewhere 1 -3 U. S. Invented Technology Phonographs 9 0% 1% Invented Here, Made Elsewhere 1 -3 U. S. Invented Technology Phonographs 9 0% 1% 9 0% Color TVs 1 0% 1970 4 0% Audiotape Recorders 0% Videotape Recorders 1% NOW 1 0% 9 9% Machine Tools 3 5% Telephones 9 9% 2 5% 8 9% Semiconductors 6 4% Computers 7 4% 0 Irwin/Mc. Graw-Hill 9 8% 20 40 60 80 100 ©The Mc. Graw-Hill Companies, Inc. , 1999

Some of the Big U. S. Players in the Global Game* 1 -4 Company Some of the Big U. S. Players in the Global Game* 1 -4 Company Foreign Revenues Foreign Profits % of Total Foreign Assets % of Total Ei du Pont de Nemours 43. 1 28. 9 40. 6 Proctor & Gamble Coca-Cola Intel Motorola Johnson & Johnson Sara Lee Colgate-Palmolive Gillette Compaq Computer Mc. Donald’s Avon Products 50. 1 67. 1 58. 4 45. 0 49. 6 39. 7 71. 6 63. 1 46. 5 57. 0 65. 3 36. 2 36. 9 67. 8 38. 4 92. 4 46. 1 53. 8 83. 6 41. 1 51. 7 49. 6 58. 9 53. 8 40. 5 37. 7 20. 2 37. 7 45. 3 51. 3 60. 4 62. 6 31. 4 55. 0 59. 0 20. 2 RJR Nabisco *1996 data. SOURCE: Adapted from Brian Zajac, “Buying American, ” July 28, 1997, p 218. Irwin/Mc. Graw-Hill ©The Mc. Graw-Hill Companies, Inc. , 1999

The International Marketing Task 1 -5 Foreign environment (uncontrollable) 1 Economic Political/legal forces Domestic The International Marketing Task 1 -5 Foreign environment (uncontrollable) 1 Economic Political/legal forces Domestic environment (uncontrollable) 2 7 Competitive (controllable) structure Competitive Forces Political/ legal Cultural forces Price Product 7 Promotion Channels of distribution 6 Geography and Infrastructure Level of Technology Economic climate 5 Irwin/Mc. Graw-Hill 3 4 Structure of distribution Environmental uncontrollables country market A Environmental uncontrollables country market B Environmental uncontrollables country market C ©The Mc. Graw-Hill Companies, Inc. , 1999

Cross Cultural Analysis to Isolate the SRC Influences 1 -6 Step 1: Define the Cross Cultural Analysis to Isolate the SRC Influences 1 -6 Step 1: Define the business problem or goal in homecountry cultural traits, habits, or norms. Step 2: Define the business problem or goal in foreign-country cultural traits, habits, or norms. Make no value judgements. Step 3: Isolate the SRC Influence in the problem and examine it carefully to see how it complicates the problem. Step 4: Redefine the problem without the SRC influence and solve for the optimum business goal situation. * *James A. Lee, “Cultural Analysis in Overseas Operations, “Harvard Business Review, March-April 1996, p. 106 -11. Irwin/Mc. Graw-Hill ©The Mc. Graw-Hill Companies, Inc. , 1999

Being Globally Aware 1 -7 To be Globally Aware is to be: Objective Tolerant Being Globally Aware 1 -7 To be Globally Aware is to be: Objective Tolerant of Cultural Differences Knowledgeable of: Cultures History World Market Potentials Global Economic, Social and Political Trends Irwin/Mc. Graw-Hill ©The Mc. Graw-Hill Companies, Inc. , 1999

Stages of International Marketing Involvement 1 -8 1. No Direct Foreign Marketing 2. Infrequent Stages of International Marketing Involvement 1 -8 1. No Direct Foreign Marketing 2. Infrequent Foreign Marketing 3. Regular Foreign Marketing 4. International Marketing 5. Global Marketing Irwin/Mc. Graw-Hill ©The Mc. Graw-Hill Companies, Inc. , 1999

International Marketing Concepts 1 -9 Concept EPRG Schema Domestic Market Extension (Ethnocentric) Multi-Domestic Market International Marketing Concepts 1 -9 Concept EPRG Schema Domestic Market Extension (Ethnocentric) Multi-Domestic Market (Polycentric) Global Marketing (Regio/Geocentric) Irwin/Mc. Graw-Hill ©The Mc. Graw-Hill Companies, Inc. , 1999

Trends in Global Business 1 -10 Internationalization of U. S. Markets Internationalization of U. Trends in Global Business 1 -10 Internationalization of U. S. Markets Internationalization of U. S. Business Growth of Regional Trade Areas EU, NAFTA, APEC Move toward free market system by countries in Latin America, Asia, Eastern Europe Large Emerging Markets such as Argentina, China, South Korea, Poland, India Evolving global middle income households GATT and World Trade Organization The TRIAD Irwin/Mc. Graw-Hill ©The Mc. Graw-Hill Companies, Inc. , 1999

New and Future (Possible) Multinational Market Groups or Trading Blocks of the 21 st New and Future (Possible) Multinational Market Groups or Trading Blocks of the 21 st Century 1 -11 European Union European Economic Area (EC and EFTA) North American Free Trade Area Southern Cone-Mercosur Asean Free Trade Area (AFTA) Commonwealth of Independent States (CIS) Central European Free Trade Area (CEFTA) Irwin/Mc. Graw-Hill ©The Mc. Graw-Hill Companies, Inc. , 1999

New and Future (Possible) Multinational Market Groups or Trading Blocks of the 21 st New and Future (Possible) Multinational Market Groups or Trading Blocks of the 21 st Century 1 -12 Possible Regional Trade Groups Western Hemisphere Free Trade Areas (WHFTA) Canada to Argentina Asia-Pacific Economic Cooperation (APEC) Pacific Rim Countries including U. S. / Canada/Mexico/Japan South American Free Trade Area (SAFTA) Andean Pact and Mercosur Chinese Economic Area (CEA) Hong Kong, Taiwan, Coastal Provinces of So. China U. S. /European Union Many possibilities of Republics of Russia, Baltic States Irwin/Mc. Graw-Hill ©The Mc. Graw-Hill Companies, Inc. , 1999