International Marketing Chapter 3 History and Geography The

International Marketing Chapter 3 History and Geography: The Foundations of Culture Philip R. Cateora, Mary C. Gilly, and John L. Graham

Introduction 3 • To understand a society’s actions and its points of view, you need to appreciate: – The influence of historical events – The geographical uniqueness to which a culture has had to adapt • Culture can be defined as society's accepted basis for responding to external and internal events • To interpret a culture’s behavior and attitudes, a marketer must have some idea of a country’s history and geography 2

History Perspective in Global Business 3 • History helps define a nation’s mission – How it perceives its neighbors – How it perceives itself – Its place in the world • Insights into history are important for understanding current attitudes • It is necessary to study culture as it is now as well as to understand culture as it was – A country’s history 3

Geography and Global Markets 3 • Geography – an element of the uncontrollable environment that confronts every marketer – Affects a society’s culture and economy – Physical makeup limits a nation’s ability to supply its people’s needs 4

Climate and Topography 3 • Altitude, humidity, and temperature extremes – South America – British resistance of the English Channel – Trade through the Alps 5

Product adaptation is needed 6

Geography, Nature and Economic Growth 3 • As countries prosper, natural barriers are overcome • Environmental issues – Disruption of ecosystems – Relocation of people – Inadequate hazardous waste management – Industrial pollution 7

Social Responsibility 3 and Environmental Management • Environmental protection is not an optional extra • Pollution is on the verge of getting completely out of control • China has 16 of the world’s 20 most polluted cities • Critical issue: the disposal of hazardous waste • Sustainable development 8

Resources (1 of 2) 3 • The availability of minerals and the ability to generate energy are the foundations of modern technology • The principal supplements to human energy – – – – Animals Wood Fossil fuel Nuclear power Ocean tides Geothermal power The sun 9

Resources (2 of 2) 3 • United States in perspective – 1942 – nearly self-sufficient – 1950 – major importer – 1973 -2000 – increased dependency from 36% to 66% – Mid-2000’s – predicted to be importing more than 70% of needs • The location, quality, and availability of resources will affect the pattern of world economic development and trade well into the 21 st century 10

3 Roy Philip 11

3 Roy Philip 12

Dynamics of Global Population Trends 3 • Global population trends determine today’s demand for goods – – Rural/urban population shifts Rates of growth Age levels Population control • Changes in population will profoundly affect future demand • The most important deterrent to population control is cultural attitudes about the importance of large families 13

Controlling Population Growth 3 • Procreation is one of the most culturally sensitive uncontrollable factors • Perhaps the most important deterrent to population control is cultural attitudes about the importance of large families • Family planning and all that it entails is by far the most universal means governments use to control birthrates, but some economists believe that a decline in the fertility rate is a function of economic prosperity and will come only with economic development 14

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Rural/Urban Migration 3 • Result of a desire for greater access to: – Sources of education – Health care – Improved job opportunities 16

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Population Decline and Aging 3 • Population growth in many countries has dropped below the rate necessary to maintain present levels • A nation needs a fertility rate of about 2. 1 children per woman • Not one major country has sufficient internal population growth to maintain itself 18

Summary 3 • A prospective international marketer should be reasonably familiar with the world, its climate, and topographic differences. • Geographic hurdles must be recognized as having a direct effect on marketing and the related activities of communications and distribution. 19

3 CASE 1. Starbucks Going Global Fast Starbucks may be replacing Mc. Donald’s as the American brand foreigners most love to hate.

Topics for student presentations • WTO: Russia’s accession and participation • G-8 (G-20): problems and prospects • Organization for Economic Cooperation and Development (OECD) • Impact of GATS, TRIMs, and TRIPs on global trade. Your task is to make a report and presentation (PP-format) 3

3 Tasks for the next classes: • Questions to discuss in small groups. • Case 2. Coping with Corruption in International Trading. 22

Questions to discuss in small groups 3 • Show employment and topography in Russia affect marketing within the country. • Show significant historical events have affected Russian culture. • The world population pattern trend is shifting from rural to urban areas. Discuss the marketing ramifications. • The telegraph, the telephone, television, satellites, the computer and the Internet have all had an effect on how international business operates. Discuss how each of these communications affects international business management. Prepare reports and presentations! 23