THERE IS NO RIGHT WAY TO DO SOMETHING

THERE IS NO RIGHT WAY TO DO SOMETHING WRONG. Somi

BUDAPESTI GAZDASÁGI FŐISKOLA INTERNATIONAL MARKETING LECTURE- 8 In English 20 th April 2012 – FRIDAY 0940 hr – 1110 hr (E. F. 13 -15) Miklós (Nicholas) SOÓS 0630 265 9638 miklosoos@hotmail. com somi

LECTURE DATES - TIMES - LOCATION RE: Miklós (Nicholas) SOÓS 1. FEB. 17. 0940 -1110 [E. F. 13 -15] 2. FEB. 24. 0940 -1110 [E. F. 13 -15] 3. MARCH 2. 0940 -1110 [E. F. 13 -15] 4. MARCH 9. 0940 -1110 [E. F. 13 -15] MARCH 16. VACATION MARCH 23. VACATION 5. MARCH 30. 0940 -1110 [E. F. 13 -15] – re. feb. 10 6. APR. 6. 0940 -1110 [E. F. 13 -15] (guest lect? ) 7. APR. 13. 0940 -1110 [E. F. 13 -15] 8. APR. 20. 0940 -1110 [E. F. 13 -15] 9. APR. 27. 0940 -1110 [E. F. 13 -15] 10. MAY 4. 0940 -1110 [E. F. 13 -15] 11. MAY 11. 0940 -1110 [E. F. 13 -15] somi

CLASS ATTENDANCE Lectures No. % Lect. 1 16 24 Lect. 2 22 33 Lect. 3 30 45 Lect. 4 30 45 Lect. 5 35 52 Lect. 6 34 51 Lect. 7 34 51 Lect. 8 Lect. 9 Lect. 10 somi

BGF. INTERNATIONAL MARKETING – MINI TEST 1 - ASSESSMENTS Markscale % No. <45 4 46 -50 1 51 -55 0 56 -60 7 61 -65 0 66 -70 6 71 -75 0 76 -80 8 81 -85 7 91 -95 Lowest score 20% Highest score: 100% Class average 2 (67): 39% 0 96 -100 71% 0 86 -90 Class average : 1 Total no. of students: 34 somi

MINI TEST 1 - RESULTS somi

Please ensure that you personally sign the attendance sheet every time you attend a lecture. somi

The visual contents of lectures will be available internally on the following site: K: HallgatokANGOLSoós tanár úr (available internally only) somi

SOURCES, REFERENCES – SUGGESTED READINGS The course is NOT based on any specific textbook. The following are recommended. International Marketing, Cateora, P. & Graham, J. (2005) 12 th edition, Mc. Graw-Hill Global Marketing, Hollensen, S. (2004) 3 rd edition, Prentice Hall International Marketing Strategy, Doole, I. & Lowe, R (2004) 4 th edition Thomson International Marketing and Export Management, Albaum G, Prentice Hall London Principles of Marketing, Kotler P et. Al, 2 nd European edition, Prentice Hall E. 2003 Principles of Marketing, Jobber D, Mc. Graw-Hill Principles of Marketing, Brassington F, Financial Times Prentice Hall, 2000 Marketing on the Internet: Principles of online marketing, Strauss J & Raymond F, Prentice Hall, 1999 Internet sites: www. pmcinc. org/ www. tradeport. org www. FAS. USDA. gov somi

ASSESSMENT METHOD End of year written examination 60% Two (2) ‘mini’ exams of 20 min. duration during unannounced lectures 40% somi

Now I would like to introduce you to our guest lecturer Juste SIAUCIUNAITE from Lithuania who will inform us about her country much of which will be relevant to to the subject on International Marketing. Please welcome Juste.

Lithuania – small but unique!

• The Lithuanian tricolor flag was re-adopted in 1989, after Lithuania regained its independence from the Soviet Union. It was last used in the beginning of the 20 th century, from 1918 to 1940. The yellow stripe of the Lithuanian flag represents golden fields of grain, the green represents a lush countryside, and the red represents blood spilled in battle for Lithuania.

• The Lithuanian coat of arms is an ancient symbol that stands for Lithuania's long European history. The modern coat of arms of Lithuania was officially adopted in in the 1990 s, but the coat of arms dates back to the middle ages. The white rider (or Vytis) and horse are depicted on a red background with gold and blue accents.

• Gediminas, the grand duke or prince of Lithuania in the 13 th-14 th centuries, was responsible for founding Lithuania as an empire. Gediminas is remembered for his response to the religio-political issues of the day. Widespread conversion to Christianity clashed with deeply rooted paganism, making Gediminas' rule especially difficult. This statue of Gediminas is found in the main square in Vilnius Lithuania.

• This wooden sculpture of Christ can be found at Lithuania's Hill of Crosses. This pilgrimage site is a place for Lithuanians and international travelers to pray or simply meditate.

• Painted, dyed, and decorated eggs are a part of the Lithuanian Easter tradition, just like elsewhere in Eastern Europe. These Easter eggs are wooden, but Lithuanian decorated eggs can also be blown eggshells dyed with natural plant dyes and patterned using a traditional wax-removal method.

• Lithuania's economy has long depended upon what its farmers could produce. However, Lithuania has often struggled to keep up with technological farming advances. Especially in rural Lithuania, farming may be done much the way it has been done for centuries. This granary is one example of the existing rural Lithuanian agricultural artifacts that are part of Lithuania's rustic charm.

• Fishing along the coast or along other waterways has been an important survival technique for Lithuanians for hundreds of years. Particularly in Neringa, fishing is still a way of life. Visitors to Lithuania may even join fishing tours (both during the warm months, and during the winter for ice fishing trips) or enjoy some smoked fish while they travel along the Baltic coast.

• Lithuania was once apart of the Amber Road, so it's no wonder that amber is used so prelevantly through Lithuania also has amber museums for you to visit.

• Lithuanian traditional costumes feature long skirts, aprons, vests, and hats for the women, and long pants, vests or coats, and boots for the men.

Do’s and dont’s in Lithuania • DO exchange business cards after introductions. • DON'T sit until invited to sit down. • DO expect a Lithuanian to try to protest if you give them a gift. Explain that it's just a little something and offer it again until they accept. • DON'T try to schedule meetings in July and August, which are common vacation months. • DO bring a gift for your hosts, such as chocolates, liquor, flowers, or fruit.

• DO be aware that you might have to remove your shoes before entering Lithuanian home. • DON'T put your hands in your pockets or sit with an ankle resting on the other knee. Both are considered poor etiquette. • DO not be late more then 15 minutes. • DON'T give yellow chrysanthemums, as they are used for funerals. • DO wait for a woman to extend her hand first.

• DO open your gift upon receipt. • DON'T move to a first name basis until invited to do so. • DO finish all the food on your plate. • DON'T remain seated while greeting someone. Stand up! • DO indicate that you are done eating by putting the fork and knife parallel across the right side of the plate. • DON'T make jokes about Lithuanian culture. Lithuanians are very proud of their culture, so to make a joke about it would be in poor taste. • DO compliment the host and finish everything served to you.

• DO tip about 10% of the bill. That is customary, but not obligatory. • DON'T give a baby gift before a baby is born; it's bad luck. • DO give flowers in odd numbers, not even. Even numbers of flowers are for funeral. • DON'T smile unless you mean it. In Lithuania, smiling a lot can be seen as insincere. • DO dress conservatively for business occasions. A suit is acceptable for men, and women should wear fashionable yet conservative clothes. • DON'T shake hands or greet someone over a threshold. Go into the room first, and then exchange handshakes. • DO arrive on time. Lateness might indicate that you don't respect your hosts.

• DO greet people with a handshake, direct eye contact, and a smile. • DON'T speak too loudly in public. • DO arrive on time for appointments. Punctuality is important. • DON'T wear t-shirts, shorts, sneakers, or sweats during business meetings. • DO accept offers of hospitality and do reciprocate.

• DO open doors for women, if you are male. • DON'T point with your finger. Instead, point with your entire hand. • DO not pick your nose in public. • DON‘T drop litter. • DO maintain eye contact at business meetings. • DON'T interrupt others while they are speaking. Wait patiently for them to finish. • DO not ask a lady her age. • DON'T try to bring personal relationships into business. They are kept separate. • DO remove gum, pencils, cigarettes or anything else from your mouth while talking on the phone.

Geography • Climate: With four distinct seasons, the climate is humid continental, with a moderating maritime influence from the Baltic Sea. • Cities (2011): Capital--Vilnius (pop. 542, 932); other cities--Kaunas (336, 912); Klaipeda (177, 812); Siauliai (120, 969).

Geography • Area: 65, 200 sq. Km • Nationality: Noun and adjective-Lithuanian(s). Population (2011): 3, 244, 601.

Government • Type: Parliamentary democracy. Constitution: On October 25, 1992, Lithuanians ratified a new constitution, which was officially signed on November 6 that year.

Economy • GDP (2010): $36 billion. GDP growth (2010): 1. 3%. GDP growth (2011 forecast): 5%. Annual inflation rate (September 2011): 4. 5%. Unemployment rate (second quarter of 2011): 15. 6%. • Natural resources: Limestone, clay, sand, gravel, iron ore, and granite

Neighbours • The largest and most populous of the Baltic states, Lithuania is situated on the eastern shore of the Baltic Sea, in northeastern Europe. It is bordered by Latvia to the north, Belarus to the southeast, Poland to the southwest, and Kaliningrad, a territory of Russia, to the west. It has 60 miles of sandy coastline, of which only 24 miles face the open Baltic Sea.

• The terrain is marked by numerous small lakes and swamps, and a mixed forest zone covers 30% of the country. According to some geographers, Lithuania's capital, Vilnius, lies at the geographical center of Europe.

Language • The Lithuanian language still retains the original sound system and morphological peculiarities of the prototypal Indo. European tongue and, therefore, is fascinating for linguistic study. Between 400 and 600 AD, the Lithuanian and Latvian languages split from the Eastern Baltic (Prussian) language group, which subsequently became extinct.

Economy • After joining the EU in 2004, Lithuania saw its economy boom, reaching a record 8. 9% GDP growth in 2007. • Lithuania pegged its national currency--the litas--to the euro on February 2, 2002 at the rate of LTL 3. 4528 to EUR 1.

Defense • Lithuania, a member of the North Atlantic Treaty Organization (NATO) since 2004, fully endorses the concept of collective defense.

Foreign relations • Lithuania became a member of the United Nations (UN) on September 17, 1991 and is a signatory to a number of UN organizations and other international agreements. Lithuania gained membership in the World Trade Organization on May 31, 2001.

• Thank you for your attention!

Where we finished last week. somi

FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION External Factors Target Country Market Factors Target Country Environ mental Factors Target Country Production Factors Home Country Factors Foreign Market Entry Mode Decision Company Resource/ Commitment Factors Company Product Factors Internal Factors somi

FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION External Factors Target Country Production Factors Productive Agents Economic Infrastructure • quality • transport • quantity • communication • material cost • port facilities • labor • energy Low production costs in the target country encourage some form of local production as against exporting. somi

FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION External Factors Target Country Market Factors Target Country Environ mental Factors Target Country Production Factors Home Country Factors Foreign Market Entry Mode Decision Company Resource/ Commitment Factors Company Product Factors Internal Factors somi

FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION External Factors Home Country Factors Market, Production, Environmental Big domestic markets allow companies to grow locally, less likely to seek foreign markets Competitive Structure Oligopolistic (few dominant) situations allow cos. to grow before entry to foreign markets- usually invest in production. High Production Cost Government Policies Encourages entry mode involving local production e. g. licensing, investment Tax incentive for export; restrictive on foreign investment somi

FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION External Factors Target Country Market Factors Target Country Environ mental Factors Target Country Production Factors Home Country Factors Foreign Market Entry Mode Decision Company Resource/ Commitment Factors Company Product Factors Internal Factors somi

FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION External Factors Home Country Factors Market, Production, Environmental Big domestic markets allow companies to grow locally, less likely to seek foreign markets Competitive Structure Oligopolistic (few dominant) situations allow cos. to grow before entry to foreign markets- usually invest in production. High Production Cost Government Policies Encourages entry mode involving local production e. g. licensing, investment Tax incentive for export; restrictive on foreign investment somi

INFLUENCE OF EXTERNAL FACTORS AN EMPIRICAL VARIFICATION 100 countries studied relating to market entry attractiveness, on the basis of 59 characteristics. Three clusters: - ‘HOT’ Stable Gov. High mrkt oppty. High econ. level Low barriers re: legal, geocultrl. Austria, Australia, Canada, Norway, Sweden, Switzl. , N. Z. , Japan ‘MODERATE’ Somewhere between ‘HOT’ and ‘COLD’ Latin Amer. , Finland, Ireland, Israel, Hong K. , Kuwait, Spain, Taiwan ‘COLD’ Opposite to ‘HOT’ countries Most African c. , India, Middle East, Bolivia, Haiti, Peru, Greece As companies move from ‘HOT’ to ‘COLD’ countries they depend increasingly on export entry and decreasingly on investment and local production. For average ‘HOT’country export = 47. 2% of all entry mode. For average ‘COLD’ country export = 82. 6% of entry modes. somi

FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION External Factors Target Country Market Factors Target Country Environ mental Factors Target Country Production Factors Home Country Factors Foreign Market Entry Mode Decision Company Resource/ Commitment Factors Company Product Factors Internal Factors somi

FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION Internal Factors Company Product Factors Company Resource/ Commitment Factors How a company responds to external factors in choosing an entry mode depends on internal factors. somi

FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION Internal Factors Company Product Factors Differentiation Degree Pre- and Post- Purchase Service Highly differentiated products with distinct advantages = price and other discretion. Product service demand close proximity to customer Favors export entry. Favors subsidiary and local production entry mode e. g. tourism, engineering, advertising, banking etc. . needs to be done locally Technology Technical products more likely licensing Low differentiated products favor local production entry. How a company responds to external factors in choosing an entry mode depends on internal factors. somi

FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION External Factors Target Country Market Factors Target Country Environ mental Factors Target Country Production Factors Home Country Factors Foreign Market Entry Mode Decision Company Resource/ Commitment Factors Company Product Factors Internal Factors somi

FACTORS IN THE FOREIGN MARKET ENTRY MODE DECISION Internal Factors Company Resource/ Commitment Factors Management Capital Production Skills Marketing Skills The more abundant a company’s resources is these factors the more its entry mode options Willingness to commit Resources must be joined by the willingness to commit them to foreign market development. A high degree of commitment means that managers will select the entry mode from a wider range of alternatives. For most companies, international commitment has grown along with international experience over a lengthy period of time. somi

Foreign Market Entry Decision Process. A Logical Flow Model no Product? yes Investigate? no yes Potential? -Prim. res. yes no no Potential? -Send. res. yes Prim. Re. supports Send. res. ? Redesign Entry mode Redesign Markng Plan Delay entry no Continue locally no yes Entry mode? yes no no Good Marketing Plan? yes Enter now? ? yes Operations Redesign Strategy no Satisfactory? yes 24/39 Other Market Opportunity? no no Withdraw Stay with single market somi

DON’T FIND FAULT, FIND A REMEDY Henry Ford Somi