Transcript BA635-2005 - University of Alaska | Home

Marketing in the
“New” Economy
Service
Marketing
CRM
CRM
International
Marketing
Internet
Marketing
Critical Questions
1. Why is international marketing an
important consideration for a purely
domestic business?
2. If you were hired as the marketing
consultant by a local/national
company that is considering going
international- what “factors” would you
tell them they need to consider when
formulating their international/global
marketing strategy?
Levi’s “Global”
Marketing Strategy
•Global in Concept
•Local in Execution
The Marketing concepts,
processes & considerations –
essentially the same….
•C
ompany
•C
ompany
•C
ompany
•C
ompany
•Company
•C
onsumers
•C
onsumers
•C
onsumers
•C
onsumers
•Consumers
•C
ompetitors
•C
ompetitors
•C
ompetitors
•C
ompetitors
•Competitors
•C
onditions
•C
onditions
•C
onditions
• PEST
••C
PEST
onditions
••C
PEST
onditions
• PEST
• PEST
G
Growth,
Growth,
Growth,
Place
Product
Place
Product
Competitive
Growth,
Competitive
Service
Service
Product Place
Growth,
Competitive
Service
Place
Product
Target
&
Target
Competitive
Service&
Place
Product
Market
Target
Competitive
Market
&
Service
Positioning
Target
Market
&&
Positioning
Target
Market
Positioning
Price
Promotion
Price Promotion
Strategies
Market
Positioning
Strategies
Price Promotion
Positioning
Strategies
Price Promotion
Strategies
Price Promotion
Strategies
G
G
N N
C
G
N
C
G
N
C
C
N
C
E
TGT
TGT
TGT
TGT
TGT
E
D
D
D
D
E
E
E
WMWM
F F
WM
F
WM
F
WM
D
F
Just more layers….
w/ Controllables— less controllable &
Uncontrollables-- more perplexing
Int’l Marketing Same as Domestic
just more Challenging
Challenges in Planning
Gathering of data & conducting situation analysis
– Lack of availability, validity, reliability and/or familiarity
w/ international data sources
– Actual --but limited-- business experience w/ country
may be used as substitute for organized research
Interpreting results
–
Lack sensitivity to differences in market conditions &/or consumer
behavior caused by Ethnocentricity (AKA: the “SelfReference Criterion”
Challenges in Conducting
Difficult to control & coordinate marketing programs across
countries w/ different media & distribution systems
In order to
avoid simple but
costly Mistakes
Need to fully
account for any
& all
differences in
every new
market
The name Coca-Cola in China
was first rendered as Kekou-ke-la
Unfortunately, the Coke company
did not discover until after
thousands of signs had been
printed that the phrase means 'bite
the wax tadpole' or 'female horse
stuffed with wax,' depending on the
dialect.
Coke then researched 40,000
Chinese characters and found a
close phonetic equivalent, 'ko-kouko-le,' which can be loosely
translated as 'happiness in the
mouth.'
http://www.relojournal.com/sept96/tadpole.htm
Pepsi’s slogan, “Come alive with the Pepsi
Generation,” read as
“Pepsi will bring your ancestors
back from the dead,” in Taiwan.
The Kentucky Fried Chicken slogan,
“finger- lickin’ good,” was translated as
“eat your fingers off, ” in Chinese.
Clairol introduced the “Mist Stick” curling iron in
Germany where mist is slang for manure. Not too
many people had use for a manure stick.
Subtle & Not So Subtle factors
accounted for
Marketing Failures
Cake mixes initially failed
in both Britain and
Japan
Subtle-Pictures on
boxes were just too
perfect for Britons-must be hard to make
Not so subtle- Few
Japanese households
had ovens
In Italy, an ad for “Schweppes Tonic Water”
translated as “Schweppes Toilet Water.”
General Motors introduced the Chevy
Nova in South America and was
unaware that Spanish in
no va means it won’t go.
When Ford’s Pinto flopped in Brazil, Ford learned pinto
was Brazilian slang for tiny male genitals. All the
nameplates were changed to Corcel, which means
horse.
Widely circulated, but on Feb. 15, 2003 taken from: http://www.library.ubc.ca/patscan/funny_trade.html
Colgate introduced a
toothpaste in France
called CUE, the name of a
notorious porno
magazine
US Marketers aren't the only
ones making mistakesEnglish Translations made by Japanese firm added to labels
to increase prestige for their products being sold in China.
Product
English Translation
Japanese Spam
Liver Putty
Toilet Paper
My Fanny Brand
Ready to Eat Pancakes
Strawberry Crap
Antifreeze Spray
Hot Piss Brand
Pediatrician’s Slogan
Specialist in
Deceased
Children
SOURCE: “Some Strawberry Crap Dessert, dear?” South China Morning Post,
December 9, 1996 p. 12.
International
Marketing Blunders
The Scandinavian vacum
manufacturer Electrolux
used the following in an
American campaign:
Nothing Sucks like an
Electrolux
Some Unique Brand names
Fockink – liqueur: Netherlands
Green Piles – lawn fertilizer: Japan
Homo Sausage – Japan
Krapp – toilet paper: Sweden
Last Climax – paper tissues: Japan
Pansy – men’s underwear: China
Pschitt – soft drink: France
Zit – soft drink: Greece
How you sell a product must equate
with how the consumer sees the
product:
U.S.: Hot dish
France: Salad component
U.K.: Sandwich filler; pasta
topping
Korea: Sprinkled over ice
cream (sweet)
Japan: After school snack
Hallmark cards failed when introduced in FranceFrench dislike syrupy sentiment and prefer writing
their own cards.
Philips began to earn a profit in Japan only after
reduced the size of its coffeemakers to fit into
smaller Japanese kitchens and its shavers to fit
smaller Japanese hands.
Coca-Cola had to withdraw its two-liter bottle in
Spain after discovering that few Spaniards owned
refrigerators large enough compartments to
accommodate it.
General Foods’ Tang initially failed in France
because it was positioned as a substitute for orange
juice at breakfast. The French drink little orange juice
and almost none at breakfast.
Kellogg’s Pop-Tarts failed in Britain because the
percentage of British homes with toasters was
significantly lower than in the United States and the
product was too sweet for British tastes.
Do Your Home work:
Political-Legal & Regulatory Variables: Must be
constantly monitored as gov’ts constantly alter
their countries trade policies, commercial laws
& business regulations
Every new country and
every new market one
enters brings with itit’s own set of laws, rules,
regulations, standards,
requirements, policies,
procedures, guidelines,
documents, stamps, taxes,
fees, licenses, etc., etc.
etc.
Everything is regulated…
What you can sell, how much you can sell
When you can sell
How & to whom you can sell
And how much you can sell it for…
Before you begin to formulate your
promotional strategy you need to
know for every country & market
What . . .
Products you can advertise?
Appeals that can be used?
Times products may be promoted?
Rules regarding foreign language use?
Taxes levied against advertising?
Can you use:
Ads directed to children?
Foreign words in ads?
National symbols in ads?
Belgium
no references to
dieting.
France
no child
endorsements.
United Kingdom
no candy as meals.
no Snickers for lunch!
Germany
no comparative
advertising.
Examples of Differences in Regulation Of
Children’s Ads across Europe
Austria No advertising of war toys.
Belgium Ads for candy on TV must show a stylized toothbrush.
Denmark No advertising of prizes for children.
Finland No ads during children’s programs.
France No deceptive packaging or contents & No Child endorsements
Germany No ads that encourage children to beg parents to buy product.
Greece All toy ads banned on TV from 7a.m.-1p.m.
Ireland Ads should not encourage the consumption of alcohol.
Italy
Ads aimed at adults not allowed in children’s programming.
Netherlands No candy ads before 7:55p.m.
Portugal Ads must not exploit the inexperience of children.
Source: Lucy Rouse, Dilip Subramanian, Ia Wadendall, and Fiona McHugh, "A Question of Child Care," Marketing &
Media Europe 1996, March 1996, 34-35.
Regulatory Challenges
In the U.K., all advertising is
allowed if not specifically
forbidden…
In Germany, everything is
forbidden if not specifically
allowed…
In Italy, everything is allowed,
even if forbidden…
In Belgium, nobody knows what’s
forbidden…
Other Political- Legal
& Regulatory
Concerns
Political Stability
Respect for “Rule-of-Law”
Favorable Trade & Investment
Environment
Nondiscrimination
Access To Markets
# Regulatory Hurdles
Nationalism & Nationalization
View of Profits
Governmental Methods of
Trade Regulation
Promotion
Restriction
Govt’l Methods Promoting &
Restricting Trade
Trade Promotion
Subsidies
Export Financing
Foreign Trade Zones
Special Agencies
Trade Restriction
Tariffs
Quotas
Embargoes
Local Content
Requirements
Admin Policies
Currency Controls
Trade Restriction Local
Content Requirements
Laws stipulating that producers
in the domestic market must
supply a specified amount of a
good or service.
Purpose - force companies from
other nations to employ local
resources in their production
processes—particularly labor
We’re taught to Play by
the Rules….
Problem is--No Universal
Rules— No International
Law/Courts specializing in
Commercial disputes
Our Rules (English-Common
Law System) – more the
exception than the rule
EVERYONE
Common law
The United Kingdom and its
former colonies all follow a legal
system based on common law.
.. law based on the cumulative
wisdom of judges' decisions on
individual cases through history.
Thus each country's legal system
evolves as individual cases set
precedents.
Civil law
.. the world's most common form
of legal system.
It is based on a detailed listing, or
codification, of what is, and is not,
permissible.
-civil law system judge takes on
many of investigative &
inquisitorial tasks that would be
completed by lawyers in a
common law system.
Islamic law
Law is based on
the Koran &
rules governing
the faith and
practice of
Muslims
http://www.droitcivil.uottawa.ca/world-legal-systems/eng-monde.html
With no Global law–
Legal Issues & Disputes in
International Business
Resolved thru:
 Contracts
 Arbitration
 WTO
Contract- Determine
Legal Jurisdiction
Disputes settled—
By Jurisdictional Clauses
Included In Contract
 Where Contract entered into
 Where provisions of
Contract Performed
International Arbitration
In order to avoid Courts in
settling international trading
disputes…Ensure that
Contracts have arbitration
clause inserted that
specifies:
Country of arbitration
The arbitrator
& Rules of arbitration
In past 10 years WTO emerged
as principle arbiter of Int’l trade
Formed in 1995 - GATT-Uruguay Round - Most
comprehensive trade agreement in history-
“ (WTO) is the only
international organization
dealing with the global rules
of trade between nations.
Its main function is to
ensure that trade flows as
smoothly, predictably and
freely as possible.”
(Extract from WTO website)
WTO -World Trade Policeman?
104 disputes brought to
WTO in 1st three years.
196 handled by GATT
during its 50 year
history.
US is biggest WTO user
- 34 disputes.
Do Your Home work
Fish Where the Fish are…
Economic Variables
Counties level & rate of
economic development
Per capita income &
income distribution
Expenditure patterns for
goods & services
WORKING TIME REQUIRED TO
BUY A BIG MAC
0
Minutes
Caracas
Moscow
Manila
Shanghai
Mexico City
Bogota
Warsaw
Bangkok
Sao Paolo
Johannesburg
Singapore
Paris
Kuala Lumpur
London
Frankfurt
New York
Tokyo
20
40
60
80
100
120
Evolving Middle Income HouseholdsBuying Boom for Asia, 1995-2000
What the added
middle class
buy (In millions)
Between 1993 and
1995
2000
Bedrooms
32
116
Living Rooms
16
58
Kitchens
16
58
Bathrooms
32
116
1,200
4,350
Large appliances
16
58
Televisions
24
87
Telephones
24
87
Cars
16
58
Living space (sq.m.)
73.3
Millions of
households
approaching
$18,000 per year
buying power
Indexed to
Singapore prices
32.5
14.4
1991
1995
2000
Emerging - NIC’s & BEM’s*
75% growth in world trade coming from
130 Newly Industrialized Countries ---but
½ of that from:
Big Emerging Market’s
Have more than ½ of the world’s population
Account for 25% world’s GDP (@$2Trillion)
2010- China = world’s largest economy
BEMs: Big Emerging Markets
China
India
Indonesia
South Korea
Brazil
Mexico
Argentina
South Africa
Poland
Turkey
Low Income Countries
GNP per capita of $785 or less
Characteristics
Limited industrialization
High percentage of population involved in farming
High birth rates
Low literacy rates
Heavy reliance on foreign aid
Political instability and unrest
Of these, only China and India are BEMs
Lower Middle Income
Countries
GNP per capita between $786 and $3,125
Sometimes called less-developed countries
(LDCs)
Characteristics
Early stages of industrialization
Cheap labor markets
Factories supply items such as clothing, tires, building
materials, and packaged foods
3 BEMs: Poland, Turkey, Indonesia
Upper Middle Income
Countries
GNP per capita between $3,126 to $9,655
Characteristics
Rapidly industrializing
Rising wages
High rates of literacy and advanced education
Lower wage costs than advanced countries
Sometimes called newly industrializing economies
(NIEs)
3 BEMs: Argentina, Brazil, Mexico, South Africa
High Income Countries
GNP per capita above $9,656
Sometimes referred to as post-industrial
countries
Characteristics
Importance of service sector, information processing
and exchange, and intellectual technology
Knowledge as key strategic resource
Orientation toward the future
Do Your Homework
C U L T U R E
The Int’l Marketer’s
Quandary
“I BELIEVE
I UNDERSTAND
WHAT YOU THINK YOU WANT
*
BUT I AM NOT SURE YOU
REALIZE THAT WHAT YOU
WANT
IS WHAT I SELL”
Perhaps no other set of variables
more daunting & complex
Communication & language
(inc. non-verbal)
Dress & appearance
Food & eating habits
Time & time consciousness
Rewards & recognitions
Relationships
Values & norms
Sense of self & space
Mental process & learning
Beliefs & attitudes
C U L T U R E
Definition of Culture
The integrated sum total of
learned behavioral traits that
are manifest & shared by
members of a society”
the man-made part of
our environment… the
distinctive life style of a
people acquired thru learned
behavior …
C U L T U R E
Iceberg Theory
Evident and Deep Culture
C U L T U R E
Elements of Culture:
-
-
Language
Aesthetics
 Graphic & Structural Arts
 Folklore
 Music, Drama, Dance
Material Culture
 Technology
 Economics
-
Belief Systems
 Humans and The Universe
- Social Institutions
 Political Structures
 Education
 Social Organization
C U L T U R E
Definitions
Evident Culture
.. customs, language, art, artifacts & behavior
the first cultural phenomena you recognize as a foreigner.
ie “siesta“ in Mexico, being punctual in Germany, “job hopping“
in the U.S., driving on the left in UK, bull fights in Spain.
Deep Culture
.. the underlying aspects of a culture, i.e. values, norms,
cause -effect relationships, views of the world, -- very
difficult to change
C U L T U R E
fine arts
literature drama classical music
popular music folk-dancing
games
cooking dress language
rituals techniques laws customs
EVIDENT
CULTURE
notions of modesty concept of beauty
ideals governing child-rearing rules of descent
cosmology relationship to animals patterns of superiority
relations definition of sin courtship practices concept of justice
incentives to work notions of leadership tempo of work patterns of group
decision making concept of cleanliness attitudes toward the dependent
theory of disease approaches to problem solving concept of status mobility
eye behavior nature of friendship concept of self ordering of time Roles
in relation to status by age, sex, class, occupation, kinship, and so forth.
conversational patterns in various social contexts concept of past and future
definition of insanity patterns of visual perception preference for
competition or cooperation body language Social interaction rate notions of
adolescence notions about logic and validity patterns of handling emotions
facial expressions arrangement of physical space community sense myths
values assumptions …etc!…
DEEP
CULTURE
C U L T U R E
Cultural
Research(ers)
w/ Marketing
Applications
HALL
Hofstede
Trompenaars
C U L T U R E
Edward T. Hall
The Silent Language, - 1959
The Hidden Dimension, -1966
Beyond Culture, - 1976
The Dance of Life, The Other Dimension of
Time, - 1983
 Hidden Differences: Studies in International
Communication-, 1983, 1984, 1985
 Hidden Differences: Doing Business with
the Japanese, - 1987
 Understanding Cultural Differences,
Germans, French and Americans - 1990




C U L T U R E
MONOCHRONIC vs.
POLYCHRONIC TIME

M-time is one-thing-at-a-time



Monochronic cultures stress a high degree of
scheduling
and an elaborate code of behavior built around
promptness in meeting obligations and
appointments
Americans are mostly monochronic
 P-time is many-things-at-a-time



human relationships and interactions are valued
over arbitrary schedules and appointments.
Many things may occur at once (since many people
are involved in everything), and interruptions are
frequent.
P-time is common in Mediterranean and ColonialIberian-Indian cultures.
C U L T U R E
HIGH vs. LOWCONTEXT CULTURES
…terms refer to the fact that when people communicate, they take for
granted how much the listener knows about the subject under
discussion.
 In low-context communication, listener
knows very little & must be told practically
everything
 In high-context communication listener is
already 'contexted' - does not need much
background information
C U L T U R E
Contextual Background
of Various Countries
Japanese
Arabian
Latin American
Spanish
Italian
English (UK)
French
Low
Context
Explicit
North American (US)
Scandinavian
German
Swiss
High
Context
Implicit
C U L T U R E
Geert Hofstede
organizational psychologist
In 1991 surveyed IBM employees &
managers in 53 countries—
Identified 5 dimensions that
national culture and explained 50%
of the differences in respondents’
attitudes…

especially significant because the
type of organization is held
constant
1. Power
distance
2. Uncertainty
Avoidance
3. Individualism
4. Masculinity
5. Time Horizon
C U L T U R E
Geert Hofstede
1. Power distance
or the degree to which
members of a society
automatically accept a
hierarchical or unequal
distribution of power in
organizations and the
society
C U L T U R E
Geert Hofstede
2. Uncertainty
avoidance
or the degree to which
members of a given society
deal with the uncertainty &
risk of everyday life and
prefer to work with longterm acquaintances and
friends rather than with
strangers
C U L T U R E
Geert Hofstede
3. Individualism
or the degree to which an
individual perceives himor her-self to be separate
from a group and free
from group pressure to
conform
C U L T U R E
Geert Hofstede
4. Masculinity
or the degree to
which a society looks
favorably on
aggressive and
materialistic behavior
C U L T U R E
Geert Hofstede
5. Time horizon
(short term to long
term)
or the degree to
which members of a
culture are willing to
defer present
gratification in order
to achieve long-term
goals
C U L T U R E
Geert Hofstede’s Cultural Values Index
MAS
Macho-Man
IDV -HI=Individualist
Low= equality/knowledge
is power
HI= Dogmatic
UAI
PDI
HI=power
hierarchical/inherited
Low=Tolerant of
diff./deviance/dissent
LO=Gender Equity
Low-Group/Collective
C U Power
L T U Distance
R E
Small Power
Distance
Collectivist
Large Power
Distance Collectivist
1
2
Individualism Index
0
and Individualism-Collectivism
3
4
Small
Power
Distance
112 Individualist
10
6
5
Large Power
Distance
Individualist
110
Power Distance Index
1. Costa Rica
2. Korea &
Mexico
3. Brazil & India
4. Israel &
Ireland
5. Australia &
U.S.A.
6. France & Italy
C U L T U R E
Masculinity/Femininity and Uncertainty Avoidance
Uncertainty Avoidance Index
0
112
Weak Uncertainty
Avoidance Feminine
Weak Uncertainty
Avoidance Masculine
3
2
1
4
5
6
Strong Uncertainty
Avoidance Feminine
10
7
8
9
10 Strong Uncertainty
Avoidance Masculine
Masculinity Index
100
1. Norway
2. Malaysia
3. Jamaica
4. U.S.A.
5. Taiwan
6. Costa Rica
7. Australia
8. Mexico
9. Japan
10. Greece
C U L T U R E
http://www.geert-hofstede.com/index.shtml
C U L T U R E
US Cultural Indices
C U L T U R E
Fons Trompenaars
7 dimensions of culture
Universalism vs. Particularism
What is more important - rules or relationships?
Individualism vs. Communitarianism
Do we function in a group or as an individual?
Specific vs. Diffuse cultures
How far do we get involved?
Affective vs. Neutral cultures
Do we display our emotions?
Achievement vs. Ascription
Do we have to prove ourselves to receive status or is it given to us?
Sequential vs synchronic cultures
Do we do things one at a time or several things at once?
Internal vs External control
Do we control our environment or work with it ?
C U L T U R E
both consumer
& business…
…cultural traditions,
norms beliefs &
behaviors
need to be thoroughly
understood &
accounted for to fully
succeed in any
marketing endeavor
C U L T U R E
What’s your
Int’l Business
IQ?
12 Questions
C U L T U R E
Q1
In Taiwan, giving
what fruit is a
good omen for a
businessperson?
C U L T U R E
Q2
What number in
Chinese-speaking
countries (also in Japan) is
as ominous as the
number 13 in Western
culture?
A: 4
B: 7
C: 3
D: 5
C U L T U R E
Q3
The executive of a Chinese
company is celebrating their
65th birthday. Which of the
following is not a
appropriate gift?
A: a silk tie
B: a silver Mont Blanc pen
C: a gold clock
D: a crystal paperweight
E: gold and jade cufflinks
C U L T U R E
Q4
During a TV commercial,
the announcer gives the
OK sign on camera. In
which country does this
mean something entirely
different?
A: Australia
B: Brazil
C: Finland
D: France
E: Ireland
C U L T U R E
Q5
In England, it is
inappropriate to
discuss business
after work over
drinks.
 A: true
 B: false
C U L T U R E
Q6
You’re creating a sales
training manual for
employees doing business
in Japan. When would you
tell them NOT to discuss
business?
A: at dinner
B: over lunch
C: on the golf course
D: at the start of a
business meeting
E: in your superior’s office
C U L T U R E
Q7
 The influence that a
country’s image/ stereotype
has on consumer perceptions
of the product
A. The Ethnocentric Effect
B. The Self-reference criterion
C. The Country of Origin Effect
D. The Euro-factor
C U L T U R E
Q8
 Your company would like
to send its top sales
representative aboard to
meet with its distributors
in August. In which
country is this most likely
to become a problem?





A: Italy and France
B: Ireland and
Sweden
C: Japan and China
D: Australia and New
Zealand
E: Hungary and
Romania
C U L T U R E
Q9
 At a business dinner in Korea, your
counterpart’s wine glass is halfempty. What should you do?
A: refill her glass immediately
B: sit back and let her refill
her own glass
C: wait until her glass is
empty and then refill it
D: fill your own glass and
replace it with hers
C U L T U R E
Q10
When writing
names in Korea,
what color is not
appropriate to
use?
A: blue
B: red
C: black
D: none of the
above
C U L T U R E
Q11
In the Philippines,
people indicate
directions with their…
A: forefingers
B: mouths &
accompanying head
movement
C: feet
D: none of the above
C U L T U R E
Q12 (the last one)
 When you meet an Indonesian
businessperson for the first
time, you should:
A: bow deeply at the waist
B: nod your head slightly
w/ your hand in a
praying position in front
of your chest
C: shake hands loosely and
state your name
D: kiss her on both cheeks
C U L T U R E
What’s your
Int’l Business EQ?
POP-Quiz
Answers
C U L T U R E
Q1
• In Taiwan,
receiving a
pineapple for a
gift is a good
omen for a
businessperson
C U L T U R E
Cultural Give &
Take-Do’s & Don’ts
Japan—Do not open in front of
giver/ no bows, ribbons
Europe: avoid red & white /don’t
wrap flowers; don’t spend too
much
Arabia: Don’t give at outset
Latin Am.: Give after informal
meetings
China: present privately; don’t
make a big deal of it
C U L T U R E
Q2
• What number in
Chinese-speaking
countries and also
in Japan is as
ominous as the
number 13 in
Western culture?
• A: 4
C U L T U R E
The
Other Numbers
Other Countries
number 7 is considered bad
luck in Kenya, good luck in the
Czech Republic and has a
magical connotation in
Benin, Africa.
 The number 10 is bad luck in
Korea.
 The number 4 means death in
Japan.
C U L T U R E
Q3
• The executive of a
Chinese company
is celebrating her
65th birthday.
Which of the
following is not
appropriate?
• C: a gold clock
C U L T U R E
Q4
• During a TV
commercial, the
announcer gives the
How about this
OK sign on camera. In
in Australia?
which country does
this mean something
entirely different?
• B: Brazil
C U L T U R E
Q5
• In England, it is
inappropriate to
discuss business
after work over
drinks.
• A: true
C U L T U R E
Q6
• You’re creating a sales
training manual for
employees doing business in
Japan. When would you tell
them NOT to discuss
business?
• D: at the start of a
business meeting
C U L T U R E
Q7
 The influence that a country’s
image/ stereotype has on
consumer perceptions of the
product
C. The Country of Origin Effect
Any influence that “Country of
Manufacturer” has on
consumers positive or negative
perception of product
C U L T U R E
Stereotypes
English________
French_________
Italian__________
Japanese_______
American_______
Jamaican_______
Australian_______
Iranian____________
Cuban_________
German________
Swiss__________
Russian________
Scottish________
Irish___________
Mexican________
Canadian_______
Alaskan_________
C U L T U R E
Q8
• Your company would like to
send its top sales
representative aboard to
meet with distributors in
August. In which country
is this most likely to become
a problem?
• A: Italy and
France
C U L T U R E
Q9
• At a business dinner
in Korea, your
counterpart’s wine
glass is half-empty.
What should you do?
• C: wait until her
glass is empty and
then refill it
C U L T U R E
Q10 When writing
names in Korea,
what color is not
appropriate to use?
B: red
Red represents witchcraft and death
in many African countries.
Red is a positive color in Denmark.
C U L T U R E
Red
China - symbol of celebration and
luck, used in many cultural
ceremonies that range from
funerals to weddings
India - color of purity (used in
wedding outfits
C U L T U R E
Yellow
Yellow Asia sacred, imperial
Western
cultures - joy,
happiness.
C U L T U R E
Blue
 China - associated
w/immortality.
 Hindus - the color of Krishna
 Middle East - protective color
 * Note: Blue is often considered
to be the safest global color.
C U L T U R E
Green
 China - studies indicate this is not a good
color choice for packaging, green hats
mean a man's wife is cheating
 Arab world- the color of Islam
 Ireland - religious significance
 Some tropical countries - associated with
danger
 Western cultures - indicates
environmental awareness
C U L T U R E
Q11
• In the Philippines,
people indicate
directions with their…
• B: mouths and
accompanying
head movement
C U L T U R E
Q12 (the last one)
• When you meet an
Indonesian
businessperson for
the first time, you
should:
• C: shake hands
loosely and state
your name
C U L T U R E
How did You do?
10-12: Cultural CEO
7-9: Sr. Management
3-6: Mgt. Trainee
1-2: Corp. Toilet Cleaner
0 : Your Fired!
A High International Business IQ
is mandatory for anyone involved
in International Advertising….
Cultural Hot Spots
humor
prestige
romance
music
colors
visual imagery
Verbal/ Non-Verbal
The Creative Challenge
Translation difficulties
Culture-bound assumptions
& inferences-SRC
Identifying cross-cultural
icons
Crafting an AD
Even if get the
words right…
Every other
element of AD
needs to be
questioned
Questions about Aesthetics?
Production
techniques used in
commercials.
Color
Sound, Music, SFX
Lighting
Angles
Question about People &
Personalities
The characters in
commercials?
Questions about Non-Verbals
gestures
expressions
make-up
body language
Questions about
Are values being
associated w/
product
important;
appropriate
Status appeals are stressed in
Japanese advertisements
Hong et al. (1987)
Individual determinism
plays major role in
American
advertisements
Is proper appeal
being Utilized –
Rational vs
Emotional?
Mueller (1987)
found Japanese
magazines often
use less rational
appeals
Examples of
International Advertising
•http://www.summitawards
.com/winners.html
•http://www.adeater.com/
•http://www.magindia.com/
international/
MacroEnvironmental
Conditions
GLOBALIZATION
Advancements in
Communication &
Distribution technologies
are the Precipitating Drivers
of Globalization
Increased speed, efficiency, capacity & Decreased cost
 Compunications:

Computer Hard/Software interfaced w/ Satellite, Internet, Fiberoptics…
 Distribution:

Jet travel, Containerization, Cross-docking, Global tracking, JIT
delivery systems…
GLOBALIZATION
Increased Speed &
Decreased Costs
Average ocean freight / port charges per short ton cargo.
Average air transport $$$ per passenger mile.
Three-minute New York-London call.
Year:
1930
1960
1990
Source: HufBauer,
1991
Sea Freight
Air Transport
Cross-Atlantic
Telephone
Call
60
0.68
244.65
27
0.24
45.86
29
0.11
3.32
Falling Transport and Communication
Costs 1930-1990 (constant 1990 US$)
Average ocean freight and port charges per short ton of import and export cargo.
Average air transport revenue per passenger mile.
Three-minute New York-London call.
Source: HufBauer, 1991
GLOBALIZATION
1500-1840
1850-1930
Best average speed of
horse-drawn coaches and
sailing ships, 10mph.
Steam locomotives average
65mph. Steamships average
36mph.
Propeller aircraft
300-400 mph.
1950s
The
Shrinking
Globe
1960s
Jet passenger
aircraft 500-700mph.
Internet=
Instant
Time, Mobility & Economic Growth
http://www.flexibility.co.uk/issues/trans
port/time-mobility.htm
February 08, 2005
Lax Natarajan & Sully Romero
Ordonez
124
GLOBALIZATION
Just in Time
Lead Time - Days
Manufacturing
supply chain
has shrunk
over the past
20 years.
25
20
15
10
5
0
1980
1990
2000
Evolving Now into Just One Big Market:
The Global Economy
… the increasing
tendency of
economies around the
world to interact w/
one another as one
market instead of
many national
markets
For US- Presently about 1/3 of profits and 1/5 of
February 08, 2005
Lax Natarajan & Sully Romero
economic growth are
related to global business
Ordonez
126
World Market Connections
International
trade
International
Production
International &
Global Marketing
International
Finance
International
Development
INTERNATIONAL LINKAGES
Goods & Services
Trade Flows
Capital & Labor
Resource Flows
Information &Technology
Money
February 08, 2005
Lax Natarajan & Sully Romero
Ordonez
128
One Big World Market:
The Global Economy
The weekly volume of
international trade in
currencies
exceeds the annual value
of trade in goods &
services.
February 08, 2005
Lax Natarajan & Sully Romero
Ordonez
129
One Big World Market:
The Global Economy
• Daily international financial flows now
exceed $1.2 trillion.
• From 1990 to 2000, world GDP grew ~
30%
– Total world exports of merchandise &
services increased by 80 %.
• This year- World exports of goods &
services predicted to reach $11.4 trillion
(24% of world GDP).
February 08, 2005
Lax Natarajan & Sully Romero
Ordonez
130
World Bank
Borders Have Become Meaningless
& there’s no place to hide…
The entire
globe is now
tied together
as a single
community
operating
24/7/365
February 08, 2005
Trans-National
Cross-Cultural
High Speed/ Low
Cost
Transportation &
Communication
Lax Natarajan & Sully Romero
Ordonez
131
After more than a
century of electric
technology, we have
extended our central
nervous system in a
global embrace,
abolishing both space
& time”
-Marshall McLuhan,
Understanding Media- 1955
February 08, 2005
Lax Natarajan & Sully Romero
Ordonez
132
The Global Village
Driver
The further & faster
people are able to
travel &
communicate…
the greater the
amount of interaction
& influence
February 08, 2005
Lax Natarajan & Sully Romero
Ordonez
133
Rise of the “Global Village”
… not just the
“shrinking” of time &
space
The new electronic
media have
transcended time &
space w/ “virtual
mobility”
February 08, 2005
Lax Natarajan & Sully Romero
Ordonez
134
Digital age
communication
technologies
Cable Television
Pay Television Services
Direct Broadcast Satellite [DBS]
MMDS and LMDS
Digital Television
Streaming Media
Digital Radio
Multimedia Computers and Video Games
The Internet and World Wide Web
Internet Commerce
Office Technologies
Virtual Reality
Home Video
Digital Audio
Distance Learning
Wireless Telephony
Broadband Networks
Residential Gateways and Home Networks
Satellite Communications
source >> Future Technologies Inc. [www.fti.com]
The Global
Economy
The Global
Village
The Global
Corporation
Evolution of the International Firm
Exporter
Multi-National
Trans-National
Global
February 08, 2005
Lax Natarajan & Sully Romero
Ordonez
137
Exporting
Mindless Approach to
International Markets
Make no special
provisions
DomesticExtension
February 08, 2005
Lax Natarajan & Sully Romero
Ordonez
138
International Marketing
Multinational corporations (MNCs)
Companies that maintain significant operations in
two or more countries simultaneously but are based
in one home country
Transnational (TNC)
corporation
Adapt to local
conditions in each
foreign market
A company that maintains
significant operations in
more than one country
Multi-Domestic
simultaneously and
approach
decentralizes decision
making in each operation
to the local country 139
February 08, 2005
Lax Natarajan & Sully Romero
Ordonez
Multinational Corporations
2/3s of world trade in goods and
services is controlled by
multinational companies.
Of the 100 largest economies in
the world, 51 are corporations.
The sovereignty of nations will
perhaps continue to weaken due
to multinationals & increasing
integration of world economies.
February 08, 2005
Lax Natarajan & Sully Romero
Ordonez
140
Multinational Corporations
In 1970, of the 7,000
multinationals identified by the
United Nations, more than 1/2
were from -- the United States &
Britain.
By 1995, less than half of the
36,000 multinationals identified
by the United Nations came
from four countries: the United
States, Japan, Germany, and
February 08, 2005
Lax Natarajan & Sully Romero
Switzerland.
Ordonez
141
Multinational Corporations
At present, there are
65,000 MNCs* w/
850,000 affiliates in
foreign countries
MNCs’ total sales
amount to almost $19
trillion.
http://www.nationmaster.com/
http://www.nationmaster.com/graph-T/eco_tra_cor_par#
February
08, 2005
Lax Natarajan & Sully Romero
Ordonez
142
Global Marketing
Company takes an integrated approach across countries
& regions -- Manages for worldwide business
leverage & competitive advantage …
Leverage
Commonalities into
a global strategy
(but where necessaryallow for local
implementation)
Global (Glocal)
Marketing
February 08, 2005
Is a “Mind-set” of how to
approach Int’l Markets
• Not a matter of how big
company is
• Or- whether or not
have a “global product”
• Or- how many counties
you operate in
Lax Natarajan & Sully Romero
Ordonez
143
Global Campaigns
Message
Message 1
Market
A
February 08, 2005
Adopted Campaigns
Market
B
Message 2
Message 3
Market
C
Lax Natarajan & Sully Romero
Ordonez
144
ACHIEVING GLOBAL SYNERGIES
LEVERAGING ASSETS
AND POSITION

Scale
Efficiencies

Coordination and
Integration

Transfer of Ideas,
Experience and
Know-how
February 08, 2005
STRATEGIC
FLEXIBILITY
Global
Strategy
Lax Natarajan & Sully Romero
Ordonez

Production
Shifting

Multiple
Sourcing

Transfer Pricing

Managing Cash
Flow
145
The Global Corporation
 Global
Vision
 Global Leverage
 Global Sourcing
Global Competitive
Moves
 Global Partnerships
February 08, 2005
Lax Natarajan & Sully Romero
Ordonez
146
Valuable W3 Resource
http://globaledge.msu.edu/index.asp
GlobalEDGE© is a global business knowledge webportal that connects international business
professionals worldwide to a wealth of information,
insights, and learning resources on global business
activities.
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