The Scope and

Challenge of Global
Marketing
 The Scope and
Challenge of
International Marketing
 International Marketing
 An organization that engage in
international marketing focuses its
resources and competencies on global
market opportunities and threats.
 A fundamental difference between regular
marketing and international marketing is
the scope of activities.
1-9
 Global Perspective
 International Marketing is affected by and affects
all the previous issues.
 McDonald’s has pulled out in international markets
in both Latin America and the Middle east.

1. Slow economies,
2. Increasing competition,
3. Anti- Americanism have impacted sales in
both regions
EXPECT THE UNEXPECTED
 CHICAGO (Reuters) - Fast-food giant McDonald's Corp. Would

close about 175 restaurants, slash up to 600

corporate jobs and pull out of three countries in the Middle East
and Latin America as it struggles to turn around its U.S.

performance and trim worldwide costs. 

 The actions, which will cause McDonald's to miss its 2002
earnings forecast, mark the second major round of store closings
in two years. The company will also stop owning real estate in
four other countries.
Trends Affecting Global
Businesses
 Rapid growth of WTO, (NAFTA-USMCA), EU.
 Acceptance of the free market system among
developing countries in Latin America, Asia, and
Eastern Europe.
 The burgeoning impact of the Internet, mobile
phones, on the dissolution of national borders.
 Crossing Boarders
 French Farmers
 Chinese Fishermen
 Egyptian/Dutch company Agrium
The International Marketing Task

1-15
 The various uncontrollable factors that companies
have to encounter in international markets in
addition to all the uncontrollable factors they would
normally face in domestic markets.
 The uncontrollables in a foreign country could range
from political or legal regulations that are unique to
a country, competition, structure of distribution, to
consumer tastes and socio-cultural differences that
are new to the company.

What makes international marketing so much

more complicated than domestic marketing?
 Self-Reference Criterion &
Ethnocentrism
 Self-Reference Criterion (SRC) is an unconscious
reference to one’s own cultural values, experiences,
and knowledge as a basis for decisions.
 Ethnocentrism is the belief that people in one’s own
company, culture, or country knows best how to do
things.
 Both the SRC and ethnocentrism obstruct the ability
to assess a foreign market in its true light.
 It also illustrates that it is predictable for
companies not to be influenced by Self Reference
Criterion (SRC) or Ethnocentric attitudes, it is
important that they consciously pay attention to
overcome these attitudes while entering foreign
markets.
 A person from one culture is often not aware that
a reaction is influenced by one’s cultural
background and that those from another culture
may have a different perspective.
 The nature of the SRC is that whenever

confronted by some aspect of another

culture, one’s reaction and evaluation is

routinely clouded by one’s own cultural

experiences.
 For example, it is common for one to frown
upon the foods of another country when the
same feelings may be expressed when people
from that country visit other world regions.
 It is how one is raised and the foods one is accustomed
to, such pepperoni topping on pizza in the U.S., a
topping which most of the rest of the world is not
familiar with.

 When this topping was requested by an American tourist

in Germany, she received a pizza topped with
“pepperoncini” peppers.
 In Korea, it is common to top ice cream
with canned corn, which most of the
western world may view with distaste at
first reaction which is a natural reaction
based on one’s own SRC and ethnocentric
values.
Examples for SRC and Ethnocentrism
 Personal space (American assume foreigners are
pushy while foreigners assume American are
unfriendly & standoffish)
 Refusing food or drink
 Esso in Japanese means;
 Pet Milk in French means
 Unilever repackaged in plastic in Brazil
 Soap was packaged in small
 McDonald’s in India to name Big Mac to Maharaja
Mac
 Markets
 Markets constantly change; they are not
static but expand and contract in
response to marketing effort, economic
conditions, and other cultural
influences.
 Markets and market behavior are part of

the country’s culture.

(markets are result of culture)

 Marketers are constantly adjusting their
efforts to cultural demand of the market, but
they also are acting as AGENTS OF CHANGE
whenever the product or idea being marketed
is innovative.
 Whatever the degree of acceptance, the use
of something new is the beginning of cultural
change, and the marketer becomes a change
agent
GO GLOBAL BUT ACT LOCAL (Gloco)
 ADAPTING TO THE LOCAL BUSINESS ENVIRONMENT
GIVES NEW ENTRANT THE ABILITY TO IDENTIFY NEW
OPPORTUNITIES MORE EFFECTIVELY, AND MAKES
INTERACTION WITH THE LOCAL COMMUNITY EASIER.
 McArabia burger
 Grilled kofta
 Halal food certificate
 Nestle healthy kids global program “Ajyal salima”

Global Perspective
Culture’s Pervasive Impact

 Culture influences every part of our lives

 Cultures impact on birth rates

 Birthrates have implications for sellers of

diapers, toys, schools, and colleges

Culture’s Pervasive Impact
Markets are the result of the 3 way
interaction of:

1. Marketer’s efforts

2. Economic conditions and

3. All other elements of culture

 Culture
 Culture is a very important part of
international marketing, it affects us
from the time we wake up in the
morning till we go to bed and even while
we sleep the products we use are
impacted by culture.
Culture
 Culture impacts birthrates; eg: contraception is
not permitted by religion in primarily strict
Catholic or Muslim nations.
 Rich and developed countries are not adding to
their population due to:
 Lifestyle.
 Higher education levels.
 As well as women in the workforce.
This will be reflected in a decline in birthrates
in the developed world.
 Consequences of Culture
Being born in the
Year of DRAGON is
considered good
luck and this in turn
have implications
for sellers of:
……….and so forth in
successive years in
Singapore

Year of Fire Horse

in Japan
(occurs every 60 years)

4-43
Chinese Calendar
Consequences of Culture
 Smaller families are becoming favored
almost everywhere.
 This leads experts to predict that the
planet’s population will actually begin to
decline after 2050 unless there will be a
major breakthroughs in longevity occur, as
some predict.
Culture’s Pervasive Impact
 Consumption of different types of food influences
culture
 Chocolate by Swiss, seafood by Japanese preference,
beef by British, wines by France and Italy
 Even diseases are influenced by culture
 Stomach cancer in Japan, and lung cancer in Spain
 Best medicine for stomach cancer is a TICKET to
JAPAN
 Different types of food are consumed in different cultures

In hot, tropical countries, spicy food is eaten as spices

preserve the food even without refrigeration. The geography
of the country also shapes food habits, the Japanese eat a lot
of fish and seafood since that is the primary source of food for
a country made up of tiny islands in the pacific ocean.
Source: EuroMonitor International 4-49
The British love their chocolate, perhaps the higher
consumption rate there is caused by Cadbury’s
advertising, or perhaps the cooler temperature have
historically allowed for easier storage and better
quality 4-50
• Dutch are the champion
consumers of cut flowers.
• Japan surrounded by water
and this explains the
preference for seafood.
• The flat geography in
England allows for the
efficient production of
beef.
Source: EuroMonitor International, 2010, 2012 4-51
The French are famous for wines and champagne because
the weather and soil are conducive for grape farming.
Diseases also follow food habits such as lung cancer in
Spain due to excessive smoking, liver disease in
Germany due to consumption of fatty foods.
4-53
Three Definitions of Culture
1. Culture is the sum of the “values, rituals,
symbols, beliefs, and thought processes that
are learned, shared by a group of people, and
transmitted from generation to generation”

2. “software of the mind, problem-solving tool”

Guide for humans on how to think and
behave..(Hofstede)
Three Definitions of Culture
3. “An invisible barrier… a completely
different way of organizing life, of
thinking, and of imaging the underlying
assumptions about the family and the
state, the economic system, and even
Man himself” (Hall)
 In most countries with large Muslim
populations, social and economic life are
affected during Ramadan.
 PEOPLE doing business in Muslim countries
during Ramadan often find a lower level of
productivity, increased difficulty in meeting
deadlines and challenges scheduling meetings.

RAMADAN
4-57
 We as humans and consumers are able to
adapt to changing environments through
innovation.
 Individuals can learn culture from social
institutions through socialization (where one
is raised and how) and acculturation
(adjusting to a new culture).
 We also learn and adapt to a culture through
role modeling, or imitation of peers.
 People also make decisions about
consumption and production through
application of their cultural-based knowledge.
 Origins of Culture:
Geography
 Geography, which includes climate,
topography, flora, fauna, and microbiology,
influences our social institutions
 Philip Parker reports strong correlations
between the latitude (climate) and the per
capita GDP of countries
 Geography includes more than just the weather

and temperature, it is also what kind of plants

and animals can be raised in the region and

that influences society and consumption.

Geography
 Origins of Culture:
History
 The impact of specific events in history can be seen
reflected in technology, social institutions, cultural
values, and even consumer behavior
 The military conflicts in the Middle East in 2003 bred
new cola brands, Mecca Cola, Muslim Up, and Arab Cola
 Origins of Culture: History
See the cola pictures, Turkey has their own
cola called “Cola Turkey,” a coca cola taste
alike, but a local brand. Military conflicts in
the Middle East bred these brands, because
of an anti U.S. attitude.
 Origins of Culture
The Political Economy

 For most of the 20th Century three approaches to governance

competed for world dominance:

 Fascism (a government ruled by a dictator

controls the lives of the people and in which
people are not allowed to disagree with the
government) Fascism fell in 1945
 Origins of Culture
The Political Economy
 Communism: the government owns the things
that are used to make and transport products
(such as land, oil, factories, ships, etc.) and
there is no privately owned property,
Communism crumbled in the 1990s
 Democracy/free enterprise
Origins of Culture: Technology
 Technological innovations influence cultural
values
 Jet aircraft, air conditioning, televisions,
computers, and the internet have
all influenced culture
Origins of Culture: Technology
• Every technological innovation has a profound
impact on culture. For example, as we have
moved from VHS tapes to DVDs to BlueRay it has
impacted our lifestyle, taking up less space and
providing more convenience.
• The internet has changed the way we
communicate & has made the world a smaller
place.
Fukui Marriage Hunting Cafe
 Chinese Book of Songs
 When a son is born
Let him sleep on the bed,
Clothe him with fine clothes.
And give him jade to play with .…
 When a daughter is born,
Let her sleep on the ground,
Wrap her in common wrappings,
And give her broken tiles for playthings.
 Origins of Culture: Social Institutions
1. Family behavior varies across the world, e.g.,
extended families living together to Dad washing
dishes
2. Religious value systems differ across the world, e.g.,
Muslims not allowed to eat pork to Hindus not allowed
to consume beef, CHANEL desecrated Quran &
AMAZON disgusting costumes

3. School and education, and literacy rates affect culture

and economic growth…marketer must depend on
symbols and pictures
Origins of Culture: Social Institutions
4. Media (magazines, TV, the Internet) influences
culture and behavior
5. Government policies influence the thinking and
behaviors citizens of adult citizens, e.g., the French
government offers new “birth bonuses” of $800
given to women as an incentive to increase family
size
6. Corporations influence culture via the products they
market, e.g., Burger king in Japan
 Social Institutions
MEDIA SCHOOL
 Cultural
Values

Thought
Rituals
Processes
Elements
of
Culture

Beliefs Symbols

4-78
 Cultural Values
Hofstede, who studied over 90,000 people in 66 countries,
found that the cultures differed along four primary dimensions
Individualism/Collective Index
(IDV), which focuses on self-orientation
Power Distance Index
(PDI), which focuses on authority orientation
Uncertainty Avoidance Index
(UAI), which focuses on risk orientation
Masculinity/Femininity Index
(MAS),which focuses on assertiveness and
achievement
Individualism/Collectivism Index
1. The Individualism/Collective Index refers to the
preference for behavior that promotes one’s self-
interest
2. High IDV cultures reflect an “I” mentality and tend to
reward and accept individual initiative
3. Low IDV cultures reflect a “we” mentality and
generally subjugate the individual to the group
4. Collectivism pertains to societies in which people
from birth onward are integrated into strong,
cohesive groups
 Power Distance Index
1. The Power Distance Index measures power inequality
between superiors and subordinates within a social
system

2. Cultures with high PDI scores tend to be hierarchical

and value power and social status
3. High PDI cultures that those who hold power are
entitled to privileges
4. Cultures with low PDI scores value equality and
reflect egalitarian views
 Uncertainty Avoidance Index
1. The Uncertainty Avoidance Index measures the
tolerance of uncertainty and vagueness among
members of a society
2. High UAI cultures are highly intolerant of
ambiguity, experience anxiety and stress, accord a
high level of authority to rules as a means of
avoiding risk
3. Low UAI cultures are associated with a low level of
anxiety and stress, a tolerance of deviance and
disagree, and a willingness to take risks
Uncertainty Avoidance Index
 Countries with high UAI distrust others and
rely upon people with power for
information and rules and regulations to
reduce risk.
 For example high UAI countries tend to
have many forms to complete and
additional steps to conduct business.
Hofstede's Indexes, Language, and Linguistic Distance Source: Geert Hofstede, Culture's Consequences (thousand Oaks CA: Sage). 4-84
 Rituals and Symbols
 Rituals are patterns of behavior and
interaction that are learned and repeated
vary from country to country
 e.g., extended lunch hours in Spain and
Greece
 Language as Symbols: the “languages” of
time, space, things, friendships, and
agreements
 Rituals are important in every culture. How
Easter is celebrated in the U.S. with the Easter
Bunny’s visit and a traditional meal, is very
different from how it is celebrated in Mexico,
where it is tradition to visit the tombstones
and pay homage to the dead.
 Wedding gowns are typically
white in the West, but very
colorful and bright in the
country of India where the
groom arrives on a horse with an
entourage
 Symbols in a culture include
language, both verbal and non-
verbal and includes the
perception of time, space and
relationships.
 Rituals and Symbols
 In Canada, language has been the focus of political
disputes
 Differences in language vocabulary varies widely,
even English in different countries
 Aesthetics as Symbols
 the arts, folklore, music, drama, and dance of a
culture influences marketing

In Canada, French versus English has been a point of contention between

regions. Aesthetics includes a country’s music, art, folklore and drama.
 Whose English?

• Trunk • Boot
United States

United Kingdom
• Hood • Bonnet
• Convertible • Hood
Top • Lift
• Elevator • W.C.
• Toilet • Tub or Shower
• Bathroom • Hoover
• Vacuum

4-92
 Beliefs, which mainly
stem from religious
training, vary from
culture to culture
 The western aversion to
the number 13 or
refusing to walk under a
ladder

Beliefs
 FACTS

 4 (Tetraphobia)
 Alfa Romeo 144 in Singapore
 49 In Japan
 Plate number in China 4 vs. (6,8,9)
 Triskaidekaphobia (fear of Friday the 13th)

 Beliefs
 Beliefs, which mainly stem from
religious training, vary from culture to
culture
 Japanese concern about Year of the

Fire Horse
 The Chinese practice of Feng Shui in

designing buildings
 Beliefs
 In Asian countries such as Japan and China the number
4 represents death and it is avoided at all costs, some
building even skip the fourth floor and go from 3 to 5.
 Similar to the superstition about the number 13 in the
West.
 Other examples of beliefs/superstitions are: not
opening an umbrella in the house (Western) or not
passing salt directly to a person (Eastern).
FULLA, THE VEILED BARBIE
 DEVELOPED IN FULLA,
1999 THE VEILEDBOY
BY NEW BARBIE
DESIGN STODIO IN
SYRIA.
 FULLA REMAINS THE CLOSEST TO ARAB VALUES (NOT
RAZAN AND JAMILA)
 BARBIE’S HIGH HEELS, DRESSES AND SWIMSUIT ARE
REPLACED BY PRAYER OUTFITS, A MAT AND SMALL
QURAN FULLA CARIES IN HER SUITCASE.
 BUSINESS AROUND THE WORLD HAVE COME TO
ACKNOWLEDGE THE IMPORTANCE OF SELLING PRODUCTS
AND SERVICES THAT MATCH VALUES AND FIT THE
CULTURE OF THEIR MARKET.
Knowledge of management style, that is:
 the business culture,
 management values, and
 business methods and
 behaviors existing in a country and a willingness to
accommodate the differences are important to success
in an international market,
 Degree of Adaptation
 Marketers must be aware of local customs and be
willing to accommodate to those differences that can
cause misunderstanding.
 Essential to effective adaptation is the recognition that
there are differences between your own culture and
others.
 If you do not understand your foreign counterpart’s
customs, you are more likely to evaluate that person’s
behavior in terms of what is familiar to you.
 Degree of Adaptation
 Brazilian executive interrupting!!!!
 In China Make a point but do not win argument
or criticism
 In Germany Do not use first name unless asked to
( address a person as: Herr or Frau )
 Brazil Do not be offended by Brazilian inclination
to touch during conversation
When different cultures meet, open tolerance and willingness to
accommodate each other’s differences are necessary
 Cultural Imperatives, Electives
and Exclusives

 Cultural imperatives:
 Business customs and expectations that must be met,
conformed, recognized and accommodated if
relationships are to be successful
 Cultural electives:
 Areas of behavior or customs that cultural aliens may
wish to conform to or participate in but that are not
required
 Cultural imperatives are “must do” things in
another culture, such as meeting and greeting,
exchange of business cards in Asian cultures
(e.g.: China, Japan, and Korea).
 Cultural electives are optional activities that a
foreigner may or may not want to engage in, such as
drinking aperitifs (strong alcoholic drinks) before
lunch in the Czech Republic or coffee in Saudi
Arabia, no offense is taken if one refuses to
participate in these cultural customs.
 Cultural imperatives Examples Include

In Asia it is imperative to avoid causing your counterpart

to lose face
 Raising your voice or shouting at Chinese in public or to
correct one in front of his peers will cause that person
to lose face.
 In china, the outsider is, at best, in fifth place in order
of importance when deciding with whom to conduct
business.
Cultural imperatives Examples Include

 Prolonged eye contact is considered offensive in Japan

however it is important to make strong eye contact
with Arabs and Latin America or you run the risk of
being seen as vague and untrustworthy.
 Cultural Electives Examples Include

 Eat food that disagree with digestive system

 Drink alcoholic beverages (personal or religious
reasons)
 Greet another man with kiss (a custom in some
countries)
 Symbolic attempt to participate in such options is
not only acceptable but also help establish rapport.
 Japanese don not expect you to bow but a symbolic
bow indicates interest to Japanese culture.
Drinking half a bottle is a cultural elective,
but taking a sip is more of an imperative in
this case. 5-
112
Cultural Imperatives, Electives & Exclusives
 Cultural exclusives:

 customs or behavior patterns reserved

exclusively for the locals and from which the
foreigner is barred and must not participate.
 Ex: foreigners criticizing or joking about a
country’s politics even though locals may,
among themselves criticize such issue.