Download International Marketing

INTERNATIONAL MARKETING
• Culture
• Product strategies
• Legal issues
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
1
Learning Objectives
• Identify impact of culture on
–
–
–
–
Values
Perception of reality
Product choices
Response to marketing activity
• Identify advantages and disadvantages of
product standardization, adaptation, and
customization under different circumstances
• Identify some legal issues that must be
considered by firms doing business abroad
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
2
An Effective Billboard Advertisement?
VERY
DIRTY
CLOTHES
BUAD 307
CLOTHES GETS
WASHED WITH
THE
ADVERTISED
DETERGENT
BRAND
INTERNATIONAL MARKETING
SQUEEKY
CLEAN
CLOTHES
Lars Perner, Instructor
3
LEARNING OUTCOME OBJECTIVES
• Identify the for forces impacting the
marketer operating in varying cultural,
legal, economic, and political
environments
• Identify the increasingly competitive
international market place
• Identify strategic opportunities for
operating internationally
• Identify the interdependent nature of
decisions made in the international
context
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
4
International Marketing: Considerations and Outcomes
MKT 465
COVERS
INTERNATIONAL
MARKETING IN
MORE DETAIL
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
5
Definitions
Culture:
“That complex whole
which includes knowledge, belief,
art, morals, custom, and any other
capabilities and habits acquired by
man as a member of society.”
Alternative definition:
“Meanings that are shared by
most people in a group [at
least to some extent]”. (Adapted
from Peter and Olson, 1994)
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
6
Cultural Lessons
• Diet Coke is named Light Coke in
Japan—dieting was not well
regarded
• Red circle trademark was
unpopular in Asia due to its
resemblance of Japanese flag
• Packaging of products is more
important in some countries
than in U.S.
• Advertisement featuring man
and dog failed in Africa—dogs
were not seem as man’s best
friend
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
7
More Cultural Lessons...
• Cologne ad featuring a man
“attacked” by women failed in
Africa
• Food demonstration did well in
Chinese stores but not in Korean
ones--older women were insulted
by being “taught” by younger
representatives
• Pauses in negotiations
• Level of formality
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
8
Approaches to Product Introduction
● Customization
Completely new
product made for
each country
Standardization ●
Adaptation
Adjustments are made in
regions or countries to
accommodate infrastructure,
cultural, economic, or other
differences
Products sold
across the World
are identical
Complete customization or standardization
are rare—modest adjustments are usually
made
Not suitable for
the Middle
East!
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
9
Reasons for Standardization
• Avoiding high costs of
customization, if applicable
• Technological intensity
– Reduced confusion
– International compatibility
among product group
components
– Faster spread of rapid life
cycle products
BUAD 307
• Convergence of global
consumer tastes/needs
• Country of origin
positioning
INTERNATIONAL MARKETING
Lars Perner, Instructor
10
Standardization—Advantages
• Benefits
– Economies of scale
– More resources available for
development effort
• Better quality possible
– Rapid product life cycles may make
extensive adaptation infeasible
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
11
Standardization—Disadvantages
• Unnecessary
features
• Vulnerability
to trade
barriers
• Strong local
competitors
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
12
Product Adaptations
• Mandatory—required by laws of
nature or laws of government
– Legal requirements
– Infrastructure
• “Discretionary”—not required by
natural or human laws but often
not really “optional” in practice
(needed to compete with brands
that do offer adaptations)
• Local tastes
• Fit into cultural environment
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
13
Mandatory Adaptation Issues
• Infrastructure differences—e.g.,
electricity supplies vary among
countries in
– Voltage
– Frequency (time between flips in polarity
under alternating current)
– Plugs
• Conflicting rules between countries—
it may not be possible to make a
product that would be simultaneously
legal in both of two countries
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
14
Country of Origin Effects
• Perception of product
– quality (e.g., Japan, Germany)
– elegance and style (e.g., France, Italy)
• Historical associations
• Positioning strategies
– Emphasis on origin (e.g., French wine)
– De-emphasis/obfuscation of country of
origin (e.g., French beer, American
products with French language labels)
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
15
Flops in the Transplantation of Advertising
• Man and his dog
• “Follow the leader—he’s
on a Honda!”
• Detergent ad
• “Get your teeth their
whitest!”
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
16
International Brand Adaptations
• Chevy Nova did not do
well in Latin America (“no
va.”)
A Japanese soft drink which did not sell well in
English speaking countries…
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
17
U.S. Laws of Interest…
•
•
•
•
Anti-trust: It is illegal for U.S. firms to participate in collusion
and other anti-competitive activities abroad. Most countries
have such laws; not all enforce these.
Foreign Corrupt Influences Act: It is illegal for U.S. firms to pay
bribes abroad.
Anti-boycott laws: It is illegal for U.S. firms to participate in a
boycott of Israel or even certify that one’s firm does not do
business with Israel. Technically, it is illegal to participate in all
non-U.S. Government sanctioned boycotts, but the emphasis is
on Israel.
Trading With the Enemy:
–
–
•
It is illegal to trade at all (with few exceptions) with enemy certain states
(e.g., North Korea, Iran, Libya).
Exports of certain technologies (mostly with potential for military use) is
heavily restricted.
Extra-territoriality: U.S. courts will often take jurisdiction over
cases of violations of U.S. law that occurred entirely abroad.
BUAD 307
INTERNATIONAL MARKETING
Lars Perner, Instructor
18