Chapter 1 – The Scope and Challenge of International Marketing
Teaching Objectives
As an introductory chapter, the broad goal is to provide a view of international marketing
that sets the boundaries and scope of the course. The teaching objectives are to:
1. Provide students with a broad picture of the global environment within which business
operates today and into the future.
2. Give students an appreciation of how the globalization of world markets and the
internationalization of U.S. business and U.S. markets influence all functions of business
including marketing.
3. Show how the internationalization or globalization of markets affects their professional
futures regardless of where they work in business. In short, just as domestic or
international business cannot escape the internationalization of business and U.S.
markets, neither can students escape the influences of these international trends on
their professional careers.
4. Illustrate the scope of the international marketing task.
5. Show the importance of one’s self-reference criterion in assessing international issues.
6. Illustrate the stages of becoming international and the international marketing concepts
used in international marketing management.
7. Impress students with the importance of becoming globally aware.
Comments and Suggestions
1. Key points to make are: a) An increasingly larger share of corporate profits are
generated by international operations; b) In previous decades competition for U.S.
markets was only among U.S. businesses with the same relative cost of money, labor,
and product but now it includes competitors from the world over; c) U.S. multinationals
face competition for lucrative markets from new rivals from developed as well as
developing countries; and d) The growth of new markets created by changes in Latin
America, Asia, Eastern Europe and the former members of USSR, India, and hopefully
the MENA region.
2. Exhibit 1–3, The International Marketing Task, serves as a guide when discussing the
international marketing manager’s task. With this illustration, points about the
environment of business, uncontrollables and controllables can be made.
,3. As an assignment for class discussion, Case 1–1, Starbucks-Going Global Fast, can be
used to have students think about the marketing mix and the effects of uncontrollables
and controllables both in the domestic and foreign environments. Have students read
and answer the questions in the case before class. During class, have the students
illustrate the various controllables and uncontrollables in Using Exhibit 1–3, The
International Marketing Task, with examples from the case. Students can be challenged
by asking how they would have done things differently to overcome some of the
problems illustrated in the case.
4. A key point to make when discussing the self-reference criterion is that 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. It often uses
Hall’s idea of the silent language of space (see Edward T. Hall, “The Silent Language in
Overseas Business,” Harvard Business Review, May–June 1960, pp. 87–96 or Edward T.
Hall, The Silent Language (New York: Doubleday & Co., 1959) to make this point. In this
first chapter and throughout the course it is important to stress the nature of the SRC,
that is, whenever confronted by some aspect of another culture one’s reaction and
evaluation is routinely clouded by one’s own cultural experiences.
5. When exploring the different Stages of International Marketing Involvement it is
important that students understand that the differences between global markets and
global products. Further, they need to understand that a global marketing orientation
does not necessarily mean standardization across all markets. Instead it may mean
operating as if all the country markets in a company’s scope of operations (including the
domestic market) are approached as a single global market that may have multiple
market segments extending across country borders and that the company is seeking
commonalties across country markets in order to standardize the marketing mix where
culturally feasible and cost effective.
Lecture Outline
I. The Internationalization of U.S. Business
II. International Marketing Defined
III. The International Marketing Task
A. Marketing Controllables
B. Domestic Uncontrollables
C. Foreign Uncontrollables
IV. Self-Reference Criterion: An Obstacle
V. Becoming International
A. Stages of International Marketing Involvement
B. Global Markets and Global Marketing
VI. Developing A Global Awareness
, Discussion Questions
1. Define:
International marketing Foreign uncontrollables
Controllable elements Marketing relativism
Uncontrollable elements Self-reference criterion (SRC)
Domestic uncontrollables Global awareness
1. “. . . the marketer’s task is the same whether applied in Dime Box, Texas, or Dar es
Salaam, Tanzania.”
Discuss. The only difference between domestic marketing and international marketing
is that the activities take place in more than one country. Therefore, the marketing task
is the same throughout the world.
2. How can the increased interest in international marketing on the part of the U.S. firms
be explained?
Increased interest has been brought about because of changing competitive structures,
coupled with shifts in demand characteristics throughout the world. The U.S. market has
reached saturation levels for many products and services, and increasing numbers of
firms are faced with surpluses which must be sold. Also, many firms find that return on
investment may be higher in foreign markets than in domestic markets. Finally, more
and more firms realize that tomorrow’s markets will be world markets and it is
imperative that they establish world market positions early.
1. Discuss the four phases of international marketing involvement.
The first phase includes those domestic firms which have no foreign business activity
except those sales made to foreign customers who come directly to the firm. The second
phase includes domestic firms which have temporary surpluses which are sold abroad.
Therefore, sales are made on an availability basis with little or no intention for
continuing market representation. The third phase includes the domestic firms that
have permanent productive capacity which is utilized to produce goods which are sold
on a continuing basis in foreign markets. The fourth phase includes the international
company that produces a product for the world market.
2. Discuss the conditions that have led to the development of global markets.
, According to Professor Levitt and others who suggest that there is a global market for
goods, this phenomenon has resulted from new communications technology, travel and
other factors which have led to the markets of the world being more aware of different
products and processes. As a result of this awareness, there are segments in each
market who have had similar experiences and thus have common needs. These common
needs are described as a demand for high quality, reasonably priced, standardized
products. There is a strong feeling that within each country’s market there is a growing
segment that has been exposed to ideas from around the world and thus have had their
tastes and perceived needs affected. There is a strong feeling that world markets are
being driven toward a converging commonality of taste and needs leading toward global
markets.
3. Differentiate between a global company and a multinational company.
The main distinction between a global and a multinational company is that a global
company assumes there are segments across countries which have the same needs and
wants and designs a standardized, high quality, reasonably priced product for those
segments and markets it as if there are no differences among the country markets. On
the other hand, a multinational company operates in a number of countries and adjusts
its products and marketing practices for each market. The multinational company has a
specific marketing plan and adapts products for each country market. The philosophy
for the multinational company is that there are cultural differences among countries
that require specific adaptations for those markets. This is contrasted with the global
company which sees the entire world, or major regions of it, as a single entity requiring
no specialized adjustments. This distinction may be more myth than fact and reflects
Professor Levitt’s opinion.
Teaching Objectives
As an introductory chapter, the broad goal is to provide a view of international marketing
that sets the boundaries and scope of the course. The teaching objectives are to:
1. Provide students with a broad picture of the global environment within which business
operates today and into the future.
2. Give students an appreciation of how the globalization of world markets and the
internationalization of U.S. business and U.S. markets influence all functions of business
including marketing.
3. Show how the internationalization or globalization of markets affects their professional
futures regardless of where they work in business. In short, just as domestic or
international business cannot escape the internationalization of business and U.S.
markets, neither can students escape the influences of these international trends on
their professional careers.
4. Illustrate the scope of the international marketing task.
5. Show the importance of one’s self-reference criterion in assessing international issues.
6. Illustrate the stages of becoming international and the international marketing concepts
used in international marketing management.
7. Impress students with the importance of becoming globally aware.
Comments and Suggestions
1. Key points to make are: a) An increasingly larger share of corporate profits are
generated by international operations; b) In previous decades competition for U.S.
markets was only among U.S. businesses with the same relative cost of money, labor,
and product but now it includes competitors from the world over; c) U.S. multinationals
face competition for lucrative markets from new rivals from developed as well as
developing countries; and d) The growth of new markets created by changes in Latin
America, Asia, Eastern Europe and the former members of USSR, India, and hopefully
the MENA region.
2. Exhibit 1–3, The International Marketing Task, serves as a guide when discussing the
international marketing manager’s task. With this illustration, points about the
environment of business, uncontrollables and controllables can be made.
,3. As an assignment for class discussion, Case 1–1, Starbucks-Going Global Fast, can be
used to have students think about the marketing mix and the effects of uncontrollables
and controllables both in the domestic and foreign environments. Have students read
and answer the questions in the case before class. During class, have the students
illustrate the various controllables and uncontrollables in Using Exhibit 1–3, The
International Marketing Task, with examples from the case. Students can be challenged
by asking how they would have done things differently to overcome some of the
problems illustrated in the case.
4. A key point to make when discussing the self-reference criterion is that 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. It often uses
Hall’s idea of the silent language of space (see Edward T. Hall, “The Silent Language in
Overseas Business,” Harvard Business Review, May–June 1960, pp. 87–96 or Edward T.
Hall, The Silent Language (New York: Doubleday & Co., 1959) to make this point. In this
first chapter and throughout the course it is important to stress the nature of the SRC,
that is, whenever confronted by some aspect of another culture one’s reaction and
evaluation is routinely clouded by one’s own cultural experiences.
5. When exploring the different Stages of International Marketing Involvement it is
important that students understand that the differences between global markets and
global products. Further, they need to understand that a global marketing orientation
does not necessarily mean standardization across all markets. Instead it may mean
operating as if all the country markets in a company’s scope of operations (including the
domestic market) are approached as a single global market that may have multiple
market segments extending across country borders and that the company is seeking
commonalties across country markets in order to standardize the marketing mix where
culturally feasible and cost effective.
Lecture Outline
I. The Internationalization of U.S. Business
II. International Marketing Defined
III. The International Marketing Task
A. Marketing Controllables
B. Domestic Uncontrollables
C. Foreign Uncontrollables
IV. Self-Reference Criterion: An Obstacle
V. Becoming International
A. Stages of International Marketing Involvement
B. Global Markets and Global Marketing
VI. Developing A Global Awareness
, Discussion Questions
1. Define:
International marketing Foreign uncontrollables
Controllable elements Marketing relativism
Uncontrollable elements Self-reference criterion (SRC)
Domestic uncontrollables Global awareness
1. “. . . the marketer’s task is the same whether applied in Dime Box, Texas, or Dar es
Salaam, Tanzania.”
Discuss. The only difference between domestic marketing and international marketing
is that the activities take place in more than one country. Therefore, the marketing task
is the same throughout the world.
2. How can the increased interest in international marketing on the part of the U.S. firms
be explained?
Increased interest has been brought about because of changing competitive structures,
coupled with shifts in demand characteristics throughout the world. The U.S. market has
reached saturation levels for many products and services, and increasing numbers of
firms are faced with surpluses which must be sold. Also, many firms find that return on
investment may be higher in foreign markets than in domestic markets. Finally, more
and more firms realize that tomorrow’s markets will be world markets and it is
imperative that they establish world market positions early.
1. Discuss the four phases of international marketing involvement.
The first phase includes those domestic firms which have no foreign business activity
except those sales made to foreign customers who come directly to the firm. The second
phase includes domestic firms which have temporary surpluses which are sold abroad.
Therefore, sales are made on an availability basis with little or no intention for
continuing market representation. The third phase includes the domestic firms that
have permanent productive capacity which is utilized to produce goods which are sold
on a continuing basis in foreign markets. The fourth phase includes the international
company that produces a product for the world market.
2. Discuss the conditions that have led to the development of global markets.
, According to Professor Levitt and others who suggest that there is a global market for
goods, this phenomenon has resulted from new communications technology, travel and
other factors which have led to the markets of the world being more aware of different
products and processes. As a result of this awareness, there are segments in each
market who have had similar experiences and thus have common needs. These common
needs are described as a demand for high quality, reasonably priced, standardized
products. There is a strong feeling that within each country’s market there is a growing
segment that has been exposed to ideas from around the world and thus have had their
tastes and perceived needs affected. There is a strong feeling that world markets are
being driven toward a converging commonality of taste and needs leading toward global
markets.
3. Differentiate between a global company and a multinational company.
The main distinction between a global and a multinational company is that a global
company assumes there are segments across countries which have the same needs and
wants and designs a standardized, high quality, reasonably priced product for those
segments and markets it as if there are no differences among the country markets. On
the other hand, a multinational company operates in a number of countries and adjusts
its products and marketing practices for each market. The multinational company has a
specific marketing plan and adapts products for each country market. The philosophy
for the multinational company is that there are cultural differences among countries
that require specific adaptations for those markets. This is contrasted with the global
company which sees the entire world, or major regions of it, as a single entity requiring
no specialized adjustments. This distinction may be more myth than fact and reflects
Professor Levitt’s opinion.
