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CAB8 / International Marketing Period 4 Summary
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Cab 8 summaryBegrippen;
international marketing; performing business activities for profit in more than one nation or
country
marketing relativism; marketing strategies and judgements are based on experiences, and
experiences is interpreted by each marketer in terms of his or her own culture and
experience
Self-reference criterion (SRC): Considering our own conditions (cultural values), values,
and norms while evaluating others
EPRG schema; classifies firms by their orientation: ethnocentric, polycentric, regiocentric or
geocentric.
Chapter 1
The domain of international marketing is easy to explain. It comprises selling and buying
products and services across countries. In practice, however it is not that simple and
involves numerous complex activities that need to be synchronized and coordinated.
The modern world is organised on the basis that each nation state is sovereign and independent
from other countries. In reality, however, no country can completely isolate its internal affairs
from external forces. Whether or not a company wants to participate directly in international
business, it cannot escape:
→ effect of increasing number of domestic firms exporting, importing
and/or manufacturing abroad
→ number of foreign-based firms operating in most markets
→ growth of regional trade areas
→ rapid growth of world markets
→ increasing number of competitors for global markets
Of all the trends affecting global business today, five stand out as the most dynamic and as
the ones that are influencing the shape of international business:
1. the interdependence of the world economies and globalization of production and
consumption.
2. the increase in wealth and growth in most parts of the world, causing enhanced
purchasing power as well as volatility in financial markets throughout the world
3. the evolution of large emerging markets such as Brazil, China, India, Russia,
Indonesia, Turkey and Pakistan.
4. the availability of advanced methods of communication and transportation due to
developments in information technology.
5. The volatile nature of our reality and environment; the two latest crises - the
economic crisis of 2008-2009 and the 2020 COVID-19 pandemic - have shown that
we live in an ever-changing world.
, These forces affecting international business have led to a dramatic growth in
international trade and contributed to a perception that the world has become a smaller
and more interdependent place.
Companies have become even more aggressive to capture new markets in order to
compensate for recessions at home or economic slowdown in their traditional markets
International marketing defined
International marketing is the performance of business activities that direct the flow of a
company’s goods and services to consumers or users in more than one nation for a profit.
The difference in definition of domestic marketing and international marketing; is that the
marketing activities take place in more than one country. The goal of a business is to make a
profit by promoting, pricing, and distributing products for which there is a market. If this is the
case, what is the difference between domestic and international marketing?
The answer lies not with different concepts of marketing, but with the environment within
which marketing plans must be implemented. The uniqueness of foreign marketing comes from
the range of unfamiliar problems and the variety of strategies necessary to cope with the
different levels of uncertainty encountered in foreign markets.
Factors that impact the profitable outcome of good marketing plans;
Competition, legal constraints, government controls, weather, consumer behaviour and any
number of other uncontrollable elements.
Generally speaking, the marketer cannot control or influence these uncontrollable elements,
but instead must adjust or adapt to them in a manner consistent with a successful outcome.
• Marketing decisions; positioning, product, price, promotion and distribution.
• Uncontrollable elements of the marketplace; competition, politics, laws, consumer
behaviour, level of technology ect.
The international marketing task
Difference international marketer’s task and the domestic marketer; the international marketer
must deal with at least two levels of uncontrollable uncertainty instead of one.
The greater the number of foreign markets in which a company operates, the greater the
possible variety of foreign environmental uncontrollable with which to contend.
Frequently, solution to a problem in a country in market A is not applicable to a problem in
country market B.
,Marketing controllables
Assuming the necessary overall corporate resources, the marketing manager blends price,
positioning, products, promotion, and channels-of-distribution activities to capitalize on
anticipated demand. The controllable elements can be altered in the long run and, usually, in
the short run, to adjust to changing market conditions or corporate objectives . The outer
circles surrounding the market controllables represent the levels of uncertainty that are
created by the domestic and foreign environments. These are the elements that are outside
the control of the managers but need to be handled.
Domestic uncontrollable
The second circle includes home-country elements that are outside the control of the
manager and that can have a direct effect on the success of a foreign venture: political
forces, competitive structure and economic climate. The capacity to invest in plants and
facilities either in domestic or foreign markets is to a large extent a function of domestic
economic vitality.
Foreign uncontrollable
The process of evaluating the uncontrollable elements in a foreign market often involves
substantial doses of cultural, political and economic shock. A business operating in a
number of foreign countries might find polar extremes in political stability, class structure and
economic climate – critical elements in business decisions.
The more significant elements in the uncontrollable foreign environment include:
1. political/legal forces
2. economic forces
3. competitive forces
4. level of technology
5. structure of distribution
6. geography and infrastructure
7. cultural forces
, The problem of foreign uncertainty is further complicated by a frequently imposed ‘alien
status’ that increases the difficulty of properly assessing and forecasting the dynamic
international business climate . There are two dimensions to the alien status of a foreign
business: alien in that the business is controlled by foreigners, and alien in that the culture of
the host country is alien to the foreign company. The alien status of a business results in
greater emphasis being placed on many of the uncontrollable elements than would be found
in relation to those same elements in the domestic market. A strategy successful in one
country can be rendered ineffective in another by differences in political climate, stages of
economic development, level of technology or other cultural variation.
Environmental adaptations
When a marketer operates in other cultures, marketing attempts may fail because of
unconscious responses based on frames of reference acceptable in one’s own culture but
unacceptable in different environments. Unless special efforts are made to determine local
cultural meanings for every market, the marketer is likely to overlook the significance of certain
behaviours or activities and proceed with plans that result in a negative or unwanted response.
To avoid errors, the foreign marketer should be aware of the principle of marketing
relativism; marketing strategies and judgements are based on experiences, and experiences
is interpreted by each marketer in terms of his or her own culture and experience.
Avoid engaging in marketing relativism; Basing marketing strategies and judgements on
one’s own culture and experience.
Self-reference criterion: an obstacle
Adaptation is a conscious effort on the part of the international marketer to anticipate the
influences of both the foreign and domestic uncontrollable environments on a marketing mix,
and then to adjust the marketing mix to minimise the effects.
The primary obstacle to success in international marketing is a person’s self-reference
criterion (SRC) in making decisions; an unconscious reference to one’s own cultural values,
experiences and knowledge as a basis for decisions. The SRC disrupts the ability to assess
a foreign market in its true light. When faced with a problem in another culture, the tendency
is to react instinctively, referring only to our SRC for a solution.
Your SRC can prevent you from being aware that there are cultural differences or from
recognizing the importance of those differences → you fail to recognise the need to take
action, discount the cultural differences that exist among countries or react to a situation in a
way that is offensive to your hosts. If we evaluate every situation through our SRC, then we
are ethnocentric.
The most effective way to control the influence of the SRC is to recognise its existence in our
behaviour → an awareness of the need to be sensitive to differences and to ask questions
when doing business in another culture can avoid many of the mistakes possible in
international marketing.
Self-reference criterion (SRC): Considering our own conditions, values, and norms while
evaluating others.
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