GLOBALENVIRONMENTAL

SCAN7CHAPTER

By Brandon Miller

Pages 183-190

Joke Time:The Real Reason Behind the

Andersen/Enron Fiasco

Global Environmental Scan

Uncontrollable factors that affect global marketing:

• Cultural factors• Economic factors• Political-Regulatory factors

Overview

• Cultural Diversity (cultural factors) Cross-cultural analysis

• Values• Customs

Foreign Corrupt Practices Act• Cultural Symbols

Semiotics• Language

Back translation• Cultural ethnocentricity

Consumer ethnocentrism

Overview Continued

• Economic Factors• Stage of Economic Development• Economic Infrastructure• Consumer Income and Purchasing Power• Currency Exchange Rates

Cultural Environmental Factors

• A cross-cultural analysis involves the study of similarities and differences among consumers in two or more nations or societies

• The cross-cultural analysis creates an understanding about values, customs, symbols, & languages of other societies.

Cultural Environmental Factors: Values

• A society’s values represent personally or socially preferable modes of conduct or states of existence that are enduring. Values influence the behavior of the consumers.• McDonalds example in India• Visa example in Germany

Cultural Environmental Factors: Customs

• Customs are the norms and expectations about the way people do things in a specific country.• Cosmetics example in France• Japanese Valentines Day example

Cultural Environmental Factors: Customs

• The Foreign Corrupt Practices Act makes it a crime for U.S. corporations to bride an official of a foreign government or political party to obtain or retain business in a foreign country.• Bribes are a tax deductible expense in

France & Greece

Cultural Environmental Factors: Symbols

• Cultural symbols are things that represent ideas and concepts. Semiotics is the study of these symbols. Improper use of symbols can be disastrous for global marketers.• Tiffany & Company example in Japan• Coke example with the Parthenon

Cultural Environmental Factors: Language & Back Translation

• The best language to communicate with consumers in is their own.

• Over 3,000 languages spoken world-wide• Vicks example in Germany

Cultural Environmental Factors: Language & Back Translation

• In back translation, a translated word or phrase is retranslated into the original language by a different interpreter. (error checking control)• Nike flames example

Cultural Environmental Factors: Consumer Ethnocentrism

• Consumer ethnocentrism is the tendency to believe that is inappropriate or immoral to purchase foreign-made products.

• Observed in segments of the U.S., France, Japan, Korea, & Germany

Economic Environmental Considerations

• Economic Factors:• Stage of Economic Development• Economic Infrastructure• Consumer Income and Purchasing Power• Currency Exchange Rates

Economic Environmental Factors: Stage of Economic Development

• Developed Countries: Mixed economies (Ex: U.S., Japan, Canada, & Western Europe)

• Developing Countries: Usually moving towards an industrialized economy (Ex: Hungary, South Africa, & Pakistan)

Economic Environmental Factors: Economic Infrastructure

• Economic infrastructure is a country’s communication, transportation, financial, & distribution systems.

• Critical for determining how, where, & to whom to market.• Coke example in India

Economic Environmental Factors: Consumer Income & Purchasing Power

• Marketers must consider the average household incomes of the consumers.

FIGURE 7-5FIGURE 7-5 How purchasing power differs around the world

Economic Environmental Factors: Currency Exchange Rates

• A currency exchange rate is the price of one country’s currency expressed in terms of another country’s currency.

• Failure to consider exchange rates can have severe consequences• Mattel Barbie example

ReviewGlobal marketing is affected by uncontrollable

factors that include:• Cultural factors

• Values• Customs• Cultural Symbols• Language• Cultural ethnocentricity

• Economic factors• Stage of Economic Development• Economic Infrastructure• Consumer Income and Purchasing Power• Currency Exchange Rates

Any Questions or Comments?

Thanks for listening

By Brandon Miller