international marketing chapter 03
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McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
History and Geography: The Foundations of Culture
Chapter 3
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Learning Objectives
LO1 The importance of history and geography in understanding international marketsLO2 The effects of history on a country’s cultureLO3 How culture interprets events through its own eyesLO4 How long-past U.S. international policies still affect customer attitudes abroadLO5 The effect of geographic diversity on economic profiles of a countryLO6 Why marketers need to be responsive to the geography of a countryLO7 The economic effects of controlling population growth and aging populationsLO8 Communication infrastructures are an integral part of international commerce
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History & Contemporary Behavior• Historical events between nations influence
business and history• Any nation’s business and political culture is
shaped by history
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Case in Point: Japan
• Why do the Japanese have such strong loyalty toward their companies?
• Why is a distribution system so difficult for an outsider to develop?
• Why are decisions made by consensus?• Why are they loyal to family, to country, to
company, and to social group?
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Manifest Destiny
Manifest Destiny and Monroe Doctrine were the basis of U.S. foreign policy in the 19th and 20th centuries
Manifest Destiny meant that Americans were a chosen people ordained by God to create a model society. It referred to the territorial expansion of the United States from the Atlantic to the Pacific
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Monroe Doctrine
The Monroe Doctrine has three basic premises:• No further European colonization in the New World• abstention of the United States from European political
affairs, and• nonintervention by European governments in the
governments of the Western Hemisphere.
Exhibit 3.1. Source: Oxford Atlas of the World, 18th ed., 2002 Preprinted with permission of Philip Maps 3-7
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Geography and Global Markets
• Climate & Topography• Geography, Nature & Economic Growth• Social Responsibility and Environmental Mana
gement• Resources
Climate and Topography
Knowledge about geography, the climate and physical terrain when appraising a market
Influences marketing from product adaptation to the development of marketing systems
Climatic features affect uses and functions of products and equipment
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Climate and Topography
Products may require special cooling or lubrication to function adequately in tropical zones
Climate differences in Europe caused Bosch-Siemens to alter its washing machines
Geographic terrain such as mountain ranges in a country can influence transportation of products.
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Geography, Nature & Economic Growth
Linkage exists between geographic location and economic growth
Association between landlocked countries and level of economic development
Countries with hostile climates associated with economic stagnation
Countries that suffer the most from major calamities are among the poorest in the world, which influences ability to market products
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Social Responsibility & Environmental Management
Environmental protection is not an optional extra; it is an essential part of the complex process of doing business.
Of special concern to governments and businesses are ways to stem the tide of pollution and to clean up decades of neglect.
Many governments are drafting new regulations and enforcing existing ones.
A strong motivator is the realization that pollution is on the verge of getting completely out of control.
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Resources
Importance of natural resources especially to manufacturing of products; Supply of natural resources not endless
Human labor provides the preponderance of energy in many countries
Importance of oil and gas in world energy consumption
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Exhibit 3.3 Source: EuroMonitor International, 2012; Intergovernmental Panel on Climate Change3-15
Exhibit 3.4 Source: Data compiled from Energy Information Administration (EIA), International Energy Outlook 2011 (Washington, D.C. 2012), http://www.eio.doe.gov/ 3-16
Global Population Trends
Important to know about current population trends because people constitute markets for various categories of goods
Necessary to know about: • rural/urban population shifts• rates of growth • age levels• population control • population decline and aging• worker shortage and immigration
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Exhibit 3.5 Source: World Population Prospects, The 2011 Revision, United Nations Economic and Social Affairs, www.unpopulation.org. 2012.
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Population Control Issues
• Adequate Incomes • High literacy levels• Education for women• Health care• Family planning• Cultural attitudes• Political reasons
World Trade Routes & Communication Links
• Knowledge about trade routes over land, sea, and air important in making marketing decisions
• The majority of world trade is among the most industrialized and industrializing countries of Europe, North America, and Asia
• Need to be aware about communication links—the underpinning of all commerce
• Impact of the Internet revolution especially for global marketing of products
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