marketing in the “new” economy internet marketing crm service marketing international marketing
TRANSCRIPT
Marketing in the “New” Economy
Internet MarketingInternet
Marketing
CRMCRM CRM CRM
Service MarketingService
Marketing
International
Marketing
International
Marketing
Critical Questions1. Why is international marketing an
important consideration for a purely domestic business?
2. If you were hired as the marketing consultant by a local/national company that is considering going international- what “factors” would you tell them they need to consider when formulating their international/global marketing strategy?
Critical Questions1. Why is international marketing an
important consideration for a purely domestic business?
2. If you were hired as the marketing consultant by a local/national company that is considering going international- what “factors” would you tell them they need to consider when formulating their international/global marketing strategy?
Levi’s “Global” Marketing Strategy
•Global in Concept•Local in Execution
The Marketing concepts, processes & considerations –
TargetTargetMarketMarket
Product Place
PromotionPrice
TargetTargetMarketMarket
Product Place
PromotionPrice
TargetTargetMarketMarket
Product Place
PromotionPrice
•CCompanyompany
•CConsumersonsumers
•CCompetitorsompetitors
•CConditionsonditions• PESTPEST
WMWM
TGTTGT
EE
DD
CCNN
GG
FF
Service
Growth, Growth, Competitive Competitive
& & Positioning Positioning StrategiesStrategies
TargetTargetMarketMarket
Product Place
PromotionPrice
TargetTargetMarketMarket
Product Place
PromotionPrice
TargetTargetMarketMarket
Product Place
PromotionPrice
•CCompanyompany
•CConsumersonsumers
•CCompetitorsompetitors
•CConditionsonditions• PESTPEST
WMWM
TGTTGT
EE
DD
CCNN
GG
FF
Service
Growth, Growth, Competitive Competitive
& & Positioning Positioning StrategiesStrategies
TargetTargetMarketMarket
Product Place
PromotionPrice
TargetTargetMarketMarket
Product Place
PromotionPrice
TargetTargetMarketMarket
Product Place
PromotionPrice
•CCompanyompany
•CConsumersonsumers
•CCompetitorsompetitors
•CConditionsonditions• PESTPEST
WMWM
TGTTGT
EE
DD
CCNN
GG
FF
Service
Growth, Growth, Competitive Competitive
& & Positioning Positioning StrategiesStrategies
TargetTargetMarketMarket
Product Place
PromotionPrice
TargetTargetMarketMarket
Product Place
PromotionPrice
TargetTargetMarketMarket
Product Place
PromotionPrice
•CCompanyompany
•CConsumersonsumers
•CCompetitorsompetitors
•CConditionsonditions• PESTPEST
WMWM
TGTTGT
EE
DD
CCNN
GG
FF
Service
Growth, Growth, Competitive Competitive
& & Positioning Positioning StrategiesStrategies
TargetTargetMarketMarket
Product Place
PromotionPrice
TargetTargetMarketMarket
Product Place
PromotionPrice
TargetTargetMarketMarket
Product Place
PromotionPrice
•CCompanyompany
•CConsumersonsumers
•CCompetitorsompetitors
•CConditionsonditions• PESTPEST
WMWM
TGTTGT
EE
DD
CCNN
GG
FF
Service
Growth, Growth, Competitive Competitive
& & Positioning Positioning StrategiesStrategies
essentially the same….
Just more layers…. w/ Controllables— less
controllable & Uncontrollables-- more perplexing
Challenges in ConductingDifficult to control & coordinate marketing programs across countries w/ different media & distribution systems
Challenges in PlanningGathering of data & conducting situation analysis– Lack of availability, validity, reliability and/or familiarity w/ international data sources
– Actual --but limited-- business experience w/ country may be used as substitute for organized research
Interpreting results
Int’l Marketing Same as Domestic just more
Challenging
– Lack sensitivity to differences in market conditions &/or consumer behavior caused by Ethnocentricity (AKA: the “Self-Reference Criterion”
In order to avoid simple
but costly Mistakes
Need to fully account for
any & all differences in
every new market
http://www.relojournal.com/sept96/tadpole.htm
Unfortunately, the Coke company did not discover until after thousands of signs had been printed that the phrase means 'bite the wax tadpole' or 'female horse stuffed with wax,' depending on the dialect. Coke then researched 40,000 Chinese characters and found a close phonetic equivalent, 'ko-kou-ko-le,' which can be loosely translated as 'happiness in the mouth.'
The name Coca-Cola in China was first rendered
as Ke-kou-ke-la
Pepsi’s slogan, “Come alive with the Pepsi Generation,” read as “Pepsi will bring your ancestors back from the dead,” in Taiwan.
The Kentucky Fried Chicken slogan, “finger- lickin’ good,” was translated as “eat your fingers off, ” in Chinese.
Clairol introduced the “Mist Stick” curling iron in Germany where mist is slang for manure. Not too many people had use for a manure stick.
Subtle & Not So Subtle factors accounted for
Marketing Failures
Cake mixes initially failed in both Britain and Japan
Subtle-Pictures on boxes were just too perfect for Britons--must be hard to make
Not so subtle- Few Japanese households had ovens
In Italy, an ad for “Schweppes Tonic Water” translated as “Schweppes Toilet Water.”
General Motors introduced the Chevy Nova in South America and was
unaware that Spanish in no va means it won’t go.
When Ford’s Pinto flopped in Brazil, Ford learned pinto was Brazilian slang for tiny male genitals. All the nameplates were changed to Corcel, which means horse.
Widely circulated, but on Feb. 15, 2003 taken from: http://www.library.ubc.ca/patscan/funny_trade.html
Colgate introduced a toothpaste in France called CUE, the name of a notorious porno magazine
Colgate introduced a toothpaste in France called CUE, the name of a notorious porno magazine
English Translations made by Japanese firm added to labelsto increase prestige for their products being sold in China.
Product English Translation
Japanese Spam Liver Putty
Toilet Paper My Fanny Brand
Ready to Eat Pancakes Strawberry Crap
Antifreeze Spray Hot Piss Brand
Pediatrician’s Slogan Specialist in Deceased
Children
English Translations made by Japanese firm added to labelsto increase prestige for their products being sold in China.
Product English Translation
Japanese Spam Liver Putty
Toilet Paper My Fanny Brand
Ready to Eat Pancakes Strawberry Crap
Antifreeze Spray Hot Piss Brand
Pediatrician’s Slogan Specialist in Deceased
Children
SOURCE: “Some Strawberry Crap Dessert, dear?” South China Morning Post, December 9, 1996 p. 12.
US Marketers aren't the only ones making mistakes-
International Marketing Blunders
The Scandinavian vacum manufacturer Electrolux used the following in an
American campaign:
Nothing Sucks like an
Electrolux
Some Unique Brand names
Fockink – liqueur: Netherlands
Green Piles – lawn fertilizer: Japan
Homo Sausage – Japan
Krapp – toilet paper: Sweden
Last Climax – paper tissues: Japan
Pansy – men’s underwear: China
Pschitt – soft drink: France
Zit – soft drink: Greece
Fockink – liqueur: Netherlands
Green Piles – lawn fertilizer: Japan
Homo Sausage – Japan
Krapp – toilet paper: Sweden
Last Climax – paper tissues: Japan
Pansy – men’s underwear: China
Pschitt – soft drink: France
Zit – soft drink: Greece
How you sell a product must equate with how the consumer
sees the product:
U.S.: Hot dish
France: Salad component
U.K.: Sandwich filler; pasta topping
Korea: Sprinkled over ice cream (sweet)
Japan: After school snack
Hallmark cards failed when introduced in France- French dislike syrupy sentiment and prefer writing their own cards.
Philips began to earn a profit in Japan only after reduced the size of its coffeemakers to fit into smaller Japanese kitchens and its shavers to fit smaller Japanese hands.
Coca-Cola had to withdraw its two-liter bottle in Spain after discovering that few Spaniards owned refrigerators large enough compartments to accommodate it.
General Foods’ Tang initially failed in France because it was positioned as a substitute for orange juice at breakfast. The French drink little orange juice and almost none at breakfast.
Kellogg’s Pop-Tarts failed in Britain because the percentage of British homes with toasters was significantly lower than in the United States and the product was too sweet for British tastes.
Do Your Home work:
Every new country and every new market one enters brings with it- it’s own set of laws, rules, regulations, standards, requirements, policies, procedures, guidelines, documents, stamps, taxes, fees, licenses, etc., etc. etc.
Political-Legal & Regulatory Variables: Must be constantly monitored as gov’ts constantly alter their countries trade policies, commercial laws & business regulations
Everything is regulated…
What you can sell, how much you can sell
When you can sell
How & to whom you can sell
And how much you can sell it for…
What . . .What . . .Products Products you can advertise?you can advertise?Appeals Appeals that can be used?that can be used?TimesTimes products may be promoted? products may be promoted?Rules regarding foreign Rules regarding foreign language language use?use?TaxesTaxes levied against advertising? levied against advertising?
Before you begin to formulate your promotional strategy you need to know for every country & market
Can you use:
Ads directed to children?
Foreign words in ads?
National symbols in ads?
Belgium
no references to dieting.
France
no child endorsements.
United Kingdom
no candy as meals.
no Snickers for lunch!Germany
no comparative advertising.
Examples of Differences in Regulation Of Children’s Ads across Europe
Austria No advertising of war toys.
Belgium Ads for candy on TV must show a stylized toothbrush.
Denmark No advertising of prizes for children.
Finland No ads during children’s programs.
France No deceptive packaging or contents & No Child endorsements
Germany No ads that encourage children to beg parents to buy product.
Greece All toy ads banned on TV from 7a.m.-1p.m.
Ireland Ads should not encourage the consumption of alcohol.
Italy Ads aimed at adults not allowed in children’s programming.
Netherlands No candy ads before 7:55p.m.
Portugal Ads must not exploit the inexperience of children.
Source: Lucy Rouse, Dilip Subramanian, Ia Wadendall, and Fiona McHugh, "A Question of Child Care," Marketing & Media Europe 1996, March 1996, 34-35.
Regulatory ChallengesIn the U.K., all advertising is allowed if not specifically forbidden…In Germany, everything is forbidden if not specifically allowed… In Italy, everything is allowed, even if forbidden… In Belgium, nobody knows what’s forbidden…
Other Political- Legal &
Regulatory Concerns
Political StabilityRespect for “Rule-of-Law”Favorable Trade & Investment
EnvironmentNondiscriminationAccess To Markets# Regulatory HurdlesNationalism & NationalizationView of Profits
Political StabilityRespect for “Rule-of-Law”Favorable Trade & Investment
EnvironmentNondiscriminationAccess To Markets# Regulatory HurdlesNationalism & NationalizationView of Profits
Governmental Methods of Trade Regulation
RestrictionPromotion
Govt’l Methods Promoting & Restricting Trade
Trade Promotion Trade Restriction
Subsidies TariffsExport Financing QuotasForeign Trade Zones
Special Agencies
Embargoes
Local Content Requirements
Admin Policies
Currency Controls
Trade Restriction Local Content Requirements
Laws stipulating that producers in the domestic market must supply a specified amount of a good or service.
Purpose - force companies from other nations to employ local resources in their production processes—particularly labor
Laws stipulating that producers in the domestic market must supply a specified amount of a good or service.
Purpose - force companies from other nations to employ local resources in their production processes—particularly labor
We’re taught to Play by the Rules….
Problem is--No Universal Rules— No International Law/Courts specializing in Commercial disputes
Our Rules (English-Common Law System) – more the exception than the rule
EVERYONE
The United Kingdom and its former colonies all follow a legal system based on common law.
.. law based on the cumulative wisdom of judges' decisions on individual cases through history.
Thus each country's legal system evolves as individual cases set precedents.
Common law
.. the world's most common form of legal system.
It is based on a detailed listing, or codification, of what is, and is not, permissible.
-civil law system judge takes on many of investigative & inquisitorial tasks that would be completed by lawyers in a common law system.
Civil law
Law is based on the Koran &
rules governing the faith and practice of Muslims
Islamic law
http://www.droitcivil.uottawa.ca/world-legal-systems/eng-monde.html
With no Global law– Legal Issues & Disputes in International Business
Resolved thru: Contracts Arbitration WTO
Disputes settled— By Jurisdictional Clauses Included In Contract
Where Contract entered into Where provisions of
Contract Performed
Contract- Determine Legal Jurisdiction
International Arbitration
In order to avoid Courts in settling international trading disputes…Ensure that Contracts have arbitration clause inserted that specifies:
Country of arbitrationThe arbitrator& Rules of arbitration
In past 10 years WTO emergedas principle arbiter of Int’l trade
Formed in 1995 - GATT-Uruguay Round - Most comprehensive trade agreement in history-
“ (WTO) is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.”
(Extract from WTO website)
WTO -World Trade Policeman?
104 disputes brought to WTO in 1st three years.
196 handled by GATT during its 50 year history.
US is biggest WTO user - 34 disputes.
Do Your Home work
Fish Where the Fish are…
Economic Variables Counties level & rate of economic development
Per capita income & income distribution
Expenditure patterns for goods & services
CaracasMoscow
ManilaShanghai
Mexico CityBogota
WarsawBangkok
Sao PaoloJohannesburg
SingaporeParis
Kuala LumpurLondon
FrankfurtNew York
Tokyo
WORKING TIME REQUIRED TO BUY A BIG MAC
00 2020 40 40 60 60 80 10080 100 120 120
Minutes
Evolving Middle Income Households- Buying Boom for
Asia, 1995-2000
Millions of households approaching $18,000 per year buying power Indexed to Singapore prices
14.4
32.5
73.3
1991 1995 2000
What the added Between 1993 andmiddle class 1995 2000buy (In millions)
Bedrooms 32 116
Living Rooms 16 58
Kitchens 16 58
Bathrooms 32 116
Living space (sq.m.) 1,200 4,350
Large appliances 16 58
Televisions 24 87
Telephones 24 87
Cars 16 58
Emerging - NIC’s & BEM’s*
75% growth in world trade coming from 130 Newly Industrialized Countries ---but ½ of that from:
Big Emerging Market’s
Have more than ½ of the world’s population
Account for 25% world’s GDP (@$2Trillion)
2010- China = world’s largest economy
BEMs: Big Emerging Markets
China
India
Indonesia
South Korea
Brazil
Mexico
Argentina
South Africa
Poland
Turkey
Low Income Countries
GNP per capita of $785 or less
CharacteristicsLimited industrialization
High percentage of population involved in farming
High birth rates
Low literacy rates
Heavy reliance on foreign aid
Political instability and unrest
Of these, only China and India are BEMs
Lower Middle Income Countries
GNP per capita between $786 and $3,125
Sometimes called less-developed countries (LDCs)
CharacteristicsEarly stages of industrialization
Cheap labor markets
Factories supply items such as clothing, tires, building materials, and packaged foods
3 BEMs: Poland, Turkey, Indonesia
Upper Middle Income Countries
GNP per capita between $3,126 to $9,655
CharacteristicsRapidly industrializing
Rising wages
High rates of literacy and advanced education
Lower wage costs than advanced countries
Sometimes called newly industrializing economies (NIEs)
3 BEMs: Argentina, Brazil, Mexico, South Africa
High Income Countries
GNP per capita above $9,656
Sometimes referred to as post-industrial countries
CharacteristicsImportance of service sector, information processing and exchange, and intellectual technology
Knowledge as key strategic resource
Orientation toward the future
Do Your Homework
C U L T U R E
The Int’l Marketer’sQuandary
“I BELIEVE I UNDERSTAND
WHAT YOU THINK YOU WANT
**BUT I AM NOT SURE YOU REALIZE THAT WHAT YOU
WANTIS WHAT I SELL”
Communication & language (inc. non-verbal) Dress & appearance Food & eating habits Time & time consciousness Rewards & recognitions Relationships Values & norms Sense of self & space Mental process & learning Beliefs & attitudes
Perhaps no other set of variables more daunting &
complex
C U L T U R E
Definition of Culture
The integrated sum total of learned behavioral traits that are manifest & shared by members of a society”
the man-made part of our environment… the distinctive life style of a people acquired thru learned behavior …
C U L T U R E
Evident and Deep Culture
Iceberg Theory
Just as 9/10 of ic
eberg is out of si
ght,
so is 9/10 of culture out of conscious
awareness of th
e members of th
at
culture.
C U L T U R E
Elements of Culture:LLanguageAAesthetics
Graphic & Structural Arts Folklore Music, Drama, Dance
MMaterial CultureTechnology
Economics
BBelief Systems Humans and The Universe
SSocial Institutions Political Structures Education Social Organization
C U L T U R E
Evident Culture.. customs, language, art, artifacts & behavior
the first cultural phenomena you recognize as a foreigner.ie “siesta“ in Mexico, being punctual in Germany, “job hopping“ in the U.S., driving on the left in UK, bull fights in Spain.
Evident Culture.. customs, language, art, artifacts & behavior
the first cultural phenomena you recognize as a foreigner.ie “siesta“ in Mexico, being punctual in Germany, “job hopping“ in the U.S., driving on the left in UK, bull fights in Spain.
Deep Culture
.. the underlying aspects of a culture, i.e. values, norms, cause -effect relationships, views of the world, -- very difficult to change
Deep Culture
.. the underlying aspects of a culture, i.e. values, norms, cause -effect relationships, views of the world, -- very difficult to change
Definitions
C U L T U R E
fine arts literature drama classical music
popular music folk-dancing games cooking dress language rituals techniques laws customs
notions of modesty concept of beauty ideals governing child-rearing rules of descent
cosmology relationship to animals patterns of superiorityrelations definition of sin courtship practices concept of justice
incentives to work notions of leadership tempo of work patterns of group decision making concept of cleanliness attitudes toward the dependent
theory of disease approaches to problem solving concept of status mobility eye behavior nature of friendship concept of self ordering of time Roles
in relation to status by age, sex, class, occupation, kinship, and so forth. conversational patterns in various social contexts concept of past and future
definition of insanity patterns of visual perception preference for competition or cooperation body language Social interaction rate notions of adolescence notions about logic and validity patterns of handling emotions
facial expressions arrangement of physical space community sense myths values assumptions …etc!…
EVIDENTCULTURE
DEEPCULTURE
C U L T U R E
Cultural Research(ers) w/ Marketing Applications
HALLHofstedeTrompenaars
C U L T U R E
Edward T. Hall
The Silent Language, - 1959 The Hidden Dimension, -1966 Beyond Culture, - 1976 The Dance of Life, The Other
Dimension of Time, - 1983 Hidden Differences: Studies in
International Communication-, 1983, 1984, 1985
Hidden Differences: Doing Business with the Japanese, - 1987
Understanding Cultural Differences, Germans, French and Americans - 1990
C U L T U R E
MONOCHRONIC vs. POLYCHRONIC TIME
M-time is one-thing-at-a-time Monochronic cultures stress a high degree of
scheduling and an elaborate code of behavior built around
promptness in meeting obligations and appointments
Americans are mostly monochronic
P-time is many-things-at-a-time human relationships and interactions are valued
over arbitrary schedules and appointments. Many things may occur at once (since many
people are involved in everything), and interruptions are frequent.
P-time is common in Mediterranean and Colonial-Iberian-Indian cultures.
C U L T U R E
HIGH vs. LOW-CONTEXT CULTURES
…terms refer to the fact that when people communicate, they take for granted how much the listener knows about the subject under discussion.
In low-context communication, listener knows very little & must be told practically everything
In high-context communication listener is already 'contexted' - does not need much background information
C U L T U R E
Contextual Background of Various Countries
High Context Implicit
Japanese
Arabian
Latin American
Spanish
Italian
English (UK)
French
North American (US)
Scandinavian
GermanSwiss
Low Context Explicit
C U L T U R E
Geert Hofstede
organizational psychologistIn 1991 surveyed IBM employees &
managers in 53 countries—Identified 5 dimensions that
national culture and explained 50% of the differences in respondents’ attitudes… especially significant because the
type of organization is held constant
1. Power distance
2. Uncertainty Avoidance
3. Individualism
4. Masculinity
5. Time Horizon
C U L T U R E
Geert Hofstede
1. Power distance
or the degree to which members of a society automatically accept a hierarchical or unequal distribution of power in organizations and the society
C U L T U R E
Geert Hofstede
2. Uncertainty avoidance
or the degree to which members of a given society deal with the uncertainty & risk of everyday life and prefer to work with long-term acquaintances and friends rather than with strangers
C U L T U R E
Geert Hofstede
3. Individualism
or the degree to which an individual perceives him- or her-self to be separate from a group and free from group pressure to conform
C U L T U R E
Geert Hofstede
4. Masculinity
or the degree to which a society looks favorably on aggressive and materialistic behavior
C U L T U R E
Geert Hofstede
5. Time horizon(short term to long term)
or the degree to which members of a culture are willing to defer present gratification in order to achieve long-term goals
C U L T U R E
Geert Hofstede’s - Cultural Values Index
IDVIDV
PDIPDI
MASMAS
UAIUAI
-HI=Individualist
Low= equality/knowledge is power
HI=power hierarchical/inherited Low--Group/
Collective
LO=Gender Equity
Macho-Man
HI= DogmaticLow=Tolerant of
diff./deviance/dissent
C U L T U R E
Power Distance Index
0
112
10 110
Small PowerDistanceCollectivist
Large PowerDistance Collectivist
Small Power DistanceIndividualist
Large PowerDistance
Individualist
4
1
2
3
5
6
Ind
ivid
ual
ism
In
dex
1. Costa Rica2. Korea & Mexico3. Brazil & India4. Israel & Ireland5. Australia & U.S.A.6. France & Italy
Power Distance and Individualism-Collectivism
C U L T U R E
Weak UncertaintyAvoidance Feminine
Weak UncertaintyAvoidance Masculine
Strong UncertaintyAvoidance Feminine
Strong UncertaintyAvoidance Masculine
Un
cert
ain
ty A
void
ance
In
dex
0
112
10 100Masculinity Index
41
2
5
6
10
98
7
3
1. Norway2. Malaysia3. Jamaica4. U.S.A.5. Taiwan6. Costa Rica7. Australia8. Mexico9. Japan10. Greece
Masculinity/Femininity and Uncertainty Avoidance
10
C U L T U R E
http://www.geert-hofstede.com/index.shtmlhttp://www.geert-hofstede.com/index.shtml
C U L T U R E
US Cultural IndicesUS Cultural Indices
C U L T U R E
Fons Trompenaars
7 dimensions of culture
Universalism vs. Particularism What is more important - rules or relationships? Individualism vs. CommunitarianismDo we function in a group or as an individual? Specific vs. Diffuse culturesHow far do we get involved? Affective vs. Neutral cultures Do we display our emotions? Achievement vs. AscriptionDo we have to prove ourselves to receive status or is it given to us? Sequential vs synchronic cultures Do we do things one at a time or several things at once? Internal vs External control Do we control our environment or work with it ?
7 dimensions of culture
Universalism vs. Particularism What is more important - rules or relationships? Individualism vs. CommunitarianismDo we function in a group or as an individual? Specific vs. Diffuse culturesHow far do we get involved? Affective vs. Neutral cultures Do we display our emotions? Achievement vs. AscriptionDo we have to prove ourselves to receive status or is it given to us? Sequential vs synchronic cultures Do we do things one at a time or several things at once? Internal vs External control Do we control our environment or work with it ?
C U L T U R E
both consumer & business…
…cultural traditions, norms beliefs & behaviors
need to be thoroughly understood & accounted for to fully succeed in any marketing endeavor
C U L T U R E
12 Questions
What’s yourInt’l Business
IQ?
C U L T U R E
Q1
In Taiwan, giving what fruit is a good omen for a businessperson?
C U L T U R E
Q2What number in
Chinese-speaking countries (also in Japan) is as ominous as the number 13 in Western culture?
A: 4
B: 7
C: 3
D: 5
C U L T U R E
Q3The executive of a Chinese
company is celebrating their 65th birthday. Which of the following is not a appropriate gift?A: a silk tieB: a silver Mont Blanc
penC: a gold clockD: a crystal paperweightE: gold and jade cufflinks
C U L T U R E
Q4During a TV
commercial, the announcer gives the OK sign on camera. In which country does this mean something entirely different?A: AustraliaB: BrazilC: FinlandD: FranceE: Ireland
C U L T U R E
Q5In England, it is
inappropriate to discuss business after work over drinks. A: true B: false
C U L T U R E
Q6You’re creating a sales training
manual for employees doing business in Japan. When would you tell them NOT to discuss business?A: at dinnerB: over lunchC: on the golf courseD: at the start of a business
meetingE: in your superior’s office
C U L T U R E
Q7 The influence that a
country’s image/ stereotype has on consumer perceptions of the product
A. The Ethnocentric EffectB. The Self-reference criterionC. The Country of Origin EffectD. The Euro-factor
C U L T U R E
Q8
Your company would like to send its top sales representative aboard to meet with its distributors in August. In which country is this most likely to become a problem? A: Italy and France B: Ireland and
Sweden C: Japan and China D: Australia and New
Zealand E: Hungary and
Romania
C U L T U R E
Q9 At a business dinner in Korea,
your counterpart’s wine glass is half-empty. What should you do?
A: refill her glass immediately
B: sit back and let her refill her own glass
C: wait until her glass is empty and then refill it
D: fill your own glass and replace it with hers
C U L T U R E
Q10When writing
names in Korea, what color is not appropriate to use?
A: blueB: redC: blackD: none of the
above
C U L T U R E
Q11
In the Philippines, people indicate directions with their…A: forefingersB: mouths &
accompanying head movement
C: feetD: none of the above
C U L T U R E
Q12 (the last one) When you meet an Indonesian
businessperson for the first time, you should:
A: bow deeply at the waist
B: nod your head slightly w/ your hand in a praying position in front of your chest
C: shake hands loosely and state your name
D: kiss her on both cheeks
C U L T U R E
What’s yourInt’l Business EQ?
POP-Quiz
Answers
C U L T U R E
• In Taiwan, receiving a pineapple for a gift is a good omen for a businessperson
Q1
C U L T U R E
Cultural Give & Take-Do’s & Don’ts
Japan—Do not open in front of giver/ no bows, ribbons
Europe: avoid red & white /don’t wrap flowers; don’t spend too much
Arabia: Don’t give at outsetLatin Am.: Give after informal
meetingsChina: present privately; don’t
make a big deal of it
C U L T U R E
Q2• What number in
Chinese-speaking countries and also in Japan is as ominous as the number 13 in Western culture?
• A: 4
C U L T U R E
The number 7 is considered bad luck in Kenya, good luck in the Czech Republic and has a magical connotation in Benin, Africa.
The number 10 is bad luck in Korea.
The number 4 means death in Japan.
Other NumbersOther Countries
C U L T U R E
Q3 • The executive of a Chinese company is celebrating her 65th birthday. Which of the following is not appropriate?
• C: a gold clock
C U L T U R E
Q4• During a TV
commercial, the announcer gives the OK sign on camera. In which country does this mean something entirely different?
• B: Brazil
How about this in Australia?
C U L T U R E
Q5• In England, it is
inappropriate to discuss business after work over drinks.
• A: true
C U L T U R E
Q6• You’re creating a sales
training manual for employees doing business in Japan. When would you tell them NOT to discuss business?
• D: at the start of a business meeting
C U L T U R E
Q7 The influence that a
country’s image/ stereotype has on consumer perceptions of the product
C. The Country of Origin Effect
Any influence that “Country of Manufacturer” has on consumers positive or negative perception of product
C U L T U R E
StereotypesCuban_________
German________
Swiss__________
Russian________
Scottish________
Irish___________
Mexican________
Canadian_______
Alaskan_________
English________
French_________
Italian__________
Japanese_______
American_______
Jamaican_______
Australian_______
Iranian____________
C U L T U R E
Q8• Your company would like
to send its top sales representative aboard to meet with distributors in August. In which country is this most likely to become a problem?
• A: Italy and France
C U L T U R E
Q9• At a business dinner
in Korea, your counterpart’s wine glass is half-empty. What should you do?
• C: wait until her glass is empty and then refill it
C U L T U R E
Q10When writing names in Korea, what color is not appropriate to use?
B: red
Red represents witchcraft and death in many African countries.Red is a positive color in Denmark.
C U L T U R E
Red
China - symbol of celebration and luck, used in many cultural ceremonies that range from funerals to weddings
India - color of purity (used in wedding outfits
C U L T U R E
YellowYellow Asia - sacred, imperial
Western cultures - joy, happiness.
C U L T U R E
BlueChina - associated
w/immortality.
Hindus - the color of KrishnaMiddle East - protective color* Note: Blue is often
considered to be the safest global color.
C U L T U R E
GreenChina - studies indicate this is not a
good color choice for packaging, green hats mean a man's wife is cheating
Arab world- the color of IslamIreland - religious significance Some tropical countries - associated
with dangerWestern cultures - indicates
environmental awareness
C U L T U R E
Q11
• In the Philippines, people indicate directions with their…
• B: mouths and accompanying head movement
C U L T U R E
Q12 (the last one)• When you meet an
Indonesian businessperson for the first time, you should:
• C: shake hands loosely and state your name
C U L T U R E
How did You do?
10-1210-12:
7-97-9:
3-63-6:
1-21-2:
0 0 :
Cultural CEO
Sr. Management
Mgt. Trainee
Corp. Toilet Cleaner
Your Fired!
Cultural Hot Spotshumorprestigeromancemusiccolorsvisual imageryVerbal/ Non-Verbal
A High International Business IQ is mandatory for anyone involved in International Advertising….
The Creative Challenge
Translation difficulties
Culture-bound assumptions & inferences-SRC
Identifying cross-cultural icons
Translation difficulties
Culture-bound assumptions & inferences-SRC
Identifying cross-cultural icons
Crafting an ADCrafting an AD
Even if get the words right…
Every other element of AD needs to be questioned
Questions about Aesthetics?
Production techniques used in commercials.
•Color•Sound, Music, SFX•Lighting•Angles
Production techniques used in commercials.
•Color•Sound, Music, SFX•Lighting•Angles
Question about People & PersonalitiesThe characters in commercials?
Questions about Non-Verbals
• gestures• expressions• make-up• body language
Questions aboutAre values being associated w/ product important; appropriate
Status appeals are stressed in Japanese advertisementsHong et al. (1987)
Individual determinism plays major role in
American advertisements
Is proper appeal being
Utilized –
Rational vs Emotional?
Mueller (1987) found Japanese magazines often use less rational
appeals
Examples of International Advertising
•http://www.summitawards.com/winners.html
•http://www.adeater.com/
•http://www.magindia.com/international/
Macro-Environmental
Conditions
GLOBALIZATION
Advancements in Communication &
Distribution technologies are the Precipitating Drivers
of Globalization Increased speed, efficiency, capacity & Decreased cost
Compunications: Computer Hard/Software interfaced w/ Satellite, Internet,
Fiber-optics…
Distribution: Jet travel, Containerization, Cross-docking, Global tracking, JIT
delivery systems…
Increased speed, efficiency, capacity & Decreased cost
Compunications: Computer Hard/Software interfaced w/ Satellite, Internet,
Fiber-optics…
Distribution: Jet travel, Containerization, Cross-docking, Global tracking, JIT
delivery systems…
GLOBALIZATION
Year: Sea Freight Air Transport Cross-Atlantic Telephone Call
1930 60 0.68 244.65
1960 27 0.24 45.86
1990 29 0.11 3.32
Average ocean freight and port charges per short ton of import and export cargo. Average air transport revenue per passenger mile. Three-minute New York-London call. Source: HufBauer, 1991
Falling Transport and Communication Costs 1930-1990 (constant 1990 US$)
Increased Speed & Decreased Costs
Average ocean freight / port charges per short ton cargo. Average air transport $$$ per passenger mile.
Three-minute New York-London call.Source: HufBauer, 1991
GLOBALIZATION
The Shrinking
Globe
1500-1840
1850-1930
1950s
1960s
Best average speed of horse-drawn coaches and
sailing ships, 10mph.
Steam locomotives average 65mph.
Steamships average 36mph.
Propeller aircraft 300-
400 mph.
Jet passenger aircraft 500-
700mph.
Internet= Instant
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Time, Mobility & Economic Growth
http://www.flexibility.co.uk/issues/transport/time-mobility.htm
Time, Mobility & Economic Growth
http://www.flexibility.co.uk/issues/transport/time-mobility.htm
GLOBALIZATION
0
5
10
15
20
25
1980 1990 2000
Lead Time - Days
Just in Time
Manufacturing supply chain has shrunk over the past 20 years.
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Evolving Now into Just One Big Market: Evolving Now into Just One Big Market:
The Global EconomyThe Global Economy
Evolving Now into Just One Big Market: Evolving Now into Just One Big Market:
The Global EconomyThe Global Economy
…… the increasing tendency of economies around the world to interact w/ one another as one market instead of many national markets
For US- Presently about 1/3 of profits and 1/5 of economic growth are related to global business
World Market Connections
International Production
International
trade
International Development
International & Global Marketing
International Finance
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INTERNATIONAL LINKAGES
Trade Flows
Resource Flows
Goods & Services
Capital & Labor
Information &Technology
Money
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One Big World Market: One Big World Market: The Global EconomyThe Global Economy
One Big World Market: One Big World Market: The Global EconomyThe Global Economy
The weekly volume of international trade in currencies
exceeds the annual value of trade in goods & services.
The weekly volume of international trade in currencies
exceeds the annual value of trade in goods & services.
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• Daily international financial flows now exceed $1.2 trillion.
• From 1990 to 2000, world GDP grew ~ 30%– Total world exports of merchandise &
services increased by 80 %.
• This year- World exports of goods & services predicted to reach $11.4 trillion (24% of world GDP).
One Big World Market: One Big World Market: The Global EconomyThe Global Economy
One Big World Market: One Big World Market: The Global EconomyThe Global Economy
World Bank
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Borders Have Become Meaningless
& there’s no place to hide…Borders Have Become Meaningless
& there’s no place to hide…
Trans-National Cross-Cultural
High Speed/ Low Cost
Transportation & Communication
The entire globe is now tied together as a single community operating 24/7/365
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After more than a century of electric technology, we have extended our central nervous system in a global embrace, abolishing both space & time”
-Marshall McLuhan, Understanding Media- 1955
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The Global Village Driver
The Global Village Driver
The further & faster people are able to
travel & communicate… the greater the
amount of interaction & influence
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Rise of the “Global Village”Rise of the “Global Village”Rise of the “Global Village”Rise of the “Global Village”
…… not just the “shrinking” of time & space
The new electronic media have transcended time & space w/ “virtual mobility”
Cable TelevisionPay Television ServicesDirect Broadcast Satellite [DBS]MMDS and LMDSDigital TelevisionStreaming MediaDigital RadioMultimedia Computers and Video GamesThe Internet and World Wide WebInternet CommerceOffice TechnologiesVirtual RealityHome VideoDigital AudioDistance LearningWireless TelephonyBroadband NetworksResidential Gateways and Home NetworksSatellite Communications
source >> Future Technologies Inc. [www.fti.com]
Digital agecommunication
technologies
The Global Village
The Global Economy
The Global Corporation
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Exporter Exporter
Multi-NationalMulti-National
Trans-NationalTrans-National
GlobalGlobal
Evolution of the International FirmEvolution of the International Firm
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Mindless Approach to International Markets
Make no special Make no special provisionsprovisions
Domestic- Domestic- ExtensionExtension
ExportingExporting
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Multinational corporations (MNCs) Companies that maintain significant operations in two
or more countries simultaneously but are based in one home country
Adapt to local Adapt to local conditions in each conditions in each
foreign marketforeign market
Multi-Domestic Multi-Domestic approachapproach
International Marketing
Transnational (TNC) corporation
A company that maintains significant operations in more than one country
simultaneously and decentralizes decision
making in each operation to the local country
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Multinational Corporations
2/3s of world trade in goods and services is controlled by multinational companies.Of the 100 largest economies in the world, 51 are corporations.The sovereignty of nations will perhaps continue to weaken due to multinationals & increasing integration of world economies.
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Multinational CorporationsMultinational Corporations
In 1970, of the 7,000 multinationals identified by the United Nations, more than 1/2 were from -- the United States & Britain.
By 1995, less than half of the 36,000 multinationals identified by the United Nations came from four countries: the United States, Japan, Germany, and Switzerland.
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Multinational Corporations
At present, there are 65,000 MNCs* w/ 850,000 affiliates in foreign countriesMNCs’ total sales amount to almost $19 trillion.
http://www.nationmaster.com/
http://www.nationmaster.com/graph-T/eco_tra_cor_par#
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Company takes an integrated approach across countries & regions -- Manages for worldwide business leverage & competitive advantage …
Leverage Leverage Commonalities into Commonalities into a global strategy a global strategy
(but where necessary- (but where necessary- allow for local allow for local
implementation)implementation)Global (Glocal)Global (Glocal)
MarketingMarketing
Global Marketing
Is a “Mind-set” of how to approach Int’l Markets• Not a matter of how big company is• Or- whether or not have a “global product”• Or- how many counties you operate in
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Global CampaignsGlobal CampaignsGlobal CampaignsGlobal Campaigns
MessageMessage
MarketMarketAA
MarketMarketAA
MarketMarketBB
MarketMarketBB
MarketMarketCC
MarketMarketCC
Adopted CampaignsAdopted CampaignsAdopted CampaignsAdopted Campaigns
Message 1Message 1Message 1Message 1 Message 2Message 2Message 2Message 2 Message 3Message 3Message 3Message 3
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ACHIEVING GLOBAL SYNERGIES
LEVERAGING ASSETS
AND POSITION
Scale Efficiencies
Coordination and Integration
Transfer of Ideas, Experience and Know-how
Scale Efficiencies
Coordination and Integration
Transfer of Ideas, Experience and Know-how
Global Strategy
STRATEGIC
FLEXIBILITY
Production Shifting
Multiple Sourcing
Transfer Pricing
Managing Cash Flow
Production Shifting
Multiple Sourcing
Transfer Pricing
Managing Cash Flow
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The Global CorporationThe Global Corporation
Global Vision Global Leverage Global Sourcing Global Competitive Moves Global Partnerships
Valuable W3 Resource
http://globaledge.msu.edu/index.asp
GlobalEDGE© is a global business knowledge web-portal that connects international business professionals worldwide to a wealth of information, insights, and learning resources on global business activities.
Frito Lay Potato Chips Attack China