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Chapter 1: The Scope and Challenge
of International Marketing

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Learning Objectives:
1. The benefits of
International markets
2. The changing face of US
business
3. The scope of international
marketing task
4. The importance of SRC
5. The increasing importance
of global awareness
6. The progression of
becoming a global marketer
Definitions: International marketing,
SRC, ethnocentrism, global
marketing, skeptics
Questions:
1. “The marketer’s task is same
whether applied in Dimebox, Texas
or Dar-es-Salam, Tanzania.”
Discuss.
2. Discuss the phases of international
marketing involvement
3. Discuss the conditions that have led
to the development of global
markets
4. Differentiate between global and
multinational company
5. Differentiate among the three
international marketing concepts
6. Discuss the factors necessary to
achieve global awareness
7. Discuss the idea of global

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Global Perspective: Recent Events
2003 SARS outbreak in Asia and Toronto2003 SARS outbreak in Asia and Toronto
Wars in Afghanistan and IraqWars in Afghanistan and Iraq
Adulterated product scandals in ChinaAdulterated product scandals in China
September 11th attacks on the World
Trade Center and Pentagon
September 11th attacks on the World
Trade Center and Pentagon

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Global Perspective: Recent Events
International disagreements between
the United States and its allies
International disagreements between
the United States and its allies
2008 Global credit crisis and recession2008 Global credit crisis and recession
Global terrorism in Indonesia, Pakistan,
India, Spain, Morocco and UK
Global terrorism in Indonesia, Pakistan,
India, Spain, Morocco and UK
Despite these events, international
commerce continued
Despite these events, international
commerce continued

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Global Business Trends
1. Growth of
WTO and
regional trade
groups
2.. Global
acceptance of
free market
system
3. Impact of the
Internet on global
communications
4. Threats of
terrorism and
armed conflict
5. Rise of new
producers and
consumers
6. Management
of global
environmental
resources

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Internationalization of Business
Increasing globalization of
markets
Increasing globalization of
markets
Firms face competition on
all fronts
Firms face competition on
all fronts
Many Canadian companies
are foreign controlled:
Tim Hortons (US), Labatt (Belgian)
Many Canadian companies
are foreign controlled:
Tim Hortons (US), Labatt (Belgian)
Firms seeking foreign
markets to increase profits
Firms seeking foreign
markets to increase profits

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Company Industry Ownership
Hudson's Bay Company Retail USA
Tim Hortons Food service USA
Labatts Beer Belgium
MacMillan Bloedel Forestry USA
Seagram Distillery France
Corel Software USA
CP Ships Shipping Germany
Fairmont Hotels Hospitality USA/Saudi Arabia
Dofasco Steel Luxembourg
Noranda Mining Switzerland
ATI Technologies Computer chips USA
Stelco Steel USA
Alcan Aluminum Great Britain
Foreign Ownership of Canadian Companies

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The Globalization Debate
 Pro-Globalists
 Anti-Globalists
 Skeptics
 Transformationalists

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Skeptics
1. Skepticism is generally any questioning attitude towards
knowledge, facts, or opinions/beliefs stated as facts, or doubt
regarding claims that are taken for granted elsewhere.
2. Philosophical Skepticism is an overall approach that requires
all information to be well supported by evidence.
3. A person who maintains a doubting attitude, as toward values,
plans, statements, or the character of others.
Transformationalists or Hyperglobalist Perspective
The authors describe the hyperglobalist perspective as an
approach which sees globalization as a new epoch in human
history. This new epoch is characterized by the declining
relevance and authority of nation-states, brought about largely
through the economic logic of a global market. Economies are
becoming “denationalized.”

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International Marketing: A Definition
The activity, set of institutions, and
processes for creating,
communicating, delivering, and
exchanging offerings that have value
for customers, clients, partners, and
society at large in more than one
country.
The activity, set of institutions, and
processes for creating,
communicating, delivering, and
exchanging offerings that have value
for customers, clients, partners, and
society at large in more than one
country.
Marketing concepts, processes, and principles are universally
applicable all over the world.
Marketing concepts, processes, and principles are universally
applicable all over the world.

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The International Marketing Task
7
3.Firm Characteristics
4.Research
3. Economy
Environmental
uncontrollables
country market A
Environmental
uncontrollables
country
market B
Environmental
uncontrollable
s
country
market C
1. Competition
1. Competition
2. Technology1.Price 2.Product
5.Promotion 6.Place
6. Geography and
Infrastructure
Foreign Environment
(Uncontrollables)
7. Structure of
Distribution
3. Economy
5. Political-
Legal
Domestic environment
(Uncontrollables)
(Controllables)
2 .Technology
4.
Culture
5. Political-
Legal
4.
Culture

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Major Cultural Obstacles
Self-Reference Criterion (SRC)
an unconscious reference to one’s own cultural values,
experiences, and knowledge as a basis for decisions
Risk of SRC:
Prevent you from becoming aware of cultural differences
Influence the evaluation of the appropriateness of a
domestically designed marketing mix for a foreign
market
Ethnocentrism
 the notion that one’s own culture or company knows
best how to do things

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Cross-Cultural Analysis
1. Define the business problem in home-country cultural traits,
habits, or norms.
2. Define the business problem in foreign-country cultural traits,
habits, or norms. Make no value judgments.
3. Isolate the SRC Influence in the problem and examine it
carefully to see how it complicates the problem.
4. Redefine the problem without the SRC influence and solve for
the optimum business goal situation

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Developing a Global Awareness
To be globally aware is to be:To be globally aware is to be:
1. Tolerant of Cultural Differences, and
2. Knowledgeable of:
(a) Culture,
(b) History,
(c) World Market Potential,
(d) Global Economic, Social and Political Trends

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Stages of International
Marketing Involvement
In general, firms go through five different phases in going
international:
In general, firms go through five different phases in going
international:
Infrequent Foreign MarketingInfrequent Foreign Marketing
No Direct Foreign MarketingNo Direct Foreign Marketing
International MarketingInternational Marketing
Regular Foreign MarketingRegular Foreign Marketing
Global MarketingGlobal Marketing

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No Direct Foreign Marketing –
Reactive
• Products “indirectly” reach foreign markets
Trading companies
Foreign customers who contact firm
Domestic wholesalers/distributors
Web orders
• Foreign orders stimulate a company’s interest
to seek additional international sales

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Infrequent Foreign Marketing –
Reactive
Caused by temporary surpluses
Sales to foreign markets are made as goods become
available
Firm has little or no intention of maintaining
continuous market representation
Foreign sales activity declines and is withdrawn
when domestic demand increases

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Regular Foreign
Marketing – Proactive
Dedicated production capacity for foreign
markets
Strategy:
Firm employs domestic or foreign intermediaries
Uses its own sales force or sales subsidiaries
Products are adapted for foreign markets as
domestic demand grows
Firms depend on profits from foreign markets

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International Marketing –
Proactive
Fully committed and involved in foreign markets
and international activities
Production takes place on foreign soil earning
firms the MNC (Multinational Corporation) title

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Global Marketing – Proactive
The firm sees the world as one market!
Market segmentation is now defined by income
levels, usage patterns, or other factors that span
the globe
More than half of its revenues come from abroad
The firm has a global perspective

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The orientation of International Marketing
Three different strategic orientations are found among
managers of international marketing operations:
Some see international marketing as ancillary to the
domestic operations
A second kind of company sees international marketing
as a crucial aspect of sales revenue generation but
treats each market as separate entity
Finally a global orientation views the globe as the
market-place and market segments are no longer based
solely on national borders-common consumer
characteristics and behaviors come into play as key
segmentation variables applied across countries.