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407 Semester final 28-07-2024

Date Learned @October 25, 2024

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Next Rep October 26, 2024

Subject IB-407

#Chapter 1 Scope and Challenges of

International Marketing

💡 International marketing is when a company plans and carries out

business activities—like deciding prices, promoting products, and selling
them—in multiple countries. The goal is to deliver goods and services
to customers in different nations while making a profit.

Chapter one discusses the environmental/cultural approach to international

marketing

an international marketer must be globally aware and have a frame of reference

that goes beyond the country or even a region and encompasses the world.
what does global awareness mean and how is it achieved?
source: structure of the text - the textbook ‘international marketing’

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 Why international marketing is difficult than domestic marketing
?
Answer
International marketing is more difficult than domestic marketing because it
involves dealing with multiple challenges like different cultures, languages, legal
systems, and market conditions across countries, which do not exist in a single
domestic market.

Key challenges include:

1. Cultural Differences: Each country has its own customs, beliefs, and values.
What works in one country might not work in another. For example,
McDonald’s had to change its menu in India to cater to the large vegetarian
population and avoid beef due to religious beliefs.

2. Economic Environment: Countries have different levels of economic

development, purchasing power, and market needs. For instance, a luxury car
brand may have strong demand in high-income countries like the U.S., but less
demand in low-income countries.

3. Political and Legal Systems: Each country has different laws regarding
business, tariffs, taxes, and trade restrictions. For example, some countries
might have stricter product safety regulations that require companies to adapt
their products.

4. International Trade Environment: Factors like tariffs, quotas, and trade

agreements impact how goods and services are marketed internationally.
Changes in global trade policies, such as those caused by Brexit or evolving
U.S.–China relations, can affect market entry strategies and overall
profitability.

5. Currency and Exchange Rates: When selling in multiple countries, companies

must deal with fluctuating exchange rates, which can impact pricing and
profits. For example, if the BDT strengthens, products might become more
expensive for foreign customers.

6. Technological and Communication Barriers: The availability and use of

technology vary across regions. For example, while digital marketing might be
prevalent in one country, others may still rely on traditional media due to

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 limited internet penetration. Furthermore, language differences can complicate
communication efforts in global campaigns

In the book "International Marketing" by R. Cateora and Bruce Money (18th

edition), these challenges are discussed in detail, with examples like Coca-Cola
adjusting its marketing strategies for different regions.

💡 Bimbo, a popular bread brand in Mexico, shows how international

marketing can be challenging. While "Bimbo" is just a brand name in
Spanish-speaking countries, in English, it has a negative meaning. Bimbo
has expanded to the U.S. and Argentina, bringing Latino favorites like
Bimbo bread to Hispanic communities in the U.S. However, when the
Mexican-owned store Gigante, which carries Bimbo products, tried to
open in Anaheim, California, it faced resistance—possibly due to fear or
bias against a foreign brand.
This reflects how countries sometimes resist foreign brands for cultural
or nationalistic reasons. For example, France has pushed back against
American media companies and criticized U.S. cultural influence.
Similarly, Americans have historically reacted negatively to Japanese
business takeovers but were more accepting of European ones, showing
a mix of nationalism and bias.

Interestingly, while American brands like McDonald's and Costco have

entered Mexican markets with ease, Mexico's oil industry still blocks
American investments, showing national pride and control over key
industries.

Companies that never ventured abroad until recently are now seeking foreign
markets.
Companies with existing foreign operations realize they
must be more competitive to succeed against foreign multinationals. They have
found it necessary to spend more money
and time improving their market positions
abroad because competition for these growing
markets is intensifying. For firms venturing into international marketing for the first

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 time
and for those already experienced, the requirement is generally the same:
a thorough and
complete commitment to foreign markets
and, for many, new ways of operating.

Environmental Adaptation
Even though marketing principles and concepts are universally applicable, the
environment within which the marketer must implement marketing plans can
change dramatically from country to country or region to region. The difficulties
created by different environments are the international marketer’s primary
concern.

The self-reference criterion and ethnocentrism

💡 An American sales manager, newly assigned to Japan, decided that his

Japanese sales team didn't need to attend early morning meetings every
day before visiting clients, as was done in the U.S. However, this
decision, influenced by his own cultural background (SRC: Self-
Reference Criterion) and a bit of ethnocentrism (the belief that his own
culture's way of doing things was best), led to a big drop in sales. When
he talked to his Japanese staff, he learned that the salespeople were
motivated by peer pressure and the daily meetings were key to their
performance. Realizing his mistake, he returned to the daily meetings,
and sales improved back to normal levels. In simpler terms, the manager
assumed what worked in the U.S. would work in Japan, but cultural
differences meant that wasn’t the case.

Cross Cultural Analysis

To avoid errors in business decisions, the knowledgeable marketer will conduct a
cross cultural analysis that isolates the SRC influences and maintain vigilance
regarding ethnocentrism. The following steps are suggested as a framework for
such an analysis.

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 1. Define the business problem or goal in home-country cultural traits, habits, or
norms.

2. Define the business problem or goal in foreign-country cultural traits, habits,

or norms through consultation with natives of the target country. 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.

Stages of international marketing involvement

No Direct foreign Marketing
A company at this stage doesn’t actively seek out customers in other
countries, but its products might still reach international markets.

Sales could happen through trading companies or directly to foreign

customers who contact the company themselves.

Sometimes, the products make it to foreign markets through domestic

wholesalers or distributors who sell them abroad, even without the company’s
knowledge or encouragement.

As companies create websites, they often start receiving orders from

international customers online. Often, it's an unexpected order from a foreign
buyer that sparks a company’s interest in pursuing more international sales.

Infrequent Foreign Marketing

Temporary surpluses due to changes in production or demand may lead to
occasional sales overseas.

These extra products are only sold internationally when available, with no plan
to maintain a steady presence in foreign markets. As local demand grows and
uses up the surplus, the company reduces or stops its foreign sales.

In this stage, the company doesn’t usually make big changes to its
organization or product range/line. However, few companies operate this way

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 today because customers worldwide prefer long-term business relationships.

Additionally, studies show that short-term international sales like these don’t
bring in much profit.

These first two stages of international marketing involvement are more reactive in
nature
and often do not represent careful strategic thinking about international
expansion.

Researchers generally agree on three main approaches that companies involved

in international markets use to make strategic decisions:

1. Regular Foreign Marketing: The company actively sells abroad on a regular

basis.

2. Multi domestic or international Marketing: The company adapts its marketing

to fit each foreign market’s unique needs.

3. Global Marketing: The company takes a unified approach to marketing, using

a consistent strategy worldwide.

Regular Foreign Marketing

At this level, the firm has permanent productive capacity devoted to the
production of goods
and services to be marketed in foreign markets.

A firm may employ foreign or domestic overseas intermediaries, or it may have

its own sales force or sales subsidiaries in important foreign markets.

The primary focus of operations and production is to service domestic

market needs. However, as overseas demand grows,
production is allocated for foreign markets, and products may be adapted to
meet the needs of individual foreign markets.

Profit expectations from foreign markets move from being seen as a bonus in
addition to regular domestic profits.

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 💡 Meter-Man, a small company of 25 employees in southern Minnesota
that manufactures agricultural measuring devices, is a good example of
a company in this stage. In 1989,
the 35-year-old company began
exploring the idea of exporting; by 1992 the company was
shipping product to Europe
. Today, one-third of Meter-Man’s sales are in 35 countries,
and soon the company expects international sales to account for about
half of its business.
“When you start exporting, you say to yourself, this will be icing on the
cake,” says the
director of sales and marketing. “But now I say going international has
become critical to
our existence.” Recently Meter-Man was purchased by Komelon, Inc., a
larger, more diversified international company with operations in
Washington state, South Korea, China, and Europe.

International Marketing/Multi Domestic Marketing

Companies at this stage are fully committed to international marketing and
actively seek markets worldwide, planning and producing goods specifically
for various countries. This commitment often includes not just selling but also
manufacturing outside their home country, making them truly international or
multinational companies.

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 💡 Fedders, a U.S. air conditioner maker, faced slow growth in its home
market, so it looked to expand in Asia, especially China. Partnering with
a Chinese company, Fedders adapted its products to fit local tastes,
designing a new split-type, energy-efficient air conditioner with features
like remote control and automatic air-sweeping. This new product was a
success, and Fedders began exploring more international markets. As it
grew globally, Fedders became a valuable acquisition target and was
bought in 2008 by Airwell, a French company with a global distribution
network.

Global Marketing
At the global marketing level, a company changes its approach to treat the entire
world, including its home country, as one large market. Rather than targeting
individual countries, it looks at groups of customers based on income, usage, or
other factors that span across countries. This shift often occurs when over half of
a company’s revenue comes from international sales. The company's top
employees may start to take on international roles, and its entire structure—like
finances, production, and marketing—becomes globally focused.

💡 Coca-Cola is a good example of this transition. Though already global, in

the mid-1990s, Coca-Cola reorganized its structure to reflect its global
operations fully. It changed from a U.S.-centered focus, with separate
international divisions, to six international regions where the U.S.
became just one part. While the U.S. still brings in nearly half of Coca-
Cola’s global revenue, the company expects future growth to come from
emerging markets outside the U.S.

For companies competing internationally, having a global perspective is often the

most effective approach. This involves seeing all markets, including domestic
ones, as parts of a single global market and standardizing marketing where it
makes sense. However, companies may still adapt their strategies for specific
products or regions when necessary. For instance, Procter & Gamble uses a

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 global strategy for diapers but adjusts its approach to multi domestic in Asian
markets for detergents.

Orientation of international marketing

The problem is the strangeness of environment while conducting international
marketing
The success lies on the ability of assessing and adjusting properly to the impact
of unfamiliar circumstances. A global awareness and sensitivity are the best
solutions of these problems and they should be nurtured in an international
organization.

The successful marketer possesses the best qualities of businessperson,

anthropologist, sociologist, prophet, lawyer, diplomat, sociologist etc.

#Chapter 13 Product and Services for

consumers

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 💡 The concept of modern theme parks began with Disneyland in
California in 1955, blending rides, attractions, and Disney characters to
create a global sensation. Tokyo Disneyland, launched later, was a big
success, attracting loyal visitors and making profits, mainly for its
Japanese investors.

When Disney launched EuroDisney (now Disneyland Paris) in 1992, it

took a larger ownership stake, aiming for more profit but also taking on
higher risks. The park faced challenges from French cultural protests,
harsh winter weather, and low attendance, leading to major financial
losses initially. However, with cash support from a Saudi prince and
restructuring efforts, the park eventually attracted millions of visitors,
although still struggling to break even.

In 2006, Hong Kong Disneyland opened, supported mainly by the Hong

Kong government, and faced fluctuating attendance. It reached
profitability in 2013, allowing it to expand with Marvel-themed
attractions. Meanwhile, Shanghai Disneyland opened in 2016 with a
customized approach for Chinese guests, including local food options
and Mandarin shows.
The Disney parks now attract over 120 million visitors globally and
generate $2 billion in profits annually, though they face occasional
cultural hurdles, like the Chinese ban on Christopher Robin due to a
controversial meme. Disney's international theme park journey has been
full of ups and downs, reflecting the unique challenges and cultural
adaptations in each region.

Introduction
International marketing is more dynamic than ever, with new customers emerging
globally, especially in markets like eastern Europe, China, India, and Latin
America.

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 While some of these markets currently have limited buying power, they hold
significant potential for the future. Meanwhile, in developed countries, consumer
demands are evolving as tastes become more sophisticated.

💡 Disney serves as a prime example of a brand that successfully blends

products and services on a global scale. For instance, Disney's movies
are shown in theaters (a service), but the same movies are sold on DVD
(a product), and both drive sales for merchandise (Disney-themed T-
shirts, hats, and toys) at Disney parks. Merchandise serves both as a
revenue stream and a way for fans or consumers to connect with the
brand. Despite the blending of products and services, trade agencies
still classify them separately. (market offerings or b2c marketing)

Today, large companies aim for global strategies, but even small businesses need
to adjust their products for different markets. Selling products abroad in the same
way as domestically is often ineffective, as some items need changes to be
appealing overseas. Ultimately, successful international marketing requires
delivering quality goods and services that meet specific local needs at reasonable
prices.

Importance of offering products suitable for the

intended market
Global competition is reshaping business by making product life cycles shorter
and increasing the focus on quality, competitive pricing, and innovation.
The marketplace has shifted from a seller’s market to a customer’s market, where
customers have numerous options and more control. more companies are
competing for their attention.
With access to information through the Internet and smartphones, consumers are
now well-informed, understanding what products are best, cheapest, or highest in
quality.

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 💡 Quality is defined by customers based on their needs and budget,
making it a valuable factor for market segmentation.
Quality is a multifaceted concept that customers define based on their
unique needs, preferences, and financial constraints. This subjective
nature of quality makes it an invaluable tool for market segmentation,
allowing companies to tailor their offerings to specific customer groups.
By understanding how different segments perceive and prioritize
quality, businesses can develop targeted strategies that resonate with
diverse consumer bases, ultimately leading to more effective product
positioning and marketing efforts in various international markets.

American products have long been known for high quality, but global competition
is pushing companies to improve further.

In most international markets, cost and quality are critical factors in purchase
decisions, and quality is seen as a competitive advantage in both consumer and
industrial markets. For many, quality is becoming the main reason(deciding
factor) customers choose one brand over another, emphasizing its role as a vital
tool in global business.

Research has shown that perceived quality can be used as a

valuable market segmentation variable.

The first sentence explains that “perceived quality” (or how people view the
quality of a product) can be a key factor in dividing a market into segments, or
groups of customers with similar needs. In other words, businesses can create
different products for people who care about quality differently.
For example:

In Japan, Apple’s newest smartphones are very popular with people who care
a lot about brand image and high quality.

Docomo’s older phones are still popular among certain buyers who value
their privacy features, appealing to people who need this kind of privacy.

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 Non-roaming phones (phones that only work within a specific area) don’t sell
well in Japan, where people expect phones to work internationally. However,
in China, these simpler, low-cost phones do very well, and companies like
UTStarcom sell them successfully there, as well as in India and Vietnam,
where the need for international roaming is less critical.

In summary, “perceived quality” allows companies to target different groups with

the right product for their specific needs, whether that’s brand image, privacy
features, or affordability

Quality Defined
Quality has two main dimensions: market-perceived quality and performance
quality. Both matter, but when customers judge a product’s quality, they often
focus more on market-perceived quality than performance quality.
Here’s an example using an airline:

From the airline’s perspective (performance quality), quality means ensuring a

safe flight and landing. They see safety as the main goal, and if this is met,
they feel they’ve delivered on quality.

However, customers’ sense of quality goes beyond that. They think of factors
like price, on-time service, how often flights are available, seating comfort,
and how airline staff treat them—from check-in through baggage claim. All of
these create what we call market-perceived quality—the quality they
experience.

Even though airlines have nearly perfected safety (very few defects), customer
satisfaction with airlines isn’t close to perfect. This is because customers judge
quality by a mix of factors that affect their overall experience, not just by whether
the flight was safe or on time.

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 💡 Products are not used in the same ways in all markets. Here, a boy in an
eastern Mexican village is prepared for a “Jaguar dance” to bring rain.
Clay, ashes, and the globally ubiquitous Coke bottle make for the best
cat costumes. Perhaps our favorite example comes from India; in the
Punjab region, lass bars, a popular yoghurt drink, are
often prepared in top-load washing machines

Market-perceived quality attributes are part of the complete product, which

includes the core product and all additional features customers expect.
Two strong examples illustrate this: Kodak didn’t recognize that customers saw
quality as the convenience of digital technology, and
Nokia clung to the idea that phones are only for calling people which eventually
led to their decline. These examples show that quality is defined by customer
expectations.

In competitive markets where customers have choices, most expect performance

quality as a basic requirement. If a product doesn’t meet their standards, they
won’t buy it.
For example, different hybrid gas-electric systems offer varying performance:
Toyota’s system saves more fuel in city driving, while General Motors’ works best
on highways. Which one is "higher quality" depends on the customer’s needs.
Japanese consumers, often in city traffic, benefit more from Toyota’s system,
while Americans, who take more road trips, might prefer GM’s. When products all
meet performance quality standards, customers choose based on market-
perceived quality attributes.

Examples of perceived quality

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 💡 An example of this market-perceived quality comes from China’s
leading refrigerator maker, which added a feature allowing consumers
to choose from 20 different colors and textures for handles and
moldings. This option lets Chinese consumers match their
refrigerators to their living rooms, where many keep them. For
example, a consumer can
design an off-white refrigerator with green marble handles and moldings
This positioning helps the company compete with multinational brands
by providing customers an extra sense of quality.

Moldings are decorative strips or elements, typically made of plastic or

metal, used to enhance the appearance or cover joints on appliances or
furniture. In this context, they refer to the customizable trim pieces on
refrigerators that can be changed to match a room's décor.

Who measures quality?

how quality—how good or reliable a product is—can be measured by objective
third parties (independent organizations that don’t work for the companies
making the products). One example is J.D. Power and Associates, a well-known
organization in the U.S. that surveys consumers to rate the quality of products,
starting with cars and later expanding to other products, like computers.
So, in short, J.D. Power collects feedback from actual customers and then
publishes ratings, helping consumers compare the quality of different brands and
helping companies understand how their quality compares to competitors.

Additionally, customer satisfaction indexes from Sweden are now used widely to
measure satisfaction across many products and services.
Another quality measure for imported products is the “fair trade” certification by
Fair Trade USA, which ensures farmers in developing countries get fair prices, not
lower rates from middlemen, for products like coffee and chocolate.

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 In recognition of quality, the
U.S. Department of Commerce annually awards American firms for their
excellence in international markets. Companies like Motorola and Ritz Carlton
have won the Malcolm Baldrige Quality Award twice, and Solar Turbines
International (a division of Caterpillar) has also received this prestigious award.

Maintaining (Performance) Quality

Maintaining performance quality is essential, but products can be damaged as
they move through the distribution chain. This is a common problem for global
brands when production is far from the market, or when they lose control of
products in the local distribution system. For example, when Mars Company
introduced Snickers and other Western chocolates to Russia, they initially
became very popular. Foreign brands like Mars, Toblerone, Waldbaur, and
Cadbury topped the list, while only one Russian brand made it into the top ten.
However, within five years, Russian brands took over eight of the top ten spots,
with only one U.S. brand, Mars’s Dove bars, remaining.
Several factors led to this decline in foreign brands’ popularity.
First, Red October Chocolate Factory in Russia improved its packaging, products,
and equipment to better compete.

Performance quality also became an issue; some foreign companies rushed to

enter the market and sold out-of-date or low-quality products.
Additionally, chocolates smuggled into Russia were mishandled and sold on the
streets, arriving to consumers misshapen or discolored, which hurt their quality
compared to Red October chocolates.
Market-perceived quality was another factor. Russian chocolate has a unique
taste, with more cocoa and chocolate liqueur, making it grittier than Western
brands. This taste difference made Red October chocolates more appealing to
Russian consumers, even though they were often priced higher than Western
brands.
This example shows that delivering quality is essential for success in the
competitive global market, and deciding whether to standardize or adapt a
product is crucial for ensuring quality.

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 In 2009, Toyota, known for its quality cars, faced a serious issue in the U.S. Some
cars had sticky gas pedals that caused sudden, unintended acceleration, which
was linked to 34 deaths. This led to congressional hearings, where Toyota’s CEO,
Akio Toyoda, apologized and admitted the company wasn’t perfect.
A major criticism was Toyota’s slow response to consumer complaints, taking a
long time before a recall of six million cars. This delay affected public trust and
could influence upcoming lawsuits. Despite the setback, Toyota is still a top global
brand, although its reputation has slightly declined.

Physical or Mandatory Requirements and Adaptation

To sell a product successfully in a new international market, it often has to be
changed to meet local laws, cultural standards, or environmental conditions. This
process, called product homologation, involves adapting a product to meet these
specific local requirements.
Most changes are mandatory due to local rules, rather than cultural preferences.
For example, companies might need to change the voltage on electrical products,
simplify a product if local technology is less advanced, or print labels in multiple
languages. IKEA, for example, provides safety information in 26 languages, and
Electrolux sells cold-wash-only machines in areas where electricity is limited or
expensive.
Adapting products is also essential due to legal, economic, political,
technological, and climate-related requirements. For instance, PepsiCo briefly
renamed its product Lehar-Pepsi in India to align with local sentiment. In many
countries, laws control packaging sizes, labeling, and safety standards. Video
games, for example, must meet local content regulations on violence and
sexuality.
In less economically developed regions, products often need significant changes
to make them affordable. This could involve selling items in smaller quantities—
like single cigarettes or mini-packs of chewing gum. Mary Kay offers smaller
fragrance bottles in Latin America, where consumers like having a variety of
scents. In China, Cheetos are sold in 15-gram packs for 1 yuan (around 12 cents)
to make them affordable for children.

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 Climatic conditions can also demand product adjustments. For example, General
Motors (GM) had to add extra air filters and adjust clutches to make Chevrolet
cars suitable for the Middle Eastern climate. As U.S. car exports grow,
companies like Ford are now selling a homologated Mustang internationally.
Similarly, China is working to meet international standards as it aims to export
more of its cars worldwide.
An example of successful adaptation comes from Oreos in China. When first
introduced in 1996, Oreos weren’t popular, but by 2005, the company adjusted the
recipe to be less sweet, reduced the packaging size, and lowered prices. This led
Oreos to become China’s top-selling cookie, with new flavors tailored to local
tastes, like green tea and fruit-filled varieties. Marketing partnerships, such as
Mondelez’s collaboration with Alibaba, have also helped expand Oreo’s reach in
China.
Since most products start in home markets and require modification for
international sales, companies need a reliable process for identifying what
products need adaptation to succeed abroad.

Green Marketing and Product Development

Green marketing focuses on reducing the environmental impact of marketing
activities.
Europe leads this movement, with the European Union (EU) implementing strict
laws to reduce packaging waste and promote eco-friendly products. For
instance, the EU law requires that between 50-65% of packaging weight must be
recovered and 25-45% recycled.

Each stage in the distribution chain must also handle waste responsibly, with
retailers required to accept packaging from consumers if recycling options are
unavailable. Manufacturers can avoid these returns by funding curbside or central
collection systems.
In the U.S., consumer demand for greener products has impacted industries as
well. For example, rising gas prices and environmental concerns contributed to
the decline of fuel-hungry vehicles like GM’s Hummer, while companies like Harley
Davidson introduced electric motorcycles to appeal to eco-conscious consumers.

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 In China, the rapid demand for refrigerators, which use energy and contain
polluting refrigerants, highlights the need for green adaptations.
Ecolabeling in Europe, which began in 1992, evaluates a product’s environmental
impact across its life cycle ("cradle-to-grave"), though ecolabels are voluntary.
Hoover’s washing machines gained popularity after earning the label, tripling its
market share in Germany, but mixed or unofficial symbols cause consumer
confusion, leading to skepticism about green claims.

Businesses are finding success with sustainable packaging. Procter & Gamble,
responding to environmental pressures in Germany, introduced a super
concentrated version of its Lenor fabric softener, sold in an 85% reduced plastic
pouch. This boosted sales by 12% and set a positive example. P&G replicated this
in the U.S. with Downy, which was rebranded in refill pouches, reducing
packaging by 75% and increasing market share.
These examples show that green marketing is not just a European concern but a
global priority. Environmental awareness and legislation are spreading worldwide,
so adapting products to meet these standards is increasingly essential for global
brands.

Products and Culture

To understand the complexities of standardizing versus adapting products in
global markets, it’s essential to see how cultural factors influence a market’s
perception and value of a product. A product isn’t just a physical item; it’s a mix
of satisfactions, or utilities, that buyers gain. These utilities include physical
features (like taste, color, odor, and packaging), as well as psychological aspects
(such as brand reputation, country of origin, and the prestige associated with it).
The market's appreciation extends beyond its main function to include these
extra benefits, often shaped by cultural values.
While a product’s core function usually remains consistent across markets (e.g., a
car’s function is to transport people from one place to another), non-physical
features like color, design, and brand perception may need adjustment based on
local tastes and customs. For instance, Coca-Cola had to rename Diet Coke as
“Coke Light” in Japan because “diet” implied illness, not health. Similarly,
companies like McDonald's and Burger King have customized their offerings, such
as Burger King's squid-ink burger in Tokyo, to suit unique local preferences.

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 Sometimes, cultural norms affect how a product is received. For example,
Japanese consumers initially had little interest in dishwashers due to limited
kitchen space, but compact models have recently gained popularity. Cultural
preferences can also hinder product adoption, such as financial services in
Muslim countries where certain practices are seen as gambling or usury, which
the Koran prohibits.
The level of adaptation required depends on cultural differences between the
original and target markets. The more these differences exist, the more a product
may need modification. For example, when instant cake mixes were introduced
in Japan, they didn’t catch on well because Japanese consumers save cakes
for special occasions and typically buy them beautifully wrapped. Additionally,
Japanese homes often lack ovens, making it difficult to bake cakes at home.
Although companies tried to solve this by creating cake mixes for rice cookers,
this clashed with the strong cultural association of rice cookers with rice.

Not only do foreign products need to adapt in other countries, but the same
applies when non-American companies enter the U.S. market. For instance,
Shiseido, a Japanese cosmetics company, found success only after
redesigning its products to match American preferences for quick, easy-to-use
makeup, as opposed to the time-consuming Japanese routine.
Adapting products for global markets is similar to introducing new products at
home. It’s not just about the physical attributes but also about how the product
fits into the buyer's lifestyle, habits, and values. For example, cake mixes in the
U.S. initially didn’t sell well until they required adding an egg, which made the
process feel more hands-on and appealing to homemakers.
Unexpected adaptations sometimes emerge in global markets. For example, in
Japan, 20% of Harry Potter’s last book sales were in English, as Japanese readers
used it to improve their language skills, blending entertainment with education.

Analyzing product components for adaption

A product has many features, and together, these features create a bundle of
benefits (or utilities) that the consumer receives.

1. A product has many features: Every product is made up of different aspects,

such as its design, function, and branding.

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 2. Bundle of benefits (or utilities): When people buy a product, they don’t just
get a physical item—they get different types of benefits or “utilities” (like
satisfaction, enjoyment, or usefulness).

3. Adapting a product for a new market: To sell a product in a new place, it

sometimes needs adjustments to meet local needs and preferences.

4. The Product Component Model: This model is a way of looking at a product

by dividing it into three main parts:

Core component: This is the main product itself—its basic purpose or

function.

Packaging component: This includes packaging, design, and labeling.

Support services component: These are extras like warranties, customer

support, or brand reputation.

5. Why this model is helpful: By breaking down a product into these three parts,
companies can see how each part might need to be adapted to fit local
culture, rules, or physical requirements, giving customers a complete product
experience that feels right in their local market.

The product component model

1. Core Component

The core component of a product is the actual physical product itself, which
includes the main technology and all its design and functional features.
This core platform can be adjusted to fit local preferences, though major
changes to it can be costly, as they may require extra investments in production
processes.
However, design tweaks like changing flavors, colors, or features can make a
product better suited to different cultures. For instance, in Japan, Nestlé initially
sold American-style corn flakes, but Japanese children mostly ate them as
snacks, not breakfast. To adapt to local tastes and promote it as a breakfast food,
Nestlé introduced flavors familiar to the Japanese palate, like seaweed and
carrots, capturing 12% of the breakfast cereal market.

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 Adjusting scents is also important; cleaning products with pine or chlorine
scents weren’t liked in Japan, where citrus fragrances were preferred due to
cultural habits like sleeping close to the floor.
Functional features can be added or eliminated depending on the market. In
markets where
hot water is not commonly available, washing machines have heaters as a
functional feature.

In other markets,
automatic soap and bleach dispensers may be eliminated to cut costs or to
minimize repair problems. Additional changes may be necessary to meet safety
and electrical
standards or other mandatory (homologation) requirements. T
he physical product and all its
functional features should be examined as potential candidates for adaptation

2. Packaging Component

The packaging component includes

style features,

packaging,

labeling,

trademarks,

brand name,

quality,

price, and all other aspects of a product’s package.

Packaging components frequently require both discretionary and mandatory

changes.
For example, some countries require labels to be printed in more than one
language, while
others forbid the use of any foreign language.

Meanwhile, one study has found that consumers in the United States respond
negatively to bilingual packaging. At Hong Kong Disney�land, the jungle cruise

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 ride commentary is delivered in Cantonese, Mandarin, and English.
Several countries are now requiring country-of-origin labeling for food products.
Yellow flowers used in another company trademark were rejected in Mexico,
where a yellow flower symbolizes death or disrespect

It is easy to forget that in low-literacy countries, pictures and symbols are taken
literally as instructions and information
Care must be taken to ensure that corporate trademarks and other parts of the
packaging
component do not have unacceptable symbolic meanings
Particular attention should be given to translations of brand names and colors
used in packaging. When Ford tried to sell its Pinto automobile in Brazil, it quickly
found out that the car model’s name translated to “tiny male genitals.”
White, the color symbolizing purity in Western countries, is the color for mourning
in others
There are many reasons a company may need to adjust its product packaging.
Some countries have laws that set specific requirements for bottle, can, and
package sizes, as well as measurement units and ingredients.

If a country uses the metric system, products must typically follow it for weights
and measurements. Descriptive terms like "giant" or "jumbo" may be illegal on
labels in some places. Additionally, factors like high humidity or the need for long
shelf life in certain distribution systems may require heavier, more durable
packaging for some products.
It is also important to determine if the packaging has other uses in the market.

Lever Brothers sells Lux soap in stylish boxes in Japan because more
than half of all soap cakes there are purchased during the two gift-giving seasons.
Size of
the package is also a factor that may make a difference to success in Japan. One
study
found that package sizes can actually influence consumption levels. Soft drinks
are sold
in smaller-size cans than in the United States to accommodate the smaller
Japanese hand

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 Previously, Western products sold in China could display labels in a foreign
language (like English) as long as they had a small, removable Chinese label
attached somewhere on the package. This allowed companies to use the same
packaging for multiple markets and simply add a small Chinese label for Chinese
consumers.
However, under the new Chinese labeling law, food products must have all
essential information—such as the product name, contents, and details—
permanently printed in Chinese directly on the package. Temporary or removable
labels are no longer permitted, meaning companies must now design packaging
specifically for the Chinese market with clear Chinese text printed on it.

3. Support Services Component

The support services component includes key elements like repair, maintenance,
instructions, installation, warranties, deliveries, and spare parts availability.
Many marketing efforts have failed due to lack of attention to these services.
Repair and maintenance are especially challenging in developing countries.
Unlike in the U.S., where repair options are abundant, consumers in many other
countries have limited or no access to repair services and parts. Independent
service providers can improve brand quality by filling these gaps.
Some countries don't practice regular maintenance, so products may need to be
adjusted to require less frequent servicing. Literacy levels also impact product
instructions; for example, in rural Africa, “absorbed” in a lotion ad was changed
to “soaks into” for clarity. Brazil overcame literacy and technical skill issues by
including video instructions for complex products like military tanks and using
standardized parts to simplify repairs.

💡 High-tech products often need complementary items to succeed. For

example, Microsoft’s Xbox initially lagged in Japan due to a lack of
games suited to Japanese gamers. To fix this, Microsoft created games
specifically for that market, like the role-playing game Lost Odyssey.

The Product Component Model helps companies evaluate a product’s core,

packaging, and support components to identify required changes for foreign

407 Semester final 28-07-2024 24

 markets.

Globalization of emerging markets

it means that economies in developing countries are increasingly connecting with
the rest of the world. This happens as these countries open up their markets,
adopt new technologies, and attract foreign investments, which boosts
economic growth and helps local businesses reach global customers.
This process works both ways: businesses from emerging economies can
venture into global markets, while multinational corporations seek opportunities in
these developing regions.. This creates more choices for consumers, improves
job opportunities, and encourages the sharing of knowledge and resources.
However, it can also create challenges like increased competition and the need
for local businesses to adapt to international standards.

#Chapter 16 International Marketing

Communications and International
Advertising
Local market characteristics that affect the advertising
and promotion of products
Integrated marketing communications (IMC) include advertising, sales promotions,
trade shows, personal selling, direct selling, and public relations.
All these elements work together with a shared goal: to sell a product or service
successfully.
In many markets, the presence of effective communication channels can impact
decisions to enter a market. For instance, most toy makers agree that selling toys
profitably is difficult in countries without children-targeted TV ads.

Therefore, research on available communication channels is crucial for product

and service development. Once an offering is created to meet market needs, it’s
essential to inform potential customers about its value and availability.

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 Often, specific messages are more effective in certain channels, and each channel
may require different messaging. When companies promote a product, they
sometimes need to adjust their messaging based on the communication
channel. For example, an ad on social media might need a different tone or
content than an ad on TV or a trade show presentation. Each channel can have its
own strengths, so companies tweak messages to match the strengths of each
channel and appeal more effectively to customers there.
For most companies, advertising and personal selling are the main parts of their
marketing communications mix. This chapter briefly covers the other IMC
components. In both emerging and developed global markets, companies, large
and small, aim to create synergy by combining sales promotions, public relations,
and advertising efforts effectively.

The strengths and weaknesses of international sales

promotions in global marketing

💡 Sales promotions are short-term marketing efforts aimed at increasing

consumer purchases and improving retailer effectiveness and
cooperation. They include methods like discounts, in-store demos,
samples, coupons, gifts, contests, event sponsorships (like concerts or
fairs), and point-of-purchase displays. These activities support the main
advertising and personal selling efforts in a company’s promotional mix.

In global markets, loyalty programs are becoming more popular, though

preferences vary based on national culture. For instance, countries with high
"power distance" (where hierarchies are strong) and collectivism often prefer
loyalty programs. Conversely, cultures with high uncertainty avoidance (aversion
to risk) lean toward promotions with immediate rewards, like discounts.
Sales promotions help encourage product trials, drive immediate purchases,
introduce customers to a store or brand, gain retail displays, and support
advertising efforts. For example, Procter & Gamble promoted Ariel detergent in
Egypt through a roadshow that entertained and informed rural consumers,
increasing brand awareness and retailer willingness to stock Ariel.

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 In markets with limited media reach, sales promotions can become a larger part
of the budget, especially in rural areas. For example, Coca-Cola and Pepsi use
carnival trucks in Latin American villages to promote their drinks, rewarding
customers with a cold drink and a coupon.
Product sampling is useful for building market share or brand recognition, as seen
in Nestlé’s baby food campaign in France, where rest stops offered free baby food
samples and services.
Promotional activities often require local adaptation due to legal restrictions, which
can affect allowable discounts or free gifts. Effective sales promotions can
enhance other marketing efforts and, when needed, can substitute for
advertising in restrictive environments.

Major constraints are imposed by local laws, which may not permit premiums or
free gifts to be given.
Some countries’ laws control the amount of discount given at retail, others require
permits for all sales promotions, and, in at least one country, no competitor is
permitted to spend more on a sales promotion than any other company selling the
product.
Effective sales promotions can enhance the advertising and personal selling
efforts and, in some instances, may be effective substitutes when environmental
constraints prevent the full utilization of advertising

International Public Relations

💡 Public relations (PR) involves managing relationships between

companies and the media to share positive stories with customers, the
public, and regulators, and to handle negative rumors and issues.

For instance, Nike was criticized for using sweatshops and responded with ads,
which led to a court case about freedom of speech in advertising. Internationally,
PR challenges include Google’s conflict in China over censorship, Foxconn
employee suicides, criticism of PR firm Ketcham for working with Russia, and

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 Toyota’s gas pedal issue that led to public apologies in both the U.S. and China.
Toyota also used social media, like Tweetmeme, to share positive stories.
The Toyota incident is similar to the 2000 Bridgestone tire recall, where the
company faced backlash and made public apologies. PR firms are seeing high
growth globally as they handle issues like workplace standards and product
recalls (fixing or returning products that might be unsafe or defective) for clients
like Mattel, McDonald's, and Nike. Additionally, international companies use PR
sponsorships, such as P&G’s schools in Vietnam, Coca-Cola’s European football
sponsorship, and McDonald’s Olympic sponsorships. These sponsorships are also
seen as advertising and PR strategies, designed to build brands while promoting
corporate social responsibility.

International Advertising
Global media advertising reached $535 billion in 2017, with a 4.3% increase from
the previous year. Digital media has grown rapidly, becoming the second largest
advertising platform, while print has fallen to third, and TV—though still in the top
spot—shows signs of decline. This digital shift is creating a deflationary effect in
the industry. Mass media advertising in China has surpassed Japan for the first
time, now ranking second globally after the U.S., while Japan’s position has
dropped.

Advertising is a powerful tool for cultural change and undergoes constant

scrutiny. Spending tends to be cyclical but is more stable in relationship-focused
cultures. Studies show advertising influences consumer financial decisions,
shaped by cultural differences. Exhibits show that Procter & Gamble leads global
ad spending, while Sony has dropped significantly due to Japan’s economic
issues. Spending is now more evenly distributed across categories, with personal
care’s share falling from 24% in 2010 to 18%. Advertising patterns in China and
Russia reflect different economic stages; China’s top ten includes six Chinese
firms, mainly pharmaceuticals, while Russia’s includes three Russian firms,
including two mobile providers and one drug company.
Advertising decisions are deeply influenced by cultural factors, as consumers’
responses are shaped by their unique values, beliefs, and desires. Ads need to
align with these cultural norms to resonate with consumers effectively.

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 Creating an international advertising campaign that respects each market’s unique
culture is a key challenge for global marketers. The basic steps for international
advertising are the same everywhere:

1. Do marketing research.

2. Set communication goals.

3. Create the best messages for each market segment.

4. Choose effective media channels.

5. Set and secure a budget to meet goals.

6. Launch the campaign.

7. Measure the campaign’s success against the goals.

Of these steps, creating effective messages is usually the toughest for

international marketers, so it’s a main focus.

When global advertising is most effective; when

modified advertising is necessary
Advertising goals differ worldwide. As China’s economy grows, its companies are
building new brands, while Unilever and Aeroflot focus on expanding and
improving their image in new markets.
Multinational companies (MNCs) face challenges like high costs and
advertisement coordination issues, so they often balance global
standardization with local customization to connect with consumers
effectively.

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 💡 Examples include Gillette and Unilever, whose product names vary
by country due to established brand recognition and maintaining
local appeal while building a global image.

Nortel Networks has

used a “local heroes” approach in its international advertising. The
company picks local
celebrities to pitch standardized messages across national markets
for its telecommunications services.

Some companies, like Ford, adjust their marketing to match cultural differences,
presenting the same product as affordable in the U.S. and premium in India.
Increasingly, companies target global consumer segments, like high-income or
youth markets, based on shared values rather than national boundaries.

Promotional Misfire or Mistake

Research suggests that effective communication demands the existence of a
“psychological overlap” between the sender and the receiver; otherwise, a
message falling outside the receiver’s perceptual field may transmit an unintended
meaning. It is in this area that even the most experienced companies make
blunders.
International marketing often faces challenges due to cultural misunderstandings
and lack of target market knowledge.
the information source is a marketer with a product to sell to a specific target
market. The product message to be conveyed should reflect the needs and wants
of the target market;
however, often the actual market needs and the marketer’s perception of them do
not coincide. This disconnect is especially true when the marketer relies more on
the self-reference criterion (SRC) than on effective research. It can never be
assumed that “if it sells well in one country, it will sell in another.”

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 💡 For instance, bicycles designed and sold in the United States to
consumers fulfilling recreational exercise needs are not sold as
effectively for the same reason in a market
where the primary use of the bicycle is transportation.
Cavity-reducing fluoride toothpaste
sells well in the United States, where healthy teeth are perceived as
important, but has
limited appeal in markets such as Great Britain and the French areas of
Canada, where
the reason for buying toothpaste is breath control.

💡 From the onset of the communications

process,
if basic needs are incorrectly defined, communications fail
because an incorrect or meaningless message is received,
even though the remaining steps in the process are executed
properly

In the encoding step of international marketing, problems can arise even with a
seemingly “proper” message. Factors like color, timing, values, humor, tastes,
and the choice of spokesperson can cause the message to be interpreted
differently across cultures. For instance, while green is meant to convey coolness,
people in tropical regions might see it as a symbol of danger or disease. Similarly,
a perfume ad showing rain appeared fresh to Europeans but was seen as a fertility
symbol by Africans, leading them to question if the perfume was linked to
infertility.
Problems of literacy, media availability, and types of media create challenges in
the communications process at the encoding step. Message channels must be
carefully selected if an
encoded message is to reach the consumer.
Errors such as using the Internet as a medium

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 when only a small percentage of an intended market has access to the Internet,
or using

print media for a channel of communications when the majority of the intended
users cannot read or do not read the language in the medium, are examples of
ineffective media channel selection in the communications process.
Decoding problems often happen due to improper encoding, leading to
messages being misunderstood. For instance, Pepsi’s “Come Alive” slogan was
misinterpreted as “Come out of the grave,” while Chevrolet’s “Nova” was seen in
Spanish as “No Va!” meaning “it doesn’t go.” Other missteps include KFC’s “Finger
Lickin’ Good” translated as “Eat Your Fingers Off,” and Electrolux’s tagline as
“Nothing Sucks Like an Electrolux,” which had negative connotations.
Decoding errors also may occur accidentally, as was the case with Colgate-
Palmolive’s
selection of the brand name Cue for toothpaste. The brand name was not
intended to have
any symbolism; nevertheless, it was decoded by the French into a pornographic
word.

💡 Errors at the receiver's end usually come from a mix of issues: the
message might not match the audience's needs, poor encoding makes it
unclear, the wrong media is chosen, or the receiver misinterprets it.
Sometimes, even bad luck can cause issues, as with French’s mustard.
During the Iraq conflict in 2003, some Americans mistakenly boycotted
French's products, thinking it was a French brand when it’s actually
American.

Other Barriers to effective communication

The creative process in international marketing faces several barriers that can
complicate effective communication. Here’s a breakdown of these barriers with
simple explanations and examples:

1. Legal Barriers

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 Different countries have various laws and regulations regarding advertising. These
can dictate what can and cannot be shown in ads, which can limit creativity.
Example: In some countries, ads for alcohol or tobacco products are heavily
restricted or banned altogether, making it challenging for brands in these
industries to communicate their messages.
cigarettes are banned in Australia

2. Linguistic Barriers
Language differences can lead to misinterpretations or confusion. Even if the
message is well-crafted, poor translation can distort its meaning.

Example: The car model "Nova," which means "new star" in Spanish, was poorly
received in Spanish-speaking markets because "no va" translates to "doesn’t go."
This hurt the car's sales in those regions.

3. Cultural Barriers
Cultural differences can impact how messages are received. Symbols, humor, and
values vary widely across cultures.
Example: A humorous ad that resonates with American audiences might fall flat or
even offend in another culture. For instance, a joke about aging might be seen as
disrespectful in cultures that value elders highly.

4. Media Barriers
Not all media channels are equally accessible or effective in every country.
Factors like technology availability, media consumption habits, and preferences
can vary widely.
Example: Using social media as a primary advertising channel might work well in
the U.S., where many people are online, but in regions with limited internet access,
traditional media like television or radio may be more effective.

5. Production Barriers
Different countries may have varying production capabilities, which can limit the
types of ads that can be created. This includes differences in technology, skilled
labor, and materials.

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 Example: An ad that relies on high-end special effects may not be feasible in a
country where the necessary technology or talent is not available, leading to a
lower-quality ad.

6. Cost Considerations
Budget constraints can limit creative options. Some advertising techniques or
media placements may simply be too expensive for certain markets.
Example: A global campaign featuring a celebrity may be affordable in one
country but prohibitively expensive in another, forcing the brand to choose a less
effective strategy.
Understanding these barriers is crucial for marketers to create effective
advertising that resonates with their target audiences across different markets.

CHAPTER 4
CULTURAL DYNAMICS IN ASSESSING GLOBAL MARKETS

💡 U.S. companies tried to attract Japanese investors with new e-trading

products, hoping to capture funds as Japanese investment options
expanded. However, Japan's low risk-taking culture and limited
experience with stocks slowed interest, leading to far less trading than
in the U.S. Additionally, mistakes in trading, like Mizuho Securities’ costly
stock order error, hurt trust in Japan’s stock market.
Similarly, France’s interest in e-trading and online auctions has been
limited due to cautious views on the stock market and strict auction
laws. Unlike the U.S., where people embrace online trading and e-
auctions, Japan and France are slower to adopt these services due to
cultural differences around risk and trust.

Q: Social institutions affect culture and marketing in a

variety of
ways. Discuss, giving examples.

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 Social institutions—like family, religion, education, government, and media—
shape cultural values, beliefs, and behaviors, which in turn heavily influence
marketing strategies and consumer choices across different regions.

1. Family: In cultures where family is central, such as in India or many Latin

American countries, purchasing decisions are often influenced by family
needs rather than individual preferences. For example, advertisements for
cars or homes in these areas often focus on family comfort, safety, and
features that suit multi-generational households. Marketing campaigns for
household goods or foods often emphasize shared family experiences,
resonating with the values of family unity and care.

2. Religion: Religious beliefs impact consumer behavior by dictating what

products are acceptable or popular. For instance, in predominantly Muslim
countries, food and beverage products must adhere to halal standards,
which follow specific dietary rules. McDonald’s adapts its menu by offering
halal options in places like Saudi Arabia and Indonesia, and similarly, avoids
beef in India due to Hindu religious practices.

3. Education: Education influences how consumers understand and evaluate

products, and it often shapes media preferences as well. In highly educated
societies, consumers may prefer detailed, informative advertisements. For
example, in countries with high literacy rates and well-developed education
systems like Germany or Japan, marketing for technology or financial
services might focus on detailed product specifications or benefits. In
contrast, ads in less literate markets might use more visual elements to convey
a brand’s message.

4. Government: Governments set regulations that can directly influence

marketing practices. For instance, in France, strict advertising laws restrict the
promotion of products like alcohol and tobacco. China’s regulations on foreign
businesses and censorship standards also require international brands to
carefully craft their messaging to comply with local laws, impacting everything
from social media content to product packaging.

5. Media: Media is a powerful social institution that both shapes and reflects
cultural norms, affecting how brands communicate. In the U.S., where social
media use is high, many brands leverage influencer marketing. However, in
countries like Japan, traditional media and word-of-mouth still hold significant

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 sway, so marketing strategies often include television and print ads combined
with community engagement efforts.

By understanding the influence of these social institutions, international marketers

can better design campaigns that align with local values and norms, ultimately
building trust and connecting more effectively with diverse consumer bases.

THE ELEMENTS OF CULTURE

Culture was defined by listing its five elements: cultural values, rituals,
symbols, beliefs, and thought processes

💡 Research shows that cultural values can predict various consumer

behaviors, such as buying luxury goods for status, brand loyalty,
impulsive buying, and reactions to surprises or service failures. Using
Hofstede’s cultural framework, we can understand why new services like
e-trading may spread slower in Japan and France compared to the U.S.
Cultures with high individualism and low uncertainty avoidance, like the
U.S., tend to adopt new ideas faster, while cultures with more caution
toward uncertainty, like Japan and France, are slower to adopt
innovations.
Smaller daily rituals also vary by culture, like how meals are eaten or
how people shop. In Spain, a dinner can last hours and start around
midnight, whereas in Japan, store employees greet customers with a
bow.
Rituals help people knowing what to expect.
These rituals can play a role in business practices, which differ from
culture to culture.

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 International Marketer should be a student of culture!
An international marketer needs to deeply understand and respect cultural
differences—essentially, they should be a student of culture. This "cultural
awareness" helps marketers avoid mistakes and adapt their strategies to fit the
customs, values, and habits of people in each country.
In International Marketing by Cateora and Money, they share examples where
misunderstandings of culture led to marketing mishaps. For instance, in Japan,
Merrill Lynch initially misread Japanese consumers' low-risk investment mindset,
expecting them to eagerly adopt U.S.-style online trading platforms. However,
without a high level of cultural understanding, they didn't realize that Japanese
consumers aren't as comfortable with high-risk investments, unlike their American
counterparts, which led to less interest than anticipated.
Another example from the book shows how color symbolism can vary by culture.
While the color green might symbolize "fresh" and "cool" in the U.S., it can signify
danger or disease in tropical regions. Such knowledge can impact how a marketer
presents a product's branding in different countries.
By studying culture, international marketers can better tailor their approaches to
fit each market. This cultural awareness avoids costly mistakes and builds trust
with consumers across different regions.

Thought process
Research shows that people think and act differently based on their culture,
especially when it comes to buying decisions. For example, cultural factors can

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 influence how quickly people make choices and how they respond to different
smells.
Richard Nisbett's book, The Geography of Thought, talks about the differences
between Asian and Western ways of thinking. He uses historical and modern
research to explain that while we shouldn't stereotype cultures, there are common
patterns. For instance, people from Asian cultures often see the bigger picture,
noticing details in both the background and foreground, while Westerners tend to
focus on specific details without paying as much attention to what's around them.
This THINKING difference can affect how people value things and what they
expect in the future, which is important for marketers to understand.

When marketers create new products or campaigns, they need to think about how
culture will affect their strategies. Understanding all five cultural elements—
values, symbols, rituals, thought processes, and beliefs—is crucial. This
knowledge helps marketers avoid mistakes and better connect with their
audience, especially when launching products in different countries. Marketers
should also consider how these cultural elements influence each other and the
overall impact of their marketing actions.
The statement highlights how THINKING differences influence people's values
and expectations, which is crucial for marketers to consider when promoting
products or services.

Here’s a breakdown of what this means:

1. Cultural Values: Different cultures prioritize different values. For example, in
many Western cultures, individualism and personal achievement are highly
valued. In contrast, many Asian cultures emphasize community, harmony, and
collectivism. This means that marketing messages that celebrate personal
success may resonate well in Western markets but might not be as effective in
Asian markets, where messages focused on community benefits could be
more appealing.

2. Consumer Expectations: Culture shapes what consumers expect from

products and brands. For instance, in cultures where quality and
craftsmanship are highly regarded, consumers might expect premium
materials and durability in their purchases. In other cultures, speed and
convenience might take precedence, leading consumers to prefer quick, easy-

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 to-use solutions. Marketers need to understand these expectations to ensure
that their offerings align with what consumers in that culture are looking for.

Importance for Marketers:

Understanding these differences is vital for marketers because:

Tailored Marketing Strategies: Marketers can create messages and

campaigns that resonate better with their target audience by aligning their
strategies with cultural values and expectations.

Improved Customer Engagement: When marketing efforts reflect an

understanding of cultural nuances, consumers are more likely to feel
understood and connected to the brand.

Higher Success Rates: Products and marketing strategies that account for
cultural differences are more likely to succeed in various markets, reducing
the risk of misinterpretation or rejection by consumers.

In summary, recognizing how cultural differences affect values and expectations

enables marketers to develop more effective and relevant strategies for diverse
audiences.

Cultural Change
Culture is constantly evolving, even though it often resists change to protect its
traditions. Open societies, especially those with thriving economies, are more
likely to adapt and welcome gradual changes. Major events like wars, natural
disasters, or everyday challenges can prompt cultural shifts as societies search
for solutions. Cultures frequently borrow ideas from one another to solve shared
problems, allowing them to adjust and grow. This combination of stability and
adaptability is key for understanding how societies and markets transform over
time.
Understanding this balance between stability and adaptability culture is crucial for
marketers and businesses operating in different cultural contexts. It helps them
recognize:

Cultural Trends: By observing how cultures adapt to new circumstances (like

technology or economic shifts), marketers can identify emerging trends and

407 Semester final 28-07-2024 39

 consumer behaviors.

Market Opportunities: Recognizing that cultures may borrow from each other
allows businesses to introduce products or services that align with both
traditional values and modern preferences.

Navigating Resistance: Understanding cultural stability helps marketers

appreciate the potential resistance to change, enabling them to approach new
markets with sensitivity and respect for existing customs.

In summary, a successful approach to international marketing requires awareness

of how cultures can remain stable while also being flexible enough to change.
This insight can inform strategies that resonate with local consumers, leading to
better engagement and acceptance of products and services.

Planned and unplanned change

To effectively introduce planned change in a society, the first step is to identify
cultural factors that resist the acceptance of an innovation. Next, marketers need
to transform these obstacles into motivators for change. Just like social planners
have successfully promoted hybrid crops or improved sanitation in
underdeveloped areas, marketers can use similar methods to achieve their goals.
Marketers have two choices when introducing new products or ideas: they can
wait for cultural changes to occur naturally, or they can actively promote change
to speed up acceptance. For example, Fidelity Investments attempted to
accelerate change in Japanese investor behavior by setting up a tent at a busy
train station to distribute investment information and demonstrate their online
trading services. However, cultural change in this area has been slow for many
foreign firms.
Not all marketing requires changes in culture; successful marketing can occur by
aligning products with existing cultural norms, minimizing resistance. However,
when marketing strategies rely on cultural change, companies can choose to
either leave acceptance to chance (unplanned change) or intentionally pursue
change (planned change) by addressing cultural obstacles.
An example of unplanned change is the shift in the Japanese diet since the
introduction of milk and bread after World War II. Traditionally, Japanese diets
were based on fish and vegetables, but now they consume more animal fat and

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 protein. Fast food chains like Burger King have adapted to this change by
purchasing local chains and introducing American-style burgers. This
Westernized diet has led to rising obesity rates in Japan, prompting a shift
towards low-calorie foods and fitness clubs.
Ultimately, marketing strategies are assessed based on how well they are
accepted, resisted, or rejected by the culture. Marketers need to be aware of
their influence on host cultures and consider the consequences of their planned
changes.

Why marketers are called agents of cultural change

Marketers are often referred to as agents of cultural change for several reasons:

1. Influencing Consumer Behavior: Marketers shape and influence consumer

preferences and behaviors by introducing new products, ideas, and lifestyles.
For example, when promoting healthier food options, marketers can
encourage a shift in dietary habits within a culture.

2. Introducing Innovations: Through marketing campaigns, businesses can

introduce innovations that challenge existing norms and encourage
consumers to adopt new behaviors. For instance, the introduction of e-
commerce has changed how people shop and interact with brands.

3. Cultural Adaptation: Marketers often adapt their strategies to fit local cultures,
which can lead to changes in cultural practices. For example, fast food chains
might modify their menus to suit local tastes, thereby influencing eating habits
and culinary traditions.

4. Cultural Awareness: By understanding and respecting local customs and

values, marketers can create campaigns that resonate with consumers. This
approach can lead to shifts in cultural attitudes, such as increased
acceptance of new technologies or lifestyles.

5. Social Responsibility: Many marketers promote social causes or

sustainability, which can lead to cultural changes regarding environmental
responsibility and ethical consumption. For example, campaigns that raise
awareness about climate change can lead to more eco-conscious consumer
behavior.

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 6. Education and Information: Marketers provide information about products
and services, helping consumers make informed choices. This education can
empower consumers to adopt new technologies or practices, such as using
renewable energy sources or adopting healthier lifestyles.

7. Creating Trends: Through advertising and branding, marketers can create

trends that shape cultural norms. Fashion marketers, for example, can set
trends that change how people dress and express themselves.

Overall, marketers play a significant role in shaping cultural dynamics,

encouraging consumers to embrace change, and facilitating the adoption of new
ideas and practices within societies.

CHAPTER 3
Why an international marketer should study history and geography

Understanding customer is pre work for satisfying customers’ needs

so to understand customer, we should study history and geography

To interpret behavior and attitudes in a particular culture or country, a

marketer must have some idea of a country’s history and geography.
The influence of history on behavior and attitudes and the influence of geography
on market, trade and environmental issues are examined.

💡 History helps define a nation’s “mission,” how it perceives its neighbors,

how it sees its place in the world, and how it sees itself. Insights into the
history of a country are important for understanding attitudes about the
role of government and business, the relations between managers and
the managed, the sources of management authority, and attitudes
toward foreign corporations.

The effects of history on a country’s culture

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 The First Opium War (1839-1842) happened because Britain wanted to balance its
trade with China, especially since they were buying a lot of tea. Britain began
selling opium, which led to widespread addiction in China. When the Chinese
emperor tried to stop the opium trade, Britain responded with military force. The
war ended with the Treaty of Nanjing, where China had to open its ports to trade,
give up Hong Kong to Britain, and pay a large sum. This weakened China’s power,
letting other countries get involved in its trade and affairs, and it set the stage for
today's U.S.-China trade dynamics.
History is often told differently depending on who is writing it, as people see
things through their own culture
This cultural perspective not only influences historical interpretations but also
affects national pride and relationships. For example, maps from different
countries place that country at the center, reflecting self-centered viewpoints.

💡 This viewpoint shapes international relations. Mexicans, for instance, see

the U.S. as a threat to their sovereignty, a view rooted in historical events
like the loss of Mexican territories (Texas, Arizona, California, and New
Mexico) to the U.S. in the 1800s. Although Americans see the Monroe
Doctrine as protection for Latin America, many Latin Americans view it
as a symbol of U.S. control over the region. The Mexican Revolution,
which led to the creation of the modern Mexican state, is remembered
for expelling foreign influences, particularly American businesses

WHY TO STUDY GEOGRAPHY

Studying geography is important in international marketing because it helps
businesses understand the physical, cultural, and economic factors that impact
consumer behavior and market conditions. Here are some key reasons why
geography matters in international marketing:
Thus, the study of geography is important in the evaluation of markets and their
environment

1. Market Potential and Targeting: Geography helps identify where potential

customers are located, guiding decisions on where to enter new markets and

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 how to target specific areas based on population density, demographics, and
purchasing habits.

2. Logistics and Distribution: Understanding geography aids in planning the best

ways to transport goods efficiently, especially in regions with varying climates,
terrains, or infrastructure challenges. It also helps businesses decide on
warehouse locations and delivery routes to minimize costs.

3. Cultural Preferences and Adaptation: Geography often influences culture,

which shapes consumer preferences, traditions, and product needs.
Knowledge of local geography helps marketers adapt products, advertising,
and promotions to align with cultural values and preferences.

4. Competitive Landscape: Geography helps analyze the presence of

competitors and market saturation in different regions, helping companies
decide where to enter or expand and how to position themselves effectively.

Why marketers need to be responsive to the

geography of a country
Climate and geography significantly impact the design and use of products
worldwide. Factors like altitude, humidity, and temperature extremes can make
products that work well in one area fail in another. For instance, construction
equipment used in the U.S. needs heavy modification to handle Sahara Desert
heat and dust. Similarly, a Taiwanese company learned that packing glasses with
hay failed in the Middle East because the hay dried out and didn’t protect the
shipment.
Even within a single country, climatic diversity can require adaptations. In Ghana,
products must work in both desert and rainforest conditions. Bosch-Siemens
washing machines for Europe have different spin speeds to handle varying
climates across countries. In Italy and Spain, the sun allows for a slower spin
cycle than in Germany, where fast spin cycles are necessary due to limited
sunshine.
Seasons also vary between hemispheres. JCPenney attempted to expand into
Chile but struggled because its seasonal stock didn’t align with local demand,
ultimately limiting expansion to Brazil.

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 Geographic features like mountains, oceans, and jungles create challenges for
trade and growth. For example, the Andes Mountains hinder travel and trade on
South America’s west coast, impacting economic growth. Physical barriers like
these also affect countries like China, Russia, India, and Canada, pushing them to
invest in infrastructure to improve trade. In Europe, the English Channel and Alps
Mountains were once seen as protective barriers but now pose obstacles for
trade. This has led to the construction of tunnels, like the Chunnel and the
Lötschberg Tunnel, improving trade efficiency within the EU.

The marketer “should also examine the more complex

effect of
geography on general market characteristics,
distribution systems, and the state of the economy.”
Comment.
Geography has a broad and complex impact on market characteristics,
distribution systems, and the economy, which marketers need to understand to
make informed business decisions. Here’s a breakdown of how each area is
affected:

1. General Market Characteristics: Geography influences climate, population

density, and lifestyle, all of which shape consumer needs and preferences. For
instance, tropical regions may have a higher demand for cooling products,
while remote, mountainous areas might require durable, accessible products.
Understanding these aspects helps marketers tailor products that align with
local demands, increasing their market appeal.

2. Distribution Systems: Geographic factors such as distance, terrain, and

infrastructure quality directly impact logistics and distribution. Countries with
vast or rugged terrains, like Canada or India, may have higher transportation
costs and slower delivery times, impacting pricing and distribution strategies.
Marketers must consider how geography can limit or facilitate efficient supply
chains, using local warehouses or adjusting logistics as necessary.

3. State of the Economy: Geography can influence a region’s natural resources,

which affects its economic base and trade potential. Countries rich in
resources like oil or minerals may have strong economies with specific market

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 needs, while others might rely heavily on imports. Additionally, geographic
location affects access to trade routes and international markets, influencing
economic stability and growth potential. Marketers must examine how these
factors impact consumer purchasing power, demand, and potential barriers or
opportunities for entry.

In summary, geography affects everything from consumer demand to the cost and
feasibility of market entry, so a thorough understanding allows marketers to better
navigate and succeed in varied environments.

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