International Marketing

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2 International Marketing Marketing is a universal activity, regardless of the political, social, or economic systems of a particular country. However, this doesn t mean that consumers in different parts of the world should be satisfied in the same way. This fourth edition of International Marketing has been written to enable managers and scholars to meet the international challenges they face every day, and it provides the solid foundation required to understand the complexities of marketing on a global scale. The book has been fully updated with topical case studies, examples of contemporary marketing campaigns, the most relevant discussion topics as well as the most up-to-date theories, references, and research findings. It is this combination of theory and practice that makes this textbook truly unique, presenting a fully rounded view of the topic rather than an anecdotal or descriptive one alone. The book includes chapters on: trade distortions and marketing barriers culture consumer behavior marketing research foreign market entry strategies product and branding strategies promotion and pricing strategies currencies and foreign exchange Accessibly written and designed, this is the most international book on marketing available which can be used by undergraduates and postgraduates the world over. As one of the most successful textbooks in its field, the book has been adopted in the USA, Europe, Asia, Australia, and elsewhere, at the undergraduate, MBA, and Ph.D. levels. A companion website provides additional material for lecturers and students alike. Sak Onkvisit is Professor of Marketing at San José State University, USA. John Shaw is Professor of Marketing at Providence College, USA.

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4 0 0 0 International Marketing Analysis and strategy Fourth edition Sak Onkvisit and John J. Shaw

5 First edition published by Charles Merrill in Second edition published by Macmillan in Third edition published by Prentice-Hall in Fourth edition 00 Simultaneously published in the UK, USA and Canada by Routledge West th Street, New York, NY 000 and by Routledge New Fetter Lane, London ECP EE This edition published in the Taylor & Francis e-library, 00. To purchase your own copy of this or any of Taylor & Francis or Routledge s collection of thousands of ebooks please go to Routledge is an imprint of the Taylor & Francis Group 00 Sak Onkvisit and John J. Shaw All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Onkvisit, Sak. International marketing : analysis and strategy / by Sak Onkvisit and John J. Shaw. th ed. p. cm. Includes bibliographical references and indexes.. Export marketing.. Export marketing Management. I. Shaw, John J. II. Title. HF.O 00. dc 000 ISBN Master e-book ISBN ISBN 0 (hbk) ISBN 0 0 (pbk)

6 To my family and the memory of my grandparents and Lawrence X. Tarpey, Sr. and Ann and Jonathan and the memory of Rebecca

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8 Contents List of illustrations Preface NATURE OF INTERNATIONAL MARKETING: CHALLENGES AND OPPORTUNITIES Process of international marketing International dimensions of marketing Domestic marketing vs. international marketing The applicability of marketing Multinational corporations (MNCs) The process of internationalization Benefits of international marketing Conclusion Case. Sony: the sound of entertainment TRADE THEORIES AND ECONOMIC DEVELOPMENT Basis for international trade Exchange ratios, trade, and gain Factor endowment theory The competitive advantage of nations A critical evaluation of trade theories Economic cooperation Conclusion Case. The United States of America vs. the United States of Europe TRADE DISTORTIONS AND MARKETING BARRIERS Protection of local industries Government: a contribution to protectionism Marketing barriers: tariffs Marketing barriers: nontariff barriers Private barriers World Trade Organization (WTO) Preferential systems Some remarks on protectionism Conclusion Case. Global war on drugs or tuna? 0 vii xiii xviii

9 CONTENTS POLITICAL ENVIRONMENT Multiplicity of political environments Types of government: political systems Types of government: economic systems Political risks 00 Privatization 0 Indicators of political instability 0 Analysis of political risk or country risk 0 Management of political risk 0 Measures to minimize political risk 0 Political insurance Conclusion Case. Hoa Ni Shoe Company LEGAL ENVIRONMENT Multiplicity of legal environments Legal systems Jurisdiction and extraterritoriality Legal form of organization Branch vs. subsidiary Litigation vs. arbitration Bribery Intellectual property Counterfeiting Conclusion Case. International auto safety and patents Case. Bribery: a matter of national perspective 0 CULTURE Culture and its characteristics Influence of culture on consumption Influence of culture on thinking processes Influence of culture on communication processes Cultural universals Cultural similarities: an illusion 0 Communication through verbal language 0 Communication through nonverbal language Subculture Conclusion Case. Cross-cultural marketing: a classroom simulation CONSUMER BEHAVIOR IN THE INTERNATIONAL CONTEXT: PSYCHOLOGICAL AND SOCIAL DIMENSIONS Perspectives on consumer behavior 0 Motivation 0 Learning Personality Psychographics Perception Attitude 0 Social class 0 viii

10 CONTENTS Group 0 Family 0 Opinion leadership 0 Diffusion process of innovations 0 Conclusion 0 Case. Beneath Hijab: marketing to the veiled women of Iran 0 MARKETING RESEARCH AND INFORMATION SYSTEM Nature of marketing research Marketing information sources Secondary research Primary research Sampling 0 Basic methods of data collection Measurement Marketing information system Conclusion Case. B&R Bank: developing a new market FOREIGN MARKET ENTRY STRATEGIES Foreign direct investment (FDI) Exporting Licensing Management contract Joint venture Manufacturing Assembly operations Turnkey operations 0 Acquisition 0 Strategic alliances Analysis of entry strategies Foreign trade zones (FTZs) Conclusion Case. How to export houses 0 PRODUCT STRATEGIES: BASIC DECISIONS AND PRODUCT PLANNING What is a product? New product development Market segmentation Product adoption Theory of international product life cycle (IPLC) Product standardization vs. product adaptation A move toward world product: international or national product? Marketing of services Conclusion 0 Case 0. McDonaldization 0 PRODUCT STRATEGIES: BRANDING AND PACKAGING DECISIONS 0 Branding decisions 0 Branding levels and alternatives Brand consolidation ix

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