International Marketing

Strategy and theory

Fifth edition

Sale Onkvisit and John J. Shaw

Routledge
jg Taylor &. Francis Group LONDON AND NEW YORK

Contents

List of illustrations Preface

xiv xxi

Part 1

Overview of world business

T
3 4 5 7 7 10 10 12 19 20 23 24 29 30 32 35 36 42 48 49 55 63 64

1 Nature of international marketing: challenges and opportunities Marketing strategy: the sound of "glocal" entertainment Process of international marketing International dimensions of marketing Domestic marketing vs. international marketing The applicability of marketing Multinational corporations (MNCs) Characteristics of MNCs The process,of internationalization Benefits of international marketing Conclusion Case 1.1 Medical vacation: the globalization of health care 2 Trade theories and economic cooperation Marketing strategy: Botswana - the world's fastest growing economy Basis for international trade Exchange ratios, trade, and gain Factor endowment theory The competitive advantage of nations The validity of trade theories Limitations of trade theories and suggested refinements Economic cooperation Conclusion Case 2.1 The United States of America vs. the United States of Europe

viii

Contents

3 Trade distortions and marketing barriers Marketing strategy: the best things in life are (not] free Protection of local industries Marketing barriers: tariffs Marketing barriers: nontariff barriers Private barriers World Trade Organization (WTO) Generalized System of Preferences (GSP) Some remarks on protectionism Conclusion

69 70 71 77 80 90 90 95 96 97

Part 2

World market environment

103
105 106 107 108 114 121 123 123 125 127 127 133 135 135 141 142 143 143 144 148 149 151 152 159 172 175 176 180 181 182

4 Political environment Marketing strategy: the Indian Bengals of information services Multiplicity of political environments Types of government: political systems Types of government: economic systems Political risks Privatization Indicators of political instability Analysis of political risk or country risk Management of political risk Measures to minimize political risk Political insurance Conclusion Case 4.1 Toyota: how to win friends and influence people 5 Legal environment Marketing strategy: the long arm of the law 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 5.1 Bribery: a matter of national perspective 6 Culture Marketing strategy: fish story Culture and its characteristics

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Influence of culture on consumption Influence of culture on thinking processes Influence of culture on communication processes Cultural universals Cultural similarities: an illusion Communication through verbal language Communication through nonverbal language Subculture Conclusion Case 6.1 Cultural considerations in international marketing: a classroom simulation Case 6.2 When in Rome do as the Romans do: useful tips for those who do business in Russia Case 6.3 Language of color 7 Consumer behavior in the international context: psychological and social dimensions Marketing strategy: the samurai and luxury cars Perspectives on consumer behavior Motivation Learning Personality Psychographics Perception Attitude Social class Group Family Opinion leadership Diffusion process of innovation Conclusion Case 7.1 Tropical drink for the U.S. market

185 186 187 188 189 189 198 207 209 210 212 214 219 220 221 222 222 226 229 230 236 238 239 239 240 240 241 242

Part 3

Planning for international marketing

249
251 252 253 254 255 258 261 262 266 277 280 281

8 Marketing research and information systems Marketing strategy: phones as companions Nature of marketing research Marketing information sources Secondary research Primary research Sampling Basic methods of data collection Measurement Marketing information system Conclusion Case 8.1 Mapping Japanese tourism behavior

Contents

9 Foreign market entry strategies Marketing strategy: Raging Bull Foreign direct investment (FDI) Exporting Licensing Management contract Joint venture Manufacturing Assembly operations Turnkey operations Acquisition Strategic alliances Analysis of entry strategies Free trade zones (FTZs) Conclusion Case 9.1 Taylor Candy Company and the Caribbean market

291 292 293 296 297 301 301 305 307 308 310 314 315 317 320 320

Part 4

International marketing decisions

329
331 332 333 335 337 338 340 347 359 361 369 371 375 376 377 381 394 395 398 400 410 410 411 413 413

10 Product strategies: basic decisions and product planning Marketing strategy: East is East and West is West What is a product? New product development Market segmentation Product adoption Theory of international product life cycle Product standardization vs. product adaptation A move toward world product: international or national product? Marketing of services Conclusion Case 10.1 McfJonaldization 11 Product strategies: branding and packaging decisions Marketing strategy: global brands and mega brands Branding decisions Branding levels and alternatives Brand consolidation Brand origin and selection Brand characteristics Brand protection Packaging: functions and criteria Mandatory package modification Optional package modification Conclusion Case 11.1 Planet Ralph: the global marketing strategy of Polo Ralph Lauren

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12 Channels of distribution Marketing strategy: blood diamonds and De Beers (Part 1) Direct and indirect selling channels Types of intermediaries: direct channel Types of intermediaries: indirect channel Channel development Channel adaptation Channel decisions Determinants of channel types Distribution in Japan Selection of channel members Representation agreement and termination Black market Gray market Distribution of services Conclusion Case 12.1 Managing channel conflict in the global IT industry Case 12.2 Schwarzkopf, Inc. distribution network 13 Physical distribution and documentation Marketing strategy: booming economies and headaches Modes of transportation Cargo or transportation insurance Packing Containers Freight forwarder and customs broker Contract logistics Documentation Conclusion Case 13.1 Who can best introduce the "City Adventurer" into Saudi Arabia? 14 Promotion strategies: personal selling, publicity, and sales promotion Marketing strategy: book worms Promotion and communication Promotion mix Personal selling Publicity Sales promotion Overseas product exhibitions Conclusion Case 14.1 Selling in the EU Case 14.2 A new system installment of Sanki Denki (Thailand) 15 Promotion strategies: advertising Marketing strategy: soft and not-so-soft drinks

419 420 422 425 427 437 439 439 442 447 449 451 452 453 462 463 465 466 471 472 473 481 481 485 486 487 488 500 501 508 509 510 511 512 520 523 528 532 532 534 539 540

xii

Contents

The role of advertising Patterns of advertising expenditures Advertising and regulations Advertising media Standardized international advertising Global advertising: true geocentricity . Conclusion Case 15.1 International advertising: standardized, localized, or global? 16 Pricing strategies: basic decisions Marketing illustration: the price is right The role of price Price standardization Pricing decisions Alternative pricing strategies Dumping Price distortion Price Inflation Transfer pricing Conclusion Case 16.1 Blood diamonds (Part II)

541 541 542 542 555 566 567 568 574 575 576 576 577 584 585 589 590 591 598 602 602 605 606 607 613 614 618 632 632

fixing

17 Pricing strategies: countertrade and terms of sale/payment Marketing strategy: noncash trade Countertrade Price quotation Terms of sale Methods of financing and means of payment Conclusion Case 17.1 Countertrade: counterproductive?

Part 5

Financial decisions

637
639 640 642 642 644 649 653 653 654 659 659

18 Financial Strategies: financing and currencies Marketing strategy: the Big Mac Index Trade finance Nonfinancial institutions Financial institutions Government agencies International financial institutions/development banks International Monetary Fund (IMF) Money Foreign exchange Foreign exchange market

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Foreign exchange rate Exchange rate systems Official classification of exchange rate regimes Evaluation of floating rates Financial implications and strategies Conclusion Case 18.1 Ups and downs: a foreign exchange simulation game Index

663 666 671 672 674 684 685 690