Phillip Cateora,
University of Colorado -- Boulder John Graham,
University of California -- Irvine
ISBN: 0072833718 Copyright year: 2005
Book Preface
At the start of the last millennium the Chinese were the preeminent international traders. Although a truly global trading system would not evolve until some 500 years later, Chinese silk was available in Europe.
At the start of the last century the British military, merchants, and manufacturers dominated the seas and international commerce. Literally, the sun did not set on the British Empire.
At the start of the last decade Japan's economic successes had rendered the military competition between the United States and the Soviet Union obsolete. Pundits circa 1990 predicted a Pacific Century wherein trans-Pacific trade would surpass trans-Atlantic trade. Other Asian economies would follow the lead of Japan. No one then foresaw the ascendancy and impact of the American-created information technology revolution.
What surprises do the new decade, century, and millennium hold in store for all of us? The globalization of markets has certainly accelerated through almost universal acceptance of the democratic free enterprise model and new communication technologies, including satellites and the Internet. Which will prove the better, Chinese gradualism or the Russian big-bang approach to economic and political reform? Will the information technology boom of the previous decade be followed by a demographics bust when American baby boomers try to retire in 2010? Or will NAFTA and the young folks in Mexico provide a much needed demographic balance? Ten years out the debate about global warming should be settled—more data and better science will yield the answers. What unforeseen advances or disasters will the biological sciences bring us? Will we conquer AIDS/HIV in Africa? Will weapons and warfare become obsolete?
International marketing will play a key role in providing positive answers to all these questions. We know that trade causes peace and prosperity by promoting creativity, mutual understanding, and interdependence. Markets are burgeoning in emerging economies in Eastern Europe, the Commonwealth of Independent States, China, Indonesia, Korea, India, Mexico, Chile, Brazil, and Argentina—in short, globally. These emerging economies hold the promise of huge markets in the future. In the more mature markets of the industrialized world, opportunity and challenge also abound as consumers' tastes become more sophisticated and complex and as increases in purchasing power provide consumers with new means of satisfying new demands.
Opportunities in today's global markets are on a par with the global economic expansion that existed after World War II. Today, however, the competitive environment within which these opportunities exist is vastly different from that earlier period when United States' multinationals dominated world markets. From the late 1940s through the 1960s, multinational corporations (MNCs) from the United States had little competition; today, companies from almost all the world's nations vie for global markets.
There is no better illustration of the changes that have occurred in the competition for global markets in the last quarter century than that experienced by General Electric Lighting (GEL). GEL, begun in 1887, dominated the U.S. lighting market until traditional rival Westinghouse sold its lamp operations to Philips Electronics of Holland in 1983. "Suddenly," reflected GEL's chief, "we have bigger, stronger competition. They're coming to our market, but we're not in theirs. So we're on the defensive." Not long after, GEL acquired Tungsram, a Hungarian lighting company, and Thorn EMI in Britain, and then moved into Asia via a joint venture with Hitachi. As recently as 1988, GE Lighting got less than 20 percent of its sales from outside the United States; in 2000, more than half came from abroad. What happened at GE Lighting occurred over and over again to MNCs in the United States, Europe, and Asia. The companies that succeed in the twenty-first century will be those capable of adapting to constant change and adjusting to new challenges.
The economic, political, and social changes that have occurred over the last decade have dramatically altered the landscape of global business. Consider the present and future impact of the following:
The ever-present threat of global terrorism as represented by the September 11 attacks
Major armed conflicts in sub-Sahara Africa and the Middle East
The looming global recession
The emerging markets in Eastern Europe, Asia, and Latin America, where more than 75 percent of the growth in world trade over the next 20 years is expected to occur
The reunification of Hong Kong, Macau, and China, which finally puts all of Asia under the control of Asians for the first time in over a century
The European Monetary Union and the successful switch from local-country currencies to one monetary unit for Europe, the euro
The rapid move away from traditional distribution structures in Japan, Europe, and many emerging markets
The growth of middle-income households the world over
The continued strengthening and creation of regional market groups such as the European Union (EU), the North American Free Trade Area (NAFTA), ASEAN Free Trade Area (AFTA), the Free Trade Area of the Americas (FTAA), the Southern Cone Free Trade Area (Mercosur), and the Asian-Pacific Economic Cooperation (APEC)
The successful completion of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) and the creation of the World Trade Organization (WTO), the last now including China and Taiwan
The restructuring, reorganizing, and refocusing of companies in telecommunications, entertainment, and biotechnology, as well as in traditional smokestack industries around the world
The continuing integration of the Internet into all aspects of companies' operations and consumers' lives
These are not simply news reports. These changes affect the practice of business worldwide, and they mean that companies will have to constantly examine the way they do business and remain flexible enough to react rapidly to changing global trends to be competitive.
As global economic growth occurs, understanding marketing in all cultures is increasingly important. International Marketing addresses global issues and describes concepts relevant to all international marketers, regardless of the extent of their international involvement. Not all firms engaged in overseas marketing have a global perspective, nor do they need to. Some companies' foreign marketing is limited to one country; others market in a number of countries, treating each as a separate market; and still others, the global enterprises, look for market segments with common needs and wants across political and economic boundaries. All, however, are affected by competitive activity in the global marketplace. It is with this future that the twelfth edition of International Marketing is concerned.
Emphasis is on the strategic implications of competition in different country markets. An environmental/cultural approach to international marketing permits a truly global orientation. The reader's horizons are not limited to any specific nation or to the particular ways of doing business in a single nation. Instead, the book provides an approach and framework for identifying and analyzing the important cultural and environmental uniqueness of any nation or global region. Thus, when surveying the tasks of marketing in a foreign milieu, the reader will not overlook the impact of crucial cultural issues.
The text is designed to stimulate curiosity about management practices of companies, large and small, seeking market opportunities outside the home country and to raise the reader's consciousness about the importance of viewing international marketing management strategies from a global perspective.
Although this revised edition is infused throughout with a global orientation, export marketing and the operations of smaller companies are not overlooked. Issues specific to exporting are discussed where strategies applicable to exporting arise, and examples of marketing practices of smaller companies are examined. New and Expanded Topics in This Edition
The new and expanded topics in this twelfth edition reflect issues in competition, changing marketing structures, ethics and social responsibility, negotiations, and the development of the manager for the twenty-first century. Competition is raising the global standards for quality, increasing the demand for advanced technology and innovation, and increasing the value of customer satisfaction. The global market is swiftly changing from a seller's market to a buyer's market. This is a period of profound social, economic, and political change. To remain competitive globally, companies must be aware of all aspects of the emerging global economic order.
Additionally, the evolution of global communications and its known and unknown impact on how international business is conducted cannot be minimized. In the third millennium people in the "global village" will grow closer than ever, and will hear and see each other as a matter of course. An executive in Germany will be able to routinely pick up his or her videophone to hear and see his or her counterpart in an Australian company or anywhere else in the world. In many respects, geographic distance is becoming irrelevant.
Telecommunications, videophones, facsimile machines, the Internet, and satellites are helping companies optimize their planning, production, and procurement processes. Information—and, in its wake, the flow of goods—is moving around the globe at lightning speed. Increasingly powerful networks spanning the globe enable the delivery of services that reach far beyond national and continental boundaries, fueling and fostering international trade. The connections of global communications bring people all around the world together in new and better forms of dialogue and understanding.
This dynamic nature of the international marketplace is reflected in the number of substantially improved and expanded topics in this twelfth edition, including the following:
A deeper look at the causes of cultural differences
The Internet and its expanding role in international marketing
Negotiations with customers, partners, and regulators
Big emerging markets (BEMS)
Evolving global middle-income households
World Trade Organization
North American Free Trade Agreement
ASEAN Free Trade Area
Asia-Pacific Economic Cooperation
Multicultural research
Qualitative and quantitative research
Country-of-origin effect and global brands
Industrial trade shows
A growing emphasis on both consumer and industrial services
Trends in channel structures in Europe, Japan, and developing countries
Ethics and socially responsible decisions
Green marketing
Changing profiles of global managers
Structure of the Text
The text is divided into six parts. The first two chapters, Part 1, introduce the reader to the environmental/cultural approach to international marketing and to three international marketing management concepts: domestic market expansion, multidomestic marketing, and global marketing. As companies restructure for the global competitive rigors of the twenty-first century, so too must tomorrow's managers. The successful manager must be globally aware and have a frame of reference that goes beyond a country, or even a region, and encompasses the world. What global awareness means and how it is acquired is discussed early in the text; it is at the foundation of global marketing.
Chapter 2 focuses on the dynamic environment of international trade and the competitive challenges and opportunities confronting today's international marketer. The importance of the creation of the World Trade Organization, the successor to GATT, is fully explored. The growing importance of the Internet in conducting international business is considered, creating a foundation on which specific applications in subsequent chapters are presented.
The five chapters in Part 2 deal with the cultural environment of global marketing. A global orientation requires the recognition of cultural differences and the critical decision of whether or not it is necessary to accommodate them.
History and geography (Chapter 3) are included as important dimensions in understanding cultural and market differences among countries. Not to be overlooked is concern for the deterioration of the global ecological environment and the multinational company's critical responsibility to protect it.
Chapter 4 presents a broad review of culture and its impact on human behavior as it relates to international marketing. Specific attention is paid to Geert Hofstede's study of cultural values and behavior. The elements of culture reviewed in Chapter 4 set the stage for the in-depth analyses in Chapters 5, 6, and 7 of business customs and the political and legal environments. Ethics and social responsibility are presented in the context of the dilemma that often confronts the international manager, that is, balancing corporate profits against the social and ethical consequences of his or her decisions.
The three chapters in Part 3 are concerned with assessing global market opportunities. As markets expand, segments grow within markets; as market segments across country markets evolve, marketers are forced to understand market behavior within and across different cultural contexts. Multicultural research, qualitative and quantitative research, and the Internet as a tool in the research task are explored in Chapter 8.
Chapters 9 and 10 in Part 3 explore the impact of the three important trends in global marketing: the growth and expansion of the world's big emerging markets; the rapid growth of middle-income market segments; and the steady creation of regional market groups that include NAFTA, the European Union, AFTA, APEC, and the evolving Free Trade Area of the Americas (FTAA). Also discussed is the growing number of trade agreements that have been executed by the European Union and Japan with the FTAA and some Latin American countries.
The strategic implications of the dissolution of the USSR, the emergence of new independent republics, the shift from socialist-based to market-based economies in Eastern Europe, and the return of South Africa and Vietnam to international commerce are examined. Attention is also given to the efforts of the governments of India and many Latin American countries to reduce or eliminate barriers to trade, open their countries to foreign investment, and privatize state-owned enterprises.
These political, social, and economic changes that are sweeping the world are creating new markets and opportunities, making some markets more accessible while creating the potential for greater protectionism in others.
In Part 4, Developing Global Marketing Strategies, planning and organizing for global marketing is the subject of Chapter 11. The discussion of collaborative relationships, including strategic alliances, recognizes the importance of relational collaborations among firms, suppliers, and customers in the success of the global marketer. Many multinational companies realize that to fully capitalize on opportunities offered by global markets, they must have strengths that often exceed their capabilities. Collaborative relationships can provide technology, innovations, productivity, capital, and market access that strengthen a company's competitive position.
Chapters 12 and 13 focus on product and services management, reflecting the differences in strategies between consumer and industrial offerings and the growing importance in world markets for both consumer and business services. Additionally, the discussion on the development of global offerings stresses the importance of approaching the adaptation issue from the viewpoint of building a standardized product/service platform that can be adapted to reflect cultural differences. The competitive importance in today's global market for quality, innovation, and technology as the keys to marketing success is explored.
Chapter 14 takes the reader through the distribution process, from home country to the consumer in the target country market. The structural impediments to market entry imposed by a country's distribution system are examined in the framework of a detailed presentation of the Japanese distribution system. Additionally, the rapid changes in channel structure that are occurring in Japan, as well as in other countries, and the emergence of the World Wide Web as a distribution channel are presented.
In Chapter 15, the special issues involved in moving a product from one country market to another, and the accompanying mechanics of exporting, are addressed. The importance of the Internet in assisting the exporter to wade through the details of exporting is discussed in the context of the revised export regulations.
Chapter 16 covers advertising and addresses the promotional element of the international marketing mix. Included in the discussion of global market segmentation are recognition of the rapid growth of market segments across country markets and the importance of market segmentation as a strategic competitive tool in creating an effective promotional message. Chapter 17 discusses personal selling and sales management and the critical nature of training, evaluating, and controlling sales representatives.
Price escalation and ways it can be lessened, countertrade practices, and price strategies to employ when the dollar is strong or weak relative to foreign currencies are concepts presented in Chapter 18.
In Part 5, Chapter 19 is a thorough presentation of negotiating with customers, partners, and regulators. The discussion stresses the varying negotiation styles found among cultures and the importance of recognizing these differences at the negotiation table. Pedagogical Features of the Text
The text portion of the book provides a thorough coverage of its subject, with subject emphasis on the planning and strategic problems confronting companies that market across cultural boundaries.
The use of the Internet as a tool of international marketing is stressed throughout the text. On all occasions where data used in the text originated from an Internet source, the Web address is given. Problems that require the student to access the Internet are included with end-of-chapter questions. Internet-related problems are designed to familiarize the student with the power of the Internet in his or her research, to illustrate data available on the Internet, and to challenge the reader to solve problems using the Internet. Many of the examples, illustrations, and exhibits found in the text can be explored in more detail by accessing the Web addresses that are included.
Current, pithy, sometimes humorous, and always relevant examples are used to stimulate interest and increase understanding of the ideas, concepts and strategies presented in emphasizing the importance of understanding cultural uniqueness and relevant business practices and strategies.
Each chapter is introduced with a Global Perspective, a real-life example of company experiences that illustrates salient issues discussed in the chapter. Companies featured in the Global Perspectives range from exporters to global enterprises.
The boxed "Crossing Borders," an innovation of the first edition of International Marketing, have always been popular with students. This twelfth edition includes more than 30 new incidents that provide insightful examples of cultural differences while illustrating concepts presented in the text. They reflect contemporary issues in international marketing and can be used to illustrate real-life situations and as the basis for class discussion. They are selected to be unique, humorous, and of general interest to the reader.
The book is now presented in full color allowing for maps that allow easier depiction of geographical, cultural, and political boundaries and features. Color also allows us to better communicate through that medium the intricacies of international symbols and meanings in marketing communications. New photographs of current and relevant international marketing events are found throughout the text—all in color.
"The Country Notebook—A Guide for Developing a Marketing Plan," found in Part 6, Supplementary Material, is a detailed outline that provides both a format for a complete cultural and economic analysis of a country, and guidelines for developing a marketing plan.
In addition to "The Country Notebook," Part 6 comprises a selection of short and long cases. The short cases focus on a single problem, serving as the basis for discussion of a specific concept or issue. The longer, more integrated cases are broader in scope and focus on more than one marketing management problem. More than two-thirds of the cases are new or revised. New cases focus on healthcare marketing, negotiations, using the Internet, services and industrial marketing, and marketing research. The cases can be analyzed by using the information provided. They also lend themselves to more in-depth analysis, requiring the student to engage in additional research and data collection. Supplements
We have taken great care to offer new features and improvements to every part of the teaching aid package. Following is a list of specific features:
Instructor's Manual and Test Bank. The Instructor's Manual, prepared by the authors, contains lecture notes or teaching suggestions for each chapter. A section called "Changes to This Edition" is included to help instructors adapt their teaching notes to the twelfth edition. A case correlation grid at the beginning of the case note offers alternative uses for the cases.
The Test Bank, prepared by John R. Brooks, Jr., of Houston Baptist University, is bound with the Instructor's Manual for ease of use. The Test Bank contains over 2,000 questions, including true/false, critical thinking, and essay formats. Computerized testing software with an online testing feature is also available on the instructor's CD-ROM.
Videos. The video program has been revised for the twelfth edition and contains new footage of companies, topics videos, and unique training materials for international negotiations. An accompanying booklet offers teaching notes and questions relevant to each chapter in the text.
PowerPoint slides. The PowerPoint presentation that accompanies International Marketing, twelfth edition, contains approximately 150 exhibits from the text and other sources. All of the maps from the text are included as well. Power Point slides were prepared by Dr. Rajiv Mehta of the New Jersey Institute of Technology.
Instructor's CD-ROM. This presentation manager, available to adopters of the textbook, contains the Instructor's Manual, Test Bank, PowerPoint, video clips, and an interactive version of the Country Notebook. Instructors have the ability to customize their lectures with this powerful tool.
World Wide Web Home Page. The website is at www.mhhe.com/cateora. Included on the site are instructor resources such as downloadable files for the complete Instructor's Manual, PowerPoint slides, video clips, and links to current events and additional resources for the classroom. Instructors can also link to McGraw-Hill's site from this location in order to create their own course website and access the complete Test Bank. For students, our site provides updates on information given in the text, links to websites, an interactive version of the Country Notebook, and an eLearning Session interactive tutorial.
To obtain an instructor login for this Online Learning Center, ask your local sales representative.
If you're an instructor thinking about adopting this textbook, request a free copy for review.
2005 McGraw-Hill Higher Education