Study Guide

Topics: World Trade Organization, International trade, General Agreement on Tariffs and Trade Pages: 12 (4464 words) Published: April 14, 2013
The key to successful international marketing is adaptation to the environmental differences from one market to another. Adaptation is a conscious effort on the part of the international marketer to anticipate the influences of both the foreign and domestic uncontrollable factors on a marketing mix and then to adjust the marketing mix to minimize the effects. Two primary obstacles to success in international marketing are Self-Reference Criterion (SRC) and Ethnocentrism. They are explained in detail in the next few slides.

Self-Reference Criterion (SRC) is an unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions. The risks of SRC are great. SRC can prevent marketing managers from being aware of cultural differences or from recognizing the importance of those differences. This will result in firms failing to recognize the need to take action, discounting the cultural differences that exist among countries, and reacting to a situation in a way offensive to your hosts. A common mistake made by Americans is to refuse food or drink when offered. In the United States, a polite refusal is certainly acceptable, but in Asia or the Middle East, a host is offended if you refuse hospitality. Although you do not have to eat or drink much, you do have to accept the offering of hospitality. Also, SRC influences the evaluation of the appropriateness of a domestically designed marketing mix for a foreign market.

Closely connected to SRC is ethnocentrism – the notion that people in one’s own company, culture, or country know best how to do things. Ethnocentrism is generally a problem when managers from affluent countries work with managers and markets in less affluent countries. The risk of ethnocentrism is that it impedes the ability to assess a foreign market in its true light.

To avoid errors in business decisions, the international marketer will conduct a cross-cultural analysis that isolates the SRC influences and will maintain a vigilance regarding ethnocentrism. The following is a suggested framework for cross-cultural analysis: Define the business problem or goal in home-country cultural traits, habits, or norms; Define the business problem or goal in foreign-country cultural traits, habits, or norms through consultation with natives of the target country; Isolate the SRC influence in the problem and examine it carefully to see how it complicates the problem; and, Redefine the problem without the SRC influence and solve for the optimum business goal situation.

Once a company has decided to go international, it has to decide the degree of marketing involvement and commitment it is willing to make. In general, one of five (sometimes overlapping) stages can describe the international marketing involvement and commitment of a company. These include: No direct foreign marketing, Infrequent foreign marketing, Regular foreign marketing, International marketing, and Global marketing. The first two stages are “reactive” in nature and the remaining three are “proactive.” Rather than progressing from one stage to another; a firm may begin its international involvement at any one stage or be in more than one stage simultaneously. For example, because of a short product life cycle and a thin but widespread market for many technology products, many high-tech companies large and small see the entire world, including their home market, as a single market and strive to reach all possible customers as rapidly as possible.

In addition to U.S. economic assistance, a move toward international cooperation among trading nations was manifest in the negotiation of the General Agreement on Tariffs and Trade (GATT). The last half of the century, while free of a world war, was marred by struggles between countries espousing the Socialist Marxist approach and those following a Democratic capitalist approach to economic development. As a result of this ideological split, traditional trade...
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