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11e INTERNATIONAL
MARKETING
Mi c hae l R . Cz i nk ot a
Georgetown University
I l k k a A . Ronk ai ne n
Georgetown University
A nni e Pe ng Cui
West Virginia University
Australia ● Brazil ● Canada ● Mexico ● Singapore ● United Kingdom ● United States
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International Marketing, Eleventh Edition © 2023, © 2013, © 2010
Michael R. Czinkota, Ilkka A. Ronkainen,
WCN: 02-300
and Annie Peng Cui
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Printed in the United States of America

Print Number: 01 Print Year: 2021
To Ilona and Margaret Victoria—MRC
To Susan, Sanna, and Alex—IAR
To Yisong, Aaron, and Ella—APC
PREFACE
Thank you for reading our book! Practicing international marketing and writing a text on the subject
have much in common. The focus is on delighting the customer; it is a lot of work, the competition
is tough, and it’s fun to succeed. It is therefore with great pleasure that we present the eleventh
edition of International Marketing to you.
In the rapidly changing world of business, only a small portion of textbooks ever see a second
edition, much less an eleventh one. Publishers change, markets move in new directions, competitors
emerge, and authors adjust their commitments to new life situations. So we are very pleased to have
served the international marketing market for 34 years now, which is largely a sign of the continued
faith and confidence of our colleagues and students in our work. Thank you for allowing us to shape
the field and have a major impact on what people know about international marketing today.
Over the years, we have always made key improvements in our new editions. There has been
unprecedented change in the field of international marketing, ranging from reinterpretation of
trade rules to redefining collaboration with global players. When domestic economic activities
decrease, then international marketing decreases as well, only much more so. Austerity brings
changes in production and consumption patterns and introduces new dimensions into the decision-
making process. The role of governments is growing by leaps and bounds. They are key entities that
dictate the direction and strength of international marketing. Nationalism is on the rise, and global
uncertainties abound.
International marketers precipitate social change and provide insight to help society under-
stand the trade-offs and consequences of actions. Business and marketing are looked upon expec-
tantly by nations and their governments. International marketing is often the key option that can
deliver major improvements in economic activity.
The challenge is great. Nations around the world attempt to stabilize and revitalize their econo-
mies. Mostly, each nation’s emphasis rests with domestic issues. But international interventions
of one nation are likely to rapidly affect other countries as well. Protectionism, once introduced,
can quickly become contagious. Market economies are no longer automatically subscribed to. Key
traditional tenets of the marketing discipline, such as risk, profit, competition, and ownership, are
being redefined and reassessed.
International marketers develop the knowledge and talents to make economies work. They
explain that nations must be willing and able to buy each other’s goods if world prosperity is to
blossom. They demonstrate that a rising tide can lift all boats, but only if the boat and the sails are
in good condition and the crew is prepared and well trained.
Through their understanding of culture and emotions, international marketers can make major
strides in creating a better world. When there is disagreement or even sparring, we ask you to apply
to international marketing the advice rendered by the great scholar Ludwig von Wittgenstein: “A
philosopher who is not taking part in discussions is like a boxer who never goes into the ring.”
But international marketing is not an uncontroversial discipline. There is a large historic burden
carried by the field of marketing. Marketers like to sell more, but have focused little on their societal
impact. Certain marketing strategies have created long-term repercussions on consumers (e.g.,
obesity due to overconsumption of fast food) and on the chain of consumption. Vampire marketing
charges consumers more money as they intensify their product usage. For example, the minibar
iv
in a hotel room late at night becomes your only option to assuage hunger. We have developed the
concept of “curative marketing,” which identifies malpractices of the past, avoids them in the future,
and makes major efforts to cure the negative effects of the past transgressions. At various places in
the book, we highlight the capability of curative marketing to “do better.”
There have been key changes in data collection and use. There is much to be learned for the
marketing discipline. However, just like for most things in life: moderation is crucial. By looking at
numbers only, some analysts forget that international marketing is a social science applied across
borders. In spite of growing quantification, international marketing remains a discipline linked most
deeply with people, their emotions, and their behavior. Therefore, even a researcher with a white lab
coat, who may prefer to work with numbers only, must pay major attention to human interaction
in order to achieve societal benefit. This issue is particularly relevant to international marketing,
where variations in contexts, cultures, and behaviors bring out the importance of direct interac-
tion and individual awareness. We must understand the people who contribute to decisions and
consider their contextual constraints. Our book takes this guideline as its mission for its analyses
and its approach to the future.
The focus on international marketing is rising. We see great increases in student enrollment. In
times of slack resources, one can explore new market opportunities, customs, and customers. When
economic conditions get better, one can convert that capability into market results and receive a
payoff from all the prior work. International marketing is a vital economic stimulus, which makes
this eleventh edition of International Marketing the best one yet!
We reflect many new dimensions, emotions, and boundaries that affect the discipline. Here are
the key features that make this book stand out:
● We paint a broader picture of the implications of adopting or rejecting a market orientation. In
doing so, we introduce the concept of curative marketing, which highlights ethical and sustain-
ability issues, discusses the shortcomings of corporate transparency and executive veracity,
and develops new alternative explanations and approaches.
● We provide substantial data analyses and international data support. For example, we discuss
all economic regions, offering comparative benchmarks not only from the United States, but
also from China, Australia, Kenya, and Brazil.
● We cover the full spectrum of international marketing, from start-up operations to the forma-
tion of virtual alliances. We offer a thorough discussion of the operations of multinational cor-
porations, and also present a specific focus on the activities of small- and medium-sized firms,
which are increasingly major players in the international market.
● We provide a hands-on analysis of the growing interaction between government and business.
We have served in government positions and advised international policy marketers. As gov-
ernments take on an expanding role in business, our orientation greatly enhances the manage-
rial relevance of this book.
● We cover both the theory and the practice of international marketing. Based on our personal
research record and business experience, we can offer research insights from around the globe
and show how corporations are adjusting to the marketplace realities of today. This way, we
enhance the presentation of our material by closely linking concepts with parables, analogies,
and similes so that the meaning becomes more obvious to the reader and is better recalled.
● We acknowledge and give clear examples of how the world has changed in an era of terror-
ism, hostility, and distrust. We look at the marketing repercussions of these changes on people
management, sourcing policies, cargo security, inventory management, and port utilization.
However, we also draw on our work with corporations to find new forms of collaboration and
network building without compromising safety or security. We reflect the use of social media
in reaching out to customers, suppliers, and even competitors in order to achieve greater satis-
faction and more progress for society.
● We address the concerns of emerging and developing markets throughout the text. We pres-
ent the issue of underserved markets, with a population of 5 billion, and also explore and
suggest how these people and countries need to become greater participants in international
marketing efforts.
● Our analysis and presentation is offered from a truly global perspective. By addressing, con-
fronting, and examining the existence of different environments, expectations, and market
conditions, we highlight the need for awareness, sensitivity, and adaptation.
● We integrate the impact of the Internet on the international marketer. We discuss the revolu-
tionary changes in communication between firms and their customers and suppliers, and pres-
ent the latest consequences for international market research and entry.
Preface v
Personal Support
Most importantly, we fully stand behind our product and we will work hard to delight you. Should
you have any questions or comments on this book, you can contact us, talk to us, and receive
feedback from us.
Michael R. Czinkota Ilkka A. Ronkainen Annie Peng Cui
[email protected] [email protected] [email protected]
ORGANIZATION
The text is designed primarily for the advanced undergraduate student with prior exposure to the
marketing field. Because of its in-depth coverage, it also presents an excellent challenge for gradu-
ate instruction and executive education.
The text is divided into four parts. We open with the examination of the international marketing
environment, where we examine economic and cultural contexts, shifts bought about by globaliza-
tion, and key international institutions, regulations, and legal issues. We then examine how to find
global customers by first analyzing the global consumer in detail, followed by strategic planning,
the juxtaposition of people and markets, market entry activities, and the necessary organization
for international marketing. Our third part concentrates on the global marketing mix by presenting
the core international adjustments and expansions that have to be built on top of purely domestic
considerations. We conclude with a section on leadership in global marketing, where we present
the impact of social networks and communications, analyze the meaning of responsibility and
sustainability, and highlight new directions and challenges.
KEY FEATURES
This eleventh edition reflects the highly dynamic nature of international marketing. We offer a per-
spective on the shift in the role of market forces and the impact of this revolution on international
marketers in terms of outreach, research, and competition. Our International Marketplace vignettes
reflect corporate practices. To make it easier for the reader to follow up on information obtained
through the book, we have included Recommended Readings. These often present resources
and links to the websites of companies, data sources, governments, international organizations,
and monitors of international marketing issues.
Our focus on the physical environment and geography is strong. Updated maps provide context
in terms of social and economic data. An appendix directly addresses the relationship between
geography and international marketing. New text components, marketplaces, and cases specifi-
cally focus on the environment and the opportunities, challenges, and ambiguities that it poses to
international marketers.
We also have emphasized international institutions and their role for the international marketer.
The World Bank, the World Trade Organization, the International Monetary Fund, and the United
Nations are covered along with the public debate surrounding these institutions.
We broaden our highlights of emerging markets by systematically addressing the bottom of the
income pyramid. Our revised strategy section is now linked directly with organization, implementa-
tion, and research concerns. We have recast the chapter on market entry and expansion to include
a wider variety of ways in which firms go global. All of these strategies are now integrated into one
chapter, organized around our model of the internationalization process.
Our appendix on international employment opportunities helps students prepare for the imple-
mentation steps they have yet to take.
vi Preface
INNOVATIVE LEARNING TOOLS
Contemporary Realism
Each chapter offers current examples of real-world business situations in The International Market-
place boxes. The Challenge Us section at the end of each chapter details complex issues and asks
the student questions for discussion. These features allow the reader to develop an appreciation
for and an understanding of the linkage between theory and practice. These materials focus on
real marketing situations, including the environment and sustainability, and help students absorb
the presented materials. The instructor can highlight the boxes to exemplify theory or use them as
mini cases for class discussion.
Research Emphasis
An effort has been made to provide current research information and data from around the world.
Chapter notes are augmented by lists of relevant recommended readings incorporating the latest
research findings. In addition, a wide variety of sources and organizations that provide international
information are offered in the text. These materials enable the instructor and the student to go
beyond the text when desired.
Internet Focus
The Internet affects all of international marketing. We highlight how the way of reaching customers
and suppliers has changed given the new technology. We explain the enhanced ability of firms to
position themselves internationally in competition with other larger players. We offer insights into
the electronic marketing research process and present details of how companies cope with new
market realities. Whenever appropriate, we direct readers to internet resources that can be useful
in obtaining up-to-date information.
GEOGRAPHY
This edition contains several maps covering the social, economic, and political features of the world.
In addition, several chapters have maps particularly designed for this book, which integrate the
materials discussed in the text and reflect a truly global perspective. These maps enable the instruc-
tor to visually demonstrate concepts such as socioeconomic variables or exposure to terrorism. An
appendix dealing specifically with the impact of geography on international marketing is part of
Chapter 1.
CASES
Following each part of the text are a variety of cases. Most of our cases are updated especially for this
edition. These cases present students with real business situations and cover international market-
ing conditions from around the world. All cases address the activities of actual or former companies
and cover a broad geographic spectrum. Challenging questions accompany each case, permitting
in-depth discussion of the materials covered in the chapters.
Preface vii
ACK NOWLEDGMENT S
We are deeply grateful to professors, friends, and our reading public in general. Most instrumental
were Gary Knight, Charles Skuba, and Susan Ronkainen, who have helped us all in major ways. Their
work was crucial in refining the text, providing additional research, and further discussion of societal
dimensions. Thank you very much!
We are grateful to all the professors, students, and professionals using this book. Your interest
demonstrates the need for more knowledge about international marketing. As our market, you are
telling us that our product adds value to your lives. As a result, you add value to ours. Thank you!
Jo Ann L. Asquith Ken Fairweather Milena Simic

St. Cloud State University LeTourneau University Missouri Valley College
Thomas Belich Thomas F. List Kevin E. Voss
University of Minnesota Saginaw Valley State Oklahoma State University
University
John Besaw, Ph.D. A. N. M. Waheeduzzaman
University of Drew Martin Texas A&M University–Corpus
Washington–Tacoma University of Hawaii at Hilo Christi
Andrew J. Czaplewski Paul Myer Theodore O. Wallin
University of Colorado University of Maine Whitman School of
at Colorado Springs Management
Frank Novakowski
Yara DeAndrade Davenport University Wendel Weaver
Webster University Oklahoma Wesleyan University
Tagi Sagafi-Nejad
Matt Elbeck Texas A&M International Mark D. Woodhull, Ph.D.
Troy University University Schreiner University
Sanjeev Agarwal Subir Bandyopadhyay Samit Chakravorti
Iowa State University Indiana University Northwest Florida International University
Zafar Ahmed Warren Bilkey Shih-Fen Chen
Texas A&M–Commerce University of Wisconsin Kansas State University
Lyn S. Amine Katharine A. Bohley Hubbard Alex Christofides
St. Louis University University of Indianapolis Ohio State University
Jessica M. Bailey S. Tamer Cavusgil Farok J. Contractor
The American University Georgia State University Rutgers University
viii
Robert Dahlstrom Ceyhan Kilic Tony Peloso
University of Kentucky DePaul University Queensland University of
Technology (Australia)
Paul Dowling Hertha Krotkoff
University of Utah Towson State University Ilsa Penaloza
University of Connecticut
Carl E. Dresden Kathleen La Francis
Coastal Carolina University Central Michigan University Zahir A. Quraeshi
Western Michigan University
John Dyer Ann L. Langlois
University of Miami Palm Beach Atlantic University John Ryans
Kent State University
Luiz Felipe Trina Larsen
IBMEC Business School (Rio de Drexel University F. J. Sarknas
Janeiro, Brazil) Duquesne University
Edmond Lausier
Dr. John P. Fraderich University of Southern Regina P. Schlee
Southern Illinois California Seattle Pacific University
University–Carbondale
Bertil Liander Matthew Sim
Roberto Friedmann University of Massachusetts Temesek Business School
University of Georgia (Singapore)
Mushtaq Luqmani
Shenzhao Fu Western Michigan University James Spiers
University of San Francisco Arizona State University
Isabel Maignan
Jim Gentry Florida State University Odile J. Streed
University of Nebraska Concordia College
James Maskulka
Donna Goehle Lehigh University Janda Swinder
Michigan State University Kansas State University
James McCullouch
Needlima Gogumala Washington State University Ray Taylor
Kansas State University Villanova University
Fred Miller
Peter J. Gordon Murray State University Tyzoon T. Tyebjee
Southeast Missouri State Santa Clara University
Joseph Miller
University
Indiana University Robert Underwood
Paul Groke Virginia Polytechnic Institute
Mark Mitchell
Northern Illinois University and State University
University of South
Andrew Gross Carolina–Spartanburg Robert Weigand
Cleveland State University University of Illinois at Chicago
Tomasz Mroczkowski
John Hadjimarcou American University John Wilkinson
University of Texas at El Paso University of South Australia
Amit Mukherjee
Hari Hariharan Auburn University Sumas Wongsunopparat
DePaul University University of
Henry Munn
Wisconsin–Milwaukee
Braxton Hinchey California State University,
University of Lowell Northridge Nittaya Wongtada
Thunderbird
Carol Howard Cheryl Nakata
Oklahoma City University University of Illinois–Chicago Van R. Wood
Texas Tech University
Basil Janavaras Jacob Naor
Mankato State University University of Maine–Orono William Louden
Austin Community College
Denise Johnson Urban Ozanne
University of Louisville Florida State University Mike Harvey
Dominican University
Sudhir Kale
Arizona State University
Acknowledgments ix
Many thanks to all the colleagues and students who have helped us sharpen our thinking by
cheerfully providing challenging comments and questions. In particular, we thank Bernard LaLonde,
Ohio State University; Tamer Cavusgil, Georgia State University; and James Wills, University of Hawaii.
Many colleagues, friends, and business associates graciously gave their time and knowledge to
clarify concepts; provide us with ideas, comments, and suggestions; and deepen our understanding
of issues. Without the direct links to business and policy that you have provided, this book could not
offer its refreshing realism. In particular, we are grateful to secretaries Malcolm Baldridge, C. William
Verity, Clayton Yeutter, and William Brock for the opportunity to gain international business policy
experience and to William Morris, Paul Freedenberg, and J. Michael Farrell for enabling its imple-
mentation. We thank William Casselman of Stairs Dillenbeck Kelly Merle and Finley, Robert Conkling,
Lew Cramer of the Utah World Trade Center, Mark Dowd of IBM, David Danjczek, Greg Foster, Craig
O’Connor, Veikko Jääskeläinen, Reijo Luostarinen, and Hannu Seristö of Aalto University. A special
tip of the hat goes to Thomas Czinkota for all his inspiring thoughts and comments. Thank you very
much. Many thanks particularly to our research assistants, Gabrielle Irwin, William Houston and
Amalia Stahl. Thank you so much for your intellectual help and stimulation.
Valuable research assistance was provided by our elite student research team. They made
important and substantive contributions to this book. They pursued research information with
tenacity and relentlessness; they organized and analyzed research materials, prepared drafts of
vignettes and cases, and reinforced everyone on the fourth floor of the Hariri Building with their
can-do spirit.
Foremost, we are grateful to our families, who have truly participated in our labors. Only the
patience, understanding, and love of Ilona and Margaret Victoria Czinkota, Susan, Sanna, and Alex
Ronkainen, and Yisong, Aaron, and Ella Jiang enabled us to have the energy, stamina, and inspira-
tion to write this book.
Michael R. Czinkota
Ilkka A. Ronkainen
Annie Peng Cui
Washington, DC
July 6, 2021
x Acknowledgments
ABOUT THE AUTHORS
PROFESSOR MICHAEL CZINKOTA presents international business and trade at the McDonough
School of Business of Georgetown University in Washington D.C. He also presented for years cut-
ting edge international issues at the University of Kent in Canterbury, United Kingdom. He is the
chaired professor emeritus for international marketing at the University of Birmingham in the United
Kingdom. Fluent in English, Spanish, and German, he has held professorial appointments in Asia,
Australia, Europe, and the Americas.
Dr. Czinkota served in the U.S. government administrations of Presidents Ronald Reagan and
George H. W. Bush. As deputy assistant secretary at the Department of Commerce, he was respon-
sible for trade. He served as head of the U.S. delegation to the OECD Industry Committee in Paris.
In the Bureau of Export Administration, he was Senior Advisor for Export Controls.
Dr. Czinkota was a partner in a fur trading firm and in an advertising agency. His academic work
has focused on export development strategies and the linkage between terrorism and international
business. He is well known for his 25 years of Delphi Method studies, with participation by policy
makers, business executives, and researchers from nations around the globe, to forecast international
business change. He has written more than 140 articles in leading academic journals on the topics
and was named one of the top three contributors to the international business literature by the
Journal of International Business Studies. In 2019, the Academy of International Business awarded him
the Medal for Research Leadership in the past 50 years. The American Marketing Association pre-
sented Czinkota with its lifetime achievement award. Due to his academic engagement on terrorism,
Dr. Czinkota has worked with the U.S. Department of State and has testified 12 times before Congress.
He has authored 28 books in the fields of business, marketing, and trade. He also wrote three
leading college textbooks, International Marketing, 11th edition; International Business, 9th edition;
and Fundamentals of International Business, 3rd edition.
Dr. Czinkota served on the Global Advisory Board of the American Marketing Association, the
Global Council of the American Management Association, the Board of Governors of the Academy
of Marketing Science, and as a member of the American Council on Germany. For his work in inter-
national business and trade policy, he has been awarded honorary degrees by the Universidad del
Pacífico in Lima, Peru, and the Universidad Pontificia Madre y Maestra in the Dominican Republic.
The Universidad Ricardo Palma of Lima named its Global Marketing School after Dr. Czinkota.
He was named a Distinguished Fellow of the Academy of Marketing Science and a Fellow of the
Royal Society of Arts in the United Kingdom. Dr. Czinkota serves on several corporate boards and has
worked with corporations such as AT&T, IBM, GE, Nestlé, and US WEST. He has advised the Executive
Office of the President and the U.S. General Accountability Office on trade policy issues. He also serves
as an advisor to the United Nations and the World Trade Organization. Dr. Czinkota was born and raised
in Germany and educated in Austria, Scotland, Spain, and the United States. He studied law and business
administration at the University of Erlangen-Nürnberg and was awarded a two-year Fulbright Scholar-
ship. He holds an MBA in International Business and a Ph.D. in Logistics from The Ohio State University.
Blog: http://michaelczinkota.com/
LinkedIn: https://www.linkedin.com/in/michaelczinkota/
xi
ILKKA A. RONKAINEN is Full Professor (Emeritus) of faculty of marketing and international busi-
ness at the McDonough School of Business at Georgetown University. He also serves as a docent of
international marketing at the Aalto University (Helsinki School of Economics).
Dr. Ronkainen has published extensively in both academic journals and the trade press.
He is co-author of International Business (9 th edition) and International Business (3rd edition). His
trade books include The International Marketing Imperative and Mastering Global Markets. He
serves on the editorial boards of Journal of Business Research, International Marketing Review,
and Multinational Business Reviews.
He has received the undergraduate teaching and research award twice, as well as recognition
from the International Executive MBA program at Georgetown as the Outstanding Professor of the
Year. He is the founder and director of the McDonough School of Business’s summer program in
Hong Kong.
Dr. Ronkainen holds a doctorate and a master’s degree from the University of South Carolina
as well as a master’s of science (economics) degree from the Helsinki School of Economics. He has
served as a consultant to a wide range of U.S. and international institutions. He has worked with
entities such as IBM, the Rand Organization, and the Organization of American States. He maintains
close relations with a number of Finnish companies and their internationalization and educational
efforts.
ANNIE PENG CUI’s expertise is in the field of international branding and culture. She is the Kmart
Chair of Marketing in the Chambers College of Business and Economics, West Virginia University,
where she has served on the faculty since 2008. Dr. Cui is also the Director of Business Honors Pro-
gram at West Virginia University. She holds a Ph.D. degree in Marketing from Kent State University.
Dr. Cui’s research has appeared in top international journals, and she has served on the Editorial
Review Board for Journal of International Marketing since 2015. Dr. Cui has served on the Global SIG
Advisory Board of the American Marketing Association since 2008, and chaired this Advisory Board
between 2014 and 2017.
Dr. Cui has taught an innovative Export Management class to EMBA, MBA and undergraduate
students for over a decade. This class has helped more than 70 American companies export to over
100 countries. She has been invited to chair export-related training programs at government agen-
cies and universities around the world.
xii About the Authors
B RI EF CONTENT S
PREFACE iv
ACKNOWLEDGMENTS viii
ABOUT THE AUTHORS xi
PART 1 The International Marketing Environment 1

1 Global Environmental Drivers 2

APPENDIX A: A Brief Review of Marketing 18
APPENDIX B: Geographical Perspectives on International Marketing 22
2 International Trade Frameworks and Policy 28

3 The Role of Culture 52
4 The Economic Environment 80
5 The Political and Legal Environment 116
CASES 1 Exporting Handcrafted Goods from Indonesia 145
Super Foods: Camu Camu in Peru 147
PART 2 Finding Global Customers 151
6 Consumer, Industrial, and Government Markets 152

7 Strategic Planning 176
8 Analyzing People and Markets 200
APPENDIX A: Information Sources for Marketing Issues 228
APPENDIX B: The Structure of a Country Commercial Guide 235
9 Market Entry and Expansion 236

10 Marketing Organization, Implementation, and Control 262
CASES 2 Chopsticks from America: A Historic Assessment 291
La Casa de Las Botas 294
xiii
PART 3 The Global Marketing Mix 301
11 Product Management and Global Brands 302

12 Global Marketing of Services 339
13 Advertising, Promotion, and Sales 363
14 Pricing Strategies and Tactics 397
15 Global Distribution and Logistics 429
APPENDIX A: Elements of a Distributor Agreement 462
CASES 3 Equal Exchange: Doing Well by Doing Good 465
The Bell Boeing V-22 467
PART 4 Leadership in Global Marketing 473
16 Social Networks and Engagement 474

17 Leadership, Corporate Social Responsibility, and Sustainability 499
18 New Directions and Challenges 528
APPENDIX A: Finding Your Calling: Jobs
and Careers in International Marketing 546
CASES 4 African Producers in the Cut Flower and Foliage Trade 551
Thai Food in Europe 557
GLOSSARY 561
NAME INDEX 571
COMPANY INDEX 579
SUBJECT INDEX 585
xiv Brief Contents
CONTENT S
PREFACE iv
ACKNOWLEDGMENTS viii
ABOUT THE AUTHORS xi
PART 1 The International Marketing Environment 1
1 Global Environmental Drivers 2

The International Marketplace 1.1 Global Trends Impose New Strategic
Marketing Requirements 2
International Marketing Defined 4
The International Marketplace 1.2 Environment and Sustainability: A Global
Challenge for Ideas 5
The Importance of World Trade 6
The International Marketplace 1.3 New Sources for Outsourcing 7
Domestic Policy Repercussions 9
Opportunities and Challenges in International Marketing 11
The International Marketplace 1.4 Emerging Consumers Bring a Smile to
Coca-Cola and Consumer Goods Companies 12
The Goals of This Book 13
Summary 15
Key Terms 15
Questions for Discussion 16
Explore the Globe 16
Recommended Readings 16
Endnotes 17
APPENDIX A: A Brief Review of Marketing 18
Strategic Marketing 19
Target Market Selection 19
Marketing Management 20
The Marketing Process 20
Key Terms 21
Endnotes 21
xv
APPENDIX B: Geographical Perspectives on International Marketing 22
Location 22
Place 23
Natural Features 23
Human Features 24
Interaction 24
Movement 25
Region 27
Key Terms 27
Endnote 27
2 International Trade Frameworks and Policy 28

The International Marketplace 2.1 A Trade Negotiator’s Glossary:
What They Said and What They Really Meant 28
The Historical Dimension 29
The International Marketplace 2.2 The Modern-Day Pirate 29
Global Division 31
Transnational Institutions Affecting World Trade 32
World Trade Organization 32
The International Marketplace 2.3 Does the WTO Still Contribute
to World Trade? 33
International Monetary Fund 34
World Bank 35
Regional Institutions 36
Trade Positions Compared 37
A Diagnosis of the U.S. Trade Position 37
The Impact of Trade and Investment 40
The Effect of Trade 40
The Effect of International Investment 40
Policy Responses to Trade Problems 41
Restrictions of Imports 41
Export Promotion Efforts 45
A Strategic Outlook for Trade and Investment Policies 46
A U.S. Perspective 46
An International Perspective 47
The International Marketplace 2.4 The Trade Reality of E-Commerce 48
Summary 49
Key Terms 49
Endnotes 51
3 The Role of Culture 52

The International Marketplace 3.1 IMAX Broadens Presence 52
Culture Defined 54
The International Marketplace 3.2 Singles’ Day, a Global Shopping
Festival 56
xvi Contents
The Elements of Culture 57
Language 57
Nonverbal Language 59
Religion 60
Values and Attitudes 62
Manners and Customs 63
Material Elements 64
Aesthetics 65
Education 65
Social Institutions 65
The International Marketplace 3.3 Global SEM: A Story in Three Acts 66
Sources of Cultural Knowledge 67
Cultural Analysis 68
The Training Challenge 71
Making Culture Work for Marketing Success 73
Embrace Local Culture 73
Build Relationships 73
The International Marketplace 3.4 Cultural Awareness Online 74
Help Employees Understand You 75
Adapt Products and Processes to Local Markets 75
Coordinate by Region 75
Summary 76
Key Terms 76
Endnotes 78
4 The Economic Environment 80

The International Marketplace 4.1 Global Middle-Class Market 80
Market Characteristics 83
Population 83
Infrastructure 89
Impact of the Economic Environment on Social Development 91
Regional Economic Integration 94
European Integration 94
The North American Free Trade Agreement and USMCA 96
The International Marketplace 4.2 Retail Markets in Mexico 97
Integration in Latin America 98
Integration in Asia 100
Integration in Africa and the Middle East 101
The International Marketplace 4.3 The Gulf Economies Are Linked
East and West 102
Emerging Markets 103
Adjust Entry Strategy 104
Manage Affordability 107
Invest in Distribution 108
Build Strong Brands 108
Contents xvii
Developing Markets 108
Research 108
Create Buying Power 109
Tailor Local Solutions 109
Improve Access 109
Shape Aspirations 109
Challenges to Economic Integration 110
Summary 110
Key Terms 111
Endnotes 113
5 The Political and Legal Environment 116

The International Marketplace 5.1 “Of Course I’m
a Principal Player” 116
Home-Country Political and Legal Environment 118
Embargoes and Sanctions 118
Export Controls 119
A New Environment for Export Controls 121
The International Marketplace 5.2 Export Controls 122
Import Controls 123
Regulation of International Business Behavior 124
Host-Country Political and Legal Environment 125
Political Action and Risk 125
The International Marketplace 5.3 Baidu, Not Google, Is Keyword
for Search in China 126
Legal Differences and Restraints 129
The International Marketplace 5.4 The Archbishop and the Law 130
Influencing Politics and Laws 131
International Relationships 133
International Politics 133
International Law 133
Ethical Issues 134
Corporate Governance and Responsibility 134
The International Marketplace 5.5 Does Pollution Matter? 136
Intellectual Property 137
Bribery and Corruption 138
Summary 141
Key Terms 141
Endnotes 143
CASES 1 Exporting Handcrafted Goods from Indonesia 145
Super Foods: Camu Camu in Peru 147
xviii Contents
PART 2 Finding Global Customers 151
6 Consumer, Industrial, and Government Markets 152

The International Marketplace 6.1 Apple Targets Global Consumers 152
Drivers of the Global Consumer 154
The Global Consumer 154
Influences on the Global Consumer 156
Economic Status 156
The International Marketplace 6.2 Rise of the Global Middle Class 157
Technology Level 158
Personal Motives 159
The International Marketplace 6.3 China’s Huge Consumer Market 159
Culture 160
Social Factors 161
Situational Factors 162
Country-of-Origin Effects 162
The Industrial Buyer 163
Influences on the Global Industrial Buyer 164
Culture 164
Stage of Economic Development 165
The International Marketplace 6.4 Global Consumerism
and Sustainability 166
National Situational Factors 166
The Government Buyer 167
Marketing to Global Consumers 168
Targeting Global Customers 168
Country-of-Origin Challenges 169
Global Customer Relationship Management 170
Selling to Governments 171
Summary 172
Key Terms 173
Endnotes 174
7 Strategic Planning 176

The International Marketplace 7.1 Powering Growth
in Emerging Markets 176
Global Marketing 177
Globalization Drivers 178
Market Factors 178
Cost Factors 178
Environmental Factors 179
Competitive Factors 180
The International Marketplace 7.2 Born Globals
and Social Entrepreneurs 180
The Outcome 181
Contents xix
The Strategic Planning Process 182
Understanding and Adjusting the Core Strategy 183
Formulating Global Marketing Strategy 184
The International Marketplace 7.3 Consumer Confidence
and COVID-19 189
Developing the Global Marketing Program 189
Implementing Global Marketing 190
The Local Company in the Global Environment 193
The International Marketplace 7.4 Emerging-Market Growth War
Pits Global Brand Giants against Local Rivals 195
Summary 196
Key Terms 196
Endnotes 197
8 Analyzing People and Markets 200

The International Marketplace 8.1 Research in Business
and Soccer 200
Defining the Issue 201
International and Domestic Research 201
New Parameters 202
New Environments 202
Number of Factors Involved 202
Broader Definition of Competition 202
Recognizing the Need for Research 202
The Benefits of Research 203
Determining Research Objectives 204
Going International: Exporting 204
Going International: Importing 205
Determining Secondary Information Requirements 206
Sources of Data 206
Evaluating Data 208
Analyzing and Interpreting Secondary Data 208
The Primary Research Process 209
Determining Information Requirements 209
Industrial versus Consumer Research 210
Determining Research Administration 210
Determining the Research Technique 211
The International Marketplace 8.2 Excellence in International
Research 214
Designing the Survey Questionnaire 217
Developing the Sampling Plan 218
The International Marketplace 8.3 Check Your Translations! 219
Data Collection 219
Analyzing and Interpreting Primary Data 219
Presenting Research Results 220
Follow-Up and Review 220
Research on the Web 220
xx Contents
The International Information System 221
Environmental Scanning 222
Delphi Studies 222
Scenario Building 223
Summary 224
Key Terms 224
Endnotes 226
APPENDIX A: Information Sources for Marketing Issues 228
European Union 228
United Nations 229
U.S. Government 229
Selected Organizations 230
Indexes to Literature 231
Directories 231
Periodic Reports, Newspapers, Magazines 232
Selected Trade Databases 233
Trade Publication References with Bibliographic Keywords 233
Trade Publication References with Summaries 233
Full Text of Trade Publications 233
Statistics 233
Price Information 234
Company Registers 234
Trade Opportunities, Tenders 234
Tariffs and Trade Regulations 234
Standards 234
Shipping Information 234
Others 234
APPENDIX B: The Structure of a Country Commercial Guide 235
The U.S. Commercial Service 235
Doing Business in China 235
Table of Contents 235
9 Market Entry and Expansion 236

The International Marketplace 9.1 Product Innovation May Come
Mainly from China 236
Stimuli to Internationalize 237
Proactive Stimuli 238
Reactive Stimuli 239
Change Agents 240
Internal Change Agents 240
External Change Agents 241
Going International 242
Export 242
Export Management Companies 243
Trading Companies 244
E-Commerce 245
Contents xxi
Licensing and Franchising 246
Licensing 246
The International Marketplace 9.2 The Emergence of Ready to Drink Tea 246
Franchising 249
Foreign Direct Investment 250
Major Foreign Investors 250
Reasons for Foreign Direct Investment 252
A Perspective on Foreign Direct Investors 253
Types of Ownership 254
The International Marketplace 9.3 Foreign Direct Investments in Vietnam:
The Good and the Bad 255
Advantages of Joint Ventures 256
Summary 258
Key Terms 259
Endnotes 260
10 Marketing Organization, Implementation, and Control 262

The International Marketplace 10.1 Touch and Improve People’s
Everyday Lives 262
Organizational Structure 263
Organizational Designs 264
Evolution of Organizational Structures 271
The International Marketplace 10.2 Beyond the Matrix 272
Implementation 273
Locus of Decision Making 273
Factors Affecting Structure and Decision Making 275
The Networked Global Organization 275
Promoting Global Internal Cooperation 277
The Role of Country Organizations 279
Control 281
Types of Controls 281
The International Marketplace 10.3 Corporate Acculturation 284
Summary 286
Key Terms 287
Endnotes 289
CASES 2 Chopsticks from America: A Historic Assessment 291
La Casa de Las Botas 294
xxii Contents
PART 3 The Global Marketing Mix 301
11 Product Management and Global Brands 302

The International Marketplace 11.1 Are Global Brands the Way to Go? 302
Product Variables 304
Standardization versus Adaptation 305
Factors Affecting Adaptation 305
The Market Environment 306
Government Regulations 306
Nontariff Barriers 307
Customer Characteristics, Expectations, and Preferences 308
Economic Development 309
Competitive Offerings 311
Climate and Geography 311
Product Characteristics 311
Product Constituents and Content 311
Branding 312
Packaging 312
The International Marketplace 11.2 When There Is More to a Name 313
Appearance 314
Method of Operation or Usage 314
Quality 315
Service 315
Country-of-Origin Effects 315
Company Considerations 316
Global Product Development 316
The Product Development Process 317
The Location of R&D Activities 319
The Organization of Global Product Development 320
The Testing of New Product Concepts 322
The Global Product Launch 322
Managing the Brand Portfolio 323
Brand Strategy Decisions 324
Private Brand Policies 330
Product Counterfeiting 331
Summary 333
Key Terms 334
Endnotes 336
12 Global Marketing of Services 339

The International Marketplace 12.1 Marketing “The Cloud”:
Computing as a Service 339
Differences between Services and Goods 340
Linkage between Services and Goods 341
Stand-Alone Services 341
Contents xxiii
The Role of Services in the U.S. Economy 346
The Role of Services in the World Economy 348
Global Transformations of Services 349
International Trade Problems in Services 350
Data Collection Problems 350
Regulations and Service Trade Negotiations 351
Corporate Involvement in International Services Marketing 352
Services and E-Commerce 352
Services and Academia 354
Typical International Services 354
Starting to Market Services Internationally 356
The International Marketplace 12.2 Service Contractor Offers Sustainability in
Trade Shows and Exhibitions 357
Strategic Implications of International Services Marketing 358
Summary 360
Key Terms 360
Endnotes 361
13 Advertising, Promotion, and Sales 363

The International Marketplace 13.1 Global Sponsorship 363
The Marketing Communications Process 364
Planning Promotional Campaigns 367
The Target Audience 367
Campaign Objectives 368
The Budget 370
Media Strategy 370
The Promotional Message 375
The Campaign Approach 377
Measurement of Advertising Effectiveness 379
Other Promotional Elements 381
Personal Selling 381
The International Marketplace 13.2 Automation of the Sales Force 383
Direct Marketing 384
Sales Promotion 385
Trade Shows and Missions 386
Public Relations 388
Internal Public Relations 388
Sponsorship Marketing 391
Summary 392
Key Terms 393
Endnotes 395
xxiv Contents
14 Pricing Strategies and Tactics 397
The International Marketplace 14.1 Now for the Hard Part:
Getting Paid for Exports 397
Price Dynamics 398
The Setting of Export Prices 400
Export Pricing Strategy 401
Export-Related Costs 402
Terms of Sale 403
The International Marketplace 14.2 Penetrating Foreign Markets
by Controlling Export Transport 405
Terms of Payment 406
Getting Paid for Exports 408
Managing Foreign Exchange Risk 410
Sources of Export Financing 413
Commercial Banks 413
Forfaiting and Factoring 414
Official Trade Finance 414
Leasing 415
Pricing Within Individual Markets 415
Corporate Objectives 415
Costs 416
Demand and Market Factors 417
Market Structure and Competition 418
Environmental Constraints 418
Pricing Coordination 419
Transfer Pricing 419
Use of Transfer Prices to Achieve Corporate Objectives 420
Transfer Pricing Challenges 421
Countertrade 423
Why Countertrade? 423
Types of Countertrade 423
Summary 425
Key Terms 425
Endnotes 427
15 Global Distribution and Logistics 429

The International Marketplace 15.1 Getting the Distribution Job Done
in Latin America 429
Channel Structure 431
Channel Design 432
Customers 432
Culture 432
Competition 432
Company Objectives 433
Character 434
Capital 434
Contents xxv
Cost 434
Coverage 434
Control 434
Continuity 435
Communication 435
The International Marketplace 15.2 Tesco: Community Promises
and Local Priorities 435
Channel Management 436
Selection of Intermediaries 436
The Distributor Agreement 437
Gray Markets 439
Termination of the Channel Relationship 440
E-Commerce 442
International Logistics 443
Supply Chain Management 444
The Impact of International Logistics 445
The New Dimensions of International Logistics 445
The International Marketplace 15.3 Supply Chains after the
Japanese Earthquake 445
International Transportation Issues 446
Transportation Infrastructure 446
Availability of Modes 447
Choice of Transport Modes 448
The International Shipment 450
Documentation 450
Assistance with International Shipments 450
International Inventory Issues 451
Order Cycle Time 451
Customer Service Levels 451
Inventory as a Strategic Tool 452
International Storage Issues 452
Storage Facilities 452
Outsourcing 453
Foreign Trade Zones 453
International Packaging Issues 453
Management of International Logistics 454
Centralized Logistics Management 454
Decentralized Logistics Management 455
Contract Logistics 455
Logistics and Security 455
Recycling and Reverse Logistics 456
Summary 457
Key Terms 457
Endnotes 459
APPENDIX A: Elements of a Distributor Agreement 462
CASES 3 Equal Exchange: Doing Well by Doing Good 465
The Bell Boeing V-22 467
xxvi Contents
PART 4 Leadership in Global Marketing 473
16 Social Networks and Engagement 474

The International Marketplace 16.1 Volkswagen’s Global Social Media
Campaigns 474
Social Networks: Key to Online Relationships 477
The Rise of Social Media 478
Forms of Social Media 479
Why Do Social Media Work? 480
Creating Content via Social Media 481
The International Marketplace 16.2 Africa’s Blossoming Social Media 483
Marketing Dimensions of Social Media 485
Generate Exposure for the Firm and Its Products 485
Build Brand Equity 485
Drive Traffic to Corporate Websites 485
Link with Other Sites across the Internet 485
Leverage Social Networks 486
Generate Buzz and Spread Specific Messages Virally 486
Generate Product Sales 486
Conduct Market Research 486
Develop Ideas for New Products and Marketing Approaches 487
Garner Publicity from News Media 487
Improve Search Engine Rankings 487
Achieve Cost Effectiveness 487
The International Marketplace 16.3 Social Media for Charity Fundraising 487
Challenges of Social Media 488
Send the Wrong Message 488
Resource Intensive 489
Results Are Difficult to Measure 489
Lack of Access 489
Social Media and International Communications 489
Advertising 489
Sales 490
Public Relations 490
Promotional Activities 491
Integrating Social Media with Traditional Marketing Communications 491
Social Media Around the World 491
Social Media Success Strategies in International Marketing 493
Understand the Difference between Traditional Approaches and Social Media 493
Communicate Your Expertise 493
Customize the Message to the Audience 494
Target a Specific Market 494
Understand Your Markets 494
Monitor Your Firm’s Online Reputation 494
Manage Information about Your Company and Brands 494
Summary 495
Key Terms 495
Contents xxvii
Endnotes 497
17 Leadership, Corporate Social Responsibility,

and Sustainability 499
The International Marketplace 17.1 Executive Compensation and Aristotelian
Philosophy 499
Leadership 501
Recognizing Marketing Challenges and Dilemmas 501
The Increased Role of Government 503
Trust 503
The Leadership Challenge 507
The International Marketplace 17.2 For Unilever, Smarter Planet Is Smart
Business 508
Aligning Strategy, Products, and Societal Interests 509
Corporate Social Responsibility 509
What Is the Responsibility of Business? 509
Defining Corporate Social Responsibility 511
The International Marketplace 17.3 “And the Award Goes to. . .” 512
Strategic Focus 513
CSR Reporting 513
Sustainability 515
A Sustainable Future? 515
Sustainable Practices 516
The International Marketplace 17.4 “Can a War on Carbon Be Good
Business?” 517
Sustainable Consumers 518
Greenwashing 519
Growing Importance to Marketing 520
Curative Marketing 521
Truthfulness 522
Simplicity 522
Expanded Participation 522
Personal Responsibility 522
Summary 523
Key Terms 523
Endnotes 525
18 New Directions and Challenges 528

The International Marketplace 18.1 Marketable Global Business
School Models 528
International Marketing Drivers 530
Demographics 530
Technology 531
Culture 532
Economic Development 533
xxviii Contents
Natural Resources 534
Political and Legal 534
The International Marketplace 18.2 Counterfeiting and Software Piracy 535
The Marketer of the Future—Strategic Efforts 536
The Balance between Global and Local 536
Innovation 537
Collaborative Partnerships 538
The International Marketplace 18.3 “The Body Shop” 539
Connecting with the World’s Customers 540
Technology-Based Marketing Research 541
Summary 542
Key Terms 542
Endnotes 544
APPENDIX A: Finding Your Calling: Jobs and Careers in International
Marketing 546
Further Training 546
Employment with a Large Firm 546
Employment with a Small or Medium-Sized Firm 546
Opportunities for Women in Global Firms 547
Self-Employment 547
Endnotes 549
CASES 4 African Producers in the Cut Flower and Foliage Trade 551
Thai Food in Europe 557
GLOSSARY 561
NAME INDEX 571
COMPANY INDEX 579
SUBJECT INDEX 585
Contents xxix
PART One
The
International 1 Global Environmental
Drivers
Marketing
Environment 2 International Trade
Frameworks and Policy
P
3
art One introduces the interna-
tional trade framework and envi-
ronment. It highlights the need for
international marketing activities and The Role of Culture
explores recent developments in world
trade and global markets, including an
4
overview of regional and international
trade agreements. These chapters are
largely devoted to macroenvironmental The Economic
forces that firms and managers must
be aware of when marketing interna- Environment
tionally. In order to be successful, the
marketer must adapt to the interna-
5
tional environment and must be able to
resolve conflicts stemming from differ-
ences in cultural, economic, political,
The Political and Legal
and legal factors. Environment
Juergen Stumpe/Image Professionals GmbH/Alamy Stock Photo
Cases
CHAPTER
1
CHAPTER
Global Environmental Drivers
LEARNING OBJECTIVES
By the time you complete this chapter, you will be able to:
● Understand the rationale behind inter- ● See the benefits and challenges to ● recognize the repercussions which the
national marketing. which international marketing exposes impact international marketing has on
and is exposed to consumers, suppliers, other nations and people.
● Appreciate the linkages between interna- competitors both at home and abroad.
tional marketing and international trade.
The International Marketplace 1.1
Global Trends Impose New Strategic Marketing Requirements

International marketing experts agree that global may discover important customer needs that have
business trends are even more important to mar- been left underserved. Valuable smaller brands may
keting strategy than they were only a few years ago. be jettisoned by the giants. For example, P&G has
Keeping on top of global trends with a focus on long- divested great brands like Pringles, Folgers, and Jif.
term profitable growth and competitive advantage Of course, smaller players will need to seek efficien-
will be vital to success. A look at the business plans cies through strategic alliances and other joint efforts
of top global marketers confirms the importance of to compete globally. They will also be heavily depen-
emerging markets as drivers of significant growth. dent on industry and government efforts to establish
For example, population increases and urbanization open markets and global technology standards.
in large emerging markets are reshaping interna- Nations, countries, regions, and cities will also
tional marketing strategy. With an eye to the needs pursue niche strategies as they further specialize
of global consumers, Coca-Cola, Danone, and Nestlé in the development of industry clusters. Firms will
increasingly market nutrition rather than just food. open subsidiaries, R&D centers, and representa-
We expect a greater emphasis on the markets tive offices in order to take advantage of proxim-
provided by second-tier cities, which are large cities ity to customers, suppliers, new channels, research
not yet in the political or economic spotlight, par- providers, and competitors. Governments will
ticularly in China, India, Brazil, and Russia. In China, seek advantage through clusters and place greater
for example, many cities beyond Beijing, Shanghai, emphasis on the special educational needs of the
and Guangzhou have millions of increasingly afflu- workforce in those industrial centers.
ent consumers yet are unfamiliar to most Western With more dynamic growth coming from
marketers. Firms will need to expand their distri- emerging markets, the more developed economies
bution and market-entry strategies to these large seem destined for slower growth patterns. Inevi-
population centers, thus creating new regional tably, those who do not participate in economic
hubs. There must also be collaboration with the expansion will become frustrated and seek relief
public sector to encourage infrastructural invest- through government remedies. Government has
ments in these regions. again become, and will remain, an important factor
Smaller firms can also benefit from the glo- in international marketing. The dangers of an insular
balization of markets by seeking opportunity in focus lurk. Changing times will require strong lead-
niche markets, especially those neglected or aban- ership from the public sector and corporations to
doned by the large players. As large corporations avoid the easy, but wrong, answer of protectionism.
seek economies of scale and category dominance SOURCE: Michael R. Czinkota and Charles J. Skuba, “International Business Not
through billion-dollar global brands, smaller players as Usual,” Marketing Management, Summer 2010.
You are about to begin an exciting, important, and necessary task: the explora-
tion of international marketing. International marketing is enticing because
it combines the science and the art of business with many other disciplines.
Economics, anthropology, cultural studies, geography, history, languages, juris-
prudence, statistics, demographics, and many other fields combine to help you
explore the global market. Different business environments will stimulate your
intellectual curiosity, which will enable you to absorb and understand new phe-
nomena. International marketing has been compared by many who have been
active in the field to the task of mountain climbing: challenging, arduous, and
exhilarating.
International marketing is important because the world has become globalized
and this process on occasion has become quite controversial. Increasingly, we
all are living up to the claim of the Greek philosopher Socrates, who stated,
“I am a citizen, not of Athens or Greece, but of the world.” International marketing
takes place all around us every day, has a major effect on our lives, and offers new
opportunities and challenges. After reading through this book and observing interna-
tional marketing phenomena, you will see what happens, understand what happens,
and, at some time in the future, perhaps even make it happen. All of this is much bet-
ter than to stand by and wonder what happened.
International marketing is necessary because, from a national standpoint,
economic isolationism has become impossible. Failure to participate in the global
marketplace assures a nation of declining economic capability and its citizens of a
decrease in their standard of living. Successful international marketing, however,
holds the promise of an improved quality of life, a better society, and more efficient
business transactions. The International Marketplace 1.1 not only highlights how global
market forces and marketers need to adjust to a changing environment but also
clarifies how market forces and marketers are the critical catalysts between individu-
als, businesses, and society.
This chapter is designed to increase your awareness of what international mar-
keting is about. It describes current levels of world trade activities, projects future
developments, and discusses the repercussions on countries, institutions, and indi-
viduals worldwide. Both the opportunities and the threats that spring from the global
marketplace are highlighted, and the need for an international “marketing” approach
on the part of individuals and institutions is emphasized.
While international marketing may provide consumption advantages to con-
sumers, it also opens up markets to competition, which in many instances has
been unexpected and is difficult to cope with. As a result, international marketing
activities do not favor everyone to the same degree. Just like Janus, the two-faced
god of the Romans, international marketing can bring benefits and opportunity
to some, while delivering drawbacks and problems to others. International
marketers, as well as consumers of international products and services, need to
understand how to make globalization work for them as well as to think about how
to ensure that these benefits are afforded to a wide variety of people and coun-
tries. Therefore, both as an opportunity and a challenge, international marketing,
both with its costs and benefits, is of vital concern to countries, companies, and
individuals.
This chapter concludes with an explanation of the major organizational thrust
of this book, which differentiates in each functional chapter between the beginning
internationalist and the global corporation. This theme ties the book together by
taking into account the concerns, capabilities, and goals of firms that will differ widely
based on their level of international expertise, resources, and involvement. The
approach to international marketing taken here will therefore permit you to under-
stand the entire range of international activities and allow you easily to transfer your
acquired knowledge into practice.
In todays time even amongst a highly digitized economy, there’s often a claim that
rapidity of decision making is of foremost importance. However, the authors do not
Chapter 1: Global Environmental Drivers 3
believe in such a haphazard approach to decision making in international marketing.
Rather, they consider steady and focused decision making as critical for long term
sound outcomes. Keep this in mind as we together proceed with our learning and
analysis regarding international marketing.
International Marketing Defined

The American Marketing Association defines international marketing as the multinational process of
planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services
to create exchanges that satisfy individual and organizational objectives.1 International marketing has
forms ranging from export–import trade to licensing, joint ventures, wholly owned subsidiaries, turnkey
operations, and management contracts.
As this definition indicates, international marketing very much retains the basic marketing
tenets of value and exchange. There is also the focus on stakeholders and society whose pres-
ent positions are to be improved. The fact that a transaction takes place across national borders
highlights the difference between domestic and international marketing. The international mar-
keter is subject to a new set of macro-environmental factors, to different constraints, and to quite
frequent conflicts resulting from different laws, cultures, and societies. The basic principles of
marketing still apply, but their applications, complexity, and intensity may vary substantially. It is
in the international marketing field where one can observe most closely the role of marketing as
a key agent of societal change and as a key instrument for the development of socially responsive
business strategy. When we look, for example, at the economies of China and Russia, we can see
the many new challenges confronting international marketing. How does the marketing concept
fit into these societies? How can marketing contribute to economic development and the improve-
ment of society? How should distribution systems be organized? How should the price mechanism
work? Similarly, in the areas of social responsibility and ethics, the international marketer is faced
with a multicultural environment of differing expectations and often inconsistent legal systems
when it comes to monitoring environmental pollution, maintaining safe working conditions, copying
technology or trademarks, or paying bribes. 2 In addition, the long-term repercussions of market-
ing actions need to be understood and evaluated in terms of their societal impact, using not just
today’s criteria but considering also the long-term perspective of future affected parties. These
are just a few of the issues that the international marketer needs to address. The capability to
master these challenges successfully affords a company the potential for new opportunities and
high rewards. The International Marketplace 1.2 shows how General Electric (GE) leverages its
leadership in environmental business areas to seek new ideas and communicate its international
marketing strategy.
The emphasis on stakeholders and society at large indicates the need for the marketer to look beyond
narrow self-interest and to understand that there are many parties touched by marketing. Willing or unwill-
ing, they all participate in the outcome of the marketing effort, and their interests must be considered.
International marketing also focuses on the need to create, communicate, and deliver value
internationally. These dimensions indicate that marketing internationally is an activity that needs to
be pursued, often aggressively. Those who do not participate in the transactions are still exposed to
international marketing and subject to its changing influences. The international marketer is part of the
exchange and recognizes the constantly changing nature of transactions. This need for adjustment, for
comprehending change, and, in spite of it all, for successfully delivering value highlights the fact that
international marketing is as much an art as it is a science.
To achieve success in the art of international marketing, it is necessary to be firmly grounded
in its scientific aspects. Only then will individual consumers, policymakers, and business executives
be able to incorporate international marketing considerations into their thinking and planning. Only
4 Part One: The International Marketing Environment
Environment and Sustainability: A Global Challenge for Ideas

Environmental concerns have become a global phe- countries. We awarded $55 million to over 20 different
nomenon, and marketers see opportunity. Clean great ideas.”
energy, water stewardship, and sustainable manu- In the second phase of its Ecomagination Chal-
facturing practices have become high priorities for lenge, GE launched a $200 million “Powering Your
global marketers as customers and governments Home” challenge in to seek new business ideas.
worldwide have increased their expectations for GE invited technologists and entrepreneurs world-
corporate environmental performance. wide to submit ideas on how to improve household
Some corporations have chosen not only to energy efficiency and to harness wind, solar, hydro,
implement sustainability programs but also to align and biomass power. The 856 entrants to the chal-
their business strategies with the global move- lenge had the opportunity to win cash prizes and to
ment toward sustainability. One such company is partner with GE to develop their ideas with capital
GE, which has included its “ecomagination” pro- backing from leading venture capital firms. Regard-
gram as part of its global marketing campaign of ing the second phase, Comstock said: “What we’re
“imagination at work.” In the first of two phases hoping is that the world’s great inventors can come
of GE’s Ecomagination Challenge, a “Powering the up with more of these kind of ideas that we can
Grid” challenge was conducted in 2010 to invite fund, that we can maybe bring to market, that we
ideas on how to build the next-generation power can license.” With its Ecomagination Challenge, GE
grid. Beth Comstock, GE’s chief marketing officer, focuses its search for product innovation on global
commented about the first phase: “We ended up customer needs and highlights it with a global public
with about 4,000 submissions from 150 different relations program.
Sean Blake/Gallo Images/Getty Images
Korea Smart Green City Jeju display model.
SOURCE: “GE and Par tners Seek Best Ideas for Eco Home of the -of-200-Million-ecomagination-Challenge-2db8.aspx; and Adam A ston,
Future in Nex t Phase of $200 Million ‘ Ecomagination Challenge,’ ” “ What GE Has in Store for Round 2 of the Ecomagination Challenge,”
GE pres s release, w w w.genew scenter.com / Pres s- Releases /GE-and GreenBiz.com, w w w.greenbiz.com/blog /2011/01/28/what-ge-has-s tore
-Par tners-Seek-Bes t-Ideas-for-Eco -Home- of-the-Future-in-Nex t-Phase -round-2-ecomagination-challenge.
then will they be able to consider international issues and repercussions and make decisions based
on answers to questions such as the following:
● Where are my current and potential customers?

● Does my market have borders?
● Does international activity increase risk?
● What marketing adjustments are or will be necessary?
● What threats from global competition should I expect?
● How do innovation and entrepreneurship change the global marketplace?
● What are my strategic global alternatives?
● how can international marketing improve the global standard of living and contribute to improving
life’s pleasures?
If all these issues are integrated into each decision made by individuals and by firms, international
markets can become a source of growth, profit, needs satisfaction, and quality of life that would not
have existed for them had they limited themselves to domestic activities. The purpose of this book is
to aid in this decision process.
The Importance of World Trade

World trade has assumed an importance heretofore unknown to the global community. In past centuries, trade
was conducted internationally, but never before did it have the broad and simultaneous impact on nations, firms,
and individuals both positive and negative that it has today.
● As of 2020, world trade suffered.. suffered a slowdown in both merchandise (down 3 percent from
2018) and recorded services before suffering from a sharp reduction with the emergence of the
coronavirus pandemic.
● Experts estimate that world trade is likely to continue its decline. Some of this reduction in global
trade retains its relative importance for nations, companies, and consumers.3
● Global growth of trade has typically out-performed the growth of domestic economies in the past
few decades. However, as Exhibit 1.1 shows, forecasts vary substantially for the next few years.
The Iron Curtain has disintegrated and newly

emerging economies have liberalized their eco-
nomic systems, bringing billions of new consum-
ers into the global economic system and offering
a vast array of new marketing opportunities—
albeit amid uncertainty. Firms invest on a global
scale, with the result that entire industries shift
their locations. International specialization and
cross-sourcing have made production much
more efficient. New technologies have changed
the way we do business, allowing us to both
Arni Saeberg/Bloomberg/Getty Images
supply and receive products from across the

world by using the Internet. As a result, con-
sumers, union leaders, policymakers, and some-
times even the firms themselves are finding it
increasingly difficult to define where a particular
product has been made. There are trading blocs
such as the European Union in Europe, CUSMA
Ash plume from Eyjafjallajokull Volcano.
Exhibit 1.1 Volume of World Merchandise Exports, 2000–2022
140
130
120
110
100
90
80
70
60
50
40
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Merchandise trade Optimistic scenario
Pessimistic scenario Trend 1990–2008

Trend 2011–2018
SOURCE: WTO Secretariat, www.wto.org/english/news_e/pres11_e/pr628_e.htm.
in North America, MERCOSUR in Latin America, and ASEAN in Asia. These blocs encourage trade
relations among their members, but, through their rules and standards, they also affect the trade and
investment flows of non-member countries.
Individuals and firms have come to recognize that they are competing not only domesti-
cally but also globally. World trade has given rise to global linkages of markets, technology, and liv-
ing standards that were previously unknown and unanticipated. At the same time, it has deeply affected
domestic policymaking and has often resulted in the emergence of totally new opportunities as well
as threats to firms and individuals. The International Marketplace 1.3 provides an example. (Interde-
pendence rightfully reflects mutual dependence as well.) World trade has forged a network of global
linkages that bind us all—countries, institutions, and individuals—much more closely than ever before.
New Sources for Outsourcing

Since the 1980s, corporations in developed nations During the financial crisis of 2008 and 2009,
have been sending entire business functions and there was significant concern that the global out-
management roles to developing countries. Com- sourcing business would suffer. A 2021 report by
panies have been outsourcing by using efficient call Grand View Research indicated that those concerns
centers for information technology and technical had been misplaced. The research indicated that
and software support. Multinational companies cut the global business process outsourcing market size
costs while developing countries benefit from an was valued at USD $232.32 billion in 2020, which is
upsurge in jobs and income. Outsourcing of busi- expected to experience annual growth rate of 8.5%
ness processes (BPO), information technology (ITO), from 2021 to 2028.
and infrastructure management services allow firms However, the shape and geography of the
to remain focused on their core business capabilities sourcing industry continues to evolve. In its 2011
but access innovative best practices and technolo- survey of the world’s offshore outsourcing mar-
gies in noncore areas by delegating to outsourcing ket, Morrison & Foerster reported that outsourc-
specialists. ing to China is increasing relative to India and was
“boosted by the Chinese government’s announce- “India, with its first-mover advantage and deep skill
ment of generous tax incentives to outsourcing base, still maintains the lion’s share of the IT ser-
service providers in China’s most important cities.” vices market” and “is the all-around stand-out, able
The survey showed that outsourcing to China was to provide manpower for any type of offshoring
principally in the area of information technology but activity.” A.T. Kearney reported that “China has ‘high
that there was growth as well in areas such as R&D degrees of labor skill and corporate output—both
and film animation. of which buoy the nation’s digital-resonance score’”
The annual A.T. Kearney Global Services Loca- and that China’s “is ‘establishing larger tech nodes
tion Index 2021 found that Asian countries were the in such regions as the Southern Pearl River Delta’.”
top locations for offshoring of services, with India, S O U R C E : h t t p s : // w w w. g r a n d v i e w r e s e a r c h . c o m / i n d u s t r y - a n a l y s i s
China, Malaysia, Indonesia, Thailand, Vietnam, and /business-process-outsourcing-bpo-market. Morrison & Foerster Global
Sourcing Group, January 2011; and https://www.kearney.com/digital/article/?/a
the Philippines ranked among the top 10 locations. /the-2021-kearney-global-services-location-index.
These linkages were first widely recognized during the worldwide oil crisis of 1970, but they continue to
increase, as was demonstrated dramatically in the financial crisis that was triggered in 2007.
U.S. subsidies for ethanol production from corn affect prices for other agricultural crops and
livestock in the far reaches of the world. European and American business executives learned
how to pronounce Eyjafjallajokull in 2010 as plumes of ash from that Icelandic volcano closed
airports and stranded air travelers in many European cities. They received another Icelandic lan-
guage lesson in 2011 when the Grimsvotn volcano erupted, although with a lesser aviation effect.
Grimsvotn caused then-President Obama to cut short his visit to Ireland to avoid potential flight
problems. The March 2011 earthquake and tsunami off the northeastern coast of Japan caused
massive casualties and destroyed or damaged much of the regional Japanese port and highway
infrastructure. This also caused a series of disasters at the Fukushima Daiichi nuclear plant that
led to a level 7 “major accident” on the International Nuclear and Radiological Event Scale. This
resulted in worldwide disruptions in manufacturing and trade with automotive plant closures or pro-
duction cutbacks in Japan, the United States, Europe, and other parts of the world. The “just-in-
time” supply chains of the automotive, semiconductor, smartphone, digital camera, and personal
computer industries were immediately placed in peril around the world.
These linkages have also become more intense on an individual level. Communication has built
new international bridges, be it through music or international programs transmitted by CNN, BBC, Al
Arabiya, Al Jazeera, and social media. All this has encouraged similar activities around the world—
where many of us wear jeans, dance to the same music on our iPods, and eat kebabs, curry, and
sushi. Transportation linkages let individuals from different countries see and meet each other with
unprecedented ease. Common cultural pressures result in similar social phenomena and behavior—for
example, more dual-income families are emerging around the world, which leads to more frequent,
but also more stressful, shopping.
World trade is also bringing about a global reorientation of corporate processes, which opens up entirely
new horizons. Never before has it been so easy to gather, manipulate, analyze, and disseminate information—
but never before has the pressure been so great to do so. Ongoing global technological innovation in marketing
has direct effects on the efficiency and effectiveness of all business activities. Products can be produced more
quickly, obtained less expensively from sources around the world, distributed at lower cost, and customized to
meet diverse clients’ needs. As an example, it would have been thought impossible for a firm to produce parts for
a car in more than one country, assemble the car in yet another country, and sell it in still other nations. Today,
such global investment strategies, coupled with production and distribution sharing, are becoming a matter of
routine. Of course, these changes increase the level of global competition, which in turn increases the challenge
of staying in a leadership position.
Advances in technology also allow firms to separate their activities by content and context. Firms
can operate in a “market space” rather than a marketplace by keeping the content while changing
the context of a transaction. For example, a newspaper can be distributed online globally rather than
house-to-house on paper, thereby allowing outreach to entirely new customer groups.
The level of global investment is at an unprecedented high. The shifts in financial flows have
had major effects. They have resulted in the buildup of international debt by governments, affected
the international value of currencies, provided foreign capital for firms, and triggered major foreign
direct-investment activities. Societies can grow concerned about these shifts. For example, in the
United States, the PATRIOT Act defines critical infrastructure as systems and assets so vital that any
breakdown in them “would have a debilitating impact on security, national economic security, national
public health, or safety.” A national strategy was developed for the protection of critical infrastructure
in 11 sectors: agriculture and food, water, public health, emergency services, defense industrial bases,
telecommunications, energy, transportation, banking and finance, chemical industry and hazardous
material, and postal services and shipping. The “key assets” identified are national monuments and
icons, nuclear power plants, dams, government facilities, and commercial key assets.4 The fact that
there is increasing foreign investment in such key assets indicates that nations, firms, and people grow
more and more dependent on one another.
This interdependence, however, is not stable. For the first 200 years of its history, the United
States looked to Europe for markets and sources of supply. Today, U.S. two-way trade with Asia far
outpaces U.S. trade with Europe. Africa may rise in importance due to its natural resources. The
participants in international marketing also are changing their roles. For example, the International
Monetary Fund (IMF) was founded in 1944 to help restructure impoverished economies. More recently,
however, the fund has been assisting nations that used to be categorized as “wealthy,” such as Iceland,
and member states of the European Union, such as Greece. It appears to become increasingly dif-
ficult to differentiate between “rich” and “poor.” For example, based on its foreign currency reserves
of $3.2 trillion, China easily qualifies for the upper echelons of the wealthy countries. 5 However, the
nation’s GDP per capita would still let it be classified as a developing nation.
Not only is the environment changing, but the pace of change is accelerating as well. Atari’s Pong
was first introduced in the early 1980s; today, action games and movies are made with computerized
humans. The first office computers emerged in the mid-1980s; today, tablet computers have become
commonplace. E-mail was introduced to a mass market only in the 1990s; today, many college students
hardly ever send personal notes using a stamp and envelope and are more likely to communicate with
each other via texting than e-mail.6
These changes and the speed with which they come about significantly affect countries, cor-
porations, and individuals. One change is the role participants play. For example, the United States
accounted for nearly 25 percent of world merchandise exports in the 1950s, but by 2010 this
share had declined by two-thirds. Also, the way countries participate in world trade is shifting. As
Exhibit 1.2 shows, since 2005 trade by developing nations has grown far more quickly than that of
developed nations.7
Of course, one needs to consider the base from which this growth has taken place. Here the Euro-
pean Union, China, and the United States are the consistent leaders. Also, in the past two decades, the
role of primary commodities in international trade has dropped precipitously, while the importance of
manufactured goods and services has increased. Most important, the growth in the overall volume and
value of both merchandise and services trade has had a major impact on firms, countries, and individuals.
Domestic Policy Repercussions

The effects of closer global linkages on the economics of countries have been dramatic. Policymakers
have increasingly come to recognize that it is very difficult to isolate domestic economic activity from
international market events. Decisions that once were clearly in the domestic purview have now become
subject to revision by influences from abroad, and domestic policy measures are often canceled out or
counteracted by the activities of global market forces.
A lowering of interest rates domestically may make consumers happy or may be politically wise
but can quickly lead to major imbalances if it results in a large outflow of funds to countries that offer
higher interest rates. The amounts involved are significant.
As of June 2020 the U.S. Federal Reserve had supported $2.3 trillion in lending to affected
households, employers, financial markets, and state and local governments. 8 The European Central
Bank, during the same time, had provided 750 billion euro to its economy.
Exhibit 1.2 Values of Trade in Goods and Services by Region
SOURCE: “https://unctad.org/system/files/official-document/ditctab2020d4_en.pdf. Visit https://www.wto.org/english/res_e/statis_e/statis_e.htm for the latest.
Agricultural and farm policies, which historically have been strictly domestic issues, are suddenly
thrust into the international realm. Any policy consideration must now be seen in light of international
repercussions due to influences from global trade and investment.
To some extent, the economic world as we knew it has been turned upside down. For example,
trade flows traditionally have been used to determine currency flows and therefore the level of the
exchange rate. In the more recent past, currency flows took on a life of their own. Independent
of trade, they set exchange rates, which are the values of currencies relative to each other. These
exchange rates in turn have now begun to determine the level of trade. Governments that wish to
counteract these developments with monetary policies find that currency flows outnumber trade flows
by 100 to 1. Also, private-sector financial flows vastly exceed the financial flows that can be marshaled
by governments, even when acting in concert. Major economic change can be swift and harsh, and
its cause may be difficult to identify. An analogy might consist of persons traveling in a giant plastic
bubble filled with vital air. Suddenly the bubble begins to shrink, the air escapes, but the passengers
don’t find the rupture, nor are they able to replenish the air sufficiently. Rash reaction may lead to
mistakes and unintended consequences, but no reaction will lead to a hard landing.
Constant rapid technological change and vast advances in communication permit firms and
countries to quickly emulate innovation and counteract carefully designed plans. As a result,
governments are often powerless to implement effective policy measures even when they know
what to do.
Policymakers therefore find themselves with increasing responsibilities yet with fewer and less
effective tools to carry out these responsibilities. At the same time that more parts of a domestic
economy are vulnerable to international shifts and changes, these parts are becoming less controllable.
The global market imposes increasingly tight limits on national economic regulation and sovereignty.
To regain some of their power to influence events, policymakers have sought to restrict the
impact of global trade and financial flows by erecting barriers, charging tariffs, designing quotas,
and implementing other import regulations. However, these measures too have been restrained by
international trade agreements, particularly through the World Trade Organization (WTO) (www.wto
.org). Nonetheless, there is a growth in trade perspectives by countries who view many existing
regulations as one-sided and unfair. Global trade has therefore changed many previously held notions
about nation-state sovereignty and extraterritoriality. The same interdependence that has made us
more affluent has also left us more vulnerable. Because this vulnerability is spread out over all major
trading nations, however, some have credited international marketing with being a pillar of interna-
tional peace. Clearly, closer economic relations can result in many positive effects. At the same time,
however, interdependence brings with it risks, such as dislocations of people and economic resources
and a decrease in a nation’s capability to do things its own way. Given the ease—and sometimes the
desirability—of blaming a foreign rather than a domestic culprit for economic failure, it may well also
be a key task for the international marketer to stimulate societal acceptance of the long-term benefits
of interdependence.
Opportunities and Challenges in International Marketing

To prosper in a world of abrupt changes and discontinuities, of newly emerging forces and dangers, and
of unforeseen influences from abroad, firms need to prepare themselves and develop active responses.
New strategies need to be envisioned, new plans need to be made, and the way of doing business
needs to be changed. The way to obtain and retain leadership, economically, politically, or morally,
is—as the examples of Rome, Constantinople, and London have amply demonstrated—not through
passivity but rather through a continuous, alert adaptation to the changing world environment. To help
a country remain a player in the world economy, governments, firms, and individuals need to respond
aggressively with innovation, process improvements, and creativity.
The growth of global business activities offers increased opportunities. International activities can
be crucial to a firm’s survival and growth. By transferring knowledge around the globe, an international
firm can strengthen and build its competitive position. Firms that heavily depend on long production
runs can expand their activities far beyond their domestic markets and benefit from reaching many
more customers. Market saturation can be avoided by lengthening or rejuvenating product life cycles
in other countries. Production sites, which once were inflexible, can now be shifted from one country
to another, and suppliers can be found on every continent. Cooperative agreements can be formed that
enable all parties to bring their major strengths to the table and emerge with better products, services,
and ideas than they could produce on their own. In addition, research has found that multinational
corporations face a lower risk of insolvency and tend to pay higher wages than do domestic companies.
For example, in the European Union, export-related jobs pay 12 percent better than other jobs in the
rest of the economy.9 At the same time, every export has to find a location where it can become an
import. This import, in turn, will replace either another import or reduce employment in the importing
community. Such a result can easily lead to conflicts and imbalances, which, as they grow, can lead
to significant policy repercussions. In such debates, one must consider that international marketing
enables consumers all over the world to find greater varieties of products at lower prices and to improve
their lifestyles and comfort.
International opportunities require careful exploration. What is needed is an awareness of global
developments, an understanding of their meaning, and a development of capabilities to adjust to
change. Firms must adapt to the international market if they are to be successful.
One key facet of the marketing concept is adaptation to the environment, particularly the market.
Even though many executives understand the need for such an adaptation in their domestic market,
they often believe that international customers are just like the ones the firm deals with at home. It is
here that many firms commit grave mistakes that lead to inefficiency, lack of consumer acceptance,
and sometimes even corporate failure. As The International Marketplace 1.4 explains, there are quite
substantial differences in this world between consumer groups.
Emerging Consumers Bring a Smile to Coca-Cola and Consumer Goods Companies

Historically, the leading consumer goods companies emerging markets by 2015, using the rationale that
of the world have focused the bulk of their market- “as the number of middle-class households in these
ing efforts on the most developed countries, where markets grows, we expect demand for our products
economic wealth and disposable income were concen- will increase as people have more money to spend
trated and infrastructure allowed for them to efficiently on feeling and staying healthy.”
reach consumers. Return on marketing investment Procter & Gamble (P&G), which sells its brands
was greatest in the United States, Western Europe, and to consumers in more than 180 countries, has simi-
Japan. However, as a result of economic liberalization lar ambitions and has simplified the expression of its
and the embrace of Western capitalism by the largest strategy for growth: “touching and improving the lives
emerging and developing economies, firms are taking of more consumers in more parts of the world, more
a new look at where to find new customers. completely.” As a part of this strategy, P&G’s CEO,
The Coca-Cola Company “refreshes” consumers Robert McDonald, stated that in 2010 “we reached
in over 200 countries. In its Vision 2020 statement, the an additional 200 million consumers, bringing the
firm summarized the dynamics of the changing global total served to 4.2 billion—on track toward our goal of
marketplace in relation to its market opportunity: “By reaching 5 billion consumers by fiscal 2015. Average
2020, we believe the world will experience significant per capita spending on P&G products increased in
social and economic shifts, from a population increase 70% of our top countries, up from 60% in fiscal 2009.
of more than 800 million people to nearly 900 million And, global household penetration—the percentage
people moving into urban areas and more than of households using at least one P&G product—
1 billion people joining the middle class. These trends increased nearly two percentage points, to 61%.”
indicate there will be more people with more dispos- These companies are not ignoring their tradi-
able income who potentially will tap into refreshment tional markets either. As Coca-Cola’s 2020 Vision
and convenience.” That must bring a smile to Coca- states: “Over the next 10 years and beyond, the
Cola executives and those of other companies as well. United States will have some of the world’s most
Firms are increasingly turning their attention attractive demographics for our business. By 2020,
east and south, where much of this change is occur- the United States will add about 31 million people,
ring. Philips, the Amsterdam-based global health and its teen population will also be around 31 mil-
and well-being company, has stated its objective lion. Only India and China will have larger teen
to generate at least 40 percent of its global sales in populations.”
Doug Kanter/Bloomberg/Getty Images
Coca-Cola employees at one of three new bottling plants in China.

SOURCE: Dan Sewell, “P&G plans for Asian Growth,” Associated Press, The BIZ/304179953/1031/BIZ; Robert A. McDonald, “Letter to Shareholders,” P&G
Journal Gazette, April 17, 2011, www.journalgazette.net /article/20110417/ 2010 Annual Report; and The Coca Cola Company, 2009 Annual Report.
Firms increasingly understand that many of the key difficulties encountered in doing business
internationally are marketing problems. Judging by corporate needs, a background in international
marketing is highly desirable for business students seeking employment, not only for today but also
for long-term career plans.
Many firms do not participate in the global market. Often, managers believe that international
marketing should only be carried out by large multinational corporations. It is true that there are
some very large players from many countries active in the world market. But smaller firms are major
players, too.
In the United States, 98 percent of exporters are small and medium sized enterprises
(SMEs).10 Increasingly we find smaller firms, particularly in the computer and telecommunications
industries, that are born global because they achieve a worldwide presence within a very short time.11
Those firms and industries that are not participating in the world market have to recognize that
in today’s trade environment isolation has become impossible. Willing or unwilling, firms are becoming
participants in global business affairs. Even if not by choice, most firms and individuals are affected
directly or indirectly by economic and political developments that occur in the international market-
place. Those firms that refuse to participate are relegated to reacting to the global marketplace and
therefore are unprepared for harsh competition from abroad.
Some industries have recognized the need for international adjustments. Farmers understand
the need for high productivity in light of stiff international competition. Computer makers and firms in
other technologically advanced industries have learned to forge global relationships to stay in the race.
Firms in the steel, textile, and leather sectors have shifted production, and perhaps even adjusted
their core business, in response to overwhelming onslaughts from abroad. Other industries in some
countries have been caught unaware and have been unable to adjust. The result is the extinction of
firms or entire industries, such as VCRs in the United States and coal mining and steel smelting in
other countries.
The Goals of This Book

This book aims to make you a better, more successful participant in the international marketplace
by providing information about how international markets work, how a changing context affects the
marketing functions, and by eventually helping you to translate knowledge into successful business
transactions. By learning about both theory and practice, you can obtain a good conceptual under-
standing of the field of international marketing as well as become firmly grounded in the realities of the
global marketplace. Therefore, this book approaches international marketing in the way the manager
of a firm does, reflecting different levels of international involvement and the importance of business–
government relations.
Firms differ widely in their international activities and needs, depending on their level of experi-
ence, resources, and capabilities. For the firm that is just beginning to enter the global market, the
level of knowledge about international complexities is low, the demand on time is high, expectations
about success are uncertain, and the international environment is often inflexible. Conversely, for
a multinational firm that is globally oriented and employs thousands of people on each continent,
much more leeway exists in terms of resource availability, experience, and information. In addition,
the multinational firm has the option of responding creatively to the environment by either shifting
resources or shaping the environment itself. For example, the heads of large corporations have access
to government ministers to plead their case for a change in policy, an alternative that is rarely afforded
to smaller firms.
To become a large international corporation, a firm usually has to start out small. Similarly, to
direct far-flung global operations, managers first have to learn the basic issues and their cultural,
economic, financial, political, and legal dimensions.
For each component of the marketing mix, the book discusses in detail the beginning internation-
alization of the firm. Some basic, yet essential, issues addressed are: What is the difference between
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His contribution to Somatology was a series of measurements on
arms; and he discovered that the fore-arm of the Negro is longer, in
comparison with his upper-arm, than that of the European, and that
that of the Ape is relatively longer than that of the Negro. On account
of these measurements on the living (no less than fifty Negroes were
measured), White has been claimed as the founder of
Anthropometry. Soemmerring (1755-1830), however, had made use
of measurements in his comparison of the anatomy of the Negro with
the European.
Measurements About the middle of the nineteenth century
and observations on the living were made, in addition
Observations of to Anthropometry; investigations were undertaken,
Living
not of the skulls and bones of the dead, or even of
Populations.
the head-forms and body-measurements of the
living, but of the forms of such features as the nose and ear,
pigmentation of the skin and eyes, and the like. As early as 1834 L.
R. Villermé had started investigations on the various classes of the
population of Great Britain, comparing the dwellers in the country
with those of manufacturing districts and large cities, mainly in the
interests of hygiene; and later he examined the size and health of
children working in coal-mines.
In 1861 the venerated Dr. John Beddoe published a study of hair
and eye colour in Ireland, and he has continued his researches in
this fruitful field from time to time in various parts of the British Isles,
and to a less extent on the continent of Europe.
But it was on the continent that this method of investigation was
most ardently prosecuted; and the story of its political origin may
here be briefly recounted, since the results were of great service to
the science of Anthropometry.
During the bombardment of Paris, in the Franco-Prussian War, the
Natural History Museum suffered some damage through shells; and
soon afterwards the director, de Quatrefages, published a pamphlet
on La Race Prussienne (1871). This was to show that the Prussians
were not Teutonic at all, but were descended from the Finns, who
were classed with the Lapps as alien Mongolian intruders into
Europe. They were thus mere barbarians, with a hatred of a culture
they could not appreciate; and their object in shelling the museum
was “to take from this Paris that they execrate, from this Babylon that
they curse, one of its elements of superiority and attraction. Hence
our collections were doomed to perish.” A reply was made by
Professor Virchow, of Berlin, and the battle raged furiously. The
significance of this controversy to Anthropometry lies in the fact that
its immediate result was an order from the German Government
authorising an official census of the colour of the hair and eyes of
6,000,000 school children of the Empire—a census which served at
once as a stimulus to and a model for further investigators.
This census had some amusing and unexpected results, quoted
by Dr. Tylor[29] as illustrating the growth of legends:—
29. Pres. Add. Brit. Ass., 1879.
No doubt many legends of the ancient world, though not really history,
are myths which have arisen by reasoning on actual events, as definite
as that which, some four years ago, was terrifying the peasant mind in
North Germany, and especially in Posen. The report had spread far and
wide that all Catholic children with black hair and blue eyes were to be
sent out of the country, some said to Russia; while others declared that it
was the King of Prussia who had been playing cards with the Sultan of
Turkey, and had staked and lost 40,000 fair-haired, blue-eyed children;
and there were Moors travelling about in covered carts to collect them;
and the schoolmasters were helping, for they were to have five dollars for
every child they handed over. For a time popular excitement was quite
serious; the parents kept their children away from school and hid them,
and when they appeared in the streets of the market town the little ones
clung to them with terrified looks.... One schoolmaster, who evidently
knew his people, assured the terrified parents that it was only the children
with blue hair and green eyes that were wanted—an explanation that sent
them home quite comforted.
Observations of external characters, combined with precise

measurements, have now been made on a large scale in most
European countries, and these methods are adopted on
anthropological expeditions. In this way a great deal of valuable
material for study has been accumulated, but much work remains to
be done in this direction.
Methods of Not only have head, body, and limb
Dealing with measurements been recorded, but the device of
Anthropometric an “index” has been adopted which gives the ratio
Data. between two measurements, as, for example, in
the previously-mentioned cephalic index (p. 34).
The averages or means of series of indices obtained from one
people have been compared with those obtained from other peoples;
but this method is misleading, as there is frequently a very
considerable range in any given series, and a mean merely gives a
colourless conception of racial types, the only value of which is a
ready standard of comparison, which, however, is full of pitfalls.
A further step in the advancement of anthropometric research was
made when the extent and frequency of such deviations from the
mean were recorded. At first this was done in a tabular manner by
means of seriations; then curves were employed: a single peak was
held to indicate purity of race, double peaks that two racial elements
entered into the series measured, a broad peak or plateau was
interpreted as being due to race fusion. Dr. C. S. Myers,[30] who has
discussed these and other methods, points out the fallacies of this
interpretation, saying: “There can be little doubt that most of the
many-peaked curves owe their irregularity to the inadequate number
of individual measurements which have been taken.”
30. C. S. Myers, “The Future of Anthropometry,” Journ. Anth. Inst., xxxiii., 1903,
p. 36.
Dr. Myers emphatically states:—

If physical anthropology is to be a science, its results must be capable
of expression in mathematical formulæ. To this end some of the most
interesting of biological work of the age is tending ... generally speaking,
the study of living forms is passing from the descriptive to the quantitative
aspect, and it is by experiment and observation on biometrical lines that
future progress is clearly promised.... Thanks to the recent work of
Professor Karl Pearson, the proper start has at last been made.
His school is now attacking by statistical methods the problem of the

dependence of the variation of one character upon that of another. It
should be remembered that Quetelet was the first to apply the
Gaussian Law of Error to human measurements in its elementary
binomial form; in this he was followed by Sir Francis Galton, who
was the first in this country to realise the importance of applying
mathematical methods to anthropological measurements and
observations. An interesting account of the genesis of his work in
this direction is given in his Memories of My Life (1908). Similar work
has also been undertaken by German investigators.
Scientific and We may conclude this chapter with a brief
Practical Value summary of the main lines which investigations
of are now taking; but it is impossible to mention
Anthropometry.
even the more important of recent workers in this
vast field.
From the beginning of the study, anthropometry was employed as
a precise means of expressing the differences between man and the
lower animals; and, owing to improved methods of research and the
discovery of new material, the origin and differentiation of man is still
investigated with assiduity.
Though no one measurement can be used for purposes of race
discrimination, yet a series of measurements on a sufficiently large
group of subjects, together with observations on the colour of the
skin, hair, and eyes, the form of various organs—such as the nose
and ears—and other comparisons of a similar nature, are invaluable
in the study of the races of mankind. It is only in this way that the
mixtures of the population can be sorted out, their origins traced, and
some idea gained of the racial migrations which have taken place
since man first appeared.
Through the initiative of Sir Francis Galton, as Dr. Myers points
out, anthropometry has begun to investigate other problems which
must ultimately be of ethnological interest; and he has opened out
the whole subject of heredity, which eventually must enter into every
branch of physical anthropology. The followers of Mendel are at
present laying a foundation upon their experiments with plants and
animals. At present very little attention has been paid by them to
man; nor, probably, can much be attempted until more precise data
are available.
Lamentably little is known with accuracy about the physical and
psychical effects of the mixture of different human types, and it is yet
to be determined how far the admitted unsatisfactory character of
many half-caste populations is due to physiological or sociological
causes.
There is a great dearth of sufficiently numerous and reliable
observations and statistics concerning the effect of the environment
upon small or large groups of human beings—a problem to which
Professor Ridgeway devoted his last presidential address to the
Royal Anthropological Institute (1910).
It is often important that the physical fitness of people should be
tested, in order to see how they stand in relation to other people, and
to discover any physical imperfections. Especially is this desirable in
the case of children; and the government inspection of school
children, though inadequate, is a step in the right direction. By such
means early inclinations to various defects are discovered and
prevented, and valuable statistics are obtained which can not only be
utilised for comparative purposes, but may form a basis for future
legislation. It is also a matter of importance to determine whether
certain imperfections are due to diseased, abnormal, or other
undesirable factors in their parentage; or whether they are the
results of unfavourable subsequent conditions. But in order that
comparisons can be made, it is necessary to make similar
investigations on the normal, capable, and healthy population.
Another branch of investigation was undertaken mainly for the
identification of criminals, and consisted in certain measurements
selected by M. Alphonse Bertillon, supplemented by photographs
and a record of individual peculiarities. The practical value of this
method of identification in France was demonstrated by its
immediate results. Criminals began to leave off aliases, and
numbers of them flocked to England. Finger-prints as a means of
identification were first discovered by Purkenje, the Breslau
physiologist (1823), who utilised them for classification. Sir William
Herschel, of the Indian Civil Service, adopted the method in Bengal,
and now methods introduced by Sir Francis Galton are in use in
India, England, and elsewhere, having in most cases supplanted the
Bertillon system.
Chapter III.
ANTHROPOLOGICAL CONTROVERSIES
Next to geographical discovery, perhaps the most stimulating

influence on Anthropology has been the succession of controversies
in which it has constantly been involved. It has always been
regarded as a somewhat anarchical subject, advocating views which
might prove dangerous to Church and State; and many are the
battles which have raged within and without. Huxley attributed the
large audiences which were wont to throng the Anthropological
Section of the British Association to the innate bellicose instincts of
man, and to the splendid opportunities afforded by Anthropology for
indulging those propensities.[31]
31. Add. Brit. Ass., Dublin, 1878.
The discussions of the earlier centuries were focussed round the

question of the origin of man, and from this highly debateable
problem arose the two antagonistic groups of the monogenists, or
orthodox school, deriving all mankind from a single pair, and the
polygenists, who believed in a multiple origin. Before the discoveries
of prehistoric archæology had advanced sufficiently to show the
futility of such discussion, anthropologists were split up into opposing
camps by the question of the fixity of species, and became
embroiled in one of the fiercest controversies of modern times—that
of evolution. A subordinate subject of contention, implicated in the
polygenist doctrines, was the place of the Negro in nature, involving
the question of slavery.
Origin of Man.
Among the ancient philosophers the question of
the origin of man was answered in various ways;
some, like Pythagoras, Plato, and Aristotle, believed that mankind
had always existed, because there never could have been a
beginning of things, relying on the scholastic argument that no bird
could be born without an egg, and no egg without a bird. Epicurus
and Lucretius believed in a “fortuitous cause,” a preparation of fat
and slimy earth, with a long incubation of water and conjunction of
heavenly and planetary bodies. Others, that men and animals
“crawled out of the earth by chance,” “like mushrooms or blite.”
With the spread of Christianity the Mosaic cosmogony became
generally adopted, and monogenism developed into an article of
faith. The Church fulminated against those atheists who admitted
doubts on the subject of Adam and Eve, or believed in the existence
of antipodal man, or that man had existed for more than the 6,000
years allotted to him by Scripture. If the censure of the Church did
not lead to recantation, the heretic was burnt. A seventeenth-century
divine, Dr. Lightfoot, Vice-Chancellor of the University of Cambridge,
was even more precise than Archbishop Ussher: he reached the
conclusion that “man was created by the Trinity on October 23, 4004
B.C., at nine o’clock in the morning.”[32]
32. Clodd, Pioneers of Evolution, quoting from White, Warfare of Science with
Theology.
The discovery of the New World dealt a severe blow to the

authority of the Fathers on matters of science. Antipodal man, whom
St. Augustine[33] had extinguished as “excessively absurd,” was
found to exist, and the Spaniards forthwith excused their barbarities
to the American natives on the plea that they were not the
descendants of Adam and Eve.
33. De Civitate Dei.
Polygenism and Henceforward the polygenists began to gain
Monogenism. ground. Theophrastus Paracelsus (1520) first
asserted the plurality of the races of mankind, and explained the
Mosaic cosmogony as having been written “theologically—for the
weaker brethren.” Vanini (1616) mentions a belief, entertained by
atheists, that man was descended from or allied to monkeys. In 1655
Isaac de la Peyrère, a Calvinist scholar of Bordeaux, published in
Amsterdam his Præ-Adamitæ, to prove that Adam and Eve were not
the first human beings upon the earth; and his work, being prohibited
by authority, became immensely popular.
His theory, though unorthodox, was founded on Scripture, and
regarded Adam and Eve as merely a special and much later
creation; the Gentiles, who peopled the rest of the earth, having
been formed from the dust of the earth, together with the beasts of
the field, on the sixth day. The inhabitants of the New World, which,
being separate from the Old, could not have been peopled with the
same race, were of Gentile origin. This theory was bitterly opposed.
The Parlement of Paris caused the book to be publicly burned. The
Inquisition laid hands on the author, and he was forced to abjure
both his Pre-Adamite heresy and his Calvinism. He died in a convent
in 1676.
The writings of the Encyclopedists, the freedom of thought claimed
by Voltaire and Rousseau, together with the classification of species
by Linnæus, emboldened the polygenists. Lord Kames[34] was one of
the earliest exponents in England, and he soon found many
followers. Two separate lines of antagonism may be distinguished in
the controversy. In one—the Anglo-French—Prichard, Cuvier, and de
Quatrefages represent the monogenists, and Virey and Bory de
Saint-Vincent the polygenists; the other, in which America and the
slavery question were implicated, polygenists and anti-abolitionists
going hand-in-hand, was represented by Nott and Gliddon in
America, Knox and Hunt in England, and Broca in France.
34. Sketches on the History of Man, 1774.
When materials began to accumulate they were detrimental to the
polygenist theory. Especially was this the case with regard to the
proof of what Broca termed “eugenesis”—i.e., that all the Hominidæ
are, and always have been, fertile with each other. This, which
formed a test between species and varieties in Botany and Zoology,
was claimed also in Anthropology, and the polygenists had to seek
for support elsewhere. They found it in Linguistics; “language as a
test of race” bulked large in ethnological controversy, and is not yet
entirely extinct.
At first the monogenists claimed language as supporting their
views. All languages were to be traced to three sources—Indo-
European, Semitic, and Malay; and these, in their turn, were the
offspring of a parent tongue, now entirely lost. But it was soon found
impossible to reconcile even Aryan and Semitic, and a common
parent for all three languages was inconceivable. The linguistic
argument then passed over to the polygenists.
Hovelacque stated that “the ascertained impossibility of reducing a
multiplicity of linguistic families to a common centre is for us
sufficient proof of the original plurality of the races that have been
developed with them.” M. Chavée[35] went further. “We might,” he
says, “put Semitic children and Indo-European children apart, who
had been taught by deaf mutes, and we should find that the former
would naturally speak a Semitic language, the latter an Aryan
language.” F. Müller and others took up this line of argument, holding
that distinct stock languages proved the existence of distinct stock
races. But, as Professor Keane points out, in his summary of the
controversy (1896, chap. vii.), quod nimis probat, nihil probat—what
proves too much, proves nothing—and the hundred or more stock
languages in America alone, reduced the argument to an absurdity.
35. See Topinard, 1878, p. 424.
Monogenists. Among the monogenists may be included most
of the older anthropologists—Linnæus, Buffon,
Blumenbach, Camper, Prichard, and Lawrence. Since they held that
all mankind was descended from a single pair (the question as to
whether this pair were white, black, or red, occasioned a further
discussion), they had to account for the subsequent divergence
producing the present clearly-recognised varieties; and, in so doing,
anticipated the theory of evolution, which was not clearly enunciated
until the time of Lamarck.
Linnæus believed in fixity of species, but had doubts about the
Biblical account. As a naturalist, he found it difficult to credit the
exceptional nature of a country which had supplied the wants of
zoological species as opposed to one another as the polar bear and
the tropical hippopotamus. Buffon ascribed the variations of man to
the influence of climate and diet. Though Prichard and Lawrence
both denied the possibility of the transmission of acquired
characters, Prichard believed that the transmission of occasional
variations might, to some extent, account for the diversities of races.
[36]
Lawrence wrote more clearly: “Racial differences can be
explained only by two principles—namely, the occasional production
of an offspring with different characters from those of the parents, as
a native or congenital variety; and the propagation of such varieties
by generation.” He considered that domestication favoured the
production of these congenital and transmissible variations, and,
anticipating the Eugenic school, deplored the fact that, while so
much care and attention was paid to the breeding of domestic
animals, the breeding of man was left to the vagaries of his own
individual fancy.
36. In an essay entitled “A Remarkable Anticipation of Modern Views on
Evolution,” Professor E. B. Poulton draws attention to the ideas expressed in
the first and second editions of the Researches, by Prichard, “one of the
most remarkable and clear-sighted of the predecessors of Darwin and
Wallace.... It is an anomaly that such works as the Vestiges should attract
attention, while Prichard’s keen insight, sound judgment, and balanced
reasoning on many aspects of organic evolution, and especially on the scope
of heredity, should remain unknown.” Essays on Evolution, 1908, pp. 192,
175.
Lawrence. Sir William Lawrence (1783-1867) was
appointed Professor of Anatomy and Surgery to
the Royal College of Surgeons at the early age of thirty-two. His
lectures on “Comparative Anatomy, Physiology, Zoology, and the
Natural History of Man,” delivered between 1816 and 1818, raised
an immediate outcry; and the author (to use his own words) was
charged “with the unworthy design of propagating opinions
detrimental to society, and of endeavouring to enforce them for the
purpose of loosening those restraints in which the welfare of
mankind exists.” Lawrence was forced to bow before the storm of
abuse, and announce publicly that the volumes had been
suppressed, as he was refused copyright. It is interesting to note that
these lectures are among those at present recommended for the use
of students of Anthropology.
Lawrence was far in advance of his time, and much of his teaching
may be said to have anticipated the doctrine of evolution.
Unfortunately, the theological protest raised by his lectures—
published when he was only thirty-five—resulted in his forsaking
Anthropology altogether, and he henceforward devoted himself
entirely to anatomy and surgery.
Lord Monboddo. Another prophet in advance of his times was
Lord Monboddo. James Burnett Monboddo (1714-
1799) was regarded as one of the most eccentric characters of the
eighteenth century, mainly on account of his peculiar views about the
origin of society and of language, and his theories as to the
relationship of man with the monkeys. He was deeply interested in
all the current accounts of “tailed men,” thus justifying Dr. Johnson’s
remark that he was “as jealous of his tail as a squirrel.” Later
students of his writings are less struck by these eccentricities, which
afforded endless jests to the wags of the age, than by his scientific
methods of investigation and his acute conclusions. He not only
studied man as one of the animals, but he also studied savages with
a view to elucidating the origin of civilisation.
Many other pre-Darwinian evolutionists might be mentioned, but
Professor Lovejoy’s caution must be noted:—
The premature adoption of a hypothesis is a sin against the scientific
spirit; and the chance acceptance by some enthusiast of a truth in which,
at the time, he has no sound reason for believing, by no means entitles
him to any place of honour in the history of science.[37]
37. Pop. Sci. Monthly, 1909, p. 499.
The first to enunciate a coherent theory of evolution—that of

Transformism or Transmutation—was Lamarck.[38]
38. De Maillet and Robinet had already outlined part of the Lamarckian doctrine.
Lamarck. Lamarck (1744-1829) believed that species
were not fixed, but that the more complex were
developed from pre-existent simpler forms. He attributed the change
of species mainly to physical conditions of life, to crossing, and
especially to use or disuse of organs, which not only resulted in the
modification, growth, or atrophy of some, but, under the stress of
necessity, led to the formation of new ones. “La fonction fait
l’organe.” He also held that changes produced in the individual as
the result of environment were transmitted to the offspring. Organic
life was traced back and back to a small number of primordial germs
or monads, the offspring of spontaneous generation. Man formed no
exception. He was the result of the slow transformation of certain
apes.
Lamarck’s views were first published in 1801, and were enlarged
in his Philosophie Zoologique, 1809.
Cuvier. Lamarck’s chief opponent was Cuvier (1769-
1832), Professor of Natural History and of
Comparative Anatomy in Paris, who, besides being the recognised
authority on zoology (his great book, Le Règne Animal, was long the
standard work on the subject), was even more renowned as an
anatomist. He upheld the theory of Catastrophe, of alternate
destructions and regenerations, against the new theories of
Transformism and Evolution.
According to this widely accepted belief, the universe was subject
to violent terrestrial revolutions, involving the destruction of all
existing things and the total annihilation of all living beings belonging
to the past epoch.
The theory was by no means new; it was current in the East in the
thirteenth century. In a book written by Mohamed Kaswini on the
wonders of nature, he tells the following tale:—
In passing one day by a very ancient and extremely populous city, I
asked of one of the inhabitants who founded their city. He replied to me:
“I know not, and our ancestors knew no more than we do on this point.”
Five hundred years afterwards, passing by the same place, I could not
perceive a trace of the city. Inquiring of one of the peasants about the
place when it was that the city was destroyed, he answered me: “What an
odd question you put to me; this country has never been otherwise than
as you see it now.” I returned there after another five hundred years, and
I found in the place of the country I had seen—a sea. I now asked of the
fishermen how long it was since their country became a sea; and he
replied that a person like me ought to know that it had always been a sea.
I returned again after five hundred years; the sea had disappeared, and it
was now dry land. No one knew what had become of the sea, or if such a
thing had ever existed. Finally, I returned once more after five hundred
years, and I again found a flourishing city. The people told me that the
origin of their city was lost in the night of time.[39]
39. Quoted from R. Knox, Anth. Rev., i., 1863, p. 263.

Cuvier’s position was supported by the evidence brought to
France by Napoleon’s scientific expedition to Egypt (1801). Here
were seen numbers of mummified animals, probably dating back
some three to four thousand years, but showing no appreciable
difference from existing types. This was held to demolish the theory
of evolution by proving the immutability of species.
Étienne Saint- Étienne Geoffrey Saint-Hilaire (1772-1844), the
Hilaire. zoologist on the Egyptian expedition, interpreted
the results differently, and was one of the most brilliant supporters of
Lamarck. In 1828 he published his convictions that the same forms
have not been perpetuated since the origin of all things, though he
did not believe that existing species were undergoing modification.
Cuvier returned to the charge, and in 1856 propounded his doctrine
of the periodical revolutions of the earth, of the renewal each time of
the flora and fauna, and of the incessant and miraculous intervention
of a creative Will. And for a time, owing to his position and authority,
he held the field.
Robert In 1844 appeared a book which had an
Chambers. enormous influence on the pre-Darwinian history
of Evolution. This was an anonymous work entitled Vestiges of the
Natural History of Creation, the authorship of which was not revealed
until the publication of the twelfth edition in 1884. It was the
production of Robert Chambers (1802-1871), co-editor with his
brother William of Chambers’s Journal, and author of many books on
Scotland and a few on science. He traced the action of general laws
throughout the universe as a system of growth and development,
and held that the various species of animals and plants had been
produced in orderly succession from each other by the action of
unknown laws and the influence of external conditions. The Vestiges
became at once the centre of scientific discussion, denounced by the
orthodox, and held “not proven” by most of the men of science of the
time. Its supporters were called “Vestigiarian,” a term which implied
also “unscientific,” “sentimental,” and “absurd.”
The curious point is that in the Vestiges we find much of what was
subsequently called the Darwinian theory already enunciated.
According to Wallace, it clearly formulated the conception of
evolution through natural laws, and yet it was denounced by those
who soon after were to become the champions of Darwinism. This
was partly due to the way in which the doctrine was treated and
expressed, partly also to the “needless savagery” of Professor
Huxley.
Huxley wrote in 1887: “I must have read the Vestiges ... before
1846; but, if I did, the book made very little impression on me.... I
confess the book simply irritated me by the prodigious ignorance and
thoroughly unscientific habit of mind manifested by the writer.”
Professor Lovejoy[40] explains the reasons for Huxley’s attitude:—
40. Loc. cit.
The truth is that Huxley’s strongly emotional and highly pugnacious

nature was held back by certain wholly non-logical influences from
accepting an hypothesis for which the evidence was practically as potent
for over a decade before he accepted it as it was at the time of his
conversion. The book was written in a somewhat exuberant and
rhetorical style. With all its religious heterodoxy, it was characterised by a
certain pious and edifying tone, and was given to abrupt transitions from
scientific reasoning to mystical sentiment. It contained numerous
blunders in matters of biological and geological detail; and its author
inclined to believe, on the basis of some rather absurd experimental
evidence, in the possibility of spontaneous generation. All these things
were offensive to the professional standards of an enthusiastic young
naturalist, scrupulous about the rigour of the game, intolerant of
vagueness and of any mixture of the romantic imagination with scientific
inquiry.... He therefore, in 1854, almost outdid the Edinburgh Review in
the ferocity of his onslaught upon the layman who had ventured to put
forward sweeping generalisations upon biological questions while
capable of errors upon particular points which were palpable to every
competent specialist.
Huxley refers to this review as “the only review I ever have had
qualms of conscience about, on the grounds of needless savagery.”
Darwin more mildly described it as “rather hard on the poor author.”
Indeed, he confessed to a certain sympathy with the Vestiges; while
Wallace, in 1845, expressed a very favourable opinion of the book,
describing it as “an ingenious hypothesis, strongly supported by
some striking facts and analogies.”
The strongest testimony to the value of Chambers’s work is that of
Mr. A. W. Benn, who writes in Modern England, 1908, concerning the
Vestiges:—
Hardly any advance has since been made on Chambers’s general
arguments, which at the time they appeared would have been accepted
as convincing, but for theological truculence and scientific timidity. And
Chambers himself only gave unity to thoughts already in wide
circulation.... Chambers was not a scientific expert, nor altogether an
original thinker; but he had studied scientific literature to better purpose
than any professor.... The considerations that now recommend evolution
to popular audiences are no other than those urged in the Vestiges.
Herbert Spencer. The next great name among the pre-Darwinian

evolutionists is that of Herbert Spencer. About
1850 he wrote:—
The belief in organic evolution had taken deep root (in my mind), and
drawn to itself a large amount of evidence—evidence not derived from
numerous special instances, but derived from the general aspects of
organic nature and from the necessity of accepting the hypothesis of
evolution when the hypothesis of special creation had been rejected. The
special creation belief had dropped out of my mind many years before,
and I could not remain in a suspended state: acceptance of the only
possible alternative was imperative.[41]
41. Duncan, Life and Letters of Herbert Spencer, 1898, II., 317.
This suspended state, the tätige Skepsis of Goethe, was just what
Huxley was enjoying; in his own words, “Reversing the apostolic
precept to be all things to all men, I usually defended the tenability of
received doctrines, when I had to do with the transmutationists; and
stood up for the possibility of transmutation among the orthodox.”
Thus, up to the date of the publication of the Origin of Species,
scientific opinion was roughly divided into two opposing camps: on
one side were the classic, orthodox, catastrophic, or creationist
party, who believed in the fixity of species, and that each species
was the result of special miraculous creation; on the other, the
evolutionists or transmutationists, who rejected special creation, and
held that all species were derived from other species, by some
unknown law.
It was the formulation of this unknown law that makes 1859 an
epoch in the history of Anthropology.
Charles Darwin. Darwin’s work may best be summed up in the
words of his loyal and self-effacing co-worker,
Alfred Russel Wallace:—
Before Darwin’s work appeared the great majority of naturalists, and
almost without exception the whole literary and scientific world, held
firmly to the belief that species were realities, and had not been derived
from other species by any process accessible to us ... [but] by some
totally unknown process so far removed from ordinary reproduction that it
was usually spoken of as “special creation.”... But now all this is changed.
The whole scientific and literary world, even the whole educated public,
accepts, as a matter of common knowledge, the origin of species from
other allied species by the ordinary process of natural birth. The idea of
special creation or any altogether exceptional mode of production is
absolutely extinct.... And this vast, this totally unprecedented, change in
public opinion has been the result of the work of one man, and was
brought about in the short space of twenty years.
Huxley describes the attitude towards the theory in the year

following the publication of the Origin of Species: “In the year 1860
there was nothing more volcanic, more shocking, more subversive of
everything right and proper, than to put forward the proposition that,
as far as physical organisation is concerned, there is less difference
between man and the highest apes than there is between the
highest apes and the lowest.... That question was not a pleasant one
to handle.” But the “horrible paradoxes of one generation became
the commonplaces of schoolboys”; and the “startling proposition” of
1860 was, twenty years later, a “fact that no rational man could
dispute.”[42]
42. Add. Brit. Ass., 1878, Dublin.
This question of the difference between man and the apes was
embittered by the personal encounter between Huxley and Owen.
Professor Owen, in 1857, stated that the hippocampus minor, which
characterises the hind lobe in each hemisphere in the human brain,
is peculiar to the genus Homo. This Huxley denied;[43] and, as neither
disputant would acknowledge that he was mistaken, the question
became “one of personal veracity.”
43. “It is not I who seek to base man’s dignity upon his great toe, or to insinuate
that we are lost if an ape has a hippocampus minor.”—Anth. Rev., I., 113.
As a possible explanation of this famous dispute, it is interesting to

note the discovery announced by Professor D. J. Cunningham of the
absence of this cavity on one side of the brain of an orang-utan, with
the suggestion that Owen “may in the first instance have been
misled by an abnormal brain of this kind.”[44]
44. Cunn. Mem., II., R.I.A., p. 128.
The further history of the development, expansion, and curtailment

of the Darwinian theory as such lies beyond the scope of this little
book. The criticisms of sexual selection and of the origin of the
higher mental characters of man by Wallace; the denial of the
inheritability of acquired characters by August Weismann and others;
the orthogenesis theory of Theodore Eimer, the “mutation” theory of
Hugo de Vries and Mendel’s researches—all opened up lively
controversies, and the field of science is still clouded with the smoke
of their battles.
The ferment provoked by the publication of Darwin’s Origin of
Species profoundly affected, as was natural, the nascent science of
Anthropology. At the meeting of the British Association in Nottingham
in 1866 Dr. James Hunt read an address before the Anthropological
Department to show that “the recent application of Mr. Darwin’s
hypothesis of ‘natural selection’ to anthropology by some of Mr.
Darwin’s disciples is wholly unwarranted either by logic or by
facts.”[45] In this address he said that he still believed the deduction
he had made three years previously—“that there is as good reason
for classifying the negro as a distinct. species from the European as
there is for making the ass a distinct species from the zebra; and if,
in classification, we take intelligence into consideration, there is a far
greater difference between the negro and the European than
between the gorilla and chimpanzee.” He insisted that
“anthropologists are bound to take the totality of the characteristics
of the different types of man into consideration. “It is to be regretted,
however,” Dr. Hunt continues, “that there are many writers in
Germany who have recently written as though the question of man’s
place in nature were settled”; but he is delighted to find that
“Professor Carl Vogt is doing all he can to show the fallacy of the
unity hypothesis.” He quotes Professor Vogt as saying: “This much is
certain, that each of these anthropoid apes has its peculiar
characters by which it approaches man.... If, in the different regions
of the globe, anthropoid apes may issue from different stocks, we
cannot see why these different stocks should be denied further
development into the human type, and that only one stock should
possess this privilege. The further we go back in history the greater
is the contrast between individual types, the more opposed are the
characters.”
45. Anth. Rev., iv., 320.
The controversies and discussions of this period were not confined
to those who had technical knowledge or scientifically trained minds.
All sorts of people joined in the fray, mainly because they fancied
that the new ideas were subversive of “revealed religion”; but it
would serve no useful purpose to recall the false statements and
bitter expressions that were bandied about. Some had merely a
sentimental objection to the doctrine of evolution; but at the present
day most people would subscribe to the declaration of Broca, who
wrote: “Quant à moi, je trouve plus de gloire à monter qu’à
descendre et si j’admettais l’intervention des impressions
sentimentales dans les sciences, je dirais que j’aimerais mieux être
un singe perfectionné qu’un Adam dégénéré.”[46]

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International Marketing, 11th Edition -

Australia ● Brazil ● Canada ● Mexico ● Singapore ● United Kingdom ● United States

Product Manager: Heather Thompson

Product Assistant: Juleah Morehouse

Marketing Manager: Anthony Winslow

IP Analyst: Diane Garrity

Production Service: MPS Limited ISBN: 978-0-357-44512-9

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Printed in the United States of America

Jo Ann L. Asquith Ken Fairweather Milena Simic

xii About the Authors

PART 1 The International Marketing Environment 1

1 Global Environmental Drivers 2

2 International Trade Frameworks and Policy 28

PART 2 Finding Global Customers 151

6 Consumer, Industrial, and Government Markets 152

9 Market Entry and Expansion 236

11 Product Management and Global Brands 302

PART 4 Leadership in Global Marketing 473

16 Social Networks and Engagement 474

xiv Brief Contents

PART 1 The International Marketing Environment 1

1 Global Environmental Drivers 2

2 International Trade Frameworks and Policy 28

3 The Role of Culture 52

4 The Economic Environment 80

5 The Political and Legal Environment 116

6 Consumer, Industrial, and Government Markets 152

7 Strategic Planning 176

8 Analyzing People and Markets 200

9 Market Entry and Expansion 236

10 Marketing Organization, Implementation, and Control 262

11 Product Management and Global Brands 302

12 Global Marketing of Services 339

13 Advertising, Promotion, and Sales 363

15 Global Distribution and Logistics 429

16 Social Networks and Engagement 474

17 Leadership, Corporate Social Responsibility,

18 New Directions and Challenges 528

The International Marketplace 1.1

Global Trends Impose New Strategic Marketing Requirements

Chapter 1: Global Environmental Drivers 3

International Marketing Defined

4 Part One: The International Marketing Environment

Environment and Sustainability: A Global Challenge for Ideas

Sean Blake/Gallo Images/Getty Images

Korea Smart Green City Jeju display model.

Chapter 1: Global Environmental Drivers 5

● Where are my current and potential customers?

The Importance of World Trade

The Iron Curtain has disintegrated and newly

supply and receive products from across the

6 Part One: The International Marketing Environment

Pessimistic scenario Trend 1990–2008

The International Marketplace 1.3

New Sources for Outsourcing

17 Leadership, Corporate Social Responsibility,