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International Marketing

Marketing is a universal activity, regardless of the political, social, or economic systems of a particular country.

However, this doesn't mean that consumers in different parts of the world should be satisfied in the same way.

This fourth edition of

International Marketinghas been written to enable managers and scholars to meet the

international challenges they face every day, and it provides the solid foundation required to understand the com-

plexities of marketing on a global scale.

The book has been fully updated with topical case studies, examples of contemporary marketing campaigns,

the most relevant discussion topics as well as the most up-to-date theories, references, and research findings. It

is this combination of theory and practice that makes this textbook truly unique, presenting a fully rounded view

of the topic rather than an anecdotal or descriptive one alone.

The book includes chapters on:

trade distortions and marketing barriers culture consumer behavior marketing research foreign market entry strategies product and branding strategies promotion and pricing strategies currencies and foreign exchange

Accessibly written and designed, this is the most international book on marketing available which can be used by

undergraduates and postgraduates the world over. As one of the most successful textbooks in its field, the book

has been adopted in the USA, Europe, Asia, Australia, and elsewhere, at the undergraduate, MBA, and Ph.D.

levels. A companion website provides additional material for lecturers and students alike. Sak Onkvisitis Professor of Marketing at San José State University, USA. John Shawis Professor of Marketing at Providence College, USA. 1111
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Analysis and strategy

Fourth edition

Sak Onkvisit and John J. Shaw

11 11 2 3 4 5 6 7 8 9 10 11 1 1 2 3 41
5 6 7 8 9 20 11 1 1 2 3 4 5 6 7 8 9 30
1 2 3 4

International

Marketing

First edition published by Charles Merrill in 1989

Second edition published by Macmillan in 1993

Third edition published by Prentice-Hall in 1997

Fourth edition 2004

Simultaneously published in the UK, USA and Canada by Routledge

29 West 35th Street, New York, NY 10001

and by Routledge

11 New Fetter Lane, London EC4P 4EE

Routledge is an imprint of the Taylor & Francis Group

© 2004 Sak Onkvisit and John J. Shaw

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any

electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording,

or in any information storage or retrieval system, without permission in writing from the publishers.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data

Onkvisit, Sak.

International marketing : analysis and strategy / by Sak Onkvisit and

John J. Shaw. - 4th ed.

p. cm.

Includes bibliographical references and indexes.

1. Export marketing. 2. Export marketing - Management.

I. Shaw, John J. II. Title.

HF1416.O55 2004

658.84 - dc222003023746

ISBN 0-415-31132-2 (hbk)

ISBN 0-415-31133-0 (pbk)

This edition published in the Taylor & Francis e-Library, 2007. ìTo purchase your own copy of this or any of Taylor & Francis or Routledgeís collection of thousands of eBooks please go to www.eBookstore.tandf.co.u k.î

ISBN 0-203-93006-1 Master e-book ISBN

To my family and the memory of my grandparents

and Lawrence X. Tarpey, Sr. and

Ann and Jonathan and the memory of Rebecca

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List of illustrationsxiii

Prefacexviii

1 NATURE OF INTERNATIONAL MARKETING: CHALLENGES AND OPPORTUNITIES 1

Process of international marketing 3

International dimensions of marketing 4

Domestic marketing vs. international marketing 5

The applicability of marketing 6

Multinational corporations (MNCs) 7

The process of internationalization 15

Benefits of international marketing 15

Conclusion18

Case 1.1 Sony: the sound of entertainment 19

2 TRADE THEORIES AND ECONOMIC DEVELOPMENT 22

Basis for international trade 23

Exchange ratios, trade, and gain 26

Factor endowment theory27

The competitive advantage of nations 32

A critical evaluation of trade theories 33

Economic cooperation39

Conclusion46

Case 2.1 The United States of America vs. the United States of Europe 47

3 TRADE DISTORTIONS AND MARKETING BARRIERS 52

Protection of local industries 55

Government: a contribution to protectionism 57

Marketing barriers: tariffs59

Marketing barriers: nontariff barriers 62

Private barriers73

World Trade Organization (WTO) 74

Preferential systems76

Some remarks on protectionism 77

Conclusion78

Case 3.1 Global war on drugs or tuna? 80

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vii

Contents

4 POLITICAL ENVIRONMENT 84

Multiplicity of political environments 86

Types of government: political systems 89

Types of government: economic systems 92

Political risks100

Privatization102

Indicators of political instability 102

Analysis of political risk or country risk 104

Management of political risk 106

Measures to minimize political risk 107

Political insurance112

Conclusion114

Case 4.1 Hoa Ni Shoe Company 115

5 LEGAL ENVIRONMENT121

Multiplicity of legal environments 122

Legal systems124

Jurisdiction and extraterritoriality 125

Legal form of organization 128

Branch vs. subsidiary129

Litigation vs. arbitration131

Bribery132

Intellectual property139

Counterfeiting146

Conclusion148

Case 5.1 International auto safety and patents 149 Case 5.2 Bribery: a matter of national perspective 150

6 CULTURE153

Culture and its characteristics 155

Influence of culture on consumption 156

Influence of culture on thinking processes 157

Influence of culture on communication processes 158

Cultural universals159

Cultural similarities: an illusion 160

Communication through verbal language 160

Communication through nonverbal language 167

Subculture178

Conclusion181

Case 6.1 Cross-cultural marketing: a classroom simulation 182

7 CONSUMER BEHAVIOR IN THE INTERNATIONAL CONTEXT: PSYCHOLOGICAL

AND SOCIAL DIMENSIONS 187

Perspectives on consumer behavior 190

Motivation190

Learning192

Personality193

Psychographics197

Perception198

Attitude202

Social class203

viii

CONTENTS

Group204

Family205

Opinion leadership206

Diffusion process of innovations 206

Conclusion207

Case 7.1 Beneath Hijab: marketing to the veiled women of Iran 208

8 MARKETING RESEARCH AND INFORMATION SYSTEM 213

Nature of marketing research 214

Marketing information sources 216

Secondary research216

Primary research218

Sampling220

Basic methods of data collection 222

Measurement224

Marketing information system 232

Conclusion237

Case 8.1 B&R Bank: developing a new market 238

9 FOREIGN MARKET ENTRY STRATEGIES 243

Foreign direct investment (FDI) 245

Exporting246

Licensing248

Management contract252

Joint venture252

Manufacturing254

Assembly operations257

Turnkey operations260

Acquisition260

Strategic alliances262

Analysis of entry strategies 263

Foreign trade zones (FTZs) 265

Conclusion267

Case 9.1 How to export houses 267

10 PRODUCT STRATEGIES: BASIC DECISIONS AND PRODUCT PLANNING 272

What is a product?275

New product development275

Market segmentation277

Product adoption278

Theory of international product life cycle (IPLC) 279 Product standardization vs. product adaptation 285 A move toward world product: international or national product? 297

Marketing of services298

Conclusion302

Case 10.1 McDonaldization 304

11 PRODUCT STRATEGIES: BRANDING AND PACKAGING DECISIONS 308

Branding decisions310

Branding levels and alternatives 313

Brand consolidation3231111

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ix

CONTENTS

Brand origin and selection 324

Brand characteristics326

Brand protection330

Packaging: functions and criteria 336

Mandatory package modification 336

Optional package modification 337

Conclusion338

Case 11.1 Planet Ralph: the global marketing strategy of Polo Ralph Lauren 339

Case 11.2 Majorica S.A. vs. R. H. Macy 341

12 CHANNELS OF DISTRIBUTION 344

Direct and indirect selling channels 346

Types of intermediaries: direct channel 349

Types of intermediaries: indirect channel 351

Channel development359

Channel adaptation361

Channel decisions361

Determinants of channel types 363

Distribution in Japan367

Selection of channel members 368

Representation agreement and termination 369

Black market371

Gray market371

Distribution of services378

Conclusion380

Case 12.1 The international record industry 380

Case 12.2 Schwarzkopf, Inc. distribution network 382

13 PHYSICAL DISTRIBUTION AND DOCUMENTATION 386

Modes of transportation388

Cargo or transportation insurance 394

Packing394

Freight forwarder and customs broker 398

Documentation399

Conclusion410

14 PROMOTION STRATEGIES: PERSONAL SELLING, PUBLICITY, AND SALES PROMOTION 413

Promotion and communication 414

Promotion mix416

Personal selling416

Publicity422

Sale promotion426

Overseas product exhibitions 429

Conclusion433

Case 14.1 Selling in the EU 434

Case 14.2 AllWorld Corporation 435

15 PROMOTION STRATEGIES: ADVERTISING 440

The role of advertising441

Patterns of advertising expenditures 442

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