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Chapter1TheScopeandChallengeofInternationalMarketing1“...themarketer’staskisthesamewhetherappliedinDimeBox,Texas,orDaresSalaam,Tanzania.”Discuss.Theonlydifferencebetweendomesticmarketingandinternationalmarketingisthattheactivitiestakeplaceinmorethanonecountry.Therefore,themarketingtaskisthesamethroughouttheworld.2.HowcantheincreasedinterestininternationalmarketingonthepartoftheU.S.firmsbeexplained?Increasedinteresthasbeenbroughtaboutbecauseofchangingcompetitivestructures,coupledwithshiftsindemandcharacteristicsthroughouttheworld.TheU.S.markethasreachedsaturationlevelsformanyproducts,andincreasingnumbersoffirmsarefacedwithsurpluseswhichmustbesold.Also,manyfirmsfindthatreturnoninvestmentmaybehigherinforeignmarketsthanindomesticmarkets.Finally,moreandmorefirmsrealizethattomorrow’smarketswillbeworldmarketsanditisimperativethattheyestablishworldmarketpositionsearly.3.Discussthefourphasesofinternationalmarketinginvolvement.Thefirstphaseincludesthosedomesticfirmswhichhavenoforeignbusinessactivityexceptthosesalesmadetoforeigncustomerswhocomedirectlytothefirm.Thesecondphaseincludesdomesticfirmswhichhavetemporarysurpluseswhicharesoldabroad.Therefore,salesaremadeonanavailabilitybasiswithlittleornointentionforcontinuingmarketrepresentation.Thethirdphaseincludesthedomesticfirmsthathavepermanentproductivecapacitywhichisutilizedtoproducegoodswhicharesoldonacontinuingbasisinforeignmarkets.Thefourthphaseincludestheinternationalcompanythatproducesaproductfortheworldmarket.4.Discusstheconditionsthathaveledtothedevelopmentofglobalmarkets.AccordingtotheProfessorLevittandotherswhosuggestthatthereisaglobalmarketforgoods,thisphenomenonhasresultedfromnewcommunicationstechnology,travelandotherfactorswhichhaveledtothemarketsoftheworldbeingmoreawareofdifferentproductsandprocesses.Asaresultofthisawareness,therearesegmentsineachmarketwhohavehadsimilarexperiencesandthushavecommonneeds.Thesecommonneedsaredescribedasademandforhighquality,reasonablypriced,standardizedproducts.Thereisastrongfeelingthatwithineachcountry’smarketthereisagrowingsegmentthathasbeenexposedtoideasfromaroundtheworldandthushavehadtheirtastesandperceivedneedsaffected.Thereisastrongfeelingthatworldmarketsarebeingdriventowardaconvergingcommonalityoftasteandneedsleadingtowardglobalmarkets.5.Differentiatebetweenaglobalcompanyandamultinationalcompany.Themaindistinctionbetweenaglobalandamultinationalcompanyisthataglobalcompanyassumestherearesegmentsacrosscountrieswhichhavethesameneedsandwantsanddesignsastandardized,highquality,reasonablypricedproductforthosesegmentsandmarketsitasiftherearenodifferencesamongthecountrymarkets.Ontheotherhand,amultinationalcompanyoperatesinanumberofcountriesandadjustsitsproductsandmarketingpracticesforeachmarket.Themultinationalcompanyhasaspecificmarketingplanandadaptsproductsforeachcountrymarket.Thephilosophyforthemultinationalcompanyisthatthereareculturaldifferencesamongcountriesthatrequirespecificadaptationsforthosemarkets.Thisiscontrastedwiththeglobalcompanywhichseestheentireworld,ormajorregionsofit,asasingleentityrequiringnospecializedadjustments.ThisdistinctionmaybemoremyththanfactandreflectsProfessorLevitt’sopinion.6.Differentiateamongthethreeinternationalmarketingconcepts.Companiescanbedescribedbyoneofthreeorientationstointernationalmarketingmanagement:1.DomesticMarketExpansionConcept2.Multi-DomesticMarketConcept3.GlobalMarketingConceptItisexpectedthatdifferencesinthecomplexityandsophisticationofacompany’smarketingactivitydependonwhichoftheseorientationsguidesitsoperations.TheDomesticMarketExtensionConcept.Thedomesticcompanythatseekssalesextensionofitsdomesticproductsintoforeignmarketsillustratesthisorientationtointernationalmarketing.Itviewsitsinternationaloperationsassecondarytoandanextensionofitsdomesticoperations.Theprimarymotiveistodisposeofexcessdomesticproduction.Domesticbusinessisitspriorityandforeignsalesareseenasaprofitableextensionofdomesticoperations.Whileforeignmarketsmaybevigorouslypursued,theorientationremainsbasicallydomestic.ItsattitudetowardinternationalsalesistypifiedbythebeliefthatifitsellsinPeoriaitwillsellanywhereelseintheworld.Minimal,ifany,effortsaremadetoadaptthemarketingmixtoforeignmarkets.Thefirm’sorientationistomarkettoforeigncustomersinthesamemannerthecompanymarketstodomesticcustomers.Itseeksmarketswheredemandissimilartothehomemarketanditsdomesticproductwillbeacceptable.ThisDomesticMarketExpansionStrategycanbeveryprofitable.Largeandsmallexportingcompaniesapproachinternationalmarketingfromthisperspective.Multi-DomesticMarketConcept.Onceacompanyrecognizestheimportanceofdifferencesinoverseasmarketsandtheimportanceofoffshorebusinesstotheirorganization,itsorientationtowardinternationalbusinessmayshifttoaMulti-DomesticMarketStrategy.Acompanyguidedbythisconcepthasastrongsensethatcountrymarketsarevastlydifferent(andtheymaybe,dependingontheproduct)andthatmarketsuccessrequiresanalmostindependentprogramforeachcountry.Firmswiththisorientationmarketonacountry-by-countrybasiswithseparatemarketingstrategiesforeachcountry.Su