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(BQ) Part 2 book International marketing has contents: Global marketing management - planning and organization, products and services for consumers, products and services for businesses, international marketing channels, integrated marketing communications and international advertising,... and other contents.
12 Chapter Global Marketing Management: PLANNING AND ORGANIZATION CHAPTER OUTLINE CHAPTER LEARNING OBJECTIVES Global Perspective: The British Sell Another Treasure What you should learn from Chapter 12: Global Marketing Management LO1 How global marketing management differs from international marketing management LO2 The need for planning to achieve company goals LO3 The important factors for each alternative marketentry strategy LO4 The increasing importance of international strategic alliances The Nestlé Way: Evolution Not Revolution Benefits of Global Marketing Planning for Global Markets Company Objectives and Resources International Commitment The Planning Process Alternative Market-Entry Strategies Exporting Contractual Agreements Strategic International Alliances Direct Foreign Investment Organizing for Global Competition Locus of Decision Centralized versus Decentralized Organizations cat2994X_ch12_330-357.indd 330 18/08/10 12:17 PM PART F OUR Global Perspective THE BRITISH SELL ANOTHER TREASURE The mating dance has been unusually long, but then again, the deal was unusually large Kraft first proposed to purchase the British institution Cadbury for a price of almost $17 billion in early September Then it had until November to make a formal offer or give up the fight The courtship unleashed a barrage of bad puns (e.g., “Cadbury gags on Kraft bid”) It also stirred up atavistic fears across Britain of a faceless American conglomerate wrecking a great British institution and forcing Britons to give up Dairy Milk chocolate and Creme Eggs in favor of Cheez Whiz and Jell-O A succession of studies has shown that three-quarters of mergers and acquisitions fail to produce any benefits for shareholders, and more than half actually destroy shareholder value (e.g., Quaker and Snapple, Daimler-Benz and Chrysler, Time Warner and AOL) The danger is particularly pronounced in hostile bids that cross borders and involve much loved brands A Kraft–Cadbury deal sounds designed for failure Todd Stitzer, Cadbury’s boss, argues that his firm is an embodiment of a distinctive style of “principled capitalism” that was inspired by its Quaker founders nearly two centuries ago and has been woven into its fabric ever since Destroy that tradition and “you risk destroying what makes Cadbury a great company.” Chocolate companies as a breed also have a peculiarly intimate relationship with their customers, partly because chocolate is involved in so many childhood, romantic, and festive rituals, and partly because people acquire their chocolate preferences at their mothers’ knees Most Britons would rather eat scorpions than Hershey bars The giants of the chocolate business have all dominated their respective cat2994X_ch12_330-357.indd 331 regions for decades Britons have been stuffing themselves with Dairy Milk since 1905, Creme Eggs since 1923, and Crunchies since 1929 A Kraft–Cadbury combination also would create a rottentoothed behemoth, with $50 billion in annual sales, a significant presence in every market worthy of the name, and a real chance of making up lost ground in China Kraft has a strong position in mainland Europe and operations in 150 countries Cadbury is worshipped wherever the British empire once held sway (the company commands 70 percent of the chocolate market in India, for example), and a lot of other places besides (notably, Brazil and Mexico) It also has an unrivalled distribution system among small shops in India and parts of Africa Skeptics are right to point out that grandiose mergers more often destroy brands than strengthen them, particularly when those brands are such delicate confections as chocolate bars and gooey eggs, but then again, few mergers offer the chance to establish a global empire of taste The mating dance was finally consummated in January 2010, for some $19 billion in cash and stock Of course, such a large acquisition will have to undergo scrutiny by antitrust officials on both sides of the Atlantic before final approval Among those who not appreciate this latest marital arrangement was Warren Buffett, whose Berkshire Hathaway group owns 9.4 percent of Kraft Had he been able, he would have voted against the $19 billion dowry that Kraft paid as too much Sources: “Food Fight,” The Economist, November 7, 2009, p 63; Graeme Wearden, “Warren Buffett Blasts Kraft’s Takeover of Cadbury,” guardian co.uk, January 20, 2010 18/08/10 12:17 PM 332 Part Developing Global Marketing Strategies Confronted with increasing global competition for expanding markets,1 multinational companies are changing their marketing strategies2 and altering their organizational structures Their goals are to enhance their competitiveness and to ensure proper positioning to capitalize on opportunities in the global marketplace Comprehensive decisions must be made regarding key strategic choices, such as standardization versus adaptation, concentration versus dispersion, and integration versus independence.3 Particularly as national borders become less meaningful, we see the rise of greater international corporate collaboration networks yielding new thinking about traditional concepts of competition and organization.4 A recent study of North American and European corporations indicated that nearly 75 percent of the companies are revamping their business processes, that most have formalized strategic planning programs, and that the need to stay cost competitive was considered the most important external issue affecting their marketing strategies Change is not limited to the giant multinationals but includes midsized and small firms as well In fact, the flexibility of a smaller company may enable it to reflect the demands of global markets and redefine its programs more quickly than larger multinationals Acquiring a global perspective is easy, but the execution requires planning, organization, and a willingness to try new approaches—from engaging in collaborative relationships to redefining the scope of company operations This chapter discusses global marketing management, competition in the global marketplace, strategic planning, and alternative market-entry strategies It also identifies the elements that contribute to an effective international or global organization Global Marketing Management LO1 How global marketing management differs from international marketing management In the 1970s, the market segmentation argument was framed as “standardization versus adaptation.” In the 1980s, it was “globalization versus localization,” and in the 1990s, it was “global integration versus local responsiveness.” The fundamental question was whether the global homogenization of consumer tastes allowed global standardization of the marketing mix The Internet revolution of the 1990s, with its unprecedented global reach, added a new twist to the old debate Even today, some companies are calling “global” the way to go For example, executives at Twix Cookie Bars tried out their first global campaign with a new global advertising agency, Grey Worldwide With analysis, perhaps a global campaign does make sense for Twix But look at the companies that are going in the other direction Levi’s jeans have faded globally in recent years Ford has chosen to keep only one acquired nameplate, Mazda, but also will sell the Fiesta worldwide.5 And perhaps the most global company of all, Coca-Cola, is peddling two brands in India—Coke and Thums Up Coke’s CEO explained, “Coke has had to come to terms with a conflicting reality In many parts of the Yadong Luo and Rosalie Tung, “International Expansion of Emerging Market Enterprises: A Springboard Perspective,” Journal of International Business Studies 38 (2007), pp 481–98; Peter J Buckley, L Jeremy Clegg, Adam R Cross, Xiin Liu, Hinrich Voss, and Ping Zheng, “The Determinants of Chinese Outward Foreign Direct Investment,” Journal of International Business Studies 38 (2007), pp 499–518; Daphne W Yiu, ChingMing Lau, and Garry D Bruton, “International Venturing by Emerging Economy Firms: The Effects of Firm Capabilities, Home Country Networks, and Corporate Entrepreneurship,” Journal of International Business Studies 38 (2007), pp 519–40; Igor Filatotchev, Roger Strange, Jennifer Piesse, and Yung-Chih Lien, “FDI by Firms from Newly Industrialized Economies in Emerging Markets: Corporate Governance, Entry Mode, and Location,” Journal of International Business Studies 38 (2007), pp 556–72 Thomas Hutzschenreuter and Florian Grone, “Product and Geographic Scope Changes of Multinational Enterprises in Response to International Competition,” Journal of International Business Studies 40, no (2009), pp 1149–72; Yaron Timmor, Samuel Rabino, and Jehiel Zif, “Defending a Domestic Position against Global Entries,” Journal of Global Marketing 22, no (2009), pp 251–66 Lewis K S Lim, Frank Acito, and Alexander Rusetski, “Development of Archetypes of International Marketing Strategy,” Journal of International Business Studies 37 (2006), pp 499–524 B Elango and Chinmay Pattnaik, “Building Capabilities for International Operations through Networks: A Study of Indian Firms,” Journal of International Business Studies 38 (2007), pp 541–55; Victor K Fung, William K Fung, and Yoram (Jerry) Wind, Competing in a Flat World (Upper Saddle River, NJ: Wharton School Publishing, 2008) David Kiley, “One Ford for the Whole Wide World,” BusinessWeek, June 15, 2009, pp 58–60 cat2994X_ch12_330-357.indd 332 18/08/10 12:17 PM Chapter 12 Global Marketing Management: Planning and Organization 333 The competition among soft drink bottlers in India is fierce Here Coke and Pepsi combine to ruin the view of the Taj Mahal Notice how the red of Coke stands out among its competitors in the picture Of course, now Coca-Cola has purchased Thums Up, a prominent local brand—this is a strategy the company is applying around the world But the red is a substantial competitive advantage both on store shelves and in outdoor advertising of the sort common in India and other developing countries We’re not sure who borrowed the “monsoon/thunder” slogans from whom world, consumers have become pickier, more penny-wise, or a little more nationalistic, and they are spending more of their money on local drinks whose flavors are not part of the Coca-Cola lineup.” Part of this trend back toward localization is caused by the efficiencies of customization made possible by the Internet and increasingly flexible manufacturing processes Indeed, a good example of the “mass customization” is Dell Computer Corporation, which maintains no inventory and builds each computer to order Also crucial has been the apparent rejection of the logic of globalism by trade unionists, environmentalists, and consumers so well demonstrated in Seattle during the World Trade Organization meetings in 2000 Although there is a growing body of empirical research illustrating the risks and difficulties of global standardization,6 contrary results also appear in the literature.7 Finally, prominent among firms’ standardization strategies is Mattel’s unsuccessful globalization of blonde Barbie Carl Arthur Solberg, “The Perennial Issue of Adaptation or Standardization of International Marketing Communication: Organizational Contingencies and Performance,” Journal of International Marketing 10, no (2002), pp 1–21; Marios Theodosiou and Leonidas C Leonidou, “Standardization versus Adaptation of International Marketing Strategy: An Integrative Assessment of the Empirical Research,” International Business Review 12 (2003), pp 141–71; Joan Enric Ricart, Michael J Enright, Panjak Ghemawat, Stuart L Hart, and Tarun Khanna, “New Frontiers in International Strategy,” Journal of International Business Studies 35, no (2004), pp 175–200 Oliver Schilke, Martin Reimann, and Jacquelyn S Thomas, “When Does International Marketing Standardization Matter to Firm Performance?” Journal of International Marketing 17, no (2009), pp 24–46 cat2994X_ch12_330-357.indd 333 18/08/10 12:17 PM 334 Part Developing Global Marketing Strategies Items in the Disney Princess collection are on display at the Licensing International show at New York’s Javits Convention Center It will be interesting to see Barbie’s (Mattel’s) competitive response to the ethnic breadth of the Disney line We correctly predicted in a previous edition of this book that a better approach was that of Disney, with its more culturally diverse line of “Disney Princesses” including Mulan (Chinese) and Jasmine (Arabic) Even though Bratz and Disney Princesses won this battle of the new “toy soldiers,” the question is still not completely settled Relatedly, Mattel has recently won a lawsuit against MGA, the maker of Bratz, for stealing its design But a federal court in California is allowing Bratz to be sold during the appeal process.8 Indeed, the debate about standardization versus adaptation is itself a wonderful example of the ethnocentrism of American managers and academics alike That is, from the European or even the Japanese perspective, markets are by definition international, and the special requirements of the huge American market must be considered from the beginning Only in America can international market requirements be an afterthought Moreover, as the information explosion allows marketers to segment markets ever more finely, it is only the manufacturing and/or finance managers in companies who argue for standardization for the sake of economies of scale From the marketing perspective, customization is always best.9 The ideal market segment size, if customer satisfaction is the goal, is one According to one expert, “Forward-looking, proactive firms have the ability and willingness to accomplish both tasks [standardization and localization] simultaneously.”10 We believe things are actually simpler than that As global markets continue to homogenize and diversify simultaneously, the best companies will avoid the trap of focusing on country as the primary segmentation variable Other segmentation variables are often more important—for example, climate, language group, media habits, age,11 or income, as exemplified in our discussion about the diversity within China in Chapter 11 The makers of Twix apparently think that media habits (that is, MTV viewership) supersede country, according to their latest segmentation approach At least one industry CEO concurred Ann Zimmerman, “Maker of Bratz Dolls Wins a Legal Reprieve,” The Wall Street Journal, December 11, 2009, p B10 Peggy A Cloninger and Ziad Swaidan, “Standardization, Customization and Revenue from Foreign Markets,” Journal of Global Marketing 20 (2007), pp 57–70 10 Masaaki Kotabe, “Contemporary Research Trends in International Marketing: The 1960s,” Chapter 17 in Oxford Handbook of International Business, 2nd edition, Alan Rugman (ed.) (Oxford: Oxford University Press, 2008) Also consistent are the findings of Shouming Zou and S Tamer Cavusgil, “The GMS: A Broad Conceptualization of Global Marketing Strategy and Its Effect on Firm Performance,” Journal of Marketing 66, no (October 2002), pp 40–57 11 Dannie Kjeldgaard and Soren Askegaard, “The Glocalization of Youth Culture: The Global Youth Segment as Structures of Common Difference,” Journal of Consumer Research 33 (2006), pp 21–27 cat2994X_ch12_330-357.indd 334 18/08/10 12:17 PM Chapter 12 Global Marketing Management: Planning and Organization 335 regarding media-based segmentation: “With media splintering into smaller and smaller communities of interest, it will become more and more important to reach those audiences wherever [whichever country] they may be Today, media companies are increasingly delivering their content over a variety of platforms: broadcast—both TV and radio—and cable, online and print, big screen video, and the newest portable digital media including 3-D And advertisers are using the same variety of platforms to reach their desired audience.” Finally, perhaps a few famous Italian brands are the best examples: Salvatore Ferragamo shoes, Gucci leather goods, and Ferrari cars sell to the highest-income segments globally Indeed, for all three companies, their U.S sales are greater than their Italian sales In the 21st century, standardization versus adaptation is simply not the right question to ask.12 Rather, the crucial question facing international marketers is what are the most efficient ways to segment markets.13 Country has been the most obvious segmentation variable, particularly for Americans But as better communication systems continue to dissolve national borders, other dimensions of global markets are growing in salience The Nestlé Way: Nestlé certainly hasn’t been bothered by the debate on standardization versus adaptation Evolution Not Nestlé has been international almost from its start in 1866 as a maker of infant formula Revolution By 1920, the company was producing in Brazil, Australia, and the United States and ex- porting to Hong Kong Today, it sells more than 8,500 products produced in 489 factories in 193 countries Nestlé is the world’s biggest marketer of infant formula, powdered milk, instant coffee, chocolate, soups, and mineral water It ranks second in ice cream, and in cereals, it ties Ralston Purina and trails only Kellogg Company Its products are sold in the most upscale supermarkets in Beverly Hills, California, and in huts in Nigeria, where women sell Nestlé bouillon cubes alongside homegrown tomatoes and onions Although the company has no sales agents in North Korea, its products somehow find their way into stores there, too The “Nestlé way” is to dominate its markets Its overall strategy can be summarized in four points: (1) think and plan long term, (2) decentralize, (3) stick to what you know, and (4) adapt to local tastes To see how Nestlé operates, take a look at its approach to Poland, one of the largest markets of the former Soviet bloc Company executives decided at the outset that it would take too long to build plants and create brand awareness Instead, the company pursued acquisitions and followed a strategy of “evolution not revolution.” It purchased Goplana, Poland’s second-best-selling chocolate maker (it bid for the No company but lost out) and carefully adjusted the end product via small changes every two months over a two-year period until it measured up to Nestlé’s standards and was a recognizable Nestlé brand These efforts, along with all-out marketing, put the company within striking distance of the market leader, Wedel Nestlé also purchased a milk operation and, as it did in Mexico, India, and elsewhere, sent technicians into the field to help Polish farmers improve the quality and quantity of the milk it buys through better feeds and improved sanitation Nestlé’s efforts in the Middle East are much longer term The area currently represents only about percent of the company’s worldwide sales, and the markets, individually, are relatively small Furthermore, regional conflicts preclude most trade among the countries Nevertheless, Nestlé anticipates that hostility will someday subside, and when that happens, the company will be ready to sell throughout the entire region Nestlé has set up a network of factories in five countries that can someday supply the entire region with different products The company makes ice cream in Dubai and soups and cereals in Saudi Arabia The Egyptian factory makes yogurt and bouillon, while Turkey produces chocolate And a factory in Syria makes ketchup, a malted-chocolate energy food, instant noodles, and other 12 Aviv Shoham, Maja Makovec Brencic, Vesna Virant, and Ayalla Ruvio, “International Standardization of Channel Management and Its Behavioral and Performance Outcomes,” Journal of International Marketing, 16, no (2008), pp 120–51 13 Amanda J Broderick, Gordon E Greenley, and Rene Dentiste Mueller, “The Behavioral Homogeneity Evaluation Framework: Multi-Level Evaluations of Consumer Involvement in International Segmentation,” Journal of International Business Studies 38 (2007), pp 746–63 cat2994X_ch12_330-357.indd 335 18/08/10 12:17 PM 336 Part Developing Global Marketing Strategies products If the obstacles between the countries come down, Nestlé will have a network of plants ready to provide a complete line to market in all the countries In the meantime, factories produce and sell mostly in the countries in which they are located For many companies, such a long-term strategy would not be profitable, but it works for Nestlé because the company relies on local ingredients and markets products that consumers can afford The tomatoes and wheat used in the Syrian factory, for example, are major local agricultural products Even if Syrian restrictions on trade remain, there are 14 million people to buy ketchup, noodles, and other products the company produces there In all five countries, the Nestlé name and the bird-in-a-nest trademark appear on every product Nestlé bills itself as “the only company that is truly dedicated to providing a complete range of food products to meet the needs and tastes of people from around the world, each hour of their day, throughout their entire lives.” Benefits of Global Few firms have truly global operations balanced across major regional markets However, Marketing when large international market segments can be identified, economies of scale in produc-14 tion and marketing can be important competitive advantages for multinational companies As a case in point, Black & Decker Manufacturing Company—makers of electrical hand tools, appliances, and other consumer products—realized significant production cost savings when it adopted a pan-European strategy It was able to reduce not only the number of motor sizes for the European market from 260 to but also 15 different models to Similarly, Ford estimates that by unifying product development, purchasing, and supply activities across several countries, it saves more than $3 billion a year Finally, while Japanese firms initially dominated the mobile phone business in their home market, international competitors now pose growing challenges via better technologies developed through greater global penetration Transfer of experience and know-how across countries through improved coordination and integration of marketing activities is also cited as a benefit of global operations.15 Global diversity in marketing talent leads to new approaches across markets.16 Unilever successfully introduced two global brands originally developed by two subsidiaries Its South African subsidiary developed Impulse body spray, and a European branch developed a detergent that cleaned effectively in European hard water Aluminum Company of America’s (Alcoa) joint venture partner in Japan produced aluminum sheets so perfect that U.S workers, when shown samples, accused the company of hand-selecting the samples Line workers were sent to the Japanese plant to learn the techniques, which were then transferred to the U.S operations Because of the benefits of such transfers of knowledge, Alcoa has changed its practice of sending managers overseas to “keep an eye on things” to sending line workers and managers to foreign locations to seek out new techniques and processes Marketing globally also ensures that marketers have access to the toughest customers For example, in many product and service categories, the Japanese consumer has been the hardest to please; the demanding customers are the reason that the highest-quality products and services often emanate from that country Competing for Japanese customers provides firms with the best testing ground for high-quality products and services 14 Natalia Vila and Ines Kuster, “Success and Internationalization: Analysis of the Textile Sector,” Journal of Global Marketing 21, no (2008), pp 109–26; Amar Gande, Christopher Schenzler, and Lemma W Senbet, “Valuation Effects of Global Diversification,” Journal of International Business Studies 40, no (2009), pp 1515–32 15 Nigel Driffield, James H Love, and Stefan Menghinello, “The Multinational Enterprise as a Source of International Knowledge Flows: Direct Evidence from Italy,” Journal of International Business Studies 41, no (2010), pp 350–59 16 Janet Y Murray and Mike C H Chao, “A Cross-Team Framework on International Knowledge Acquisition on New Product Development Capabilities and New Product Market Performance,” Journal of International Marketing 13 (2005), pp 54–78; John Cantwell, “Location and the Multinational Enterprise,” Journal of International Business Studies 40, no (2009), pp 35–41; Peter J Buckley and Niron Hashai, “Formalizing Internationalization in the Eclectic Paradigm,” Journal of International Business Studies 40, no (2009), pp 58–70 cat2994X_ch12_330-357.indd 336 18/08/10 12:17 PM Chapter 12 Global Marketing Management: Planning and Organization CROSSING BORDERS 12.1 Fifty years ago in the woods of southern Sweden, a minor revolution took place that has since changed the concept of retailing and created a mass market in a category where none previously existed The catalyst of the change was and is IKEA, the Swedish furniture retailer and distributor that virtually invented the idea of self-service, takeout furniture IKEA sells reasonably priced and innovatively designed furniture and home furnishings for a global marketplace The name was registered in Agunnaryd, Sweden, in 1943 by Ingvar Kamprad—the IK in the company’s name He entered the furniture market in 1950, and the first catalog was published in 1951 The first store didn’t open until 1958 in Almhult It became so incredibly popular that a year later the store had to add a restaurant for people who were traveling long distances to get there IKEA entered the United States in 1985 Although IKEA is global, most of the action takes place in Europe, with about 85 percent of the firm’s $7 billion in sales Nearly one-fourth of that comes from stores in Germany This level compares with only about $1 billion in NAFTA countries One reason for the relatively slow growth in the United States is that its stores are franchised by Netherlands-based Inter IKEA Systems, which carefully scrutinizes potential franchisees—individuals or companies—for strong financial backing and a proven record in retailing The IKEA Group, based in Denmark, is a group of private companies owned by a charitable foundation in the Netherlands; it operates more than 100 stores The Group also develops, purchases, 337 Swedish Takeout distributes, and sells IKEA products, which are available only in company stores The items are purchased from more than 2,400 suppliers in 65 countries and shipped through 14 distribution centers The goal of sourcing 30 percent of timber in both China and Russia has not yet been reached, but the efforts continue Low price is built into the company’s lines Even catalog prices are guaranteed not to increase for one year The drive to produce affordable products inadvertently put IKEA at the forefront of the environmental movement several decades ago In addition to lowering costs, minimization of materials and packing addressed natural resource issues Environmentalism remains an integral operational issue at IKEA Even the company’s catalog is completely recyclable and produced digitally rather than on film On the day that Russia’s first IKEA store opened in 2000, the wait to get in was an hour Highway traffic backed up for miles More than 40,000 people crammed into the place, picking clean sections of the warehouse The store still pulls in more than 100,000 customers per week IKEA has big plans for Russia Company officials are placing IKEA’s simple shelves, kitchens, bathrooms, and bedrooms in millions of Russian apartments that haven’t been remodeled since the Soviet days And now IKEA has opened five new stores in China’s biggest cities Sources: Colin McMahon, “Russians Flock to IKEA as Store Battles Moscow,” Chicago Tribune, May 17, 2000; “IKEA to March into China’s Second-tier Cities [Next],” SinoCast China Business Daily News, August 6, 2007, p 1; “IKEA Struggles to Source Sustainable Timber,” Environmental Data Services, July 2009, p 22 Diversity of markets served carries with it additional financial benefits.17 Spreading the portfolio of markets served brings important stability of revenues and operations to many global companies.18 Companies with global marketing operations suffered less during the Asian market downturn of the late 1990s than did firms specializing in the area Firms that market globally are able to take advantage of changing financial circumstances in other ways as well For example, as tax and tariff rates ebb and flow around the world, the most global companies are able to leverage the associated complexity to their advantage 17 N Capar and M Kotabe have noted that for services firms, the relationship between international diversification and firm performance can be curvilinear (that is, both not enough and too much are bad); see “The Relationship between International Diversification and Performance in Service Firms,” Journal of International Business Studies 34, no (2003), pp 345–55; Protiti Dastidar, “International Corporate Diversification and Performance: Does Firm Self-Selection Matter?” Journal of International Business Studies 40, no (2009), pp 71–85 18 Lee Li, Gongming Qian, and Zhengming Qian, “Product Diversification, Multinationality, and Country Involvement: What Is the Optimal Combination?” Journal of Global Marketing 20 (2007), pp 5–25; Tess Stynes and Paul Ziobro, “McDonald’s Sales Rise Despite U.S Weakness,” The Wall Street Journal, February 9, 2010, online cat2994X_ch12_330-357.indd 337 18/08/10 12:17 PM 338 Part Developing Global Marketing Strategies CROSSING BORDERS 12.2 Apple has moved fast since its introduction of the iPhone, making distribution deals with U.S and European operators Now Steve Jobs is turning east, making plans to enter Japan, one of the biggest and most sophisticated mobile phone markets in the world People familiar with the situation say Jobs recently met with NTT DoCoMo Inc.’s president, Masao Nakamura, to discuss a deal to offer the iPhone in Japan through the nation’s dominant mobile operator These informants said Apple also has been talking to the No operator, Softbank Corp., and that executives from both companies have made multiple trips to Apple’s Cupertino, California, headquarters For Apple, finding a wireless partner soon in Japan is an important step in the company’s oft-stated goal of gaining a percent share of the global cell phone business by shipping about 10 million iPhones between the product’s launch in late June 2007 and the end of 2008 The world’s second-largest economy, after the United States, is an attractive market because it not only has a strong base of iPod fans, but its nearly 100 million mobile phone users buy new phones every two years on average Japanese consumers also are accustomed to shelling out hundreds of dollars for expensive phones with advanced capabilities, such as digital television, cameras, and music Apple Shops for Partners around the World Yet Japan could be a difficult market to crack for Apple More than 10 domestic mobile phone makers work closely with the three major operators to develop phones tailored to Japanese consumers’ tastes In the past, foreign mobile phone makers have not been willing to go to such lengths and generally have met with little success in selling their phones, especially when those phones not contain essential Japanese features, such as the operators’ proprietary mobile Internet technology or e-mail software that Japanese consumers are used to having The iPhone has been successful thus far in countries where it has been launched Apple sold a total of 1.4 million iPhones by late September 2007 And though sales of the product did not quite meet some of the most bullish Wall Street forecasts, the iPhone has been one of the top-selling smart phones in the United States, where it is sold only through AT&T Inc., the nation’s largest carrier by subscribers In the end, Apple has partnered with Softbank in Japan and China Unicom and is expecting the momentum to continue well into the future Sources: John Markoff, “A Personal Computer to Carry in a Pocket,” The New York Times, January 8, 2007, pp C1, C3; Yukari Iwatani and Nick Wingfield, “Apple Meets with DoCoMo, Softbank on Launching iPhone in Japan,” The Wall Street Journal (online), December 18, 2007; Philip Michaels, “Apple: What Recession?” Macworld, January 2010, p 16 Planning for Global Markets Planning is a systematized way of relating to the future It is an attempt to manage the effects of external, uncontrollable factors on the firm’s strengths, weaknesses, objectives, and goals to attain a desired end Furthermore, it is a commitment of resources to a country market to achieve specific goals In other words, planning is the job of making things happen that might not otherwise occur Planning allows for rapid growth of the international function, changing markets, increasing competition, and the turbulent challenges of different national markets The plan must blend the changing parameters of external country environments with corporate objectives and capabilities to develop a sound, workable marketing program.19 A strategic plan commits corporate resources to products and markets to increase competitiveness and profits Planning relates to the formulation of goals and methods of accomplishing them, so it is both a process and a philosophy Structurally, planning may be viewed as corporate, strategic, or tactical International corporate planning is essentially long term, incorporating generalized goals for the enterprise as a whole Strategic planning is conducted at the highest levels of management and deals with products, capital, research, and the long- and short-term goals of the company Tactical planning, or market planning, pertains to specific actions and to the allocation of resources used to implement strategic planning goals 19 Wade M Danis, Dan S Chiaburu, and Majorie A Lyles, “The Impact of Managerial Networking Intensity and Market-Based Strategies on Firm Growth during Institutional Upheaval: A Study of Small and Medium-Sized Enterprises in a Transition Economy,” Journal of International Business Studies 41, no (2010), pp 287–307 cat2994X_ch12_330-357.indd 338 18/08/10 12:17 PM Chapter 12 Global Marketing Management: Planning and Organization 339 in specific markets Tactical plans are made at the local level and address marketing and advertising questions A major advantage for a multinational corporation (MNC) involved in planning is the discipline imposed by the process An international marketer who has gone through the planning process has a framework for analyzing marketing problems and opportunities and a basis for coordinating information from different country markets The process of planning may be as important as the plan itself, because it forces decision makers to examine all factors that affect the success of a marketing program and involves those who will be responsible for its implementation Another key to successful planning is evaluating company objectives, including management’s commitment and philosophical orientation to international business Finally, the planning process is a primary medium of organizational learning Company Objectives Defining objectives clarifies the orientation of the domestic and international divisions, and Resources permitting consistent policies The lack of well-defined objectives has found companies rushing into promising foreign markets only to find activities that conflict with or detract from the companies’ primary objectives Foreign market opportunities not always parallel corporate objectives; it may be necessary to change the objectives, alter the scale of international plans, or abandon them One market may offer immediate profit but have a poor long-run outlook, while another may offer the reverse Only when corporate objectives are clear can such differences be reconciled effectively International The planning approach taken by an international firm affects the degree of internationalCommitment ization to which management is philosophically committed Such commitment affects the specific international strategies and decisions of the firm After company objectives have been identified, management needs to determine whether it is prepared to make the level of commitment required for successful international operations—commitment in terms of dollars to be invested, personnel for managing the international organization, and determination to stay in the market long enough to realize a return on these investments.20 A company uncertain of its prospects is likely to enter a market timidly, using inefficient marketing methods, channels, or organizational forms, thus setting the stage for the failure of a venture that might have succeeded with full commitment and support by the parent company Any long-term marketing plan should be fully supported by senior management and have realistic time goals set for sales growth Occasionally, casual market entry is successful, but more often than not, market success requires long-term commitment.21 Finally, a new series of studies is demonstrating a strong regional preference for multinational companies as they expand their operations.22 Part of this preference is due to the challenges associated with cultural distance23 and part with physical distance,24 particularly 20 Orly Levy, Schon Beechler, Sully Taylor, and Nakiey A Boyacigiller, “What We Talk about When We Talk about ‘Global Mindset’: Managerial Cognition in Multinational Corporations,” Journal of International Business Studies 38 (2007), pp 231–58 21 Thomas Hutzschenreuter, Torben Pedersen, and Henk W Voldberda, “The Role of Path Dependency and Managerial Intentionality: A Perspective on International Business Research,” Journal of International Business Studies 38 (2007), pp 1055–68 22 Luis Felipe Lages, Sandy D Jap, and David A Griffith, “The Role of Past Performance in Export Ventures: A Short-Term Reactive Approach,” Journal of International Business Studies 39 (2008), pp 304–25 23 John H Dunning, Masataka Fujita, and Nevena Yakova, “Some Macro-Data on the Regionalization/ Globalization Debate: A Comment on the Rugman/Verbeke Analysis,” Journal of International Business Studies 38 (2007), pp 177–99; Ricardo G Flores and Ruth V Aguilera, “Globalization and Location Choice: An Analysis of U.S Multinational Firms in 1980 and 2000,” Journal of International Business Studies 38 (2007), pp 1187–210; Simon Collinson and Alan M Rugman, “The Regional Nature of Japanese Multinational Business,” Journal of International Business Studies 39 (2008), pp 215–30 24 Jody Evans, Felix T Mavondo, and Kerrie Bridson, “Psychic Distance: Antecedents, Retail Strategy Implications, and Performance Outcomes,” Journal of International Marketing 16, no (2008), pp 32–63 cat2994X_ch12_330-357.indd 339 18/08/10 12:17 PM 608 Wong, Nancy, 230n Wood, Donald F., 449n Woods, Tiger, 469 Woodside, Arch G., 468n Woody, Todd, 306n Wooster, Rossitza B., 257, 354n Worm, Verner, 559n Wortham, Jenna, 488n Worthen, Ben, 7n Worthley, Reg, 118n Wrage, Alexandra, 151 Wright, Allan D., 64n Wright, Orville, 67 Wright, Tom, 45n Wrong, Michela, 162n Wylie, Bob, 497 Wymbs, Cliff, 354n Xiaoyan Yang, 475n Xiin Liu, 332n Xin, Katherine, 127n, 351n, 571n Xin Zhao, 457n Xu, Linda, 420 Xuehua, Wang, 384n Xueming Luo, 496n Yadong Luo, 149n, 190n, 352n, 354n Yakabuski, Konrad, 266n Yakova, Nevena, 339n Yalcinkaya, Goksel, 237n, 425n Yalin, Bai, 419 cat2994X_nameindex_600-608.indd 608 Name Index Yamazaki, Tomoko, 109n Yan Zhang, 353n, 522n Yaprak, Attila, 522n Yardley, Jim, 68n Ya-Ru Chen, 563n Yasodhar, Naga, 80n, 485n Ye, Juliet, 443n Yeang Soo Ching, 566n Yeniyurt, Sengun, 352n Yigang Pan, 347n, 372n Yi He, 233n Yih Hwai Lee, 384n, 475n Yi-jung Chen, 150n Yim, Chi Kin (Bennett), 305n, 372n Yin, Eden, 121n, 237n, 345n, 369n Ying Ho, 127n, 351n, 503n Ying Zhao, 390n Yinlong Zhang, 111n, 384n Yiu, Daphne W., 332n Yi-Zheng Shi, 496n Yong Keun Yoo, 131n Yoo, Boonghee, 109n Yorkston, Eric, 114n Young, J T., 78n Young, Louise, 412n Youn-Kyun Kim, 385n Yu, Julie H., 127n, 351n, 355n, 503n Yukl, Gary, 506n Yu Li, 457 Yung, Katherine, 151n, 204n, 270n Yung-Chih Lien, 332n Yunxia Zhu, 555n Yuschenko, Viktor, 290 Zabarenko, Deborah, 213n Zaboj, Pavel, 523 Zaheer, Akbar, 127n, 351n Zaheer, Srilata, 127n, 351n Zaidman, Nurit, 553n Zairi, Mohammed, 412n Zak, Paul J., 571n Zaltman, Gerald, 122n, 220n, 231n Zamiska, Nicholas, 78n Zander, Lena, 23n, 354n Zander, Udo, 23n, 354n Zedillo, Ernesto, 60–61, 162 Zelller-Bruhn, Mary E., 116n Zhang, Xin, 419 Zhengming Qian, 337n, 340n Zhilin Yang, 384n, 439n Zhilong Tian, 559n Zhou, Joe Nan, 349n Zhou, Kevin Zheng, 251n, 341n Zhu, Rui (Juliet), 469n Zhu Hong, 323 Zif, Jehiel, 332n Zimmerman, Ann, 334n Ziobro, Paul, 337n Zuohao Chun Zhang, 355n Zuzanex, Jiri, 365n Zworykin, Vladimir, 68 18/08/10 12:30 PM SUBJECT INDEX Abercrombie & Fitch, 219 Acer, 397 Achievement, 135 Adaptation cultural electives and, 128–129 cultural exclusives and, 129 cultural imperatives and, 127–128 degree of, 127 e-commerce and, 448 to environmental differences, 16 overview of, 126–127 of products, 366–368, 373–377 requirements and, 363–364 standardization vs., 332–334, 394–395 Adidas, 525 Administered pricing cartels and, 542–544 explanation of, 542 government-influenced, 544 Administrative costs, 529 Ad valorem duties, 529 Advertisers in China, 461 in Russia, 461 top global, 460 Advertising See also Media planning/analysis to children, 204 communication process and, 467–471 comparative, 471 cultural diversity and, 475–476 expenditures on, 457, 460 international control of, 491–492 legal issues related to, 471–473 linguistic limitations of, 473–475 literacy and, 468, 475 media limitations and, 476 media planning and, 477–485, 488–489 product and cost limitations of, 477 radio, 473, 479, 481 strategy and goals of, 462–463, 467 taxes on, 473 television, 204, 472–473, 478, 479, 481–483 trends in global, 457, 460–461 word-of-mouth, 484–485 Advertising agencies, 489–490 Advertising campaigns execution of, 489–491 steps in, 461–462 Aeroflot, 462 Aesthetics, 115–116 Affiliation, 135 Afghanistan, 4, 171, 213, 294 Africa See also specific countries economic development in, 32, 292, 294 multinational market development activities in, 291–293 political climate in, 162–163 post-World War II, 29 African Union, 292–293 African Virtual University, 293–294 After-sale services, 406–408 Agency for International Development (AID), 28, 182 Agent middlemen, 430, 437 Agent’s fees, 149–150 Aging population, 76–78 Agricultural subsidies, 42 AIDS See HIV/AIDS Airbus Industrie, 3, 167, 353, 411 Air conditioner market, 21 Aircraft industry, 3, 398, 401, 411 Airline industry, 4, 361 Aiwa, 528 ALADI See Latin American Integration Association (LAIA) Alcohol consumption, 109 Alibaba, 354 Alien Claims Act, 212 Alien status, of foreign business, 14 Al-Jazeera, 482 Alps, 66 Alternative-fuel cars, 370–371 Aluminum Company of America (Alcoa), 336 Amazon.com, 346, 426 American Airlines, 349, 379 The American Challenge (Servan-Schreiber), 30 American Customer Satisfaction Index (ACSI), 406 American Free Trade Area (AFTA), 32 American Society for Quality Control, 406 Amnesty International, 175 Amsterdam Treaty, 282, 283 Amway Corporation, 39, 251, 425, 428, 429 Analogy, 237–239 Ancient Greece, 134, 163 Anderson Worldwide, 227 Angola, 171 Anheuser-Busch (AB), 192 Animosity, targeted, 167 Antiboycott law, 211 Antibribery law, 209 Anticapitalist protesters, 48–50 Antidumping penalties, 41–42, 46 Antiglobalization protests, 48–50 Antisweatshop campaign, 49 Antitrust laws, 208, 210–211 Apple Computer, 10, 171, 338, 374, 385, 397, 523 Arab Common Market, 294 Arab Emirates, 411 Arab Free Trade Area, 294 Arab League, 211 Arab world See also Islam; Muslims boycott of Israel, 171 business rituals in, 128 business styles in, 138–139 gift giving in, 112 high-context culture in, 153 pilgrimages in, 113 Aravind Eye Care System, 315 Arbitration, 191, 193 Archer Daniels Midland Company, 543–544 ARCO, Argentina economic development in, 251, 270 Mercosur and, 269 Arial Global Reach, 377 Aristocracy, 163 Armenia, 290 ASEAN See Association of Southeast Asian Nations (ASEAN) ASEAN+3, 319, 320 ASEAN Free Trade Area, 318, 319 ASEAN Vision 2020, 319 Asia-Pacific Economic Cooperation (APEC), 32, 277, 320 Asia Pacific Region See also specific countries bottom-of-the-pyramid markets and, 314–316 economic growth in, 32, 293, 304, 400, 401 financial crisis of 1997–1998 in, 320 Four Asian Tigers in, 303 Greater China and, 304–308, 320–328 India and, 311–312 Japan and, 308–310 management styles in, 132 market metrics and, 316–318 post-World War II, 29 trade associations in, 318–320 trade shows and, 409 Vietnam and, 313–314 Association of Southeast Asian Nations (ASEAN), 277, 318–320 AT&T, 523, 565 Austria, 204, 206 Authority, management styles and, 132–133 AVG Letter of Credit Management LLC, 546 Avon Products Inc., 251, 425 AvtoVaz, 117 Azerbaijan, 290 Back translation, 232 Balance of payments, 33–35 Balance-of-payments statement, 33–34 Ballad of East and West (Kipling), 576 Baltic States, 288, 289 Bangladesh, 164, 314 Barney’s New York, Barriers to entry for consumer services, 380 cultural barriers as, 381–382 data flow restrictions as, 381, 409 intellectual property protection as, 381 protectionism as, 380–381 Barter, 539–540 Barter houses, 540 Basel Convention on the Control of Transboundary Movement of Hazardous Wastes, 161 BATNA See Best alternative to a negotiated agreement (BATNA) Bayer, 224 Beijing Automobile Works Group, 425 Beijing Conciliation Center, 191 Beijing Toronto International Hospital, 380 Belarus, 290 Belgium, 206 Beliefs, 116–117 BEMs See Big emerging markets (BEMs) Benetton, 431 Ben & Jerry’s Ice Cream, Berg Electronics, 267 Best alternative to a negotiated agreement (BATNA), 567 Best Western International, 348 Big emerging markets (BEMs) See also Developing countries; Emerging markets characteristics of, 262–263 in Latin America, 263–271 South Africa as, 293 Billboards, 477, 478, 488–489 Bills of exchange, 546–547 Bimbo, 8, Birth control, 105 Birthrates, 97 Black & Decker Manufacturing Company, 336 Blizzard Entertainment, 201 Blocked currency, 40 Bloomingdale’s, 483 Blue Cross, 408 Blue Diamond Growers Association, 463 BMW, 7–9 Boeing, 3–5, 10, 151, 153, 167, 353, 398, 411, 575 Bolivia, 164, 269 Book of Songs, 107 Bosch-Siemens, 63 Boston Tea Party, 54 Bottom-of-the-pyramid markets (BOPMs), 314–316 609 cat2994X_subjectindex_609-622.indd 609 18/08/10 12:31 PM 610 Subject Index Boycotts, 39–40, 211 Brand names importance of, 384 international marketing and, protection of, 194 (See also Intellectual property rights) Brands county-of-origin effect and, 387–389 global, 382–383, 385–386 in international markets, 382–390 list of top, 382–383 national, 387 private, 390 Brazil business customs in, 127 consumer products in, 17 diaper prices in, 521 economic growth in, 32, 251–253, 270 labeling requirements in, 376 Mercosur and, 269 military tank exports from, 376–377 negotiating style in, 560, 572 perception of time in, 139 piracy rates in, 195 product marketing in, 374 trade with, 36 Bribery See also Corruption agent’s fees and, 149–150 in China, 210 in collectivistic and high power distance countries, 148 cultural context of, 149 extortion and, 149 Foreign Corrupt Practices Act and, 43, 149–150, 209, 210 in India, 312 political payoffs as, 181 subornation and lubrication and, 149 Western focus on, 146–149 Bridgestone/Firestone Tires, 456 British Commonwealth, 280 British Petroleum, Brugel, 374 Budêjovicky Budvar N.P., 192 Budweiser, Bulgaria, 286, 288 Bureau of Industry and Security (BIS), 212, 215 Burger King, 8, 178, 455 Burkas, 109 Burma, 212 Burroughs Corporation, 501 Business ethics bribery and, 146–150 corruption and, 144–145 Corruption Perception Index and, 147 culture and, 152–153 environmental protection and, 69–70 extortion and, 149 Foreign Corrupt Practices Act and, 43, 149–150, 210 principles of, 151 social responsibility and, 150–151 Business services after-sale, 406–408 revenue from, 406 types of, 408–409 Business Software Alliance, 195 Business-to-business markets business services and, 406–409 demand in, 395–401 on Internet, 441, 442 quality and global standards and, 401–406 relationship marketing and, 412 trade shows and, 409–411 cat2994X_subjectindex_609-622.indd 610 Business-to-consumer (B2C) marketing, 360 See also Products and services Buyer panels, 235 Buztronics Inc., 33 Cadbury, 331 Cake mixes, 367–369 Call centers, 377 Calvin Klein, 49, 525 Campbell’s Soup Company, 303, 376, 532 Canada Chinese boycott of, 39 economy in, 264 metric system and, 403 NAFTA and, 8, 9, 263–268, 271 negotiating style in, 560–561 pharmaceutical purchases from, 424 product comparison law in, 204, 206 trade with, 28 trade with Cuba, 185 Canon, 13 Capital account, 33 Capitalism communitarian, 152 individualistic, 152 spread of, 28–29 CARE, 175 Caribbean Community and Common Market (CARICOM), 268, 271 Caribbean Free Trade Association, 271 Carlsberg, 174 Carnation, Carrefour, 420, 425, 426, 521 Carrier, 207 Cartels, 542–544 Cartier, 524–525 Cash in advance, 547 Caste system, 105 Caterpillar Tractor Company, 171, 227, 385 CCTV (China), 478 Celadon Trucking Services, 267 Cell phones See Mobile phones Celtel, 15 CEMEX, 9, 168, 315 Center for Combating Unfair Competition (Germany), 207 Center for International Business Education and Research (Michigan State University), 245 Central Intelligence Agency (CIA), 164, 244 Centralized organizations, 356–357 Cereal Partners Worldwide, 350 CFE, 265 Change, 121–122, 429 See also Cultural change; Innovation Channels of distribution See also International marketing channels capital requirements for, 436 character and, 436–437 continuity and, 437–438 control and, 436 cost and, 435 coverage and, 436 management of, 438–441 selection of, 435 Channels-of-distribution structure See also International marketing channels explanation of, 421 import-oriented, 421–422 in Japan, 422–424 trends in, 424–427 The Chaos Scenario (Garfield), 477 Chevrolet, 364 Chief America, Children, television advertising to, 204 Chile, 254, 269 China administrative divisions in, 321 advertising in, 472, 492 air conditioner market in, 21 antidumping penalties on, 41 Beijing-Tianjin region in, 324–325, 327–328 belief system in, 116–117 boycott of Canada, 39 bribery in, 210 business customs in, 127 competition from, Cox Report and, 214 cultural values in, 112–113, 133 currency value in, 161 dialects in, 322, 323 distribution channels in, 421 diversity within, 305, 320–328 economic data reports from, 224–225 economic growth in, 32, 189, 251, 304–305 electronics market in, 528 energy consumption in, 73 ethnic Koreans in, 324 feng shui and, 117 financial services in, 379 foreign investments in, 179–180, 303 free trade between Taiwan and, 46 gender imbalance in, 78, 107 gift giving in, 112 Hong Kong and, 306–307, 328 housing designs in, 22 information technology in, 305–306 intellectual property rights in, 195, 197–199 Internet issues in, 201 investments in developing economies, 32 Japanese influence in, 323, 324 joint ventures in, 178, 352 legal system in, 13, 186, 189–190, 305 manufacturing in, 270, 325, 400 marketing laws in, 204, 206 marketing opportunities in, 328 marketing research in, 227 natural gas from Iran in, 170 negotiating style in, 327–328, 559, 570, 572 northeastern, 322–324, 327 Opium War and, 55 Panama Canal Zone and, 54 Pearl River Delta in, 325–326, 328 piracy and counterfeiting in, 195, 196, 200 political reform in, 164 pollution issues and, 68–70 population growth in, 75 pricing strategies in, 541 product homologation in, 364 product packaging in, 374–375 public relations in, 457 quotas in, 38 railroads in, 395 refrigerator makers in, 361 refund policies in, 429 rural areas in, 326–327 Russian influence in, 324 Shanghai and Yangtze River Delta in, 325, 328 Taiping Rebellion and, 55–56 Taiwan and, 307–308, 328 television in, 478, 481 Three Gorges Dam, 67, 68 Tibet and, 305 top advertisers in, 461 trade with, 28, 54, 55, 304, 305 work hours in, 135 World Trade Organization and, 12, 45–46, 167, 303, 305 China Telcom, 307 18/08/10 12:31 PM Subject Index Chiquita Brands International, 159 Chivas USA, Chrysler Corporation, 473 Church’s Chicken, Cisco Systems, 180, 407, 412, 441, 442 CITGO, Citibank, 10, 212, 385, 540 CitiGroup, 10 C-Itoh, 350 Civil law, 186 Clean float, 47 Client followers, 408 Climate effects of, 63–64 map of world, 86–87 product accommodations for, 364, 402 Climate change, 161 CNN, 482 Coach, 197 Coca-Cola Company, 10, 13, 14–15, 22, 104, 166, 169, 212, 332–333, 366, 376, 384, 385, 436, 454, 469, 470, 477, 516, 518, 525, 539 Code law explanation of, 186–188 in Japan, 193 Colgate-Palmolive, 259, 299, 470, 471, 517 Collectivism, 109–111, 132, 148 Colombia, 46, 60, 269, 439–440 Colonialism, 104, 163 Columbia Pictures, Commerce Control List (CCL), 215 Commercial law See also Legal environment antitrust laws and, 208 within countries, 203–208 dispute resolution and, 191, 193–194 green marketing and, 207–208 jurisdiction issues in, 190 marketing laws and, 204, 206–207 Commercial News USA, 348 Common law, 186–188 Common market, 279 Commonwealth of Independent States (CIS), 280, 289–291, 401, 409 Commonwealth of nations, 280 Communication process advertising and, 467–471 cultural diversity and, 475–476 legal constraints and, 471–473 linguistic limitations and, 473–475 media limitations and, 476 production and cost limitation and, 477 Communications See also Language issues blackouts in, 14 culture and, 114–115 elements of, 135–136 face-to-face, 136–137, 552 high- or low-context culture and, 136–137 Internet, 137–138 map of global, 90 motivation and, 507–508 nontask sounding and, 570–571 word-of-mouth, 111 Communism, 28, 104, 189, 401 Communist Party of China, 305 Communitarian capitalism, 152 Compadre, 127, 128 Comparative advertising, 471 Compensation plans for expatriates, 508 global comparisons of, 509 for global sales force, 508–511 global vs local, 509 Competition culture and, 152–153 cat2994X_subjectindex_609-622.indd 611 efficiency and, 131 organizing for global, 355–357 parallel imports and, 523–526 quality and, 360–361 sales force and, 496 Competitive market analysis, 584–585 Complementary marketing, 433 Computers, 177, 397 See also Technology Computer software, 195 See also Technology Concessions, 574 Conciliation, 191 Conference Board, 9, 352, 514 Confiscation, 168 Confucian philosophy, 56 Consortia, 352–353 Consumer behavior cultural values and, 98–99, 111–113 trends in, Consumers, country stereotypes held by, 388–389 Consumption in Americas, 260 culture and, 98–99 national comparisons of, 99, 299 Consumption patterns in Asia Pacific region, 318 in Europe/Africa/Middle East region, 299 Continental Can Company, 178 Contracts arbitration clauses in, 193 common vs code law and, 188 e-commerce and, 203 jurisdictional clauses in, 190 Contractual agreements explanation of, 346 franchising as, 347–349 licensing as, 347 Controllable elements, 12 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 193 Copyrights, 196 See also Intellectual property rights Core components, of products, 377–378 Corporate planning, 338 Corporate social responsibility, 151 Corporate sponsorships, 456–457 Corporations, as social institutions, 109 Corruption See also Bribery; Business ethics attempts to curb, 147 in India, 312 international rankings of, 147–149 overview of, 144–145 Corruption Perception Index (CPI), 147–148, 153 Costa Rica, 267–269 Costco, 9, 425, 431 Council for Mutual Economic Assistance (COMECON), 279 Council of Ministers (EU), 284 Counterfeiting, 194–196 Countertrade explanation of, 539–540 Internet and, 540–541 problems related to, 540 Countervailing duty, 537–538 Country notebook cultural analysis in, 580–581 economic analysis in, 582–584 market audit and competitive market analysis in, 584–585 overview of, 580 preliminary marketing plan in, 585–587 Country-of-origin effect (COE) explanation of, 387 global brands and, 387–389 Country stereotypes, 388–389 Covisint, 426 611 Cox Report (1999), 214 Cracker Jack, 41 Croatia, 164, 286 Cross-cultural analysis, 18 CSR (Corporate Social Responsibility) Europe, 151 Cuba trade sanctions on, 170, 171, 185 trade shows and, 410 Cultural analysis, 580–581 Cultural borrowing, 119–120 Cultural causation theory, 310 Cultural change cultural borrowing and, 119–120 explanation of, 118–119 family size and, 96–97 planned and unplanned, 122 resistance to, 121–122 Cultural conditioning, 16 Cultural congruence, 122 Cultural differences adaptation and, 381–382 adjustments to, 15–16 advertising and, 475–476 affirmative acceptance and, 126 in communication of bad news, 242 decision making and, 132–133 economic unions and, 278 in European Union, 278 expatriate awareness of, 515–516 in family size, 75 in health care, 224 in investment strategies, 95 labor-management relations and, 152 marketing and understanding, 103 negotiation behavior and, 140–141, 553, 554–564 in perceptions of time, 16, 139–140 in perceptions of women in management, 141–144 in personal space, 16–17 product components and, 373–375 in responses to marketing research, 228–229 sales force motivation and, 18, 506–508 sales force training and, 505–506 self-reference criterion and, 16–18 sensitivity and tolerance and, 18, 118 in view of bribery, 149 Cultural electives, 128–129 Cultural exclusives, 129 Cultural imperatives, 127–128 Cultural nationalism, 165 Cultural values affiliation and social acceptance and, 135 birth control and, 105 business practices and, 126 consumer behavior and, 98–99, 111–113 dimensions of, 109–110 gift giving and, 112 individualism/collectivism index and, 109–111, 132, 148, 153 language and, 115 masculinity/femininity index and, 110 personal life and, 134–135 power and achievement and, 135 power distance index and, 109, 111, 132, 153 security and mobility and, 134 uncertainty avoidance index and, 110, 111 Culture beliefs and, 116–117 birthrate and, 97 consumption patterns and, 98 corporations and, 108–109 definitions of, 102–103 dynamic nature of, 118–119 e-commerce and, 443, 448 18/08/10 12:31 PM 612 Subject Index Culture—Cont education and, 108 effects of, 96–97 families and, 107 geography and, 103–104 government and, 108–109 healthcare systems and, 106 high- and low-context, 136–137, 153 history and, 54, 62, 104 knowledge of, 18 management style and, 126, 129–131 media and, 108 overview of, 96 pervasive impact of, 96–99 political economy and, 104 products and, 366–373 relationship-oriented vs information-oriented, 154 religion and, 107–108 rituals and, 113–114 similar-but-different aspect of, 120–121 social institutions and, 105 strategic thinking and, 152–153 symbols and, 114–116 technology and, 105 thought processes and, 117–118 Culture Matters (Harrison and Huntington), 154 Currency values, 531–532 Current account, 33–34 Customs administration, 265 Customs union, 279 Cybercrime, 177 Cyberlaw in China, 189 contract validity and, 203 domain names and cybersquatters and, 201–202 jurisdiction of disputes and, 203 overview of, 201 tax collection and, 202–203 Cybersquatters (CSQs), 201–202 Cyberterrorism, 177 Czech Republic, 128, 177, 189, 192, 251, 288, 428, 479 Dabur India, 353 DaimlerChrysler, 426, 442 Daitenho, 423 Dams, 67 Dannon, 463 Data primary, 226–233 secondary, 223–226, 245–247 transborder flow of, 381, 409 Death of a Salesman (Miller), 501 De Beers Company, 543 Decentering, 232–233 Decentralized organizations, 356–357 Decision making cultural differences and, 132–133 sharing in, 130 Decoding, 467, 470–471 Deflation, 530 Delhaize, 425 Delivery options, e-commerce, 448 Dell Computer, 137, 333, 346, 426, 441 Delphi, 252 Delta Airlines, 349 Demand in business-to-business markets, 395–401 derived, 398 in developing countries, 259–262 technology and, 399–401 volatility of, 399 Democracy, 104, 146, 163 Demographics See Population Denmark, 132, 204 cat2994X_subjectindex_609-622.indd 612 Department of Agriculture, U.S., 538 Department of Commerce, U.S., 182, 212, 226, 244–246, 250, 328, 362, 403, 404, 438 Department of Defense, U.S., 411 Department of Justice, U.S., 211 Department of State, U.S., 175–176 Derived demand, 398 Deutsche Telekom, 523 Developing countries See also Emerging markets; specific countries big emerging markets in, 262–263 categories of, 251–252 demand in, 259–262 economic development in, 250–251 growth factors in, 253–254 information technology in, 255 infrastructure in, 256 in Latin America, 263–272 marketing in, 257–259, 271–272 objectives of, 255 Diagnostic Products Corporation (DPC), 210 Diamond cartel, 543 Dictatorship, 163 Diffusion, of innovation, 369–372 Direct exporting, 345 Direct foreign investment, 267, 353–354 Direct mail advertising, 483 Direct marketing, 428–429 Directory of American Firms Operating in Foreign Countries, 246 Directory of United States Importers and United States Exporters, 246 Direct sales, 346 Dirty float, 47 Disney, 7, 222–223, 334, 360, 431, 453, 478 Disneyland, 275, 359 Distance from English scores, 156–157 Distribution channel systems, 257 Distribution patterns See also International marketing channels overview of, 427 in retailing, 428–430 Distribution structure See also International marketing channels explanation of, 421 import-oriented, 421–422 Japanese, 422–424 trends in, 424–427, 496 Docks de France, 425 Doha Round, 46 Dole Food Company, 159 Dollar drafts, 547 Domestication explanation of, 168 planned, 181 Domestic environment, 12–13 Domestic middlemen See Home-country middlemen Dominican Republic, 60, 267–269 Dominican Republic–Central American Free Trade Agreement (DR-CAFTA), 267–269 Domino’s Pizza, 348 DPC (Tianjin) Ltd., 210 DR-CAFTA See Dominican Republic–Central American Free Trade Agreement (DR-CAFTA) Dual-purpose technology, 213 Dubai, 295 Due process of law, 15 Dumping, 41–42, 46, 537–538 Dun & Bradstreet, 438 East African Community (EAC), 291 Eastern Europe See also specific countries collection of market data from, 224 economic growth in, 32 overview of, 288 privatization in, 401 trade shows and, 409–411 East Germany, 177 East India Company, 55 Eastman Kodak, 12–13, 477 eBay, 95, 201, 426, 484 Ecolabeling, 364 e-commerce adaptation and, 448 culture and, 443, 448 delivery options and, 448 in European Union, 202–203 explanation of, 441 impact on traditional retailing of, 426 local contact and, 448 payment and, 448 promotion and, 448 taxation of, 202–203 in United States, 442 Economic analysis, 582–584 Economic and Monetary Union (EMU), 285–286 Economic boom of 1990s, Economic Community of West African States (ECOWAS), 291 Economic Cooperation Organization (ECO), 294 Economic development big emerging markets and, 262–272 demand and, 259–262 environmental protection and, 70–71 explanation of, 251 factors of, 253–254 foreign investment and, 168 information technology and, 255 infrastructure and, 256 Internet and, 255 in late 1990s to present, 32 literary rate and, 108 marketing development and, 250–251, 257–259, 271–272 natural resources and, 74 objectives of, 255 post-World War II, 29 stages of, 251–253, 399 in twentieth century, 28–32 in twenty-first century, 28 Economic nationalism, 165–166 Economic risks exchange controls and, 168–169 import restrictions and, 169 labor problems and, 170 local-content laws and, 169 price controls and, 169 tax controls and, 169 Economics and Statistics Administration (Department of Commerce), 244 Economist Intelligence Unit (EIU), 246 Ecuador, 42, 269 Eddie Bauer, 426 Education government influence on, 109 as social institution, 108 technology and emphasis on, 399 Efficiency, competition and, 131 Egalitarianism, 115 Egypt, 171, 294, 440 El Corte Inglés, 425–426 Electrolux, 363 Electronic Request for Item Classification (ERIC), 216 Elle, 481 El Niño, 86 El Salvador, 267–269 18/08/10 12:31 PM Subject Index e-mail, 137, 138 See also Internet e-mail marketing lists, 235 Embargoes, 39–40 Embedded research, 235 Embraer, 252 Emerging markets big, 262–263 Caribbean Community and Common Market agreement and, 268, 271 categories of, 251–252 demand in, 259–262 economic development in, 32, 250–251 growth factors in, 253–254 information technology in, 255 infrastructure and development in, 256 in Latin America, 269–271 marketing development in, 257–259, 271–272 mobile phones in, 14, 15 North American Free Trade Agreement and, 263–267, 271 objectives of, 255 Southern Cone Free Trade Agreement and, 269 United States–Central American Free Trade Agreement–Dominican Republic Free Trade Agreement and, 267–269 Encarta, 62 Encoding, 467, 468, 470 Encyclopedia Britannica, 249 Encyclopedia of Global Industries, 246 Endangered species, 39 Energy consumption, world, 71–73 Energy Group, English Channel, 65 English language as business language, 518 Internet communication and, 137 variations in, 120, 553 Enron, 4, 95 Entrepreneurship, 253 Environmental issues concerns related to, 67–69 in foreign markets, 15–16 green marketing and, 207–208, 364–365 social responsibility and ethics of, 69–70 Equities markets, 95 ESPN, 482, 483 Estée Lauder Companies, 285 Estonia, 289 Ethics See Business ethics Ethnic violence, 288 Ethnocentrism country-of-origin effects and, 388 effects of, 17 explanation of, 16 eTrade Finance Platform (ETFP), 546 e-trading, 95, 111 Euro, 286, 299 EuroDisney, 297, 359 Euromonitor International, 245 EuroPacific Ltd., 219 Europe See also specific countries advertising constraints in, 471–473, 491 aging population in, 77, 78 agricultural subsidies in, 42 compensation plans in, 509 economic unification of, 120 gift giving in, 112 Marshall Plan for, 28–29 multinational market groups in, 280–284 post-World War II, 28, 262–263, 275 private brands in, 390 promotion of corporate social responsibility in, 151 retailers in, 425–426 work counsels in, 509 cat2994X_subjectindex_609-622.indd 613 European Coal and Steel Community, 275, 283 European Commission, 203, 204, 284, 364, 381 European Common Market, 280, 282 European Community, 30, 263 European Court of Justice (ECJ), 282, 284, 285 European Economic Area, 280, 282 European Economic Community (EEC), 276, 279, 280 European Free Trade Area (EFTA), 280, 281 European Parliament, 6, 284–285 European Patent Convention (EPC), 198 European School of Management, 517 European Union (EU) agriculture and monetary issues in, 277–278 antitrust laws in, 208 cartels and, 544 cultural differences among members of, 120, 278 cyberlaw and, 203 declaration of, 285 e-commerce in, 202–203 economic and monetary union and, 285–286 environmental protection and, 69 establishment of, 275, 276, 279, 280 expansion of, 6, 286–288 function of, 277, 280, 296 green marketing in, 207–208 industrial product standards and, 403 institutions of, 284–285 intellectual property rights in, 198 Internet regulation in, 473 local-content requirement in, 169 marketing laws and, 206–207 membership statistics for, 281 Mercosur and, 269 metric system and, 404, 405 product bans by, 178 Product Liability Directive, 405 quotas in, 38 sovereignty and, 160 tax policies of, 225 trade issues with, 32, 46, 159 transportation network in, 450 Turkey and, World Trade Organization and, 45 Excelcia Foods, 353 Exchange controls, 168–169 Exchange rates floating, 47 fluctuations in, 530–532 Exclusive distribution, 524–525 Expatriates See also Foreign assignments compensation systems for, 508 cost of, 500, 512 cultural awareness in, 515–516 early return rate of, 513–514 explanation of, 498 foreign language skills of, 518–519 recruitment of, 498–499 reluctance to accept foreign assignments and, 512–513 repatriation of, 508, 514–515 on sales force, 496, 497 virtual, 499 women as, 142 Expert opinion, 236–238 Export Administration Regulations (EAR), 212, 215 Export Control Classification Number (ECCN), 215 Exporters Encyclopedia, 246 Export-Import Bank (Ex-Im Bank), 182, 245 Export License Application and Information Network (ELAIN), 216 Export licenses procedure to acquire, 216 regulations for, 212–213 Export management companies (EMCs), 431–432 613 Exports/exporting See also Trade; Trade barriers categories of U.S., 394, 395 cost of, 529 direct and indirect, 345 as market-entry strategy, 345–346 restrictions on, 39, 212–213 of technology, 394 Export Trading Company Act (ETC) Act, 433 Export Yellow Pages, 246 Expropriation, 62, 168 Extortion, 149 Extraterritoriality of U.S laws, 211–212 Exxon, 12 Face-to-face communication, 136–137, 552 Fairness, 151 Families in China, 78 expatriate, 515 size of, 96–97 as social institutions, 105, 107 Family planning, 75, 105 Farmer’s Friend, 488 Fascism, 104 Fear, targeted, 167 Fedders, 21 Fedders Xinle, 21 Federal Emergency Management Agency (FEMA), 435 Federal Trade Commission, 204 FedEx, 249, 427 Feedback, in communication process, 468, 470 Feng shui, 117 Ferragamo, 388 Fertility rates, 74, 97, 109 Fidelity Investments, 95, 122 Field surveys, 230 Finland, 204 Firestone tires, 7, First Opium War, 55 Fisher Price, 267 Fishing industry, Floating exchange rates, 47 Fluor Corp., 151, 398 Ford Motor Company, 8, 10, 332, 336, 353, 375, 426, 442, 463, 496, 565, 566 Forecasting, political risk, 178–180 Foreign assignments See also Expatriates commitment to, 498–499 expatriate repatriation following, 514–515 overcoming reluctance to accept, 512–513 reducing rate of early returns from, 513–514 Foreign Corrupt Practices Act (1977), 43, 149–150, 209, 210, 506 Foreign-country middlemen, 434 Foreign Credit Insurance Association (FCIA), 182 Foreign environment elements of, 13–15 uncontrollables in, 13 Foreign exchange, 40 Foreign investment direct, 267, 353–354 government policies to encourage, 182 NAFTA and, 265, 267 risk reduction and, 180–181 sovereignty and, 161 Foreign policy international marketing and, 12–13 Monroe Doctrine and, 59–60 Foreign Policy, 161, 178 Foreign sales corporations (FSCs), 434 Foreign trade zones (FTZs), 536–537 Forfaiting, 547 Formality, 138–139 18/08/10 12:31 PM 614 Subject Index Fortune 500 companies, 340, 352, 510 Four Asian Tigers, 313, 400 See also Hong Kong; Singapore; South Korea; Taiwan Four Seasons Hotel, 378 The Fragile Superpower (Gibney), 309 France animosity toward U.S., 167 ban of hijabs in, 109 birth bonus in, 109 cultural values in, 111, 112 employment rate in, 170 formality in, 138 investment preferences in, 95 management style in, 134 marketing laws in, 204 negotiating style in, 560 trade issues with, 27 trade with, 28 view of English language in, 137 France Telecom, 401 France 24 television, 482 Franchising background of international, 348–349 explanation of, 347 Free Burma Campaign (FBC), 174 Free-market system, Free trade See also Trade bilateral agreements for, 46–47 Middle East and, 275–276 United States and, 36, 46 Free trade areas (FTAs) See also European Union (EU); North American Free Trade Agreement (NAFTA) characteristics, 279 direct investments and, 354 growth in, French language, 231 French Peasant Confederation, Friendships, 128 Frigidaire, Fuji Photo Film, 13 Full-cost pricing, 526 The Gap Inc., 49 Gateway Computer, 441 GAZPROM, 30–31 Gazprom, 290 GE Medical Systems, 406 Gender See also Women imbalance in China, 78, 107 negotiations and, 565 Gender bias, 141–144 Genentech, General Agreement on Tariffs and Trade (GATT) business service markets and, 408 explanation of, 28, 29, 43–45 ratification of, 45 Uruguay Round of, 29, 44, 45, 538 General Agreement on Trade in Services (GATS), 44 General Electric, 10, 355, 385, 389, 394, 398, 424, 433, 534 General export license, 214 General Foods, 374 General Mills, 350 General Motors, 117, 252, 353, 364, 426, 442, 568 Genetically modified (GM) foods, 178 Geography climate and topography and, 63–66 culture and, 103–104 economic growth and, 66–67 economic unions and, 278 overview of, 63 resources and, 71–74 cat2994X_subjectindex_609-622.indd 614 social responsibility and environmental management and, 67–70 water supply, 89 The Geography of Thought (Nisbett), 118 Georgia, 164, 290 Gerber, 228, 455 Germany beer market in, 282 business customs in, 127 green marketing laws in, 207 investment in U.S companies, labor-management relations in, 152 language issues in, 17 marketing law in, 206, 207, 346 negotiating style in, 560 product comparison law in, 204 trade with, 28 unification of, 177 women in management positions in, 143 Getting to Yes (Fisher, Ury, & Patton), 561, 567, 575 Ghana, 63 Gift giving, 112 Gigante supermarkets, 8, 9, 431 Gillette Company, 259, 385, 462 GlaxoSmithKline, 524 Global awareness, 18–19 Global brands See also Brands characteristics of successful, 384–386 country-of-origin effect and, 387–389 explanation of, 382 list of top, 382–383 Global business See also International business communication links and, 80–81 government encouragement of, 182 historical perspective in, 54–62 trade routes and, 79–80 trends in, Global business risks confiscation, expropriation and domestication as, 168 cyberterrorism/cybercrime and, 177 political risks and, 167–180 political sanctions as, 170 political vulnerability and, 177–182 violence and terrorism as, 175–177 Global companies, 22 Global competition See also Competition organizing for, 355–357 quality and, 360–361 relationship marketing and, 412 sales force and, 496 Global Harmonization Task Force, 403 Globalization See also Global marketing management industrial market volatility and, 399 localization vs., 332 protests against, 48–50, 333 rankings of extent of, 23, 24 Global marketing See also International marketing benefits of, 336–338 international operations of businesses in, 22 planning for, 338–344 stage of, 21–23 Global marketing management background of, 332–335 consortia and, 352–353 direct foreign investment and, 353–354 direct sales and, 346 exporting and, 345–346 franchising and, 347–349 international joint ventures and, 351–352 Internet use and, 346 licensing and, 347 market-entry strategies for, 344–354 Nestlé and, 335–336 organizing for, 355–357 strategic international alliances and, 349–353 GlobalNetXchange, 426 Global orientation, 23 Global retailers, 431 G20 meetings (2009), 49 Gola, 219 Goldman Sachs, 95 Goldstar TVs, Goodyear, 252 Google, 174, 201, 219, 385, 443, 456, 484, 488 Google Trader, 488 Gotthard Tunnel, 66 Government-affiliated middlemen, 434–435 Government policies encouragement of foreign investments as, 182 nationalism and, 165–167 political parties and, 165 for pricing, 544 stability of, 162–163 targeted fear/animosity and, 167 trade disputes and, 167 Governments foreign exchange and, 40 forms of, 163–164 influence of, 108–109 relations between multinational corporations and, 180 Grameen Bank, 316 Grameen Foundation, 488 Grand Coast Fishing Operators, 314 Gray MacKenzie and Company, 432 Gray market, 524, 525 Great Britain See United Kingdom Great Depression, 28, 29 Greater Arab Free Trade Area (GAFTA), 294 Greece, 204 Greenhouse gas emissions, 68 Green marketing explanation of, 207–208, 364 product development and, 364–365 Green technology, 69 Grey Worldwide, 332 Gross domestic product (GDP), 251 See also Per capita GDP Gross national income (GNI), 251, 298 Gross national product (GNP) in China, 304 global, 30 Grupo Bimbo, 8, Grupo Elektra, 425 Guanxi, 127, 128, 561 Guatamala, 267–269 Gucci, 388, 524–525 Guinness Bass Import Corporation (GBIC), 346 H J Heinz Company, 529–530 Häagen-Dazs, 491 Habitat for Humanity, 175 Haiti, 66, 164, 489 Harajuku, 367 Harvard Business Review, 136 Hasbro Inc., 125, 201, 453 Hawg Heaven Bait Company, 12 Hazardous wastes, 68–69 Health Canada, 524 Health care comparisons of systems of, 106 cultural differences in views of, 224 forecasting global market for, 239 foreigners coming to U.S for, 379 Heineken, 174 18/08/10 12:31 PM Subject Index Heinz, 385 Heritage Foundation, 66, 164 Hewlett-Packard, 10, 353, 530–531 High-context culture, 136–137, 153 High-definition television (HDTV), 481 Hijabs, 109 Hijaz Railway Corp., 275 Hindustan Lever LTD, 476 History contemporary behavior and, 54–57 culture and, 54, 62, 104 Manifest Destiny and Monroe Doctrine and, 59–62 public and political attitudes and, 54 subjective nature of, 57–58 world timelines, 54–72 HIV/AIDS, 104, 145 H&M, 219 Home-country middlemen complementary marketers and, 433 explanation of, 431 export management companies and, 431–432 foreign sales corporations and, 434 global retailers and, 431 manufacturer’s export agents and, 433–434 manufacturers’ retail stores and, 431 trading companies and, 432–433 U.S export trading companies and, 433 Webb-Pomerene export associations and, 434 Home mortgage debacle (2008), 161 Honda Motor Company, 7–9, 388 Honduras, 267–269 H1N1 virus outbreak (2009), 499 Hong Kong, 32, 225, 306–307, 313, 400, 568 Hong Kong Disneyland, 7, 359, 374, 522 Huffy Corporation, Human organ trade, 443 Human-rights abuses, 212 Hungary, 288, 490 Hurricane Katrina, 435 Hyundai Motor Company, 29, 313, 407 IBM, 12, 137, 166, 171, 212, 306, 353, 397, 496, 510–511 Icons, 138 IKEA, 337, 419, 420, 431 Immigration European Union and, 287 restrictions on, 502 worker shortages and, 78–79 Import licenses, 38 Import-oriented distribution structure, 421–422 Imports See Parallel imports; Trade; Trade barriers Improvement, quest for, 130–131 Impulse buying, 111 Independence, 79 Independent enterprise, 130 in developing markets, 257 India business environment in, 311–312 caste system in, 105 cattle dung for fuel in, 312 Coca-Cola and PepsiCo in, 166, 169, 332 corruption in, 312 economic growth in, 32, 251, 311 foreign investments in, 166, 178, 311 free trade agreement with, 46 litigation in, 194 middle class in, 312 political climate in, 162 population growth in, 75, 312 Indirect exporting, 345 Individualism language use and, 115 cat2994X_subjectindex_609-622.indd 615 perceptions of, 145 in United States, 111, 126, 130 Individualism/Collectivism Index (IDV), 109–111, 132, 148, 153 Individualism/collectivism scores, 156–157 Indonesia economic growth in, 32 International Monetary Fund loans to, 47 manufacturing in, 400 Industrial corporations, 30–31 Industrial products See also Business-to-business markets demand for, 395–401 as growth market, 395 ISO 9000 certification and, 404–406 metric system and, 403, 404 privatization and, 401 Infant mortality, 75 Inflation, 529–530 Infomercials, 473, 479 Informality, 138–139 Information-oriented cultures, 154 Information source, 467 Information technology (IT) See also Technology in China, 305–306 customer relationship management and, 496 economic development and, 255 in India, 312 Infrastructure in Asia Pacific region, 316, 317 comparisons of, 298 economic development and, 256 in Europe/Africa/Middle East region, 298 explanation of, 256 Infrequent foreign marketing stage, 20 Innovation acceptance of, 121–122 adaptation and, 368–369 cultural conflict and, 122 diffusion of, 369–372 production of, 372–373 INSEAD, 151 Institutional Revolutionary Party (Mexico), 162 Integrated marketing communications (IMC) See also Advertising advertising and, 460–463 explanation of, 454 public relations and, 455–457 sales promotions and, 454–455 Intel Corporation, 10, 180, 353, 393 Intellectual property rights counterfeiting and piracy and, 194–196 inadequate protection for, 196–197 in India, 311 international conventions on, 197–198 managerial approaches to protect, 199–201 NAFTA and, 265 prior use vs registration and, 197 protection of, 145, 187–188, 381 Inter-American Convention, 197 Inter-American Convention on International Arbitration, 193 Interest Muslim prohibition against, 188–189 trends in rates of, International business See also Global business antitrust laws and, 208, 210–211 gender bias in, 141–144 International Chamber of Commerce (ICC), 193 International Court of Justice, 190 International Criminal Court, 161 International Electrotechnical Commission, 403 International Franchising Association, 348 International Herald Tribune, 143 615 International Internet marketing (IIM), 346 International joint ventures (IJVs), 351–352 See also Joint ventures International Labor Organization, 74, 143 International law, 160 International marketing cause of peace, 3–6 communication links and, 80–81 competitive strategic plans and, cultural congruence and, 122 definition of, 10–11 effect of world events on, orientation of, 23–25 self-reference criterion and, 16–18 stages of involvement in, 19–23 trends in, 5–6 Web sites for, 244–245 International marketing channels See also Channels of distribution channel choice factors and, 435–438 distribution patterns and, 427–429 distribution process and, 421–427 Internet and, 426, 441–449 logistics and, 449–450 middleman choices and, 430–435 middleman management and, 438–441 overview of, 420 International marketing research, 220–221 See also Marketing research International marketing tasks chart of, 11–12 decision factors and, 12 domestic environment and, 12–13 foreign environment and, 13–15 uncertainties in, 12 International Monetary Fund (IMF) on Asian economies, 304 explanation of, 47–48 protests against, 49, 174 Web site for, 245 International Organization for Standardization, 404 International Reciprocal Trade Association (IRTA), 540–541 International sales See Sales force; Sales management International Space Station, 3, 176 International Trade Administration (ITA), 182 Internet advertising on, 483–484 in Africa, 293–294 countertrade and, 540–541 cybercrime and, 177 cyberlaw and, 201–203 economic development and, 255 in France, 95 historical background of, 400 impact of, in Iran, 294–295 in Japan, 372 as market-entry strategy, 246 marketing channels and, 426, 441–449 marketing research on, 234–236 pharmaceutical purchases on, 424 regulation of, 473 social media on, 485 as tool for political and social activists, 174 Internet communication, 137–138 Interpublic Group, 261 Investments, 181, 265 See also Direct foreign investment; Foreign investment iPhone, 338, 523 Iran agreement for natural gas to China, 170 Economic Cooperation Organization and, 294 18/08/10 12:31 PM 616 Subject Index Iran—Cont government in, 164 religious clerics in, 109, 165 trade sanctions on, 171, 213, 295 Iraq, 12 Iraq War, 4, 174, 294 Ireland, 109 Iridium, 395–396 Irrevocable letter of credit, 545 Islam See also Arab world; Muslims ban on interest payments in, 188–189 need for understand, 107–108 pilgrimages and, 113 Islamic law, 186, 188–189 Islamic militant groups, 175 ISO 9000 certification, 404–406 ISO Health and Safety Standard, 405 ISP Virtual Show, 411 Israel Arab boycott of, 171 management style in, 132 negotiating style in, 560 Italy aging population in, 78 political climate in, 162 retailers in, 428 Ito-Yokado Corporation, 426 J Walter Thompson, 266 Japan aging population in, 77 antitrust laws in, 208 automobile manufacturing in, 310, 363 birthrate in, 109 compensation plans in, 509 Cultural Causation theory and, 310 cultural values in, 111, 112, 126 deflation in, 530 diet in, 98–99, 122 distribution structure in, 422–424 economic growth in, 400 economic policies in, 308–310 efforts to reduce corruption in, 148 employee loyalty in, 500 fertility rates in, 97 gift giving in, 112 high-context culture in, 137 industrial corporations in, 30, 31 instant cake mixes in, 367–368 investment in U.S companies, labor-management relations in, 152 legal system in, 187, 193 linguistic system in, 310 management practices in, 129 management style in, 132 marketing research in, 219, 227–229 nationalism in, 167 negotiating behavior of, 556, 570, 573 Nestlé in, 374 newspapers in, 479 Pearl Harbor attack and, 171 personal life in, 134 piracy rates in, 195 population trends in, 309–310 post-World War II, 28 sales force in, 18, 496–497, 504, 512 securities market in, 95 Toyota accelerator problems and, 242 trade issues with, 27, 28, 32, 36, 38 trading companies in, 433 U.S fear of, view of quality in, 376 World Trade Organization and, 45 Japan External Trade Organization (JETRO), 245 cat2994X_subjectindex_609-622.indd 616 JCPenney, 63–64, 424 J.D Power and Associates, 361 Jerusalem, Israel, 275 JLG Industries, 345 Job mobility, 134 Johns Hopkins Hospital, 239 Joint ventures in China, 178, 352 as means of foreign market entry, 351–352 reduction of vulnerability through, 180 restrictions on, 212 Jurisdiction cyberlaw and, 203 in international legal disputes, 190, 209 objective theory of, 209 over online activity, 203 Justice, 151 Kazakhstan, 291 Kellogg Company, 385 Kenya, 162, 164 KFC, 175, 178, 264, 306, 327, 348 Kia, 313, 456 Kimberly-Clark Corporation, 521, 522, 534 Kmart, 433 Kojima, 424 Koran, 188, 189 Korean language, 323 Korn/Ferry International, 498 KPMG, 139 Kraft Foods, 331, 455 Kyocera Corporation, 354 Kyoto Protocol, 161 Kyrgyzstan, 164 Labeling laws, 376 Labor-management relations, culture and, 152 Labor unions, political risk and, 170 Lands’ End, 346, 425, 426, 442 Language issues See also Communication process advertising and, 473–475 back translation as, 232 in China, 321–323 decentering as, 232–233 English language differences as, 120, 553 family trees of, 115 French language and, 231 international marketing and, 114–115, 518–519, 551 in Japan, 310 in Korea, 323 literacy rates and, 108, 231 marketing research and, 230–233 parallel translation as, 232 for sales force, 499 LapPower, 491 Large-Scale Retail Store Law (Japan), 423 Latin America See also specific countries consumption in, 260, 271–272 economic cooperative agreements in, 263–271 economic growth in, 32, 250, 269–270 foreign investments in, 166, 168 gift giving in, 112 history viewed from perspective of, 60–62 infrastructure in, 256 marketing research in, 261 meaning of time, 139 Monroe Doctrine and, 59–60 per capita income in, 261 petroleum from, 73 politics in, 269–270 population in, 261, 270 trade between European Union and, 46 U.S investments in, 30 Latin American Integration Association (LAIA), 268, 270–271, 277 Latvia, 197, 289 Layoffs, 5, 152, 153 Lear, 252 Leasing, 538–539 Least-developed countries (LLDCs), 252 Lebanon, 164 Legal disputes arbitration in, 191, 193 conciliation in, 191 jurisdiction in, 190 litigation in, 194 Legal environment advertising and, 471–473 alien status issues and, 14 antiboycott laws and, 211 anticorruption, 43, 149–150 antitrust laws and, 208, 210–211 commercial law within countries and, 203–208 cyberlaw and, 201–203 dispute resolution and, 191, 193–194 export restrictions and, 212–216 extraterritoriality of U.S laws and, 211–212 green marketing legislation and, 207–208 in host countries, 208–212 intellectual property rights and, 194–201 jurisdiction issues and, 190, 203 marketing laws and, 204, 205–206 national security laws and, 213–214 Legal systems common law vs code law, 187–188 Islam law, 188–189 Marxist-Socialist tenets, 189–190 overview of, 186–187 Lego Company, 125, 453 Lehar-Pepsi, 363 Lehman Bros., 95 Lenovo, 195, 324 Less-developed countries (LDCs), 252 Letters of credit, 545–546 L’Evénement Sportif, 481 Lever Brothers, 376 Levi Strauss & Co., 385, 389, 442 LG Electronics, Inc., 3, 7, 119 Libya, 12, 171 Licensing explanation of, 347 risk reduction and, 181 Lil’ Orbits, 348–349 Linguistic distance, 114–115 Literacy advertising and, 468, 475 economic growth and, 108 marketing research and, 231 product instructions and, 376 Lithuania, 197, 289 Litigation, deterrents to, 194 Living standards in Asia Pacific region, 317 in Europe/Africa/Middle East region, 298 L.L Bean, 346, 425, 426 Local-content laws, 169 Local nationals, recruitment of, 500–501 Lockheed Martin, 151, 506, 540 Loetschberg Tunnel, 66 Logistics management, 449–450 Loma Linda Hospital (California), 379 Long- short-term orientation scores, 156–157 Low-context culture, 136–137, 153 Lubrication, 149 Lucent Technologies, 267, 395 18/08/10 12:31 PM Subject Index Lucky-Goldstar, 313 Lufthansa, 143 Maastricht Treaty, 179, 280, 282 Macao, 32 Macedonia, 286 Madrid Arrangement, 197 Magazines, 481 Maintenance, product, 376 Malaysia, 42, 132, 180, 400, 491 Malcolm Baldrige Award, 405 Management objectives affiliation and social acceptance and, 135 culture and, 133 personal life and, 134–135 power and achievement and, 135 security and mobility and, 134 Management styles American culture and, 129–131 authority and, 132–133 competition, 131 decision making and, 132–133 explanation of, 126 formality and tempo as, 138–139 independent enterprise, 130 in international business, 131–132 master of destiny philosophy and, 129–130 merit, 130 never-ending quest for improvement, 130–131 objective analysis, 130 sharing decision making, 130 time systems and, 139–140 Managing Negotiations: Japan (MNJ), 566 Mango, 426 Manifest Destiny, 59 Manuals, user, 377 Manufacturers’ export agents (MEAs), 433–434 Manufacturing plants foreign companies with U.S., 7–8 trends in establishment of, 354 Maps See World/regional maps Maquiladoras, 267, 534 Marginal-cost pricing, 526, 537 Market access explanation of, 42 NAFTA and, 265 Market audit, 584–585 Market demand estimates analogy and, 237–239 expert opinion and, 236–238 global health care market and, 239 Market development economic development and, 250–251 levels of, 257–259 Market-entry strategies consortia as, 352–353 contractual agreements as, 346–349 direct foreign investment as, 353–354 direct sales as, 346 exporting as, 345–346 franchising as, 347–349 international joint ventures as, 351–352 Internet use as, 346 licensing as, 347 overview of, 344–345 strategic international alliances as, 349–351 Marketing See International marketing Marketing laws in China, 206 in European Union, 206–207 product comparison, 204, 206 variations in, 204 Marketing management See Global marketing management cat2994X_subjectindex_609-622.indd 617 Marketing mix, market integration and, 299–300 Marketing plans development of, 343 elements of, 585–587 (See also Country notebook) Marketing programs environmental adaptation in, 15–16 literary rate and, 108 Marketing research analysis and interpretation of, 239–240 breadth and scope of, 221–222 communicating with decision makers about, 241–243 estimating market demand and, 236–239 explanation of, 220–221 international, 220–221 on Internet, 234–236 in Japan, 219 in Latin America, 261 multicultural, 234 primary data for, 226–233 problem definition and objectives for, 222–223 process of, 222 qualitative, 227–228 quantitative, 226–228 responsibility for conducting, 240–241 secondary data for, 223–226, 244–247 Marketing research firms, 241 Market integration market barriers and, 297 marketing mix implications and, 299–300 market metrics and, 297–299 opportunities from, 297 strategic implications of, 296–297 Market metrics in Asia Pacific region, 316–319 in Europe/Africa/Middle East region, 297–300 Market offerings, 360 Market segmentation in 1970s, 332 product attribute and, 463 regional, 367, 463, 467 use of, 463 Marlboro, 384 Marriott, 137, 444–447 Mars Company, 362, 385, 386 Marshall Plan, 28–29 Marvel Enterprises, 535 Marxism, 28 Marxist-socialist tenets, 186, 189–190 Mary Kay Cosmetics, 204, 425 Masculinity/Femininity Index (MAS), 110 Masculinity/femininity scores, 156–157 Master of destiny philosophy, 129–130 Matrix structure, 355 Mattel, 125, 145, 223, 333, 453, 456 Mayo Clinic, 239 Mazda, 332, 566 MBC, 375 MCC, 456 McCann Worldgroup, 261 McDonald’s Corporation, 5, 7, 9, 116, 174, 175, 178, 179, 196, 198, 230, 297, 306, 348, 366, 384, 407, 456–457, 470, 530 McVitie’s, 17 Media availability of, 478 cost of, 478 coverage of, 478–479 government ownership of, 109 influence on values and culture, 108 trends in, 477 Media planning/analysis See also Advertising advertising limitations and, 476–477 billboards and, 488–489 direct mail and, 483 617 Internet and, 483–484 magazines and, 481 market data and, 479 mobile phone applications and, 485, 488 newspapers and, 479–481 radio and television and, 481–483 satellite and cable TV and, 481–483 social media and, 484–485 tactical considerations related to, 477–478 Medical Expo (Cuba), 410 Mercedes, 7–8 Merchant middlemen, 430 Merck, 180 Mercosur, 253, 269 Merit, 130 Merrill Lynch, 95, 379 Message channels, 467, 468 Metric system, 403, 404 Mexican National Advertisers Association, 479 Mexican Revolution, 58 Mexico economic development in, 251, 264, 270 foreign investment in, 32, 161, 267 infrastructure in, 256 management style in, 132 maquiladoras in, 267, 534 Mercosur and, 269 NAFTA and, 8, 9, 263–268, 271 negotiating style in, 560 political climate in, 162 relationship between U.S and, 57–58, 60–61 trade with, 28 water shortages in, 76 Mexico City, Mexico, 76 MGA Entertainment, Inc., 145 Michigan State University, 245 Microsoft Corporation, 62, 180, 195, 200, 377, 394, 398, 455, 464–466 Middle class, in India, 312 Middle East See also Arab world; Muslims; specific countries business styles in, 138–139 free trade and, 275–276 military conflicts in, 104, 294–295 multinational market groups in, 294–295 Nestlé in, 335–336 petroleum from, 73 religious tourism in, 275 Middle East Translation Services, 377 Middlemen agent, 430, 437 control of, 441 foreign-country, 434 function of, 430–431 government-affiliated, 434–435 home-country, 431–434 in Japan, 422, 423 loyalty of, 437–438 merchant, 430 method to locate, 438 method to motivate, 439 method to select, 438–439 termination of, 439–440 Military spending on, 3, 400 war trends and, 176–177 Minimum access volume (MAV), 537–538 Mitsubishi, 366, 428 Mizuho Securities Co., 95 Mobile phones in emerging markets, 14, 15, 255, 314 impact of, 3, in Japan, 219, 336 marketing applications for, 485, 488 18/08/10 12:31 PM 618 Subject Index Mobile World Cup, 119 Monarchy, 163 Monetary barriers, 40 Monochronic time (M-time), 139–140 Monroe Doctrine, 59–60 Monsoon Wedding, 114 More-developed countries (MDCs), 251–252 Morocco, 294 Mortgages, Islamic law and, 189 Moshe & Ali’s Gourmet Foods, Motivation of middlemen, 439 of sales force, 506–508 Motorola, 3, 180, 353 Mount Sinai Hospital (Miami), 239 Mrs Baird’s Bread, 8, MTN, 488 MTV Asia, 482 Multicultural research, 234 Multinational corporations (MNCs) challenges in second half of 20th century, 30–31 green marketing, 207 human-rights abuses and, 212 innovations and, 109 outperforming domestic companies, political climate and, 163 relations between governments and, 180 risk reduction methods and, 180–181 trends in, 7–8, 32 women in management positions in, 144 Multinational market regions See also Regional economic cooperative agreements; specific agreements in Africa, 291–294 in the Americas, 263–271 in Asian-Pacific Rim, 318–320 explanation of, 277 global markets and, 280–296 market integration and, 296–300 in Middle East, 294–295 patterns of cooperation in, 279–280 regulation of business activities by, 296–297 Muslims See also Arab world; Islam; Middle East ban of hijabs and burkas for, 109 ban on interest payments among, 188–189 offensive marketing and, 108 pilgrimages and, 113, 275 Myanmar, 169, 171, 174, 492 N V Philips, 32 NAFTA See North American Free Trade Agreement (NAFTA) Narmada Valley Dam Project (India), 67 National Aeronautics and Space Administration (NASA), 3, 5, 404 National Cash Register, 379 National Consumer Council, 364–365 National Enquirer, 481 Nationalism, 165–167 National security laws, 213–214 National Statistics Enforcement Office (China), 224–225 National Trade Data Bank (NTDB), 43, 245 Nation equity See Country stereotypes Natural disasters, 66–67 Natural resources in Africa, 293 economic development and, 74 overview of, 71–72 petroleum and, 71–73 Negotiation Game (Karrass), 573 Negotiations in China, 327–328 competitiveness and equality in, 561–562 cat2994X_subjectindex_609-622.indd 618 concessions and agreement in, 574 creative international, 575–576 cultural differences and, 554–564 decision-making process in, 563–564 face-to-face, 569–574 follow-up communications to, 574 impact of culture on, 140–141 nontask sounding in, 570–571 nonverbal behavior in, 551 objectivity in, 561 overview of, 140–141, 552–553 persuasion in, 573–574 preliminaries in, 566–569 stereotypes and, 553, 554, 576 time factor in, 563 value differences and, 561–563 verbal tactics in, 557 Negotiation teams, 564–565 Nepotism, 561 Nescafé, Nestlé Company, 32, 174, 261, 335–336, 342, 350, 353, 371, 374, 385, 455, 477, 483, 531 Netherlands advertising to children in, 204 ban of burkas in, 109 flowers in, 100–101 investment in U.S companies, middlemen in, 434–435 trade with, 28 Netnography, 235 New Balance, 196 Newly Independent States (NIS), 289 Newly industrialized countries (NICs) economic growth factors in, 253–254 explanation of, 30, 252, 293 Newspaper industry, 479–481 New York Convention, 193 New Zealand, 404 Nicaragua, 267–269 Nigeria, 164 Nike Inc., 70, 197, 206, 442, 456, 525 Ningen kankei, 127, 128 Nissan Motor Company, 227, 353 Nivea, 197 Niveja, 197 Nochar Inc., 33 No direct foreign marketing stage, 20 Noise, 468 Nokia, Nongovernmental organizations (NGOs), 174–175 Nontariff barriers explanation of, 36 types of, 38, 265 Nontask sounding, 570–571 Nonverbal behaviors cultural differences in, 16, 551, 555–561 linguistic aspects of, 558 Norelco, North American Free Trade Agreement (NAFTA) automobile imports and, 41 background of, 264–265 business service markets and, 408 establishment of, 32, 277 evaluation of, 267 local-content requirement of, 169 maquiladoras and, 267 marketing across borders and, 8, provisions of, 264–265, 267 sovereignty and, 160 North American Free Trade Area, 32 North Atlantic Treaty Organization (NATO), 160, 179 North Korea, 170, 171 Norway, 151, 204 Novon, 390 NYK Line, 40 Nynex, 227 OAO Gazprom, 290 Obesity, 204 Objective analysis, 130 Objective theory of jurisdiction, 209 Observational research, 235 OECD See Organization for Economic Cooperation and Development (OECD) Office Depot, 424 Oil industry, 61, 542, 543 Oil production areas, 88 Oligarchy, 163 Olympic Games, 171, 457, 552 Omnibus Trade and Competitiveness Act (1988), 36, 42–43 One China policy, 307 Oneworld Alliance, 349 Online focus groups, 235 Online stock trading, 95 Online surveys, 235 Open accounts, 547 Opium trade, 55 Opium War, 55 Orange County, California, 22, 23 Orderly market agreements (OMAs), 39 Organizational structures centralized vs decentralized, 356–357 locus of decision and, 356 matrix form of, 355 types of, 355–356 Organization for Economic Cooperation and Development (OECD), 32, 69, 146, 150, 224, 245, 288 Organization of American States (OAS), 146, 150 Organization of Petroleum Exporting Countries (OPEC), 542, 543 Organization of the Islamic Conference (OIC), 294 Organ transplants, 443 Oroweat, Overseas Private Investment Corporation (OPIC), 182, 244 Oxfam, 175 Oxford Analytica, 247 Pacific Connections, 431 PacifiCorp, Packaging components of, 374–376 environmental issues related to, 207–208, 365 Pakistan, 294 Panama, 46, 53, 54, 60 Panama Canal, 53, 54, 60, 80 Paraguay, 269 Parallel imports, 523–526 Parallel market, 524 Parallel translation, 232 Paris Air Show (2003), 411 Paris Convention for the Protection of Individual Property, 197 Paris Disneyland, 359 Patent Cooperation Treaty (PCT), 198 Patents, 98, 196 See also Intellectual property rights Payment options, e-commerce, 448 Peace from commerce, 3–6 PeaceWorks, Pearle Vision, Pearl Harbor attack, 171 Pedigree Petfoods, 386 PEMEX, 9, 61, 265 Penetration pricing, 527 People’s Republic of China (PRC) See China PepsiCo, 163, 166, 169, 174, 204, 266, 363, 364, 454, 539 18/08/10 12:31 PM Subject Index Per capita GDP, 237, 251 Permanently normalized trade relations (PNTR), 12, 171 Personal security, 134 Personal selling See Sales force Personal space, 16–17 Persuasion, 573–574 Peru, 46, 164, 180 Pesticides, 214 PetroBras, 70, 568 Petroleum, 71–73 Pharmaceutical industry, 196, 373, 524 PHENIX Initiative, 200 Philippines, 400 Philips Research, 200 Physical distribution system, 449, 450 See also Logistics management PicturePhone Direct, 346 Piggybacking, 433 Pilsner Urquell, 346 Piracy, 194–196 Pizza Corner, 348 Pizza Hut, 174, 175, 178, 264, 306, 348, 488–489 Planned change, 121–122 Planned domestication, 181 Planning for change, 121–122 corporate, 338 for global markets, 338–344 strategic, 338 tactical, 338 Planning process defining target markets and adapting marketing mix in, 342–343 developing marketing plan in, 343 implementation and control in, 344 preliminary analysis and screening in, 340–342 Playboy, 481 PNTR See Permanently normalized trade relations (PNTR) Poland economic growth in, 251 legal system in, 189 OECD and, 288 Political and social activists (PSAs), 171–174 Political bargaining, 181 Political economy, 104 Political environment alien status issues and, 14 assessment of vulnerability in, 177–182 confiscation, expropriation and domestication risks in, 168 cyberterrorism and cybercrime and, 177 of domestic marketing, 12–13 economic risks in, 168–170 for economic unions, 278 in foreign countries, 14–15 nationalism and, 165–167 in newly industrialized countries, 253 nongovernmental organizations and, 174–175 political parties and, 165 political sanctions and, 170 political/social activists and, 171–174 risks associated with, 167 sovereignty and, 160–161 stability of, 162–163 targeted fear/animosity and, 167 trade disputes and, 167 violence, terrorism and war and, 175–177 Political parties, 165 Political payoffs, 181 Political risk assessment, 178–180 Political union, 279–280 Political vulnerability explanation of, 177–178 cat2994X_subjectindex_609-622.indd 619 forecasting political risk and, 178–180 methods for lessening, 180–181 politically sensitive products and issues and, 178 Pollution, in China, 68–70 Pollution regulations, 68 Polychronic time (P-time), 139–140 Population aging and, 76–78 controlling growth of, 75 current trends in, 74–75 immigration and, 78–79 in India, 75, 312 in Japan, 309–310 in Latin America, 261, 270 rural/urban migration and, 75–76 Power, 135 Power Distance Index (PDI), 109–111, 132, 138, 148, 153 Power distance scores, 156–157 Price controls, 169 Price escalation approaches to reducing, 533–538 cost of goods and, 534 currency values and, 531–532 deflation and, 530 distribution costs and, 536 dumping and, 537–538 effects of, 532–533 exchange rate fluctuations and, 530–531 exporting costs and, 529 foreign trade zones and, 536–537 function of, 528–529 inflation and, 529–530 middleman and transportation costs and, 532 taxes, tariffs, and administrative costs and, 529, 534–536 Pricemart, 303 Price padding, 572 Price-quality relationship, 402 Price quotations, 541 Price war, 521 PricewaterhouseCoopers, 499 Pricing administered, 542–544 cartels and, 542–544 countertrade and, 539–541 full-cost vs variable-cost, 526 government-influenced, 544 leasing and, 538–539 objectives of, 522–523 of parallel imports, 523–526 skimming vs penetration, 526–528 Primary data ability to communicate opinions and, 228 explanation of, 226 language and comprehension issues in, 230–233 problems in gathering, 228–233 sampling in field surveys and, 230 types of, 226–228 willingness to respond and, 228–230 Primary language scores, 156–157 Prior use, 197 Private brands, 390 Privatization, 168, 254 in Eastern Europe, 401 in India, 311 in Latin America, 269–270, 401 Procter & Gamble (P&G), 27, 180, 196, 227, 303, 365, 375, 385, 390, 454, 460–461, 476, 486–487, 516, 521, 522, 534 Product comparison laws, 204, 206 Product component model, 373 Product homologation, 363, 364 Product Liability Directive (European Union), 405 619 Products and services See also Business-to-business markets; Industrial products; Services assessment of vulnerability of, 178 barriers to entry for, 380–382 climate and, 364, 402 core component of, 373–374 country-of-origin effect and, 387–389 cultural differences and, 366–368 design of, 402 diffusion of innovations and, 369–372 global brands of, 382–386 global marketing of, 377–380 innovation and adaptation of, 368–369, 373–377 national brands of, 387 packaging component of, 374–376 private brands and, 390 production of innovations and, 372–373 quality of, 360–366 support services component of, 376–377 trends in, 360 Promodes, 425 Promotion, 130, 448 Protectionism antidumping penalties and, 41–42 boycotts and embargoes and, 39–40 consumer services and, 380–381 domestic subsidies and economic stimuli and, 42 explanation of, 35 logic and illogic of, 35–36 monetary barriers and, 40 quotas and import licenses and, 38 standards and, 40–41 trade barriers and, 36–38 voluntary export restraints and, 39 Provemex, 350 Publicoche, 489 Public relations (PR), 455–457 Puerto Ricans, 499 Purchase price parity (PPP), 309, 423 PVI (Princeton Video Imaging), 483 Qatar, 411 Qualcomm, 354 Qualitative research, 227–228 Quality adaptation and, 363–364 in business-to-business markets, 401–406 as defined by buyer, 402–404 definition of, 361–362 in global markets, 360–361 green marketing and, 364–365 in Japan, 376 maintaining performance, 362–363 Quantas, 349 Quantitative research, 226–228 Queuing, 223 Quiksilver, 250–251, 458 Quotas, 38 Radio advertising, 473, 479, 481 Radio Shack Corporation, 342 Railroads, 395 See also Infrastructure Random House, RCA Corporation, Reader’s Digest, 233 Reader’s Digest Association, 483 Reader’s Digest International, 481 Receivers, 468 Recruitment of expatriates, 498–499 host-country restrictions on, 502 of local nationals, 500–501 of third-country nationals, 501 of virtual expatriates, 499 18/08/10 12:31 PM 620 Subject Index Recycling, 207–208 Red Crescent, 175 Red Cross, 175 Red October Chocolate Factory, 362–363 Referrals, 498 Regional Cooperation for Development (RCD), 279, 294 Regional cooperation groups, 279 Regional economic cooperative agreements See also Multinational market regions cultural factors and, 278 economic factors for, 254, 277–278 geographic and temporal proximity and, 278 multinational, 276–277 political factors for, 278 Regional segmentation, 463, 467 Regional trading groups, Caribbean Community and Common Market, 271 Registration, 197 Regular foreign marketing stage, 20–21 Reha Enterprises, 159 Relationship marketing, 412, 496 Relationship-oriented cultures, 154 Religion influence of, 107–108 map of world, 91 Religious tourism, 275 Repair, product, 376 Repatriation, 508, 514–515 Research and development (R&D), expenditures on, 372 Reserves account, 33 Retailers/retailing e-commerce, 426 global, 431 in Japan, 219, 422, 423 manufacturers’ stores and, 431 pricing strategies of, 541 private brands of, 390 size patterns in, 428 trends in, 426–427 Revocable letter of credit, 545 Rights of the parties, 151 Risk assessment, political, 178–180 Rituals, 113–114 Ritz Carlton Hotel chain, 362 River blindness, 180 Romance languages, 115 Romania, 286, 288 Roosevelt Corollary, 60 Rules of origin, 265 Rural/urban migration, 75–76 Russia See Soviet Union (former) Commonwealth of Independent States and, 289–291 computer hackers in, countertrade in, 539, 540 devaluation and debt default in, 270 direct mail in, 483 economic growth in, 32, 164 gift giving in, 112 legal system in, 189–190 natural gas and, 290 negotiating style in, 559 piracy rates in, 195 product origin issues in, 388 product quality in, 362–363 top advertisers in, 461 Sabado Gigante, 482 Sabre, 169 Sainsbury, 390 Saipan, 49 Sales force design of, 496–498 developing cultural awareness in, 515–516 cat2994X_subjectindex_609-622.indd 620 evaluation and control of, 510–512 expatriates on, 498–499 foreign-language skills of, 499 host-country restrictions on, 502 local nationals on, 500–501 motivation of, 18, 506–508 preparation for foreign assignments, 512–515 recruitment of, 498–502 selection of, 502–505 third-country nationals, 501 training of, 505–506 virtual expatriates on, 499 Sales management compensation system for, 508–511 foreign-language skills for, 518–519 profile of, 516–518 Sales promotions, 454–455 Samsung Electronics Company, 3, 7, 32, 313, 354, 397, 407 Sara Lee, 251 SARS outbreak (2003), 4, 104, 237, 411, 499 Satellite TV, 481–483 Saudi Arabia, 145, 164, 178, 376, 403–404 Scientific American, 481 Sears Roebuck, 426, 431, 433 Seasons, 63–64 Secondary data availability of, 223–224 comparability of, 225 directories as, 246 general international business sources as, 246–247 marketing guides as, 246 reliability of, 224–225 U.S government sources for, 245–246 validation of, 225–226 Web sites for international marketing, 244–247 Securities and Exchange Commission (SEC), 146, 210, 229 Securities market, 95 Self-reference criterion (SRC) advertising message and, 468, 471 business customs and, 127 ethnocentrism and, 17–18 explanation of, 16 influences of, 16–18, 140, 141, 372 marketing research and, 222 view of history and, 56 Sematech, 353 Separation allowances, 508 Serbians, 179 Service call centers, 377 Services See also Business services; Products and services characteristics of, 378 global market entry barriers for, 380–382 global marketing of, 377–380 NAFTA and, 265 7-Eleven, 7, 426–427 Shari’ah See Islamic law Sherman Antitrust Act, 211 Shipping cartel, 543 Shiseido, 368 Siemens, 146, 395 Sierra Leone, 162 “Silent Language of Overseas Business” (Hall), 135–136 Silicon Graphics Inc (SGI), 213 Simplified Network Application Process (SNAP), 216 The Simpsons, 108, 375 Singapore birthrate data in, 97 economic growth in, 313, 400 foreign investment in, 168 home product sales in, 496 Single European Market Act, 207, 282–284 Sky Channel, 481 SkyTeam, 349 Slovak Republic, 177, 288 Smart & Final, Smith & Wesson, 7, Smoot-Hawley Act of 1930, 29 Smuggling, 39, 295 Social acceptance, 135 Social institutions corporations as, 109 explanation of, 105 family as, 107 government as, 108–109 language as, 114 media as, 108 religion as, 107–108 school as, 108 Social media, 484–485 Social responsibility corporate, 151 environmental protection and, 69–70 in international marketing, 150–151 Solar Turbines Inc., 413–416, 563, 566 Solid waste, 365 Sony Corporation, 7, 368, 384, 389, 528 Sony Playstation, 37 South Africa apartheid in, 12, 171 economy development in, 291, 293 School Net program in, 294 supermarket chains in, 428 trade sanctions on, 171, 213 South America See Latin America Southdown, Southern African Development Community (SADC), 291 Southern Cone Free Trade Area See Mercosur South Korea economic growth in, 251, 313, 400 foreign investment in, 168 free-trade agreement with, 46 industrial corporations in, 30, 31 International Monetary Fund loans to, 47 manufacturing in, 534 negotiating behavior of, 556, 558 trademark issues in, 197 trade with, 28, 36, 46 Southwestern Bell, 401 Sovereign states, 160 Sovereignty, 160–161 Sovereign wealth funds, 161 Soviet Union (former) See Russia; specific countries Afghanistan and, 171, 213 Council for Mutual Economic Assistance and, 279 countertrade in, 539, 540 dissolution of, 177, 289, 290 foreign investments in, 179–180 industrial purchasing in, 399 legal system in, 189 PepsiCo in, 163 petroleum from, 73 as political and economic threat, 278 trade restrictions on, 213 Spain, 78, 489, 560 Spanish language, 499 Special drawing rights (SDRs), 47 The Spy Who Shagged Me, 120 SRC See Self-reference criterion (SRC) Standardization, adaptation vs., 332–334, 394–395 Standards for industrial products, 402–403 ISO 9000 certification, 404–406 18/08/10 12:31 PM Subject Index NAFTA and, 265 nontariff barrier, 40–41 quality and global, 401–406 Star Alliance, 349 Starbucks, 10, 49, 419, 424 State Department, U.S., 175–176 State-owned enterprises (SOEs) explanation of, 30 privatization of, 254 STAT-USA, 244 Stereotypes country, 388–389 European self-imposed, 554 negotiations and, 553, 554, 576 Stockholm Business Council on Ethics, 491 Store brands, 390 Strategic international alliances (SIAs) consortia as, 352–353 explanation of, 349–351 joint ventures as, 351–352 phases of, 350, 351 Strategic planning, 338 Strategic plans, Structural Impediments Initiative, 423 Subordination, 149 Sudan, 171 Suffrage, 163, 164 SunExpress, 441 Sun Microsystems, 441, 506 Supermarkets, 428 Support services, 376–377 Sustainable development, 70 Sweden, 204, 406 Swift & Company, Switzerland Alps and, 66 investment in U.S companies, minaret construction ban in, 109 women in management positions in, 143 Symbols aesthetics as, 115–116 language and, 114–115 in marketing, 96 Syria, 171 System for Tracking Export License Applications (STELA), 216 Taco Bell, 174, 264 Tactical planning, 338 Taiping Rebellion, 55–56 Taiwan birthrate data in, 97 China and, 46, 307–308 economic growth in, 313, 400 foreign investment in, 168 negotiating style in, 559 trade with, 28, 36 Tajikistan, 291 Tanzania, 15 Targeted fear, 167 Target markets, 342–343 Tariffs economic growth factors and, 254 explanation of, 36–38, 529 in India, 311 NAFTA and, 264, 265 price escalation and, 529, 534–536 restrictions due to, 27 Smoot-Hawley Act and, 29 on Vietnamese exports to U.S., 313 Task-related information exchange, 571–573 Taxes on advertising, 473 compensation plans and, 509 cat2994X_subjectindex_609-622.indd 621 on e-commerce, 202–203 in European Union, 283 as political risk, 169 Tea trade, 54, 55 Technology See also Information technology (IT) cultural values and, 105 differences in level of, 13–14 dual-purpose, 213 economic development and, 255, 399–400 export of, 394 market demand and, 399–401 mobile phones and, 3, 6, 14, 15, 255 Telecenters, 255 Telecommunications, 379 Teléfonos de Mexico, 401 Television advertising on, 204, 472–473, 478, 479, 481–483 in Arab world, 375 high-definition, 481 programs as exports, 22 satellite/cable, 481–483 Telmex, 401 Terrorism antiglobalization protests and, 49 cyberterrorism as, 177 effect on tourism, as global business risk, 5, 175–177 Libyan support for, 12 map of global, 91 Terrorist attack of 2001, TESCO, 227 Tesco, 525 Texas Commerce Bank, 227 Texas Instruments, 353 Text message interpreters, 14 Thailand, 47, 251, 400 Third-country nationals (TCNs), 501 Thought processes, 117–118 Three Gorges Dam (China), 67, 68 3M Corporation, 540 3M Global Trading, 540 Tiananmen Square massacre (1989), 305 Tibet, 305 Time cultural perceptions of, 16 as element in negotiations, 563 monochronic, 139–140 polychronic, 149–150 Time Warner, 478 Time zones, 250 T-Mobile, Tobacco advertising of, 491–492 consumption of, 98 Tokyo Disneyland, 359 Tokyo Round, 44 Tokyo Stock Exchange (TSE), 95 Tolerance, 18, 118 Topography, 64–66 Toshiba, 397 Total quality management (TQM), 402 Tourism, religious, 275 Toy Biz Inc., 535 Toyota, 7, 9, 167, 242, 310, 361, 363, 384, 456, 475, 568 Toys “R” Us, 431 Trace International, 151 Trade See also Free trade antidumping penalties and, 41–42, 46 balance of payments and, 33–35 China and, 54, 55 foreign commercial payments and, 544–547 General Agreement of Tariffs and Trade, 28, 29, 43–45 Japan and, 56 621 map of, 93 national security laws and, 213–214 Omnibus Trade and Competitiveness Act and, 36, 42–43 post-World War I, 29 protectionism and, 36–38 restrictions on, 169–171, 185, 213–214 role of U.S in, 31 routes of, 79–80 in services, 408–409 Trade balance, Trade barriers antidumping penalties and, 41–42 boycotts and embargoes and, 39–40 in developing world, 250 domestic subsidies and economic stimuli and, 42 efforts to ease, 42–47 explanation of, 36 issues related to, 27 monetary barriers and, 40 NAFTA and, 264, 265, 267 nontariff, 36, 38 protectionism, 35–42 quotas and import licenses and, 38 standards and, 40–41 tariffs and, 36–38 U.S hypocrisy and, 36 voluntary export restraints and, 39 Trade deficit, 31, 35 Trade Leads Database, 246 Trademarks, 194, 196, 201, 526 See also Intellectual property rights Trade-Related Aspects of Intellectual Property Rights (TRIPs), 44–45, 198 Trade-Related Investment Measures (TRIMs), 44 Trade routes, 79–80 Trade sanctions, 170, 171, 185, 295 Trade shows in business-to-business marketing, 409–411 virtual, 411 Trading blocs, 250 Trading companies, 432–433 Traditional distribution structure, 421, 424–427 Training as after-sale service, 407 for global managers, 517–518 for international marketing, 505–506 Trans-Atlantic Conference Agreement, 543 Transborder data flow restrictions, 381, 409 Transparency International (TI), 147, 148, 153 Travel and tourism industry, 378 Treaties, participation in international, 161 Treaty of Asunción, 269 Treaty of Nanjing, 55 Treaty of Rome, 279, 285 Triangulation, 237 TRIPS See Trade-Related Aspects of Intellectual Property Rights (TRIPS) Turkey Economic Cooperation Organization and, 294 economic growth in, 251 European Union and, 6, 286–287 newspapers in, 479 Twix Cookie Bars, 332, 334 Tyson Foods, 350 Uganda, 488 Ukraine, 290, 539 Uncertainty Avoidance Index (UAI), 110, 111 Uncertainty avoidance scores, 156–157 Unibex, 438 UNICEF, 175 Uniform Commercial Code, 187 Unilever, 17, 336, 390, 462 18/08/10 12:31 PM 622 Subject Index Unisys Corporation, 221 UNITE, 49 United Airlines, United Arab Emirates (U.A.E.), 295 United Kingdom ban of hijabs in, 109 candy market in, 386 as commonwealth of nations, 280 investment in U.S companies, legal system in, 193 management style in, 134 negotiating style in, 560 political parties in, 165 trade protection and, 27 trade with, 28 women in management positions in, 143 United Nations Convention against Corruption (UNCAC), 146, 150 United Nations Economic Commission for Africa (EAC), 291 United Nations (UN) data collection and, 224 economic development classification of, 251–252 economic development function of, 277 environmental protection and, 69 immigration and, 78 International Court of Justice, 190 population growth and, 74, 77 World Intellectual Property Organization, 197 United States aging population in, 77 agricultural subsidies in, 42 antitrust laws in, 208, 210–211 balance of payments, 34, 35 boom of 1990s, cartels and, 543–544 culture in, 129–131, 153–154 current account balance of, 34 DR-CAFTA and, 267–269 economic stimuli of 2008–2009, 164 emphasis on independence in, 79 encourage of foreign investment by firms in, 182 export restrictions in, 212–216 exports from, 394–395 foreign students in, 380 foreign trade zones in, 537 gift giving in, 112 healthcare services in, 379 historical overview of, 53, 54 hours worked in, 135–136 individualism in, 111, 126, 130, 145 industrial corporations in, 30, 31 intellectual property rights in, 198 internationalization of business in, 7–10 Internet use in, 372 legal procedures in, 15 Marshall plan and, 28–29 metric system and, 403, 404 Mexico and, 57–58 Monroe Doctrine and, 59–60 NAFTA and, 8, 9, 263–268, 271 negotiating style in, 561, 570, 573, 574 Panama and, 46, 53, 54, 60 participation in international treaties, 161 patent protections in, 198 perception of time in, 139 petroleum consumption in, 72–73 cat2994X_subjectindex_609-622.indd 622 post-World War II, 28–29 role in world trade, 31 sales force in, 504 territorial expansion of, 59 top trading partners with, 28 tourism in, 378 trade deficit in, 31, 35 Uruguay Round and, 44 women in management positions in, 143 World Trade Organization and, 45 United States–Canada Free Trade Area (CFTA), 263 U.S Census Bureau, 244 U.S Court of International Trade, 535 U.S Custom House Guide, 246 U.S Customs Service, 244 U.S Export trading companies, 433 U.S Trade Representative, 403 Universal Studios, University of Michigan Business School, 406 Unocal Corporation, 161, 212 UPS, 427 Urban areas, population in, 75–76 Uruguay, 269 Uruguay Round, 29, 44, 45, 538 User manuals, 377 Utilitarian ethics, 151 UTStarcom, 360 Validated export license, 214–215 Value-added tax (VAT), 27, 202–203, 283 Values See Cultural values Variable-cost pricing, 526, 537 VDSL Systems, 456 Venezuela, 61, 132, 164, 168, 198, 255, 269, 504 Versace, 388 Vicks Company, 17 Victoria’s Secret, 267 Video games, 37, 365 Vietnam, 171, 195, 251, 313–314 Violence, 175–177 Virtual expatriates, 499 Virtual meetings, 250 Virtual trade shows, 411 Vodacom, 15 Volkswagen, 9, 252 Voluntary export restraints (VERs), 39 Volvo, Voting rights, 163, 164 The Wall Street Journal, 7, 8, 239, 454 Walmart, 10, 70, 151, 167, 170, 185, 202, 227, 251, 265, 303, 420, 423–426, 431, 435, 442 Warfare, trends in, 176 Warner Bros., 200–201 Warner-Lambert, 527 Waterford Crystal, 483 Water resources, 89 The Wealth of Nations (Smith), 104, 131 Weapons of mass destruction (WMD), 213 Webb-Pomerene export associations (WPEAs), 434 Webers, Web sites See also Internet English language use and, 137–138 for international marketing, 244–245, 484 Web visitor tracking, 235 West Germany, 177 Whirlpool, 32, 251 Wholesalers See also Middlemen in Japan, 422, 423 Wimpy, 178 Wisconsin Central Transportation, Woman’s Day, 481 Women See also Gender gender bias and, 141–144 on international assignments, 142 in negotiation teams, 565 in U.S workforce, 141 Word-of-mouth communications, cultural values and, 111 Word-of-mouth (WOM) advertising, 484–485 Work counsels, 509 Worker shortages, 78–79 Workforce cultural differences in view of welfare of, 152 women in, 141 Work-personal life trade-off, 134–135 World Bank, 32, 47–49, 108, 163, 174 WorldCom, World Court (The Hague), 190 World Development Indicators (WDI), 245 World Directory of Trade and Business Associations, 246 World Economic Forum, 49 World Factbook (CIA), 244 World Health Organization (WHO), 196, 363, 491–492 World Intellectual Property Organization (WIPO), 197 World Network of Chambers of Commerce, 245 World of Warcraft, 201 World/regional maps climate, 86–87 communications, 90 oil and gas production, 88 religions, 92 terrorism, 91 trade flows, 93 water resources, 89 world, 84–85 World Trade, 245 World Trade Centers Association, 245 World Trade Organization (WTO) China and, 12, 45–46, 167, 303, 305 on dumping, 537–538 establishment of, 28, 29, 45 function of, 45–46, 176, 254, 277 getting around provisions of, 46–47 growth of, on hormone-treated beef, 178 intellectual property rights and, 195, 196 protests against, 49, 174, 333 sovereignty and, 160, 161 Taiwan and, 307–308 Trade-Related Aspects of Intellectual Property Rights, 44–45, 198 Web site for, 245 Wrigley, 475 Yahoo!, 354 Yugoslavia, 179, 288 Yum! Brands, 264, 327, 348 Zambia, 14 Zara, 219 Zenith, 7, 313 18/08/10 12:31 PM ... to Firm Performance?” Journal of International Marketing 17, no (20 09), pp 24 –46 cat2994X_ch 12_ 330-357.indd 333 18/08/10 12: 17 PM 334 Part Developing Global Marketing Strategies Items in the... “Adaptation of Marketing Mix Elements in International Markets,” Journal of Global Marketing 23 , no (20 10), pp 65–79 34 International Coffee Organization, http://www.ico.org, 20 08 cat2994X_ch 12_ 330-357.indd... and Research Propositions,” Journal of International Marketing 12, no (20 04), pp 46–70 cat2994X_ch 12_ 330-357.indd 348 18/08/10 12: 17 PM Chapter 12 Global Marketing Management: Planning and Organization