CASE 10

Microfinance and

Bottom-of-the-Pyramid

Consumers

For most consumers in developing

countries, credit is an afterthought, an

easily accessible component of making a

purchase. Certainly credit scores are tracked

and access to credit can be limited for

individuals with a bankruptcy or foreclosure.

Still, for the majority of consumers, the next loan is

the swipe of a credit card away.

Obtaining credit is difficult for bottom-of-the-

pyramid consumers in developing markets. It is

estimated that two thirds of the world’s population

is unable to obtain access to credit from banks.

Instead, credit, if available at all, it can only be

accessed through loan sharks and other forms of

organized crime.25 This debt comes with a hefty

cost. Interest rates can be extremely high.26

The lack of reasonably priced credit has

implications for international marketers. It keeps

many consumer stuck in poverty. It limits purchasing

power, constrains development, and is a key

component of bottom-of-the-pyramid markets.

For years, individuals and groups have looked

for ways to respond to the global credit access

problem. In 1976, Nobel Prize winner Muhammad

Yunus came up with a solution—microfinance. On

a trip to his home country, Bangladesh, Professor

Yunus conducted an informal survey of the loan

shark loans to local villagers. The total amount

of the average loan was a small $27. The pain

associated with this debt in terms of the amount

of interest charged was unequal to the value. The

banks in the country would not lend to the villagers

because they were not “credit worthy.” They had no

collateral and low earnings. The profit on a $27 loan

also seemed too small for them.27

Stepping into the void in the market, Professor

Yunus loaned the $27 himself. From there

microfinance was born. The concept of microfinance

is simple. By fixing the institutional gap, credit can

be made available to impoverished individuals.

This provides them the funding needed to start

businesses and earn their way out of poverty.

Photo 10.7: Manual labor

Obtaining credit is difficult for bottom-of-the-pyramid

consumers in developing markets.

Women are more likely to repay loans, which

makes them the target market for the majority of

microfinance loans.

Mallamma was a forty-two-year-old entrepreneur

in Hyderabad, India. She used a microfinance loan

of 10,000 rupees (10,000 Rs) to start a fish business.

In one year she grew the business to the point that

she is seeking a second loan of Rs 50,000 to hire an

employee and continue expanding. In Hyerabad,

another borrower, Geetawati, used an Rs 10,000

loan to buy a sewing machine after her husband

passed away. In one year, she grew the business to

the point that she earns Rs 100 per day and has an

employee. Both women repaid their initial loans.28

Professor Yurus founded the Grameen Bank,

which now lends more than $1 billion each year.

Ninety-seven percent of their borrowers are women,

and all of the loans are self-financed, making the

bank highly stable. The company also keeps costs

very low. Advertising or other promotions are not

used. The simple product coupled with the social

goal of helping the disadvantaged allows them to

be highly efficient.29 This efficiency has allowed the

Grameen Bank to start loaning to poor consumers in

developed countries, including the United States.30

Microfinance has boomed in the past decade.

In India alone, the sector grew at a 50% to 70%

annual rate from 2006 to 2009. More than eight

hundred microfinance institutions now operate in

the country.31 There are 183 members of Sa-Dhan, a

network of microfinance lenders, and for this group

the amount of loans grew from Rs 3,456 crore to

Rs 11,734 crore.32 Microfinance has become a key

component of the Indian economy. It has led to

some migration from cities to rural areas to take

advantage of the jobs created by microfinance.33

iNTEGRATED ILLUSTRATIONS & MAPS

Integrated illustrations demonstrate how five key international business factors interact with the 4 Ps.

Integrated maps expose students to global locations.

iNNOVATIVE REAL-WORLD APPLICATIONS

Innovative and thought-provoking International Incident features encourage critical thinking and class discussion.

International Marketing in Daily Life features help students apply marketing concepts to everyday life.

iNFORMATIVE CASES

Informative end-of-chapter brief cases cover key topics, including sustainability and bottom-of-the- pyramid issues. Six end-of-text comprehensive cases provide even more flexibility to your course.

Chapter 7: International Product and Brand Marketing 229

OverviewPart I of this textbook provided a backdrop for the field of international marketing. Culture, language, infrastructure, economic systems, and political and legal systems influence any domestic or global marketing operation. In Part II the central core of Figure 7.1 was examined: the market. Concepts of target market segmentation and product positioning were explained, along with international market research methods to emphasize the starting point for any marketing program: identifying consumer wants and needs.

The third part of international marketing, as shown in Figure 7.1, is the development of the physical goods and intangible services that meet the needs of those in the target market. Products are designed and sold within the context of the cultural, linguistic, economic, political, legal, and economic constraints imposed by any country in which a global marketing firm intends to operate.

In this chapter, product and brand management activities are detailed. Chapter 8 expands the discussion by incorporating the concepts of product and service adaptation. Making certain a product fits with a specific country and its culture helps the product compete in the international marketplace.

International product marketing involves first understanding the types of products that companies sell and the main dimensions of those products from the viewpoint of the consumer. Next, product mix decisions regarding the number of products in a line (depth) and the number of product lines (width or breadth) are made. Product packaging and labeling concepts are integrated into all product decisions, as are choices with regard to the number and types of business-to-business products to be offered. In addition, marketers carefully evaluate product support services to ensure consumers and business customers receive quality attention during and after the purchasing process.

International services constitute a growing segment of international marketing efforts. Companies providing financial, insurance, transportation, health-care, personal,

Figure 7.1: The International Marketing Context

Culture Language

InfrastructurePolitical and

Legal Systems

Economic Systems

Price Promotion

PlaceProduct

Markets

Chapter 1: Introduction To International Marketing 21

INTERNATIONAL EXAMPLE: MARKETING BATHING PRODUCTS

As an example of the far-reaching impact of globalization on business practices and international marketing, consider this basic human activity: bathing and cleaning. Bathing and cleaning are routine activities worldwide, but the methods and products

International Marketing in Daily LifeIt may be that most people think of something “glamorous” when the term “marketing” is used. It may feel classy or sexy to consider a marketing program for the newest hand-held mobile technology, a fancy sports car, or designer clothing. At the same time, a case can be made that the majority of marketing opportunities may come from much simpler products and services—those used in everyday life.

One common theme that appears in this textbook is the marketing of products to be used daily or regularly. The approach serves a special purpose: to illustrate how the most commonplace of daily activities can lead to the identification of target markets that companies can reach with products that are adapted to individual cultures and national circumstances. Figure 1.10 lists some of the daily activities described in this textbook. When one of these activities is described, the daily living logo show above will appear as part of the presentation.

Figure 1.10: Selected Daily Life Activities and Marketing Opportunities Presented in This Textbook

International Marketing in Daily Life

INTERNATIONAL INCIDENT As part of an international junket, your marketing team stops to visit an important potential new client in Spain. Within a few hours of cordial discussions, the manager of the client company invites you to attend the bullfights the next day as his guest. You have little interest in attending the event and do not like the custom. What should you do? How would you respectfully decline? Or, would you accept and then bow out, claiming illness the next day? Would you consider attending? How would your response change if you were a Hindu from India or Nepal? (Hindus hold all life to be sacred and consider bulls to be religious animals that should never be harmed.)

Bathing Brushing Teeth/Dental Hygiene

Using the Restroom Wearing Jeans

Sleeping and Beds Methods of Transportation

Cosmetics Candy

Dining Habits and Foods Cooking Methods

Drinks and Milk Consumption Coping with Headaches

Socialization Music

Religions Methods of Payment and Banking

168 Part II: International Markets and Market Research

and Turkey, Pakistan and India, and Israel and the Palestinians living in the West Bank and the Gaza Strip. These conflicts undoubtedly influence consumer attitudes and behaviors.

When the United States invaded Iraq in 2002, various countries throughout the world, especially in Western Europe, expressed disapproval. A survey completed in 2004 revealed that nearly 20 % of consumers abroad said they would avoid U.S. companies and products such as McDonald’s, Starbucks, American Airlines, and Barbie dolls (Mattel) because of the war. At that time, the more American a product was perceived to be, the more resistance it encountered.26

Any animosity or anger toward a country can be worsened by political, economic, or military conflicts between countries. A considerable amount of evidence suggests that animosity toward a country strongly influences consumers.27 In the United States, animosity with regard to objections to the Iraq war reached a level in which Congress circulated a resolution to change the name of the French fries in the congressional cafeteria to “Freedom fries,” because France had expressed strong opposition to the war at the beginning of the conflict.

Nationalism

At times, animosity toward another country may be coupled with nationalism. Nationalism refers to the strong pride and devotion citizens have in a country or nation. Nationalism can be the internal response to activities that can also lead to animosity as consumers examine products from other countries. Nationalism should not be considered as a purely negative or positive attitude. It may be associated with heroic sacrifice, loyalty, and group cohesiveness. From a marketing perspective, it can also lead to a preference for purchasing local goods and services. Conversely, nationalism can lead to boycotts, protests, and even acts of violence toward another country or a company conducting business in a foreign land. Nationalistic consumers often perceive that buying imported goods is wrong because it negatively impacts the domestic economy.28

In May of 2010, millions of Indonesian farmers threatened to boycott Nestlé products. Angry at a move by Nestlé to stop buying crude palm oil from Indonesian farms, an action that would potentially severely hurt the Indonesian economy, the farmers expressed national pride and attempted to protect their community.29

Religiosity

ReligionsAttitudes towards countries can also be influenced be religion and religious similarities between countries. Increasingly, religiosity, or the degree to which consumers within a country or region are religious, has become a factor some marketers consider when positioning products. Religiosity affects shopping behaviors, attitudes toward advertising, purchase information-search processes, and product preferences.30 A list of the major religions and the percentage of the population that follows each in select countries is presented in Table 5.1.

Each of these religions practices differing dietary programs, holds religious ceremonies in differing ways, exhibits varying viewpoints regarding the status of

International Marketing in Daily Life

INTERNATIONAL MARKETING

DANIEL W. BAACK | ERIC G. HARRIS | DONALD BAACK

PUT THE i IN YOUR iNTERNATIONAL MARKETING COURSE

iNTEGRATED iNFORMATIVE iNSPIRING QUOTES

iNNOVATIVE iNDISPENSABLE iNCREDIBLE VALUE

MOROCCOTUNISIA SYRIA

IRAQ

YEMEN

OMAN

A L G E R I A

L I B YAE G Y P T

S A U D IA R A B I A

S U D A N

PALESTINIANAUTHORITYJORDAN

QATAR

UNITEDARABEMIRATES

BAHRAIN

LEBANON

KUWAIT

MediterraneanSea

PersianGulf

Red

Sea

Greater Arab Free Trade AreaCooperation Council for theArab States of the Gulf

Current Account

Balances in Billions

of U.S. Dollars

over $100

$50 to$100

$10 to $50

$0 to $10

-$0 to -$10

-$10 to -$50

-$50 to -$100

0ver -$100

no data

iNDISPENSABLE ONLINE RESOURCES

Indispensable online resources for the instructor

Password-protected resources at www.sagepub.com/baack include:

• Author-created test bank available electronically and in Microsoft Word, with approximately 100 test questions for each chapter.

• Author-created PowerPoint® slides highlight essential content and features from the text

• Class assignments and answers to in-text questions

• Full-text SAGE journal articles, carefully selected for each chapter

• Video links with questions for discussion, sample syllabi, and country fact sheets

Interactive online engagement for students

See the inside back cover of this text for details and description of the free, open-access, interactive Student Study Site!

iNSPIRING QUOTES

Reviewers say we are INTEGRATED, FRESH, REAL-WORLD, RELEVANT and GROUND-BREAKING

“Who said that textbooks are boring? This is one of the few textbooks written that is comprehensive, interesting, and ground-breaking.”

–John Hadjimarcou, University of Texas, El Paso

“The single most impressive aspect is a fresh approach! It is really nice to see the integration amongst topics.”

–Melissa Malabad, Mary Baldwin College

“This is not an international business text with marketing stuff in it. . . . It resembles the textbook that I have wanted to adopt but have not seen . . .”

–Brent Smith, Saint Joseph’s University

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iNCREDIBLE VALUE

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Chapter 1: Introduction to International Marketing 3

IN THIS CHAPTER

Opening Vignette: Facebook .com: Global Marketing Opportunities and Connectivity

OverviewThe Worldwide MarketplaceTypes of Global BusinessesCompany OrientationThe Essence of Marketing

The Marketing MixMarkets, Needs, and WantsSegmentation, Target Markets,

and Positioning (STP)Marketing in an International

ContextThe Drivers of Globalization

Channels of CommunicationLower Transportation CostsImmigration and EmigrationGovernmental Actions

The Factors That Create International Marketing Complexity

CultureLanguagePolitical and Legal SystemsEconomic SystemsInfrastructureImplications

International Marketing in Daily Life

Drivers of Globalization: An Illustration

Factors That Create International Marketing Complexity: An Illustration

The International Marketing Context

The Organization of This Book

Part I: Essentials of International Marketing

Part II: International Markets and Market Research

Part III: International Product Marketing

Part IV: International Pricing and Finance

Part V: International Place or Distribution

Part VI: International Promotion and Personal Selling

Sustainability and the Bottom-of-the-Pyramid

SustainabilityBottom-of-the-Pyramid

Ethical Decision-Making and International Marketing

Strategic ImplicationsTactical ImplicationsOperational ImplicationsTermsReview QuestionsDiscussion QuestionsAnalytical and Internet

Exercises

Case 1. Carrefour: Retailing in an International Marketplace

Facebook.com: Global Marketing Opportunities and Connectivity

What online community signs up 700,000 new members each day? The answer—Facebook.com. The Facebook community included 750 million followers by mid-2011.1 The founder, Mark Zuckerberg, was named Time magazine’s “Person of the Year” in 2010.

The statistics associated with Facebook take on nearly epic proportions. If Facebook users in January 2011 were members of a country, that nation would have the third highest population in the world, with only China and India ahead. One out of every twelve people on the planet has a Facebook account. And, in the world of Internet hits, one out of every four page views in the United States occurs on the Facebook site. Facebook has caused some dramatic shifts in everyday life, the core of which are new cultural patterns of interpersonal interactions. Marketing professionals have quickly moved into this realm along with the companies they serve.2

Many users around the world are familiar with the former Facebook.com opening page. As shown in the photo on page 5, the screen prominently displays the Facebook logo, an important element of its international marketing presence. To maintain interest, the content of the opening photos rotates, giving the website an evolving visual presence. Also, by being

VIDEO LINK 1.1: Facebook’s Impact

INTERNATIONALMARKETING

I dedicate this book to my parents, my wife, and especially to my grandmother Pauline Burns. The support she has provided me the past thirty-five years has been invaluable. Thanks, Nana.

—Daniel W. Baack

I dedicate this book to my parents, my wife, and my kids. For all the love and support, thanks to you all.

—Eric G. Harris

My efforts on this book are dedicated to my brothers: Steve Kepford, who has been a constant source of inspiration, and Drew (Charles) and Landis Burns, who welcomed me as family from the beginning.

—Donald Baack

INTERNATIONALMARKETING

DANIEL W. BAACK ERIC G. HARRIS DONALD BAACKPittsburg State UniversityUniversity of Denver Pittsburg State University

Copyright © 2013 by SAGE Publications, Inc.

All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the publisher.

All opinions expressed by the authors in this book do not necessarily reflect the opinions of SAGE. SAGE shall not be liable for any liability arising out of or related to any of the material contained in this book.

Printed in the United States of America

Library of Congress Cataloging-in-Publication Data

Baack, Daniel W.

International marketing / Daniel W. Baack, Eric G. Harris, Donald Baack.

p. cm.Includes bibliographical references and index.

ISBN 978-1-4522-2635-4 (cloth)

1. Export marketing. I. Harris, Eric G. II. Baack, Donald. III. Title.

HF1416.B32 2013658.8′4—dc23 2011049049

This book is printed on acid-free paper.

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Brief Contents

Preface xxv

About the Authors xxxii

Part I. EssEntIals of IntErnatIonal MarkEtIng 1

Chapter 1. Introduction to International Marketing 2

Chapter 2. Country Selection and Entry Strategies 36

Chapter 3. Global Trade and Integration 72

Part II. IntErnatIonal MarkEts and MarkEt rEsEarch 113

Chapter 4. Markets and Segmentation in an International Context 114

Chapter 5. International Positioning 156

Chapter 6. Market Research in the International Environment 190

Part III. IntErnatIonal Product MarkEtIng 225

Chapter 7. International Product and Brand Marketing 226

Chapter 8. International Product Standardization and Adaptation 262

Part IV. IntErnatIonal PrIcIng and fInancE 297

Chapter 9. International Pricing 298

Chapter 10. International Finance and Pricing Implications 334

Part V. IntErnatIonal PlacE or dIstrIbutIon 371

Chapter 11. International Marketing Channel Management 372

Chapter 12. International Distribution: Exporting and Retailing 406

Part VI. IntErnatIonal ProMotIon and PErsonal sEllIng 439

Chapter 13. Globally Integrated Marketing Communications 440

Chapter 14. International Sales Promotions and Public Relations 480

Chapter 15. International Personal Selling and Sales Management 512

Chapter 16. International Marketing Planning, Organization, and Control 548

Appendix A: Comprehensive Cases A-1

Appendix B: Notes B-1

Appendix C: Glossary C-1

Credits D-1

Name Index E-1

Subject Index F-1

Country Index G-1

Detailed Contents

Preface xxv

About the Authors xxxii

Part I. EssEntIals of IntErnatIonal MarkEtIng 1

Chapter 1. Introduction to International Marketing 2

Opening Vignette: Facebook.com: Global Marketing Opportunities and Connectivity 3

Overview 6The Worldwide Marketplace 6Types of Global Businesses 7Company Orientation 7The Essence of Marketing 9

The Marketing Mix 10Markets, Needs, and Wants 11Segmentation, Target Markets, and Positioning (STP) 12

Marketing in an International Context 12The Drivers of Globalization 13

Channels of Communication 13Lower Transportation Costs 14Immigration and Emigration 14Governmental Actions 15

The Factors That Create International Marketing Complexity 15Culture 16Language 16Political and Legal Systems 17Economic Systems 18Infrastructure 19Implications 20

International Marketing in Daily Life 21Drivers of Globalization: An Illustration 22Factors That Create International Marketing Complexity:

An Illustration 23The International Marketing Context 24

The Organization of This Book 24Part I: Essentials of International Marketing 26Part II: International Markets and Market Research 26

Part III: International Product Marketing 26Part IV: International Pricing and Finance 27Part V: International Place or Distribution 27Part VI: International Promotion and Personal Selling 28

Sustainability and the Bottom-of-the-Pyramid 28Sustainability 28Bottom-of-the-Pyramid 29

Ethical Decision-Making and International Marketing 30Strategic Implications 31Tactical Implications 31Operational Implications 31Terms 32Review Questions 32Discussion Questions 32Analytical and Internet Exercises 33Case 1. Carrefour: Retailing in an International

Marketplace 34

Chapter 2. Country Selection and Entry Strategies 36

Opening Vignette: Teens and Jeans: Clothing in Transition 37Overview 39Economic Systems 40

Market Economy 40Command Economy 41Mixed Economy 42

Economic Development 42Most-, Less-, and Least-Developed Economies 43Rostow Modernization Model 44Emerging Markets 45Newly Industrialized Countries 46Transition Economies 46Effects on International Marketing 48Stage of Development and Bottom-of-the-Pyramid 49

Global Competition and National Competitive Advantage 49Demand Conditions 50Related and Supporting Industries 50Firm Strategy, Structure, and Rivalry 50Factor Conditions 51Government 51

Industry-Level Competitive Advantage 52Threat of New Entrants 52Threat of Substitute Products 52Bargaining Power of Suppliers 53Bargaining Power of Consumers 53Rivalry Among Competitors 54

Economic Forces and International Marketing 54Sustainability and International Marketing 55Modes of Entry 57

Exporting 58Licensing 58Franchising 59

Joint Ventures 60Strategic Alliances 60Wholly Owned Subsidiary 61Entry Mode Failure and Exit 63

Theories of Entry Mode Selection 63Internationalization Theory 63Internalization Theory 64Eclectic or OLI Theory 65Analysis 66

Strategic Implications 67Tactical Implications 67Operational Implications 67Terms 68Review Questions 68Discussion Questions 68Analytical and Internet Exercises 69Case 2. Mobile Communications: Entry Into Africa 70

Chapter 3. Global Trade and Integration 72

Opening Vignette: Kikkoman Soy Sauce: A Tradition of Trade 73

Overview 74Free Trade 75

Absolute Advantage 75Comparative Advantage 76The Benefits of Free Trade 79Governmental Policies Supporting Trade 80

Integration 81Levels of Integration 81Reasons for Integration Success 81Integration Trends 82

The World Trade Organization and Integration 83European Integration 86

The European Union 86Organization of the European Union 89Beefs Export in the European Union 90Other European Trade Organizations 91

Integration in the Americas 92North American Free Trade Agreement 92Southern Cone Common Market 93Andean Community 94Other Trade Organizations or Agreements 95

Integration in Asia, Africa, and the Middle East 96Association of Southeast Asian Nations Free Trade Area 96Asia-Pacific Economic Cooperation 97Trans-Pacific Strategic Economic Partnership Agreement 97South Asian Association for Regional Cooperation 98Beef Exports in Asia 99Integration in the Middle East and Africa 99

Protectionism vs. Free Trade 103Government Policies Limiting Trade 103

Arguments for Protectionism 104The Future 106

Legal and Ethical Issues 106Strategic Implications 108Tactical Implications 108Operational Implications 108Terms 108Review Questions 109Discussion Questions 109Analytical and Internet Exercises 109Case 3. DHL and Facilitating Small Business Trade 111

Part II. IntErnatIonal MarkEts and MarkEt rEsEarch 113

Chapter 4. Markets and Segmentation in an International Context 114

Opening Vignette: Musical Segmentation 115Overview 117Markets and Segmentation 118Culture 118

Origins of Culture 118Creating Cultural Consumption: Carnival 121

Culture and Values 122Applying Cultural Values to Marketing

Activities 122Value Levels 123

Culture and Behaviors 126Cultural Imperatives 126Cultural Electives 126Cultural Exclusives 127

Culture and Purchasing Behavior 127Aesthetics 127Religion 128Subcultures and Countercultures 130Cultural Change 130

The Nature of Markets 131The STP Approach 131

International Market Segmentation 131International Consumer Market Segments 132

Demographics 132Psychographics 134Geographic Area 135Geodemographic Segmentation 135Benefit Segmentation 135Consumer Types 136

Usage Segmentation 137International Business-to-Business

Market Segmentation 137Segmentation by Industry 138Segmentation by Size 138Geographic Location 138Product Usage 139

Customer Value 139Dual Channel Marketing 139

Regional and National Segmentation 140Wants and Needs 140Money to Spend 140Willingness to Spend 141Language 141Regionally Based Market Segments 142

Segmentation and the Bottom-of-the-Pyramid 142Products 143Pricing 143Delivery 144Promotion 144

Green Marketing and Sustainability-Oriented Segments 145Consumer Preferences 145Green by Necessity 145

A Market Segment Analysis 145Assessing Market Potential 146Assessment Criteria 147

Ethical Issues in International Segmentation 147Strategic Implications 149Tactical Implications 149Operational Implications 149Terms 150Review Questions 150Discussion Questions 151Analytical and Internet Exercises 151Case 4. Electrolux: Refrigeration and Segmentation 153

Chapter 5. International Positioning 156

Opening Vignette: The Wide World of Tea 157Overview 159The Nature of International Product Positioning 160Positioning Statements and Approaches 160

Product Attributes 160Competitors 161Use or Application 161Price-Quality Relationships 161Product User 162Product Class 162Cultural Symbol 163

International Positioning Objectives 163Brand Equity 164Brand Parity 164

International Product Positioning Challenges 165Changes in Technology 165Country-of-Origin Effects 166Regulations 169Packaging and Labels 170

International Positioning Methods 170Identify Target Markets 170Analyze Competition Within the Target Market 171

Identity Points of Difference 174Enhancing Position or Repositioning 177

Sustainability and International Positioning 180Ethical Issues in International Positioning 182Strategic Implications 183Tactical Implications 183Operational Implications 183Terms 184Review Questions 184Discussion Questions 185Analytical and Internet Exercises 185Case 5. TOTO: Positioning Plumbing

Products Globally 187

Chapter 6. Market Research in the International Environment 190

Opening Vignette: Focus on Cosmetics 191Overview 193Market Research 194The Scientific Method 194

Objectivity 194The Pace of Change 195

Types of International Market Research 195Product Research 195Pricing Research 196Promotion Research 196Distribution Research 197

The International Market Research Process 197

Defining the Problem or Situation 198Complete a Cost/Benefit Analysis 198Develop a Research Design 199

Secondary Data 199Primary Data 200Reliability and Validity 201Micro-Level Analysis 202Macro-Level Analysis 202Qualitative and Quantitative Research 204Qualitative Methods 204Quantitative Methods 206Online Research: A Hybrid Approach 209

Develop a Sample 209Sampling Issues in International Research 210Calculating the Sample Size 211

Collect Data 212Analyze and Interpret Data 213

Linguistic Problems 213Metric Equivalence Issues 213Socially Desirable Responses 214

Formulating Conclusions and Writing Reports 215Ethics and International Market Research 215Bottom-of-the-Pyramid and International Market Research 216Control of the International Market Research Process 216Strategic Implications 218

Tactical Implications 218Operational Implications 218Terms 218Review Questions 219Discussion Questions 219Analytical and Internet Exercises 220Case 6. The “Mobile You” Breathalyzer 221

Part III. IntErnatIonal Product MarkEtIng 225

Chapter 7. International Product and Brand Marketing 226

Opening Vignette: A Good Night’s Sleep 227Overview 229Types of Products 230Classifications of Products 230

Convenience Products 230Shopping Products 231Specialty Products 232

Product Dimensions 233International Product Mix Management 234

Product Lines and Mix 234Packaging 234Labeling 236

Sustainability and International Product Marketing 237International Business Products 237

Raw Materials 238Maintenance, Repair, and Operating Supplies 238Component Parts 238Accessory Equipment 239Business Services 239Process Materials 239Installations 239Distinctions Between Business and Consumer Products 239

Bottom-of-the-Pyramid International Product Marketing 240International Product Support Services 240International Services 241International Product Quality Standards 242

Quality Standards 243The Product Life Cycle 243

Development 244Introduction 245Growth 245Maturity 246Decline 246

Product Cycle Theory 247Market/Product Matrix 247

Market Penetration 248Product Development 248Diversification 248Market Development 248Implications 249

International Brand Management 249Family and Individual Branding 250

Brand and Product Line Extensions 250Cobranding 250

Building Powerful International Brands 251Brand Awareness 251Brand Meaning 252Brand Loyalty 252Double Jeopardy 253Brand Valuation 253Implications for Managers 253

Ethical Issues in International Product Marketing 254Strategic Implications 256Tactical Implications 256Operational Implications 256Terms 257Review Questions 257Discussion Questions 257Analytical and Internet Exercises 258Case 7. Interface: Prize-Winning, Sustainable Modular Flooring 260

Chapter 8. International Product Standardization and Adaptation 262

Opening Vignette: McDonald’s Global Expansion: Adaptation and Differences in Taste 263

Overview 265Legal Systems 266International Intellectual Property

Protection 266Intellectual Property Piracy 267Corporate Spying 267Reverse-Engineering 268Country Development 268

International Dispute Resolution 269Jurisdiction 270Methods of Dispute Resolution 270Marketing Implications 272

Standardization 272Service Standardization 274

Adaptation 274Laws and Adaptation 275

Adaptation of Services 277Service Quality 278Adaptation and Service Quality 279

Music: Legal Systems, Standardization, and Adaptation 279

Legal Adaptation 280Combining Standardization and Adaptation 282

The Product and Communication Adaptation Model 282

Sustainability and Adaptation 284Global Innovation 285

Types of Adopters 286Global Product Diffusion 287

New Product Development and the Bottom-of-the-Pyramid 288

Ethical Issues in Standardization and Adaptation 288Ethics and Laws 288

Strategic Implications 289Tactical Implications 289Operational Implications 289Terms 290Review Questions 290Discussion Questions 290Analytical and Internet Exercises 291Case 8. AB InBev: Adapting Beer Products in Global Markets 292

Part IV. IntErnatIonal PrIcIng and fInancE 297

Chapter 9. International Pricing 298

Opening Vignette: Wind Turbines in Finland: Pricing Sustainability and Economic Incentives 299

Overview 301The Nature of Price 302

International Prices 303Price and Perception 303

Value Considerations 303Emotional Factors 305Situational Factors 305

International Pricing Methods 306Cost-Based Pricing 307Demand- /Supply-Based Pricing 309Competition-Based Pricing 313Competition-Based Price Setting for New Products 314Profit-Based Pricing 315International Consideration in Pricing Goals 317Pricing to Bottom-of-the-Pyramid Consumers 319

International Pricing Discounts 321Loss Leader 321Seasonal Discounts 322Quantity Discounts 322Early-Payment Discounts 323Channel Discounts 323

Price Changes in International Markets 323Price Reductions 324Price Increases 324Weber’s Law 325

Ethical Issues in International Pricing 326Collusion 326Predatory Pricing 326Deceptive Pricing 326Dumping 327

Strategic Implications 328Tactical Implications 328Operational Implications 328Terms 329Review Questions 329Discussion Questions 329

Analytical and Internet Exercises 330Case 9. LaPoste: Pricing Banking Services 332

Chapter 10. International Finance and Pricing Implications 334

Opening Vignette: Pricing ArcelorMitall Steel Globally: The Effects of Currency Changes 335

Overview 337International Products 338Money and Currency 338

Currency 338International Finance 341

Capital Markets 341The Financing of Transactions 342

The Nature of Currency Exchange 342Computing Exchange Rates 343

Factors That Affect Currency Movement 344Individual and Business Transactions 345Trade and Investment Activity 346Trade Deficits 348Inflation 349Interest Rates 350

The Law of One Price and Purchasing Power Parity 350Purchasing Power 351Purchasing Power Parity 351

Governmental Activity and International Finance 353Currency Regimes 353

Global Currency Institutions 355Managing Currency Risk 357

Predicting Currency Risk 357Hedging Currency Risk 358

The Basics of International Finance Funding 358Financing Ongoing Trade Operations 359Internal Pricing 361

International Finance and International Marketing 361Markets 361Products 362Prices 362Place (Distribution) 364Promotion 364

Strategic Implications 365Tactical Implications 365Operational Implications 365Terms 366Review Questions 366Discussion Questions 366Analytical and Internet Exercises 367Case 10. Microfinance and Bottom-of-the-Pyramid Consumers 368

Part V. IntErnatIonal PlacE or dIstrIbutIon 371Chapter 11. International Marketing Channel Management 372

Opening Vignette: Fruit Around the World 373Overview 375

International Marketing Channels 375International Marketing Channel Decisions 376Distribution Intensity 376Selection of Distribution Channels 377

Direct Marketing 378Indirect Channels 379Channel Length 381Selection Factors 381Standardization of Channel Structure 382Environmental Factors and International Marketing Channel Decisions 382Existing Channels 383Future Channels 383

Managing International Distribution Channels 384Establishing International Channel Strategies 385Selecting Intermediary Arrangements 386Gray Markets 387Making Channel Arrangements and Choosing Channel Partners 388Managing Channel Power 388Trust and Commitment in International Marketing Channels 390

Cross-Cultural Negotiation and International Marketing Channels 390Stages in the Negotiation Process 390Cultural Influences on Negotiations 392

International Marketing Channel Functions 394Research Market Needs 395Promote Products 395Order Processing 396Communicate With Channel Members 396Warehousing, Inventory Control, and Materials Handling 397Address Discrepancies of Assortment 397Secure Payment and Extend Credit 398Transportation 398

International Marketing Channel Structure 398Cost 398Coordination 399Coverage 399Cooperation 399Control 399

Strategic Implications 401Tactical Implications 401Operational Implications 401Terms 401Review Questions 402Discussion Questions 402Analytical and Internet Exercises 402Case 11. JDA Software Services 404

Chapter 12. International Distribution: Exporting and Retailing 406

Opening Vignette: Exporting and the Business-to-Business Market: Alibaba.com 407

Overview 409Exporting Choices 409

Internal Reasons for Exporting 410External Reasons for Exporting 412

Market Selection 413Export Entry Modes 413

Home-Based Direct Exporting 414Foreign-Based Direct Exporting 414Indirect Exporting 415

Pricing Exports 416Exporting Documentation 416

Regulations and Documentation 417Export and Import Licenses 417Financing 417

Physical Distribution 419Materials Handling 419Inventory Location 419Inventory Control 420Order Processing 422Methods of Transportation 422Sustainability and International Distribution Systems 425Radio Frequency Identification Development and International

Transportation 425International Distribution and the Bottom-of-the-Pyramid 426Terrorism and International Marketing Channels 427

International Marketing Channels and Utility 427International Retailing 428Types of International Retail Outlets 429

Convenience Stores 429Supermarkets 429Hypermarkets 429Open Air Markets and Bazaars 430Department Stores 430Discount Stores 430Specialty Stores 431Online Retailing 431The Future 432

Strategic Implications 433Tactical Implications 433Operational Implications 433Terms 434Review Questions 434Discussion Questions 434Analytical and Internet Exercises 435Case 12. Tesco Targets China 436

Part VI. IntErnatIonal ProMotIon and PErsonal sEllIng 439

Chapter 13. Globally Integrated Marketing Communications 440

Opening Vignette: Advertising Jewelry 441Overview 443The Communication Process 444

Individual Interpersonal Communications 444Barriers to Communication 445Overcoming Barriers to Communication 450Communicating Marketing Messages 450

International Advertising Management 451Establish International Advertising Objectives 452Create an International Advertising Budget 452Choose an Advertising Agency 453Oversee the Advertising Program 454Media Selection Factors 456Assess Advertising Effectiveness 457

Standardization or Adaptation 458International Law and Globally Integrated Marketing Communications 459Message Design: Types of Appeals 459

Cultural Paradoxes 462International Advertising Appeals 463

Advertising Executional Frameworks 466Traditional Executional Frameworks 467International Executional Frameworks 468

Alternative Marketing Programs 470Buzz Marketing 471Guerilla Marketing 472Product Placements and Branded Entertainment 473Lifestyle Marketing 473

Ethical Issues in International Advertising 474Strategic Implications 476Tactical Implications 476Operational Implications 476Terms 477Review Questions 477Discussion Questions 477Analytical and Internet Exercises 478Case 13. Mobile Phone Marketing 479

Chapter 14. International Sales Promotions and Public Relations 480

Opening Vignette: Marketing Headaches 481Overview 483

Sales Promotions and the Communication Process 483International Sales Promotions 484

Push vs. Pull Strategies 484International Consumer Promotions 485

Coupons 487Premiums 488Bonus Packs 488Contests and Sweepstakes 489Rebates 490Price-off Promotions 490Sampling 491Social Media and Consumer Promotions 492Legal Issues in Consumer Promotions 493Types of Consumers and International Consumer Promotions 493Consumer Promotions and Bottom-of-the-Pyramid Consumers 494

International Trade Promotions 494Trade Shows 494Trade Allowances 495

Cooperative Advertising 497Trade Contests 497Training Programs 497Point-of-Purchase Materials 497Challenges 498

International Sales Promotions Campaign Management 498Consumer Promotions 500Trade Promotions 501

International Public Relations 502Channel Members 502Addressing Negative Publicity and Events 502Positive Publicity and Image-Enhancing Events 503Social Media and Public Relations 505Marketing Implications 506

Strategic Implications 507Tactical Implications 507Operational Implications 507Terms 508Review Questions 508Discussion Questions 508Analytical and Internet Exercises 509Case 14. Nestlé, S.A. 510

Chapter 15. International Personal Selling and Sales Management 512

Opening Vignette: International Personal Selling and Real Estate: Complications and Opportunities 513

Overview 515The Nature of Personal Selling 515

Retail Selling 516Business-to-Business Personal Selling 516

Culture and International Personal Selling 517Cultural Context 517Time and Cultural Context 518Individualism/Collectivism 518Transactions vs. Relationships 518Business Etiquette 519Cultural Adaptation 522

International Business-to-Business Selling 523Prospecting 523Preapproach 524Approach 525Presentation 526Negotiation 526Handling Objections 528Closing 528The Follow-Up 530

International Sales Force Composition 530Technology and International Sales

Force Composition 531Sales Teams 532

Foreign Language Skills and International Sales 532International Sales Force Management 533

Recruiting and Selection 533

Training 534Motivation 535Evaluation 538

Compensation 540Salary 540Commissions 540Salary Plus Commission 541Bonuses 541Benefits and Allowances 541

Repatriation 542Repatriation Knowledge Acquisition 542Management Issues 542

Strategic Implications 544Tactical Implications 544Operational Implications 544Terms 545Review Questions 545Discussion Questions 545Analytical and Internet Exercises 546Case 15. Oriflame and the Indian Marketplace 547

Chapter 16. International Marketing Planning, Organization, and Control 548

Opening Vignette: Nintendo: Marketing Strategies in a Turbulent Environment 549

Overview 551International Marketing and Strategic Planning 551

International Marketing Efficiency and Effectiveness 552Planning Levels 552International Strategic Planning 553

International Marketing Organization 556Organizational Structures 556Internal Factors and Organizational Design 561External Factors and Organizational Design 563

International Marketing Tactics and the Marketing Plan 564The International Marketing Plan 565Planning Tactics and Strategic Plans 566

Internal Marketing Communications 566International Internal Communications 566Formal Communication in Global Companies 566Barriers to International Formal Communications 568Overcoming Barriers to Formal Communications 569

International Marketing Control 570Control Measures 571Corrections 571

Emerging Trends in International Marketing 573Technological Issues 573Cultural Issues 574Economic Issues 575Emerging Markets Ascending 577Bottom-of-the-Pyramid 578

Strategic Implications 579Tactical Implications 579Operational Implications 579

Terms 579Review Questions 580Discussion Questions 580Analytical and Internet Exercises 581Case 16. Virgin Galactic and Space Travel 582

Appendix A: Comprehensive Cases A-1

Case 1. Alpen Bank: Launching the Credit Card in Romania A-1

V. Kasturi Rangan and Sunru Yong

Case 2. United Cereal: Lora Brill’s Eurobrand Challenge A-8

Christopher A. Bartlett and Carole Carlson

Case 3. Clayton Industries: Peter Arnell, Country Manager for Italy A-17

Christopher A. Bartlett and Benjamin H. Barlow

Case 4. Best Buy Inc.: Dual Branding in China A-29

R. Chandrasekhar

Case 5. La Hacienda del Sol A-43

Neeta Khera

Case 6. Dabur India A-50

Manish Khandelwal

Appendix B: Notes B-1

Appendix C: Glossary C-1

Credits D-1

Name Index E-1

Subject Index F-1

Country Index G-1

Preface

“Marketing is marketing, no matter where you are. There is still a marketing mix. The focus continues to be on creating value for customers and building relationships with them. It just becomes a great deal more complicated when you operate on an international scale.” This observation by a noted international marketing instructor succinctly summarizes the challenges international marketers face. Globalization, technological advances, economic upheaval, political shifts, and cultural trends are transforming society at an escalating rate. In this ever-changing global environment, the field of marketing must continually adapt to remain on the cutting edge.

Communicating the complexities and nuances of marketing on an international scale in a single course can be a daunting task for instructors. Students taking this course also face a unique set of obstacles. We believe many international marketing textbooks currently available complicate these challenges by focusing too much on international business in the first portion of the book and then introducing marketing topics later on. Instead of segregating the two topics, we concluded that a better approach would be to present marketing in an international context. We wrote this book out of our desire to help resolve some of the issues confronting both students and professors.

Market and CourseThe textbook is for undergraduate courses in international marketing. It also can be used in undergraduate international business courses and in topical international marketing courses at the MBA level.

Instructor ChallengesThe international marketing course is typically taught by either a marketing instructor or a business instructor. Marketing instructors, including Daniel Baack, the lead author on this book, often find the standard international marketing textbook to be fairly daunting, especially the opening chapters, which are typically packed with international business concepts. The pages are filled with charts, tables, and statistics that can overwhelm the reader. This group of instructors may be inclined to gloss over these topics and move quickly to the more standard marketing materials presented. When international business instructors teach the course, they may be more inclined to focus on international business concepts and are tempted to cover marketing material in less depth.

In essence, neither the needs of the marketing instructor nor the needs of the business instructor are met by the currently available textbooks. Our book utilizes an integrated framework designed to cover both the international business and the

xxvi International Marketing

marketing concepts found in traditional international marketing textbooks in a new and integrated way, meeting the wants of both types of instructors.

Student ChallengesStudents encounter several major challenges when taking an international marketing course. First, many students will have been exposed to only one of two topics areas. Some students may have already taken international business courses but have had little exposure to marketing. Other students may have backgrounds in marketing but an international marketing course might be their first and only exposure to international business. In essence, students taking this course may have little experience in marketing, international business, or both. We have endeavored to present the material in a manner that engages and reaches all three groups of students.

To assist students in learning the concepts, each chapter opens with a figure that integrates five key international business elements with the main elements in marketing. The figure provides students with a visual illustration of the connections between the marketing elements presented in the chapter with the most closely associated international business issues.

Some students may struggle when trying to integrate marketing concepts with international business concepts. The textbooks that begin with an overview of international business and then discuss marketing may worsen this problem by segregating the two topics and diluting the marketing focus. To help overcome this obstacle to learning, we outline the differences and similarities in domestic and foreign markets while maintaining a strong focus on core marketing concepts. This assists in understanding how to conceptualize the international marketing process.

The third complication some students face can be either ethnocentrism or a degree of naïveté. We try to overcome these impediments to learning with careful attention to the nature of culture and the cultural nuances of countries around the world. Our goal is to expand student awareness and understanding along with acceptance and appreciation of business practices in other parts of the world. We have created features and selected photographs designed to help students engage more deeply with the chapter materials. The International Incident boxes challenge students to make ethical or cultural decisions in international situations. The International Marketing in Daily Life boxes reveal how products they use in their everyday lives are impacted by global marketing.

Our ApproachWe have backgrounds in marketing, international business, brand management, consumer behavior, market research, management, and marketing communications. We hope our academic and professional experiences and areas of expertise helped us to design a textbook that provides an important and fresh contribution to the field of international marketing. There are several primary differences and advantages between our book and the books currently available: core marketing concepts are integrated with international business principles, an emphasis on bottom-of-the-pyramid markets, and the incorporation of sustainability concepts.

INTEGRATED APPROACH

As noted, in this book we utilize an integrated framework that combines marketing concepts and international business concepts. This integrated approach was designed to ameliorate

Preface xxvii

the challenges that students and instructors face. To do so, five key international business principles are defined in the opening chapter of the text:

• cultural differences

• language differences

• political and legal differences

• economic differences

• technological/operational differences

These concepts are placed into a figure along with the five key marketing elements: markets, products, prices, distribution (place), and promotion. The figure reappears in each chapter, noting when each will be given special emphasis as the topics are presented. Next the text moves directly into the primary marketing areas (markets and the 4 Ps) and concludes with operational, organizational, and managerial issues. International business concepts are presented in depth at points in which they have the greatest value in demonstrating international marketing concepts.

BOTTOM-OF-THE-PYRAMID

One major international target market consists of individuals who earn less than $2 per day. The bottom-of-the-pyramid segment is large and increasingly relevant to international marketing scholars and practitioners. The relatively untapped nature of the market appeals to many international companies. We argue that targeting this group of 4 billion people is viable and could lead to more efficient processing and innovations. We have incorporated issues associated with reaching this group in each chapter throughout the book.

SUSTAINABILITY

Sustainable business practices are of growing significance. Many students express strong interests in the topic. Sustainability issues are noted in the text, in various chapter-opening vignettes, and in end-of-chapter cases. We also link sustainability to bottom-of-the-pyramid marketing because these two crucial forces have generated a dramatic impact on globalization and international marketing programs. Successfully targeting the bottom-of-the-pyramid segment often necessitates the incorporation of business practices that emphasize sustainability. The synthesis of these themes provides a rich context for the exploration of international marketing concepts.

FeaturesTo help students think critically about the concepts and principles provided throughout the text, we developed a series of features designed to reinforce learning and help maintain reader interest.

OPENING VIGNETTES

The chapters begin with presentations about companies with an international marketing presence or about widely-used products such as aspirin and fruit. Each vignette effectively sets the stage for the chapter material. Three questions then are posed to help students reflect on the company and prepare them to read about and discuss the issues that follow in the chapter materials.

xxviii International Marketing

INTERNATIONAL INCIDENTS

Each chapter contains brief boxes that describe an unusual event or challenge that arises in a specific international setting. Each hypothetical scenario is accompanied by discussion questions in a “What would you do?” type of approach. This helps foster critical thinking and prepares students for situations that will come up as they work in a global economy.

INTERNATIONAL MARKETING IN DAILY LIFE

Throughout the text, we note that many international marketing efforts deal with products that are not “sexy” or high-tech. In fact, items as mundane as toothbrushes, headache remedies, and toilets represent approachable markets for international companies. The incorporation of these products as illustrations helps explain how marketing works on a global scale when seeking to sell everyday life products, recognizing that the same concepts often apply to more glamorous and sophisticated items.

STRATEGIC, TACTICAL, AND OPERATIONAL IMPLICATIONS

This book does not provide the standard summary section at the end of each chapter. Instead, each chapter’s materials will be reviewed under three headings: Strategic Implications, Tactical Implications, and Operational Implications. Strategic implications allow students to a integrate materials at the conceptual level, typically at the level of decision making directed by a company’s CEO and top management teams. Tactical implications link strategic concepts to the various marketing functions, such as advertising, personal selling, and creating promotions. Operational implications explain the practical implementation of the various international marketing tools at the individual level, such as how a program might affect an individual salesperson in a retail store. This approach not only summarizes the materials but also integrates analytical thinking with actual marketing practices.

END-OF-CHAPTER RESOURCES

We created end-of-chapter resources for several reasons. We wanted to give students the opportunity to assess their understanding of the chapter, apply ideas and concepts in various settings, use mathematical and statistical methods when applicable, generate discussion, and analyze a case. Each chapter concludes with the following:

Terms. Each bolded key term defined in the text is presented in the same order each appears in the chapter to help students both review the chapter and reexamine the terms to make sure they understand them.

Review Questions. Brief questions were written for each chapter to help students quickly summarize and test their comprehension of what they have read in the chapter. These questions appear in the order that chapter concepts have been presented and are designed to highlight and test the primary points, concepts, and definitions addressed in the chapter.

Discussion Questions. These items can be used for individual analyses of marketing management concepts or to guide in-class conversations. Some of the questions require students to apply the mathematical and statistical models and formulas they have learned about in the chapters.

Analytical and Internet Exercises. Completing these exercises provides students with the opportunity to apply what they have learned in the chapter. The items are often web-based assignments that challenge students to use their analytical skills.

Preface xxix

Cases. Each chapter concludes with a brief case designed to illustrate the major concepts in the chapter. Case questions can be used for class discussion or completed as an assignment.

Comprehensive Cases. Six comprehensive cases provided at the end of the book spotlight various international companies. The cases are designed to challenge students’ abilities. They require an in-depth analysis and synthesis of the case material with textbook material. The cases are also accompanied by questions that lead students to apply knowledge across multiple chapters.

BOOK DESIGN

We hope you agree that this book is visually exciting. Our thanks to Ryan Kuo from clearspace.tw for his willingness to share pictures from his many global travels. By incorporating photographs and advertisements from around the world, we believe the text comes alive. We hope the colorful and meaningful graphs, tables, and photos will appeal to the visual learner.

AncillariesFOR THE INSTRUCTOR

The password-protected Instructor Teaching Site available at www.sagepub.com/baack gives instructors access to a full complement of resources to support and enhance their course. The following assets are available on this site:

• An author-created Test Bank contains multiple-choice, true/false, short-answer, and essay questions for each chapter. The test bank is provided on the website in Word format as well as in an electronic format that can be exported into popular course management systems such as Blackboard or WebCT.

• The book’s authors also developed PowerPoint slides for each chapter. They can be used for lecture and review. Slides are integrated with the book’s distinctive features and incorporate key tables, figures, and photos.

• Video Resources vividly illustrate key information in each chapter. Video icons are strategically placed within the textbook to indicate where a video resource is available on the companion site. These links allow both instructors and students to access videos directly related to the content.

• Full-text SAGE Journal Articles accompany each chapter, providing extra commentary and analysis on important topics from SAGE’s marketing journals.

• Answers to End-of-Chapter and Discussion Questions provide valuable tools for facilitating classroom discussions.

• Suggested Class Assignments offer instructors a wide range of group and individual activities designed to enhance student learning.

• Learning Objectives and Chapter Outlines from the book provide an essential teaching and reference tool.

• Sample Course Syllabi for quarter and semester systems include suggestions for structuring an international marketing course.

• Country Fact Sheets provide detailed information and unique facts about various countries highlighted in the text.

xxx International Marketing

FOR THE STUDENT

The open-access Student Study Site available at www.sagepub.com/baack is designed to maximize student comprehension of international marketing and to promote critical thinking and application. The following resources and study tools are available on the student portion of this book’s website:

• Flashcards reiterate key chapter terms and concepts.

• Self-quizzes include multiple-choice and true/false questions, allowing students to test their knowledge of each chapter.

• Learning Objectives and Chapter Outlines from the book provide an essential study tool.

• Video Resources vividly illustrate key information in each chapter. Video icons are strategically placed within the textbook to indicate where a video resource is available on the companion site. These links allow both instructor and student to access videos directly related to the content.

• Full-text SAGE Journal Articles accompany each chapter, providing extra commentary and analysis on important topics from SAGE’s marketing journals.

• Interactive Maps allow students to increase their knowledge of geography and engage with course content in a dynamic and meaningful way.

• Country Fact Sheets provide detailed information and unique facts about various countries highlighted in the text.

• Guidelines for Developing an International Marketing Plan are included.

AcknowledgmentsThere are many persons who have assisted us in the development of this book. We would first like to acknowledge our executive editor Lisa Shaw for her tremendous support and enthusiasm. We are very grateful to Deya Saoud Jacob for her initial interest in signing this project and for her later editorial work. A special word of appreciation goes to Maggie Stanley for her assistance, as well as to Theresa Accomazzo. We would also like to note the work of Helen Salmon with regard to marketing the book.

We would like to thank the following individuals who assisted in the preparation of the manuscript through their careful and thoughtful reviews:

Mark Young, Winona State University

Ruth Lesher Taylor, Texas State University

Yun Chu, Robert Morris University

Laurie Babin, University of Louisiana at Monroe

Brent Smith, Erivan Haub School of Business, St. Joseph’s University

Douglas Hausknecht, University of Akron

John Gironda, Florida Atlantic University at Boca Raton

William Lesch, University of North Dakota

Eric C. Wittine, John Carroll University

Xueming Luo, University of Texas at Arlington

Nicholas Didow, University of North Carolina at Chapel Hill

Mark Burgess, Rider University

David Crain, Whittier College

Preface xxxi

Catherine E. N. Giunta, Seton Hill University

John Hadjimarcou, University of Texas at El Paso

Ron Lennon, University of South Florida at Tampa

Melissa Huffman Malabad, Mary Baldwin College

Mary Lee Stansifer, University of Colorado at Denver

Loy Watley, Nebraska Wesleyan University

Fekkri Meziou, Augsburg College

Ken Fairweather, Letourneau University

Finola Kerrigan, King’s College, London

Robert A. Lupton, Central Washington University

Mark Mitchell, Coastal Carolina University

Ben Oumlil, Western Connecticut State University

Al Rosenbloom, Dominican University

Mee-Shew Cheung, Xavier University

Andrew C. Gross, Cleveland State University

Donald Hsu, Dominican College

George V. Priovolos, Hagan School of Business, Iona College

Finally, Daniel Baack would like to thank his father Donald for inviting him to work on this project. It has been memorable and enjoyable, and has led to much learning about writing. He will always be grateful for the opportunity to publish a book with his dad; it was a once-in-a-lifetime experience. Thanks also to Eric G. Harris for making this such an enjoyable process. Daniel would also like to thank his mother and grandmother for their support, as well as his three great kids, Andy, Emilee, and Jason. His close friends Jason, Dan, Ben, and Ed, and his brother David provided a valuable stress release throughout the process. His talented brother-in-law, Ryan (Chih-Kuo) Kuo, provided many of the wonderful pictures used in the book. Thanks to him, and Daniel’s wife’s family, for their support. The support of individuals at the University of Denver has also been invaluable, including Carol Johnson, Donald Bacon, and, of course, Gloria Valdez. His graduate assistant, Julia Mariano, provided key last minute contributions.

Eric G. Harris would like to thank both co-authors, Donald Baack and Daniel Baack, for their cooperation and for including him on this project. He would like to thank his two children, Christian and Sydney, for their patience and support. He would also like to thank Paula Palmer, administrative specialist, for her assistance with his many work assignments. Finally, he would like to thank his mentor, Dr. John Mowen, for his guidance throughout his career.

Donald Baack would like to thank his son Daniel for convincing him to make this journey. Eric and Dan made this an extremely enjoyable project. It has turned into a wonderful learning experience and resulted in some great times while completing the manuscript. He would also like to thank his graduate assistant, Matt Carr, and the office staff, including the student workers in his department at Pittsburg State University, for the help they have given. He would also like to acknowledge his other two children, Jessica and David, and his grandchildren, Rile, Danielle, Andy, Emilee, Jason, Tatum, Damon, Joe, and Tommy.

We would like to especially thank our wives, Yen-Wen Kuo, Tara Harris, and Pam Baack, for being patient and understanding during those times when the work seemed monumental. They have been wonderful partners to us over the years.

About the Authors

Daniel W. Baack is an assistant professor of marketing and director of the Integrated Marketing Communications Program at the Daniels College of Business at the University of Denver. Previous positions include Ball State University and Saint Louis University, where Professor Baack received his Ph.D. in international business and marketing.

Professor Baack has published academic research in the Journal of Advertising, Journal of Advertising Research, Journal of International Management, European Journal of Marketing, Journal of Business Research, International Business Review,

Journal of Product and Brand Management, International Journal of Commerce and Management, Journal of Electronic Commerce Research, and the International Journal of Emerging Markets. He serves on the editorial board of the Journal of Promotion Management.

Professor Baack is an active member of the Academy of International Business, having attended all but one conference since 2003. When not writing or traveling internationally, Professor Baack stays busy with his Taiwanese wife and their three joint ventures (or children). He also enjoys playing and watching basketball, particularly while in foreign countries.

Eric G. Harris is chair and associate professor in the Department of Management and Marketing at Pittsburg State University. He has also served on the faculty at the University of South Florida. He has B.B.A. and M.B.A. degrees from Pittsburg State University, and a Ph.D. in marketing from Oklahoma State University.

Dr. Harris’s academic work has appeared in journals such as Journal of the Academy of Marketing Science, Journal of Advertising, Journal of Business Research, Psychology & Marketing, Journal of Personal Selling & Sales Management,

Journal of Services Marketing, Journal of Business & Psychology, Journal of Consumer Marketing, and others. He has also contributed to the Wiley International Encyclopedia of Marketing. He also serves on the editorial review boards for Journal of Business Research, Journal of Marketing Theory and Practice, Journal of Services Marketing, and Services Marketing Quarterly, and also serves as a consulting editor for the Journal of Managerial Issues.

In addition to International Marketing, Dr. Harris has also published CB “Consumer Behavior” with Cengage Learning (4LTR Press), which is co-authored with Barry

xxxiiiAbout the Authors

Babin. He is affiliated with a number of professional associations, including American Marketing Association, The Academy of Marketing Science, Society of Marketing Advances, and Marketing Management Association, and others.

Donald Baack holds the rank of university professor of management at Pittsburg (Kansas) State University. He previously held positions at Southwest Missouri State University, Missouri Southern State College, and Dana College. Baack received his Ph.D. from the University of Nebraska.

Professor Baack is a consulting editor and has published in the Journal of Managerial Issues. He has also published in the Journal of Advertising Research, Journal of Euromarketing, Journal of Nonprofit and Public Sector Marketing, Journal of Customer Service in Marketing, Journal of Professional Services

Marketing, Journal of Ministry Marketing and Management, Journal of Business Ethics, Journal of Global Awareness, Human Relations, and Journal of Management Inquiry.

Dr. Baack has authored International Business (Glencoe/McGraw-Hill) and Organizational Behavior (Dame). He co-authored Integrated Advertising, Promotion, and Marketing Communications (Prentice Hall), Marketing Management (Sage), and The Concise Encyclopedia of Advertising (Haworth) with Kenneth D. Clow. He also has published three popular press books in the area of romance/self-help.

Baack has been active in the Southwest Academy of Management. He was nominated for SWAM’s Distinguished Educator award in 2007, 2008, and 2010. He has been recognized as a Distinguished Alumnus at Lincoln (Nebraska) East High School and by Dana College.