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CHAPTER 19
NEW DIRECTIONS AND CHALLENGES
Chapter Outline
A. International Drivers—A Marketer’s External Environment
1. Demographics
2. Technology
B. The Marketer of the Future—Strategic Efforts
1. The Balance between Global and Local
Chapter Objectives
The chapter discusses the trends and environmental factors that will drive international marketing
Suggestions for Teaching
Since this is the last chapter, students would be familiar with the drivers that will require
considerable marketing attention. Divide the class into two groups. Allocate the drivers
Chapter Summary
A. International Drivers—A Marketer’s External Environment
1. Demographics
Demographic characteristics have long been a foundation for marketing opinions, and
trends in demography will remain critical to the future of marketing decisions.
Population numbers are affected by changes in life expectancy. Life expectancy is
increasing, and people have progressively more years to live.
The top 10 most globalized countries according to the Globalization Index 2010 are:
1. Hong Kong
2. Ireland
3. Singapore
Eight of these top 10 have land areas smaller than the state of Indiana in the United
States, with seven having fewer than nine million citizens. Mobility is key to such
globalization growth.
2. Technology
Technological development is today’s most critical man-made driver of the world.
New routes between and among countries and consumers that were basically
impassable or time-restrictive in the late twentieth century have been opened, creating
a death of distance with respect to how rapidly information is transferred around the
3. Culture
Culture is the result of learned behavior and adjustments to new conditions. Cultures
around the globe will become more similar with respect to macro issues such as
accountability, performance expectations, freedom accorded within society, and
product preferences. However, cultural clashes are expected at the micro level.
Cultural clashes are likely to occur, particularly with respect to religion.
4. Economic Development
The economy is an underlying hot spot in the growth and development of any
international enterprise. Without a doubt, the economic crisis that began in 2008
rocked the world dramatically! Individuals and nations alike were hit hard by the
collapse of financial markets.
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5. Natural Resources
A growing concern for planet Earth has prompted much interest and investment in the
world’s natural resources. Safeguarding the earth refers to protecting Earth’s people,
plants, animals, and natural systems. This global phenomenon is referred to in a
variety of contexts:
• Sustainable development
• Global warming
From a natural resource perspective, futurists predict that we will be stretching our
planet’s capacity by 2050. The concern about our natural resources and sustainability
has led to a variety of predictions for the future:
• Governments will attempt to put more land into grain production and also use tools
such as subsidies and price controls.
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6. Political and Legal
The globalization of markets has taken place against a backdrop of political instability,
and various perspectives on what is and is not legal. Looking ahead politically, the
United States witnessed a crucial presidential election in 2012. This process transpired
In a 2008 Delphi study, the authors identified terrorism as a critical dimension of
international business over the upcoming decade. Terrorism was seen as a facet of
international life that would have to be managed, even if it could not be defeated. An
extension of this study found the root causes of terrorism to be policies toward
immigration and the oftentimes dividing roles taken on by advocates of specific
religions, cultures, regions, or races. Consumers worldwide were willing to change
their consumption patterns if necessary for security considerations, and corporations
expressed an unwillingness to do business in countries that lacked law and order.
B. The Marketer of the Future—Strategic Efforts
1. The Balance Between Global and Local
“Think Globally, Act Locally” has long been the mantra in the marketing world. A
major driver behind the precarious balance between global and local has been
technology. In particular, the Internet has created a flat world. Customizing for local
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Marketers will continue to face pressure from a variety of stakeholders from both
governments and NGOs. Accounting systems will have to recognize and develop
procedures for calculating worldwide value and performance. Corporate responsibility
will be interpreted to include broad-based activities and profit sharing. Stakeholders
will demand greater involvement and will play a major role in the global image
building of the company. CSR will have to look at global impact because lapses in
ethics or social responsibility could affect brand equity in a major way.
2. Innovation
Innovation cannot be emphasized enough when it comes to the future of marketing.
Innovation has many meanings and areas of relevance—generating new ideas,
exploiting new ideas, creating higher-quality goods and services, sustaining growth,
and developing new knowledge are just several examples of what innovation can refer
to.
Eight different types of innovation have been identified:
• Disruptive innovation gets a great deal of attention and has its roots in
technological discontinuities.
Different types of innovation occur at different points during a product category’s life
cycle. Exhibit 18.5 maps these eight types of innovation onto the life cycle of a
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3. Collaborative Partnerships
Partnering with outside companies in the formulation and implementation of
customer-oriented, global marketing strategies is a necessity for companies in the
twenty-first century. Doing business in today’s economic times is the result of
4. Connecting with the World’s Customers
Historically, connecting with the customer meant that the company had one-way
communications (via advertising, packaging, and promotion). In today’s world,
Interactive digital media changes the landscape of a marketer’s world. Consumers
worldwide are now connected to companies in a variety of ways. Marketers and
consumers connect via:
• Company websites
• Videoconferencing, webinars, voice-over Internet protocol (VoIP), and podcasts
5. Technology-Based Marketing Research
Marketers will connect with consumers in ways almost unimaginable several years
ago. The marketing message has truly become a two-way communication stream, and
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marketers will be engaging in new and exciting ways of gathering information about
consumers.
An advancement that bodes well for the future of marketing research is video eye–
tracking technology. This technology tracks the eye’s movement as it views images on
a screen. From a marketing research perspective, the researcher can see what
consumers are really viewing when they see an advertisement, a package design, or
website. In the eye-tracking methodology, a person sits in front of a specialized
Researchers have preliminarily started using eye-tracking research to better
understand the impact of specific consumer technologies on advertising.
Using equipment to gauge consumer responses to stimuli opens the door for yet
Key Terms
Demographic divide: It is the measure of inequality in the population and health profiles
between rich and poor countries.
Death of distance: New routes between and among countries and consumers that were basically
impassable or time-restrictive in the late twentieth century have been opened, creating a death of
distance with respect to how rapidly information is transferred around the globe.
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Terrorism: Use of violence against civilians in order to attain goals that are political or religious
or ideological in nature.
Corruption: A major detractor with respect to business development and prosperity. It serves as
a major barrier to market entry as international organizations attempt to move goods and services
across borders.
1. What are the key drivers that today’s marketer has to understand in planning for the
international marketplace?
International marketers are constantly faced with global change. Thus, they need to identify
these changes and adapt their products accordingly to exploit the market in the future. The
major trends or drivers which marketers need to consider while planning for the international
marketplace are:
• Demographic: Widening of the demographic divide, increase in life expectancy, and
mobilization of the factors of production critically affect the future of marketing
decisions.
seamless communications between manufacturing processes and management.
• Culture: Although cultural similarities arise with time at the macro level, cultural clashes
will be quite prominent at the micro level. Cultural clashes are expected to occur
particularly in religion. Cocooning, as a cultural trend, was introduced in 2001.
• Economic development: The economic stimuli put into play by any one nation will
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2. Why have smaller countries been able to be some of the top globalized countries?
A total of eight out of ten most globalized countries according to the Globalization Index
2007 have land areas smaller than the state of Indiana in the United States, while seven
3. What is the role of each international driver in implementing each of the strategic efforts?
Answers may vary.
The balance between global and local strategies in a company has a huge impact on its’
organizational structure. With the cultural assimilation of consumers across the globe, a
4. Which of the international drivers and strategic efforts is likely to change more often and
rapidly?
Answers may vary.
Almost all the international drivers and the strategic efforts are instable. Amongst these, the
Internet Exercises
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1. Identify a global online retail commerce and describe how it (1) targets specific countries
and (2) engages the consumer in an interactive manner.
Answers may vary.
Shop.com is another leading online shopping mall. Shoppers can save money by searching
economical deals and availing free shipping. The site provides country-specific product
information for U.K., Canada, Japan, and Spain. The customer service section of this Web
site welcomes customer feedback and answers queries posted by them.
StrawberryNET is a leading online retail store for skincare, make up cosmetics, and
2. Identify five social networking sites and prepare a profile of the sites’ users in terms of
demographic characteristics (for example, gender, age, geographic location). How can an
international marketer use this type of information?
Answers may vary.
Social networking websites allow marketers to effectively target their audience by simply
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Students can use the Web 1.0 or Web 2.0 online research models to prepare a demographic
profile of the site users.
Appendix
FINDING YOUR CALLING: JOBS AND CAREERS IN INTERNATIONAL
MARKETING
Appendix Outline
A. Further Training