International Marketing and Export Management Seventh Edition

Gerald Albaum University of New Mexico, USA

Edwin Duerr San Francisco State University, USA

Financial Times Prentice Hall is an imprint of

Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney • Singapore • Hong Kong Tokyo • Seoul • Taipei • New Delhi • Cape Town • Madrid • Mexico City • Amsterdam • Munich • Paris • Milan

Contents

Preface About the authors List of abbreviations Publisher's acknowledgements

xvii xxii xxiii xxviii

International marketing and exporting

1

Introduction Reasons why rapid growth in international business will resume Increasing competitive demands on business world wide Problems and needs Being effective: the nature and practice of international marketing /' Export marketing planning and strategy The Internet, the World Wide Web, and e-business The impact of technology Entrepreneurial approaches to international marketing The growth of non-traditional exports Purpose and approach of the book Appendix The worldwide recession of 2007-2010 Questions for discussion References Further reading Case study 1.1 Voice4u Case study 1.2 New United Motors Manufacturing Inc. Case study 1.3 Export of art goods from Hungary

2 7 14 17 21 33 42 48 51 54 60 61 63 64 68 68 70 87

ix

Contents

Case study 1.4 eBay, Inc. Case study 1.5 Dell, Inc. 2

3

4

88 93

Bases of international marketing

102

Introduction Potential benefits from export marketing International trade theories Export behavior theories and motives The development of export in the firm: internationalization stages Exporting and the network model Ethical/moral issues Social responsibility and the business environment

103 103 107 116

Summary Questions for discussion References Further reading Case study 2.1 BP Case study 2.2 Toyota Motor Corporation Case study 2.3 GlaxoSmithKline PLC

148 148 150 152 152 161 166

The international environment: culture; economic forces; and competition

174

Introduction Culture and.the socio-cultural environment Economic forces Competition

174 175 194 200

Summary Questions for discussion References Further reading Case study 3.1 Supreme Canning Company Case study 3.2 Ford Motor Company

204 205 205 207 208 211

The international environment: government, political and legal forces

217

Introduction Role of government Economic integration

217 218 242

Summary Questions for discussion

247 248

126 128 132 137

Contents

5

6

7

References Further reading Case study 4.1 Avon Products, Inc. (A) Case study 4.2 Woberg Company

248 250 250 260

Market selection: definition and strategies

262

Introduction Market definition and segmentation Market expansion/selection process, procedure, and strategy Foreign market portfolios: technique and analysis

263 268

Summary Questions for discussion References Further reading Case study 5.1 IKEA Case study 5.2 Seven-Eleven Japan Case study 5.3 Better Way Company Limited

302 303 304 306 307 312 318

Information for international market(ing) decisions

322

Introduction Sources of information Assessing market potential Export marketing research Using the Internet'and e-mail for data collection

323 327 335 339 359

Summary Questions for discussion References Further reading Appendix: Selected publications and websites providing secondary data Case study 6.1 SAN A/S Case study 6.2 Aquabear AB Case study 6.3 Ford Motor Company Latin America Case study 6.4 United Parcel Service, Inc.

360 361 361 364

Market entry strategies

391

Introduction Entry as a channel decision Importance of the entry decision Entry as a strategy

392 392 393 398

277 297

364 370 374 377 388

Contents

8

9

Factors influencing choice of entry mode Managing the channel Selecting the entry mode Using free areas

406 417 419 421

Summary Questions for discussion References Further reading Case study 7.1 Yang Toyland Pte, Limited Case study 7.2 Avon Products, Inc. (B) Case study 7.3 Klako Group Case study 7.4 Li and Fung Ltd

421 422 423 425 425 434 438 440

Export entry modes

442

Introduction Indirect export Direct export Foreign sales branch The Internet and e-commerce Gray market exporting Measuring performance

443 446 462 466 480 486 489

Summary Questions for discussion References, Further reading Appendix: Developing an export plan Case study 8.1 Sinova Management Consultancy Ltd. Case study 8.2 Quint Winery Case study 8.3 Nestle Case study 8.4 Urban Outfitters

491 492 492 495 496 498 500 504 509

Nonexport entry m o d e s

512

Introduction Alternative modes of entry Manufacturing facilities Assembly operations Strategic alliances Choosing between alternatives

513 515 517 532 535 554

Summary Questions for discussion

555 555

Contents

10

11

References Further reading Case study 9.1 Imagination Entertainment Case study 9.2 GG Farm Machinery Company Case study 9.3 VW in China Case study 9.4 Gloria Jean's Coffees Case study 9.5 Sonya Madden Case study 9.6 Wah Shing Toys

557 560 561 565 566 573 576 577

Product decisions

580

Introduction Product policy Product planning and development Product mix decisions Standardization vs adaptation Packaging Branding issues

581 581 583 605 616 625 630

Summary Questions for discussion References Further reading Case study 10.1 Daewoo Corporation Case study 10.2 Tata Motors and Tata Daewoo Case study 10.3 General Motors, GM Daewoo, and Hyundai / Case study 10.4 The Pampered Chef Case study 10.5 The internationalization of Chinese brands Case study 10.6 Royal Philips Electronics Case study 10.7 The Boeing Company

639 640 641 644 645 649

Pricing decisions

670

Introduction Determinants of an export price Fundamental export pricing strategy Relation of export to domestic price policies Exchange rate changes, currency issues, and hedging The price quotation Transfer pricing

671 673 688 695 702 707 713

Summary Questions for discussion

718 719

651 653 658 663 665

Contents

12

13

14

References Further reading Case study 11.1 RAP Engineering and Equipment Company Case study 11.2 The Capitool Company Case study 11.3 Strato Designs

719 721 722 723 728

Financing and m e t h o d s of payment

730

Introduction Export financing methods/terms of payment Payment/financing procedures Export credit insurance Countertrade

731 732 739 759 760

Summary

767

Questions for discussion

769

References Further reading Case study 12.1 Tainan Glass Manufacturing Company Case study 12.2 Arion Exports

769 770 771 772

Promotion and marketing communication

774

Introduction Export marketing promotion and communication decisions Alternative techniques of promotion Promotional programs and strategy Standardization or adaptation? Advertising transference Management issues

775 778 786 814 818 827 829

Summary Questions for discussion References Further reading Case study 13.1 Christa Clothing International Case study 13.2 Nove Ltd Case study 13.3 Eli's Cheesecake Company Case study 13.4 Kraft Foods

830 831 832 834 835 841 846 852

Supply chain management/logistics and handling export orders

854

Introduction

855

15

Handling the export order Physical distribution Logistics and the systems concept Structure of international physical distribution A concluding comment

859 863 868 876 906

Questions for discussion References Further reading Case study 14.1 Jaguar Electronics, Inc. Case study 14.2 Primex Marketing, Inc. Case study 14.3 EFI Logistics

906 907 908 908 912 918

Organization of international marketing activities

921

Introduction Main considerations of being organized internationally Organizational structures

922 923 929

Summary Questions for discussion References Case study 15.1 Hewlett-Packard (HP) Case study 15.2 Unilever (A) Case study 15.3 Unilever (B)

940 940 941 941 945 956

Glossary Index

959 974

,