Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. International Marketing Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it. For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. International 10e Marketing Michael R. Czinkota Georgetown University Ilkka A. Ronkainen Georgetown University Australia(cid:129)Brazil(cid:129)Japan(cid:129)Korea(cid:129)Mexico(cid:129)Singapore(cid:129)Spain(cid:129)UnitedKingdom(cid:129)UnitedStates Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. InternationalMarketing,TenthEdition ©2013,2010South-Western,CengageLearning MichaelR.CzinkotaandIlkkaA.Ronkainen ALLRIGHTSRESERVED.Nopartofthisworkcoveredbythecopyright hereinmaybereproduced,transmitted,stored,orusedinanyformor SeniorVicePresident,LRS/Acquisitions& byanymeansgraphic,electronic,ormechanical,includingbutnotlimited SolutionsPlanning:JackW.Calhoun tophotocopying,recording,scanning,digitizing,taping,webdistribution, EditorialDirector,Business&Economics: informationnetworks,orinformationstorageandretrievalsystems,except ErinJoyner aspermittedunderSection107or108ofthe1976UnitedStatesCopyright ExecutiveEditor:MikeRoche Act,withoutthepriorwrittenpermissionofthepublisher. 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Foryourcourseandlearningsolutions,visitwww.cengage.com Purchaseanyofourproductsatyourlocalcollegestoreoratour preferredonlinestorewww.cengagebrain.com PrintedintheUnitedStatesofAmerica 1 2 3 4 5 6 7 16 15 14 13 12 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. To Ilona and Margaret Victoria—MRC To Susan, Sanna, and Alex—IAR Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. P R E F A C E Thank you for reading our book! Practicing international marketing and writing a text on the subject have much in common. The focus is on delighting the cus- tomer; it is a lot of work; the competition is tough; and it’s fun to succeed. It is therefore with great pleasure that we present the tenth edition of International Marketing to you. In the rapidly changing world of business, only a small portion of textbooks ever see a second edition, much less a tenth one. Publishers change, markets moveinnewdirections,competitorsemerge,andauthorsadjusttheircommitments to new life situations. So we are very pleased to have served the international marketing market for 30 years now, which, of course, is largely a sign of the continued faith and confidence of our colleagues in our work. Thank you for allowing us to shape the field and have a major impact on what people know aboutinternationalmarketing. Over the years, we have always made key improvements in our new edi- tions, but never before have our revisions resulted in so much of a new text. There has been unprecedented change in the field of international marketing. When domestic economic activities decrease, then international marketing decreases as well, only much more so. Austerity brings changes in production and consumption patterns and introduces new dimensions into the decision- making process.Theroleofgovernmentsisgrowingbyleapsandbounds,making them key entities to dictate the direction and strength of international marketing activities.Thereisarisingtendencytorestrictimportsandencourageexportsin ordertokeephomeindustriessafeandgraduallyreduceglobalimbalances. In dire economic times, international marketers are key agents of social change, who provide insight and knowledge that helps society understand the trade-offs and consequences of actions and thus make good decisions. The busi- ness field is looked upon expectantly by nations and their governments, who frantically search for ways for their economies to emerge from slow growth con- ditions. International marketing increasingly is the key option that can deliver major increases in economic activity. The challenge is great. Nations around the world attempt to stabilize and revitalize their economies. Typically, each nation’s emphasis rests with domestic issues. But any international intervention of one nation is likely to rapidly affect other countries and may trigger economic and policy responses. Protectionism, vii Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. viii PREFACE once introduced,canquicklybecomecontagiousandcatchfirearoundtheworld. Therationalefortheprevalenceofamarketeconomyisnotautomaticallyunder- stood any more. Key tenets of the marketing discipline, such as risk, profit, competition, and ownership, are being redefined and reassessed. International marketers develop the knowledge and talents that serve to disentangle the competing priorities confronting individuals, companies, and gov- ernments. They explain and justify the principle that nations must be able and willing to buy each other’s goods if world economies are to blossom. Marketers show how competition and consumer choice are crucial to the achievement of a higher plateau of well-being. They demonstrate that a rising tide can lift all boats, but only if the boat and the sails are in good condition and the crew is prepared and well trained. Through their field-specific knowledge and their understanding of the effects ofcultureandemotions,andbysittingatthetableandcontributingtheirinsights, international marketers can make major strides in ensuring a better world. When there is some disagreement and some sparring, we ask you to apply to interna- tional marketers the advice rendered by the great scholar Ludwig von Wittgen- stein: “A philosopher who is not taking part in discussions is like a boxer who nevergoesintothering.” But international marketing is not an uncontroversial discipline. There is a large historic burden carried by the field of marketing. For many years, market- ers, particularly in the international arena, have primarily focused on selling more, and also tried to provide an increase in customer satisfaction. However, very little effort has focused on the societal impact of certain marketing strate- gies, on the long-term repercussions on consumers (e.g., obesity due to overcon- sumption of fast food), and on the literal chain of consumption with which individuals have been restricted, inhibited, and burdened. Drip marketing is just one example of such a predatory practice. Also called “vampire marketing,” the practice consists of charging consumers more and more money as they get deeper into product usage. For example, once you are in a hotel room, the mini- bar late at night becomes your only ability to assuage hunger—at a very high price. As a result of all these practices, we have developed and present in this volume the concept of “curative marketing,” which identifies malpractices of the past, avoids them in the future, and makes major efforts to cure the negative effects of the past transgressions. At various places in the book, we highlight the capability of curative marketing to “do better.” There have of course also been key changes since data and information have increasingly pervaded our society. By taking measurements and comparing out- comes in the context of change, there is much to be learned for the marketing discipline. However, just like for most things in life: moderation is crucial. By looking for numbers only, there appears to be a trend by some towards for- getting that international marketing is a social science applied across borders. In spite of growing quantification, international marketing remains a discipline linked most deeply with people, their emotions, and their behavior. Therefore, even a researcher with a white lab coat, who may prefer to work with numbers only, must pay major attention to individual human interaction in order to pro- pel the discipline forward and achieve societal benefit. While important to mar- keting and business overall, this issue is particularly relevant in international marketing, where variations in contexts, cultures, and behaviors bring out the importance of direct interaction and individual awareness. We must understand the people who contribute to decisions and consider their contextual constraints if we wish to truly improve the performance of the international marketing discipline. Our book takes this guideline as its mission for its descriptions, its analyses, and its approach to the future. Doing so grows in importance as the focus on international marketing is ris- ing. In academia we see great increases in student enrollment—perhaps they want to stock up on knowledge and capabilities during bad times in order to be Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.