7

CHAPTER
GLOBAL
ENVIRONMENTAL
SCAN

Pages 183-190

By Brandon Miller
 Joke Time:
The Real Reason Behind the
Andersen/Enron Fiasco
 Global Environmental Scan
Uncontrollable factors that affect global
marketing:
• Cultural factors
• Economic factors
• Political-Regulatory factors
 Overview
• Cultural Diversity (cultural factors)
 Cross-cultural analysis
• Values
• Customs
 Foreign Corrupt Practices Act
• Cultural Symbols
 Semiotics
• Language
 Back translation
• Cultural ethnocentricity
 Consumer ethnocentrism
 Overview Continued
• Economic Factors
• Stage of Economic Development
• Economic Infrastructure
• Consumer Income and Purchasing Power
• Currency Exchange Rates
Cultural Environmental Factors
• A cross-cultural analysis involves the
study of similarities and differences
among consumers in two or more
nations or societies
• The cross-cultural analysis creates an
understanding about values, customs,
symbols, & languages of other societies.
 Cultural Environmental
Factors: Values
• A society’s values represent personally
or socially preferable modes of conduct
or states of existence that are enduring.
Values influence the behavior of the
consumers.
• McDonalds example in India
• Visa example in Germany
 Cultural Environmental
Factors: Customs
• Customs are the norms and
expectations about the way people
do things in a specific country.
• Cosmetics example in France
• Japanese Valentines Day example
 Cultural Environmental
Factors: Customs
• The Foreign Corrupt Practices Act
makes it a crime for U.S. corporations to
bride an official of a foreign government
or political party to obtain or retain
business in a foreign country.
• Bribes are a tax deductible expense in
France & Greece
 Cultural Environmental
Factors: Symbols
• Cultural symbols are things that
represent ideas and concepts. Semiotics
is the study of these symbols. Improper
use of symbols can be disastrous for
global marketers.
• Tiffany & Company example in Japan
• Coke example with the Parthenon
 Cultural Environmental Factors:
Language & Back Translation

• The best language to communicate

with consumers in is their own.
• Over 3,000 languages spoken world-
wide
• Vicks example in Germany
 Cultural Environmental Factors:
Language & Back Translation

• In back translation, a translated

word or phrase is retranslated into the
original language by a different
interpreter. (error checking control)
• Nike flames example
Cultural Environmental Factors:
Consumer Ethnocentrism
• Consumer ethnocentrism is the
tendency to believe that is
inappropriate or immoral to
purchase foreign-made products.
• Observed in segments of the U.S.,
France, Japan, Korea, & Germany
 Economic Environmental
Considerations
• Economic Factors:
• Stage of Economic Development
• Economic Infrastructure
• Consumer Income and Purchasing Power
• Currency Exchange Rates
 Economic Environmental Factors:
Stage of Economic Development

• Developed Countries: Mixed

economies (Ex: U.S., Japan, Canada, &
Western Europe)
• Developing Countries: Usually moving
towards an industrialized economy (Ex:
Hungary, South Africa, & Pakistan)
 Economic Environmental Factors:
Economic Infrastructure
• Economic infrastructure is a country’s
communication, transportation,
financial, & distribution systems.
• Critical for determining how, where, &
to whom to market.
• Coke example in India
 Economic Environmental Factors:
Consumer Income & Purchasing Power

• Marketers must consider the average

household incomes of the consumers.
FIGURE 7-5
How
purchasing
power
differs
around
the world
 Economic Environmental Factors:
Currency Exchange Rates

• A currency exchange rate is the price

of one country’s currency expressed in
terms of another country’s currency.
• Failure to consider exchange rates can
have severe consequences
• Mattel Barbie example
 Review
Global marketing is affected by uncontrollable
factors that include:
• Cultural factors
• Values
• Customs
• Cultural Symbols
• Language
• Cultural ethnocentricity
• Economic factors
• Stage of Economic Development
• Economic Infrastructure
• Consumer Income and Purchasing Power
• Currency Exchange Rates
Any Questions or Comments?

Thanks for listening

By Brandon Miller