History and Geography–The Foundations of Culture
History and Geography–The Foundations of Culture
1. The Importance of History and Geography in the Understanding of International Markets
2. History and Contemporary Behavior
3. History is Subjective
4. Manifest Destiny and Monroe Doctrine
5. Geography and Global Markets
6. Products and Marketing
7. Dynamics of Global Population Trends
8. Trade Routes and Industrialization
Understanding the geography and history of a country can help a marketer have a better appreciation for many of the characteristics of its culture. A culture of a people evolves in response to the environment which it confronts.
The geography of a country, its topography, climate, physical position relative to other countries affect a culture’s evolution including its marketing and distribution systems.
It is important for a marketer to understand that geography plays an important role in the economy of a country and its marketing system.
“History helps define a nation’s “mission,” how it perceives its neighbors, how it sees its place in the world, and how it sees itself.”
Importance of History
· The history of a country is important in understanding many aspects of a culture.
· One cannot fully understand how businesspeople negotiate, how they conduct business, their attitudes toward foreign investment, the legal system, and other aspects of the market/business system without a historical perspective.
· A historical perspective helps prepare an international marketer for many of the cultural differences that often cause misunderstandings and in many cases, mistakes. While a marketer may not be able to change a person’s attitude or behavior, if you have an historical perspective of why they react as they do, you can gain insights that can possibly make it easier to adapt your strategies for a successful outcome.
- Attitudes about the role of government and business
- Relations between Managers and Subordinates
- Sources of Management Authority
- Attitudes toward Foreign Corporations
History and Contemporary Behavior
“To understand, explain, and appreciate a people’s image of itself and the attitudes and unconscious fears that reflected in its view of foreign cultures, it is necessary to study the culture as it is now as well as to understand the culture as it was—that is, a country’s history”
Loyalty to family, to country, to company, and to social groups and the strong drive to cooperate, to work together for a common cause, permeate many facets of Japanese behavior and have historical roots that date back thousands of years.
Understanding of history: - Helps an international marketer
1. To understand, explain, and appreciate a people’s image of itself and the fundamental attitudes and unconscious fears that are often reflected in its view of foreign cultures, it is necessary to study the culture as it is now as well as to understand culture as it was, that is, a country’s history.
2. An awareness of the history of a country is particularly effective for understanding attitudes about the role of government and business, the relations between managers and the managed, the sources of management authority, and attitudes toward foreign MNC’s.
3. History is what helps define a nation’s “mission,” how it perceives its neighbors, and how it sees its place in the world.
4. To understand a country’s attitudes, prejudices, and fears it is necessary to look beyond the surface or current events to the inner refinement of the country’s entire past for clues.
Geography and International Marketing
“Geography is a study of the physical characteristics of a particular region of the earth. Involved in this study are climate, topography, and population. The interaction of the physical characteristics is one of the principal determinants of a country’s customs, products, industries, needs, and methods of satisfying those needs”.
· Marketing is concerned with satisfying the needs of people. International marketing seeks out the whole world as its marketplace. Therefore, for an international marketer to know how to satisfy the needs of the international market, he must be familiar enough with geography to know what the various causal factors of the people’s needs are.
· International marketer must know that various climates and topographies do exist and that they are vital in shaping the marketing plans that an international marketer must make. As an example, a producer selling machinery in the tropics would have to realize that special protection is needed to keep a machine running properly in hot and humid climates.
· Study of geography is important in the evaluation of markets
· Need to be knowledgeable about the effects of geographic diversity on the economic profiles of various nations
· Climate and topography are examined as facets of the broader and more important elements of geography
· Knowledge about geography, the climate and physical terrain when appraising a market
· Influences marketing from product adaptation to more profound influences on the development of marketing systems
· Climatic features affect uses and functions of products and equipment
Geography, Nature, and Economic Growth
· Linkage exists between geographic location and economic growth
· Association between landlocked countries and level of economic development
· Countries with unfriendly climates associated with economic stagnation
· Countries that suffer the most from major calamities are among the poorest in the world, which influences ability to market products
Social Responsibility & Environmental Management
- Firms required to be socially responsible especially in foreign markets
- Firms should comply regulations against environmental pollution and disposal of hazardous waste
- Economic development and protection for the environment can coexist
- Sustainable development guides many governments and multinational companies today
· Many view the problem as a global issue rather than a national one. One report on the global environment stressed . . . “it is quite clear that a number of critical problems—the threat to the ozone layer, the greenhouse effect, the loss of biodiversity, and ocean pollution—cannot be addressed by nations in isolation.”
· Companies looking to build manufacturing plants in countries with more liberal pollution regulations than they have at home are finding that regulations everywhere are becoming stricter. Many Asian governments are drafting new regulations and strictly enforcing existing ones. A strong motivator for Asia and the rest of the world is the realization that pollution is on the verge of getting completely out of control.
· Neither Western Europe nor the rest of the industrialized world are free of environmental damage; rivers are polluted and the atmosphere in many major urban areas is far from clean. The very process of controlling industrial wastes leads to another and perhaps equally critical issue: the disposal of hazardous waste, a by-product of pollution control. Estimates of hazardous wastes collected annually exceed 300 million tons; the critical question is disposal that does not move the problem elsewhere.
· The business community is responding positively to the notion that the focus must be on the global environment rather than “the quality of the air, land, and water in our own backyards.” An International Chamber of Commerce Industry Forum on the environment reflected a shift in company attitudes toward environmental issues away from a reactive and largely defensive stance to a proactive and constructive approach. Some disbeliever may dismiss such statements as “window dressing” and they could be, but the beginning of change is awareness. Responsibility for cleaning up the environment does not rest solely with governments, businesses, or activist groups. Each citizen has social and moral responsibility to include environmental protection among his/her highest goals.
Sustainable Development: Key Propositions
- There is a crucial and potentially positive link between economic development and the environment
- The costs of inappropriate economic policies on the environment are very high
- Addressing environmental problems requires that poverty be reduced
- Economic growth must be guided by prices that incorporate environmental values
- Since environment problems pay no respect to borders, global and regional collaboration is sometimes needed to complement national and regional regions
- Importance of natural resources especially to manufacturing of products
- Supply of natural resources not endless
- Human labor provides the preponderance of energy in many countries
- Importance of oil and gas in world energy consumption
Global Population Trends
Important to know about current population trends because people constitute markets for various categories of goods
Necessary to know about:
(1) rural/urban population shifts
(2) rates of growth
(3) age levels, and
(4) population control
(5) rural-urban migration of world population
(6) population decline and aging
(7) worker shortage and immigration
The world population pattern trend is shifting from rural to urban areas: Implications for international marketer
1. World market is becoming more unified in location. Thus, it is becoming easier to reach a larger segment of the market by just marketing in the urban population centers.
2. The types of products marketed will also change with this population shift. For example, food might become a more important product in international marketing with few people raising their own.
3. These shifts will result in greater industrialization in countries with presently low levels of industrialization. This again implies marketing changes that might affect the world marketer, increased sales of capital goods.
4. In summary, people living in cities have different needs than those living in the country. Thus, the shift from country to city means that the world marketer has a different market to serve with different characteristics.
Basis of world trade.
1. Differences in skills : The basis for world trade is the differences between countries. One of these differences is the difference between people. Different heritages have resulted in the development of certain unique skills in the people of a country.
2. Differences in economies: Another difference is the one of differing stages of economic development existing in the world today. Some countries are highly developed and industrialized. These nations, such as the United States and France, might be trading in luxuries, whereas an underdeveloped nation, such as Kenya, might be forced to trade only in essential capital goods.
3. Differences in national resources: A third difference in countries serving as a basis for world trade is the availability of natural resources. Great Britain, poor in mineral resources, imports petroleum, where West Germany, rich in mineral resources but not food, imports large amounts of fruits and vegetables.
World Trade Routes and Communication Links
• Knowledge about trade routes over land, sea, and air important in making marketing decisions
• The majority of world trade is among the most industrialized and industrializing countries of Europe, North America, and Asia
• Need to be aware about communication links—the underpinning of all commerce
• Impact of the Internet revolution especially for global marketing of products
“World trade routes bind the world together”. This statement means that the world trade routes serve as avenues of minimizing differences between countries. Without these routes, countries would stand alone – each different from the rest in resources, economy, and people. The trade routes allow both people and products to flow, making more of a unified, balanced world. The physical imbalances overcome, also smooth, cultural and economic differences through the exchange of ideas as well as products.
Impact of telegraph, telephone, television, satellites, computer, and the Internet on international business
An underpinning of all commerce is effective communications, knowledge of where goods and services exist and where they are needed and the ability to communicate instantaneously across vast distances. Facilitating the expansion of trade have been continuous improvements in electronic communications.
First came the telegraph, then the telephone, television, satellites, the computer and the Internet. Each revolution in electronic technology has had a profound effect on human conditions, economic growth and the manner in which commerce functions.
As each “new” communications technology has had its impact, new business models have been spawned and some existing businesses re-invented to adapt to the new technology while other businesses have failed to respond and thus ceased to exist.
The Internet revolution will be no different; it too affects human conditions, economic growth, and the manner in which commerce operates. As we will discuss in subsequent chapters, the Internet has already begun to shape how international business is managed. However, as the Internet permeates the fabric of the world’s cultures, the biggest changes are yet to come!
Interpretation of Manifest Destiny and the Monroe Doctrine
Manifest Destiny and the Monroe Doctrine were accepted basis for U.S. foreign policy during much of the 19th and 20th centuries.
“Manifest Destiny, in its broadest interpretation, meant that Americans were a chosen people ordained by God to create a model society”.
More specifically, it referred to the desires of American expansionists in the 1840s to extend the U.S. boundaries from the Atlantic to the Pacific; the idea of “Manifest Destiny” was used to justify U.S. annexation of Texas, Oregon, New Mexico, and California; and later, U.S. involvement in Cuba, Alaska, Hawaii and the Philippines.
The Monroe Doctrine, a cornerstone of U.S. foreign policy, was enunciated by President James Monroe in a public statement proclaiming three basis:
· no further European colonization in the New World,
· abstention of the U.S. from European political affairs,
· and nonintervention of European governments in the governments of the Western Hemisphere.