The importance of history and geography in the understanding of international markets The effects of history on a country’s culture How culture interprets events through its own eyes How the United States moved west and how this more affected attitudes The effect of geographic diversity on economic profiles of a country Why markets need to be responsive to geography of a country Economic effects of controlling population growth versus aging population Communications are an integral part of international commerce

1. Chapter 3
History and Geography
The Foundations of
Culture

2. 3 - 2
Chapter Learning Objectives
• The importance of history and geography in the understanding of
international markets
• The effects of history on a country’s culture
• How culture interprets events through its own eyes
• How the United States moved west and how this more affected
attitudes
• The effect of geographic diversity on economic profiles of a
country
• Why markets need to be responsive to geography of a country
• Economic effects of controlling population growth versus aging
population
• Communications are an integral part of international commerce

3. 3 - 3
Impact of history and Geography on The
International Marketer
•International marketers must know how the
unique geographic characteristics will affect
the marketing of their product.
•The marketer needs to ask himself/herself
how geography will affect price, promotion,
place, product, people, and politics, i.e, the 6
P’s.

4. 3 - 4
Historical Perspective In Global Business
•Historical insights of a country are
important for understanding
- Attitudes about the role of government and
business
- Relations between Managers and
Subordinates
- Sources of Management Authority
- Attitudes toward Foreign Corporations

5. 3 - 5
History and Contemporary Behavior
1.Historical events between nations
influence business and history
2.Why do the Japanese have such strong
loyalty toward their companies?
3.Why is a distribution system so
difficult for an outsider to develop?
4.Why are decisions made by
consensus?

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Global Perspective
Birth of a Nation – Panama in 67 Hours
• To fully understand a society’s actions and its points of view,
you must have an appreciation for the influence of historical
events and the geographical uniqueness to which a culture
has had to adapt.
• To interpret a culture’s behavior and attitudes, a marketer
must have some idea of a country’s history and geography.
Culture is defined as a society’s accepted basis for
responding to external and internal events.

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History and Contemporary Behavior
• Japanese History:
- Seven centuries under the shogun feudal system
- The isolation before the coming of Admiral Perry in 1853
- Threat of domination by colonial powers
- Rise of new social classes
- Western influences
- Humiliation of World War II
- Involvement in the international community
• Historically, loyalty and service, a sense of responsibility, and respect
for discipline, training, and artistry were stressed to maintain stability
and order.
• A historical perspective gives the foreigner in Japan a basis on which to
begin developing cultural sensitivity and a better understanding of
contemporary Japanese behavior.

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History is Subjective
• Historical events always are viewed from one’s own
biases and SRC.
• A crucial element in understanding any nation’s business
and political culture is the subjective perception of its
history.
- Relationship between U.S. and Mexico
• Monroe Doctrine

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Territorial Expansion of United States from
1783
• Insert Exhibit 3.1

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Manifest Destiny and the Monroe Doctrine
• Both accepted as the basis for U.S. foreign policy during much of
the 19th
and 20th
centuries.
• 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.
• Three basic dicta of the Monroe Doctrine:
- No further European colonization in the New World
- Abstention of the U.S. from European political affairs
- Nonintervention of European governments in the governments of the
Western Hemisphere
• Change in the Monroe Doctrine:
- 1881, Roosevelt Corollary

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U.S. Intervention in Latin America Since 1945
• Insert Exhibit 3.2

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GEOGRAPHY & GLOBAL MARKETS

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Geography
The study of earth’s surface, climate,
continents, countries, peoples,
industries and resources

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Climate & Topography

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TOPOGRAPHY
Topography is the study of earth’s
surface, shape and features or those of
planets

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Climate and Topography
• Climatic conditions, such as altitude, humidity,
and temperature, can have an effect on products.
• Within even a single national market, climate can
be sufficiently diverse to require major
adjustments.
• Topographical issues and geographic hurdles can
have a deep effect on the distribution channels of
the product and a country’s economy.

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Channel Tunnel: Between UK and France

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Oresund Link
»Sweden/Denmark built bridge and tunnel across the Baltic Strait to Continental Europe

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Geography, Nature and Economic Growth
• Less-privileged (developing) countries suffer disproportionately
from natural disasters over more economically stable countries
• In more prosperous countries, the ability to prepare, plan and
overcome natural disasters is much greater.
Environmental issues:
- Disruption of ecosystems
- Relocation of people
- Inadequate hazardous waste management
- Industrial pollution

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Geography, Nature and Economic Growth
• Less-privileged (developing) countries suffer disproportionately
from natural disasters over more economically stable countries
• In more prosperous countries, the ability to prepare, plan and
overcome natural disasters is much greater.
Environmental issues:
- Disruption of ecosystems
- Relocation of people
- Inadequate hazardous waste management
- Industrial pollution

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Social Responsibility and Environmental
Management
The marketer must consider what are the
environmental consequences of their
product.
- This is especially true if the company is
producing the product in the country that the
product is being marketed.

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Social Responsibility and Environmental
Management
•Pollution is on the verge of getting
completely out of control
•China has 16 of the world’s 20 most
polluted cities
Critical issue: the disposal of hazardous
waste

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Social Responsibility and Environmental Management
- Organizations that have formed to address this
problem include:
• The Organization for Cooperation & Development
• The United Nations
• The European Union
• Other international activist groups
- Many organizations and governmental agencies are
governed by a concept called “sustainable
development”
• A joint approach among governmental agencies, organizations and
environmentalists who seek economic growth with “wise resource
management, equitable distribution of benefits and reduction of
negative effects on people and environment from the process of
economic growth”

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Resources
• The availability of minerals and the ability to generate energy are the
foundations of modern technology.
• The principal supplements to human energy are:
- Animals
- Wood
- Fossil fuel
- Nuclear power
- Ocean tides
- Geothermal power
- The sun

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Resources
• The availability of natural resources has an impact on
economic growth
• Most countries are not self-sufficient, this becomes one
of the most important imports and has a major impact on
a country’s trade deficit or surplus.
• Global interdependence of energy resources is
increasingly important and has incredible political power

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World Energy Consumption
• Insert Exhibit 3.3

27. 3 - 27
Global Population Trends

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Global Population Trends
Important to know about current population trends
because people constitute markets for various
categories of goods
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

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Controlling Population Growth
• Global population trends determine today’s
demand for goods
- Rural/urban population shifts
- Rates of growth
- Age levels
- Population control
• Changes in population will profoundly affect
future demand
• The most important deterrent to population
control is cultural attitudes about the importance
of large families

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World Population by Region – 2005-2050
Life Expectancy at Birth – 2005-2010 (millions)

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Rural and Urban Population, 2005-2030
(millions)

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Rural/Urban Migration
•Result of a desire for greater access
to:
-Sources of education
-Health care
-Improved job opportunities

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Population Decline and Aging
•Population growth in many countries has
dropped below the rate necessary to
maintain present levels
•A nation needs a fertility rate of about 2.1
children per woman
•Not one major country has sufficient
internal population growth to maintain itself

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Age Density for World
and Selected Countries

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• The free flow of immigration will help to
ameliorate the dual problems of explosive
population expansion in less-developed countries
and worker shortage in industrialized regions
• Europe will need 1.4 billion immigrants over the
next 50 years
• Japan and the U.S. will need 600 million
immigrants between now and 2050
Worker Shortage and Immigration

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500 Years of Trade

37. 3 - 37
500 Years of Trade

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World Trade Routes and
Communication Links
• Progression of trade routes
- Overland
- Sea routes
- Air routes
- The Internet
• Trade routes bind world together, minimizing:
- Distance
- Natural barriers
- Lack of resources
- Fundamental differences between and economies
• Trade routes represent attempts to overcome
influence of geography
- Causing economic and social imbalances

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The Triad: Trade Between the United States and Canada,
the European Community, and Japan ($ billions)
EUROPEAN
COMMUNITY
UNITED STATES
& CANADA
JAPAN
195.4 66.3
151.6 89.0
91.5
141.7

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Communication Links

41. 3 - 41
Communication Links

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Communication Links
• Telegraph
• Telephone
• Television
• Satellites
• Computer
• Internet

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Summary
• A prospective international marketer should be reasonably
familiar with the world, its climate, and topographic differences.
• Geographic hurdles must be recognized as having a direct effect
on marketing and the related activities of communications and
distribution.
• Without a historical understanding of a culture, the attitudes
within the marketplace may not be fully understood.
• The study of history and geography is needed to provide the
marketer with an understanding of why a country has developed
as it has rather than as a guide for adapting marketing plans.