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International Terrorism and Marketing: managing the unthinkable

International Terrorism and Marketing: managing the unthinkable. Prof. Michael R. Czinkota Georgetown University czinkotm@georgetown.edu. Part I: Definition and Concerns.

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International Terrorism and Marketing: managing the unthinkable

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  1. International Terrorism and Marketing: managing the unthinkable Prof. Michael R. Czinkota Georgetown University czinkotm@georgetown.edu

  2. Part I: Definition and Concerns • International terrorism is the systematic threat or use of violence across borders to attain a political goal or communicate a political message through fear, coercion, or intimidation of particular persons or the general public (Czinkota,Knight and Liesch, 2004) • A key distinction from other disasters: Terrorists respond to preventive measures

  3. Measurement Concerns • Terrorism has direct and indirect effects • immediate consequence • subsequent actions, regulations, new policies • Analyses at three levels: • primary –individual and firm • micro- industry, value chain • macro- global environment

  4. Measurement Concerns (cont.) • Ongoing uncertainties about: • meaning of terms • clarity of data • Different threats and perceptions REQUIRE A RESEARCH TEAM marketing, music, physics, psychology…

  5. Part IIWhy Marketing ? • Marketing deals with consumers and markets • Terrorists disrupt consumer demand • Terrorism affects supply 2. Marketers are the first responders • Imports and exports • Distribution and logistics • Communication with buyers and suppliers • Administration of pricing shifts

  6. Why Marketing ? (cont.) • Marketers are trained to develop empathy • Practice of Professions • Understand unintended consequences • Marketers are well trained to cope with cultural issues • Use of Language • Power of Persuasion

  7. Part IIISome Research Propositionsbased on a Meta Analysis Firms may increasingly consider terrorism when evaluating foreign markets

  8. Terrorism may Become the Next Segmentation Base

  9. The more a country or region is affected by terrorism, the less foreign firms may be likely to purchase from that area • Firms may make essential inputs themselves rather than buy them from suppliers in terrorism threatened environments abroad

  10. Firms may diversify their base of suppliers in order to assure greater flexibility and continuity • To reduce their exposure to terrorism, firms may decrease their foreign direct investment activities and substitute exports

  11. Terrorists want “bang” for the buck • (Rich) governments can protect targets • (Rich) companies can change business models • Protection leads to softer targets

  12. IV. SOME EARLY RESEARCH RESULTS

  13. Facts • 633 survey and interview responses • Firms from US, EU, Asia, and Latin America • Mostly International and Global Firms • 1/3 large, 1/3 medium, and 1/3 small in size • ¾ have 10+ years of international business experience • ½ sell more than 20% of production abroad.

  14. Chief Concerns • Fluctuating Exchange Rates • Rising Oil Prices • Effects and Threats of Terrorism

  15. Shareholders Reward Investment in Preparation

  16. Some Early Conclusions • How quickly we forget • We are still unprepared • We do not plan sufficiently • Cost/Price tension • Cost components cannot be isolated

  17. The Good News • We are not terrified • More similarities than differences • Trade relations are strong • Continued interest in international activities • Cultural convergence is the direction

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