international marketing
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Introduction to International Marketing
Ch. 1: Scope and Challenge of International Marketing Ch.2: The Dynamic Environment of International Trade
Understanding International MarketingUnderstanding International Marketing
Market, Marketing, International marketingMarket, Marketing, International marketing Domestic vs. International MarketingDomestic vs. International Marketing
Strategic Orientation: domestic, Strategic Orientation: domestic, multidomestic, and globalmultidomestic, and global
Marketing mix: 4 PsMarketing mix: 4 Ps Environmental forces: Environmental forces: controllables vs. controllables vs.
uncontrollablesuncontrollables Environment and the marketing mixEnvironment and the marketing mix
7
The International Marketing MixThe International Marketing Mix
Political/legalforces
Economicforces
1
2
Environmentaluncontrollablescountry market A
Environmentaluncontrollablescountrymarket B
Environmentaluncontrollablescountrymarket C
Competitivestructure Competitive
Forces
Level of Technology
Price Product
Promotion Channels of distribution
Geography and
Infrastructure
Foreign environment(uncontrollable)
Structure ofdistribution
Economic climate
Cultural forces
3
45
6
7Political/
legalforces
Domestic environment(uncontrollable)
(controllable)
Environment and Marketing mix Environment and Marketing mix
Environment
Product
Price
Promotion
Place
Economic
Competitive
Technological
Demographic
Geographic
Cultural
Political/legal
Understanding International MarketingUnderstanding International Marketing
International MarketingInternational Marketing……. developing a mindset?. developing a mindset? Developing awarenessDeveloping awareness Self-Reference Criterion (SRC)Self-Reference Criterion (SRC) Adapting to local cultureAdapting to local culture
FPs’ Globalization IndexFPs’ Globalization Index Economic integrationEconomic integration Personal contactPersonal contact Political engagementPolitical engagement Technological connectivityTechnological connectivity
Global GovernanceGlobal Governance
Politics/PeacePolitics/Peace- United Nations- United Nations TradeTrade- World Trade Organization (WTO)- World Trade Organization (WTO) Money/FinanceMoney/Finance- International Monetary Fund - International Monetary Fund
(IMF)(IMF) DevelopmentDevelopment- World Bank- World Bank OverallOverall- G8 Nations (USA, Canada, UK, - G8 Nations (USA, Canada, UK,
France, Germany, Italy, Japan, and Russia)France, Germany, Italy, Japan, and Russia) Other international institutions/bodiesOther international institutions/bodies
Institutions in International TradeInstitutions in International Trade
World Economic and Trade Environment WTO, IMF, and World Bank in the World Economy
Role of the organizations Easing trade restrictions Protest against globalization
Multinationals in the global economy Role of American, European, Japanese, and Third
World multinationals on a timeline
|_______|________|_______|_______|_______|_______I1950 1960 1970 1980 1990 2000 2010
Protectionism and Trade BarriersProtectionism and Trade Barriers
Protectionism and Tariff BarriersProtectionism and Tariff Barriers Cost of protectionism: arguments for and againstCost of protectionism: arguments for and against Nontariff Barriers: Nontariff Barriers:
Quota and Import LicensesQuota and Import Licenses Domestic Subsidy and Economic StimuliDomestic Subsidy and Economic Stimuli Standards and documentation requirementsStandards and documentation requirements Boycotts and EmbargoesBoycotts and Embargoes Monetary barriersMonetary barriers Antidumping PenaltiesAntidumping Penalties
Balance of Payments (BOP) AccountBalance of Payments (BOP) Account
A. Current AccountA. Current Account Merchandise TradeMerchandise Trade
ServicesServices
Unilateral TransferUnilateral Transfer
C. International ReserveC. International Reserve Gold, Silver, and Precious MetalsGold, Silver, and Precious Metals
Foreign CurrencyForeign Currency
Special Drawing Rights (SDR)Special Drawing Rights (SDR)
B. Capital AccountB. Capital Account Portfolio InvestmentPortfolio Investment
Direct InvestmentDirect Investment
Short term loansShort term loans
D. Net Statistical D. Net Statistical DiscrepancyDiscrepancy
BOP Account must balance, BOP Account must balance, Equation: A+B = C+DEquation: A+B = C+D
Ch 1 and 2: Questions for DiscussionCh 1 and 2: Questions for Discussion
1.1. What is international marketing? How does it differ What is international marketing? How does it differ from domestic marketing?from domestic marketing?
2.2. What is “developing a mindset” in international What is “developing a mindset” in international marketing? How is it related to self-reference marketing? How is it related to self-reference criteria?criteria?
3.3. What is protectionism? Is it good (or bad) for an What is protectionism? Is it good (or bad) for an economy? How?economy? How?
4.4. Explain how nontraiff barriers affect trade.Explain how nontraiff barriers affect trade.5.5. What is subsidy? What is the effect of subsidy on What is subsidy? What is the effect of subsidy on
trade and economy?trade and economy?6.6. What is a BOP account? Explain the four subheads What is a BOP account? Explain the four subheads
of a BOP account. Why should an international of a BOP account. Why should an international marketing manager study the BOP account of a marketing manager study the BOP account of a country?country?
Top Ten 2000 U.S. TradingPartners ($ billions)
Canada $176.4 $229.2 $405.6 -$52.8Mexico 111.7 135.9 247.6 -24.2Japan 65.3 146.5 211.8 -81.3China 16.3 100.0 116.3 -83.8Germany 29.3 558.7 88.0 -29.5United Kingdom 41.5 43.5 85.0 -1.9South Korea 27.9 40.3 68.2 -12.4Taiwan 24.4 40.5 64.9 -16.1France 21.0 29.0 50.0 -8.0Singapore 17.4 19.6 37.0 -2.2
Country U.S. Exports U.S. Imports Total Surplus/Deficit
The Nationality of the World’s 100 Largest Industrial Corporations (by country of origin)
United States 67 47 47 33 32 24 24 36Germany 13 13 8 12 14 14 13 12Britain 7 7 5 6 4 1 2 5France 4 11 5 10 6 12 13 11Japan 3 7 12 18 23 37 29 22Italy 2 3 3 4 4 3 4 3Netherlands-United Kingdom 2 2 2 2 2 2 2 --Netherlands 1 3 1 1 1 2 2 5 Switzerland 1 1 2 3 3 3 5 3Argentina -- -- 1 -- -- -- -- --Belgium -- 1 1 -- -- -- -- 1Brazil -- 1 -- 1 1 -- -- -- Canada -- 2 3 -- -- -- -- --India -- -- 1 -- -- -- -- --Kuwait -- -- 1 -- -- -- -- --Mexico -- 1 1 1 1 -- 1 --Venezuela -- 1 1 1 1 -- 1 --South Korea -- -- 4 2 4 2 4 --Sweden -- -- 1 2 1 -- -- --South Africa -- -- 1 1 -- -- -- --Spain -- -- -- 2 2 -- -- --Turkey -- -- -- -- 1 -- -- --China -- -- -- -- -- -- -- 2
1963 1979 1984 1990 1993 1995 1996 2000
U.S. Current Account by Major Components, 1990-1999 ($ billions)
Merchandise Trade
a. Exports $201.8 $219.9 $215.9 $224.0 $246.6 $319.9 $362.1 $389.3 $416.9 $440.4 $456.9
b. Imports 268.9 332.4 338.1 368.5 409.9 446.4 477.4 498.3 491.0 536.5 589.4
c. Balance -67.1 -112.5 -122.2 -144.5 -160.3 -126.5 -115.2 -109.0 -74.1 -96.1 -132.5
Business Services
a. Exports 42.3 44.3 46.2 51.8 59.4 69.1 116.5 136.6 153.7 164.4 174.5
b. Imports 35.8 42.3 47.2 51.0 58.0 63.2 86.9 98.7 101.6 104.4 112.7
c. Balance +6.6 +2.0 -1.0 +0.8 +1.4 +5.9 +29.6 +37.9 +52.1 +60.0 +61.8
1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
SOURCES: Survey of Current Business, U.S. Department of Commerce, Bureau of Economic Analysis. http://www.stat-usa.gov/BEN/heal/sch.html. Februarly 1998Irwin/McGraw-Hill
1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
U.S. Current Account by Major Components, 1983-96 ($ billions)
International Investment Incomea. Receipts 77.3 85.9 88.8 90.1 103.8 108.2 152.5 160.3 136.9 114.4 113.9
b. Payments 52.4 67.4 62.9 67.0 83.4 105.6 138.9 139.6 122.1 109.9 109.0
c. Balance +24.9 +18.5 +25.9 +23.1 +20.4 +2.6 +13.6 +20.7 +14.8 +4.5 +4.0
Total Goods and Servicesa. Exports 334.4 360.8 360.6 375.0 424.8 507.8 641.4 696.8 717.0 731.4 755.6
b. Imports 371.2 455.6 460.7 498.6 565.3 629.6 718.2 754.9 730.7 767.3 827.3
c. Balance -36.8 -94.8 -100.1 -123.6 -140.5 -121.8 -76.7 -58.1 -13.7 -35.9 -71.7
Net unilateral
transfers -9.5 -12.2 -15.0 -15.3 -13.4 -13.6 -26.1 -33.7 +6.7 -31.9 -32.0
Current account
balance -46.2 -107.0 -115.1 -138.9 -153.9 -135.4 -102.8 -91.8 -7.0 -67.8 -103.7
SOURCES: Survey of Current Business, U.S. Department of Commerce, Bureau of Economic Analysis. http://www.stat-usa.gov/BEN/heal/sch.html.February 1998.
Buying Boom for Asia, 1995-2000
Millions of households approaching $18,000 per year buying power Indexed to Singapore prices
14.4
32.5
73.3
1991 1995 2000
What the added Between 1993 andmiddle class will 1995 2000buy (In million)
Bedrooms 32 116
Living Rooms 16 58
Kitchens 16 58
Bathrooms 32 116
Living space (sq.m.) 1,200 4,350
Large appliances 16 58
Televisions 24 87
Telephones 24 87
Cars 16 58
SOURCE: Bill Saporito, “Where the Global Action Is.” Fortune, Autumn-Winter 1993, p.64.
The Price of Protectionism
Industry Total Costs to Number of Cost perConsumers Jobs Saved Job Saved
(in $ millions)
Textiles and apparel $27,000 640,000 $ 42,000
Carbon Steel 6,800 9,000 $ 750,000
Autos 5,800 55,000 $ 105,000
Dairy products 5,500 25,000 $ 220,000
Shipping 3,000 11,000 $ 270,000
Meat 1,800 11,000 $ 160,000
SOURCE: Michael McFadden, “Protectionism Can’t Protect Jobs,” Fortune, May11, 1987, pp. 125.
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