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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 Marketing. Market, Marketing, International marketing Domestic vs. International Marketing

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Introduction to international marketing l.jpg

Introduction to International Marketing

Ch. 1: Scope and Challenge of International Marketing

Ch.2: The Dynamic Environment of International Trade


Understanding international marketing l.jpg
Understanding International Marketing

  • Market, Marketing, International marketing

  • Domestic vs. International Marketing

    • Strategic Orientation: domestic, multidomestic, and global

    • Marketing mix: 4 Ps

    • Environmental forces: controllables vs. uncontrollables

  • Environment and the marketing mix


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The International Marketing Mix

7

Foreign environment

(uncontrollable)

1

Economic

forces

Political/legal

forces

Domestic environment

(uncontrollable)

2

7

Competitive

structure

Political/

legal

forces

Competitive

Forces

(controllable)

Cultural

forces

Environmental

uncontrollables

country market A

Price

Product

3

Channels of

distribution

Promotion

Environmental

uncontrollables

country

market B

6

Level of

Technology

Geography

and

Infrastructure

Economic climate

Environmental

uncontrollables

country

market C

4

5

Structure of

distribution


Environment and marketing mix l.jpg

Environment

Product

Price

Promotion

Place

Economic

Competitive

Technological

Demographic

Geographic

Cultural

Political/legal

Environment and Marketing mix


Understanding international marketing5 l.jpg
Understanding International Marketing

  • International Marketing…. developing a mindset?

    • Developing awareness

    • Self-Reference Criterion (SRC)

    • Adapting to local culture

  • FPs’ Globalization Index

    • Economic integration

    • Personal contact

    • Political engagement

    • Technological connectivity


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Global Governance

  • Politics/Peace- United Nations

  • Trade- World Trade Organization (WTO)

  • Money/Finance- International Monetary Fund (IMF)

  • Development- World Bank

  • Overall- G8 Nations (USA, Canada, UK, France, Germany, Italy, Japan, and Russia)

  • Other international institutions/bodies


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Institutions 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

    |_______|________|_______|_______|_______|_______I

    1950 1960 1970 1980 1990 20002010


Protectionism and trade barriers l.jpg
Protectionism and Trade Barriers

  • Protectionism and Tariff Barriers

  • Cost of protectionism: arguments for and against

  • Nontariff Barriers:

    • Quota and Import Licenses

    • Domestic Subsidy and Economic Stimuli

    • Standards and documentation requirements

    • Boycotts and Embargoes

    • Monetary barriers

    • Antidumping Penalties


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Balance of Payments (BOP) Account

BOP Account must balance,

Equation: A+B = C+D


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Ch 1 and 2: Questions for Discussion

  • What is international marketing? How does it differ from domestic marketing?

  • What is “developing a mindset” in international marketing? How is it related to self-reference criteria?

  • What is protectionism? Is it good (or bad) for an economy? How?

  • Explain how nontraiff barriers affect trade.

  • What is subsidy? What is the effect of subsidy on trade and economy?

  • What is a BOP account? Explain the four subheads of a BOP account. Why should an international marketing manager study the BOP account of a country?


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Top Ten 2000 U.S. Trading

Partners ($ billions)

Country U.S. Exports U.S. Imports Total Surplus/

Deficit

Canada $176.4 $229.2 $405.6 -$52.8

Mexico 111.7 135.9 247.6 -24.2

Japan 65.3 146.5 211.8 -81.3

China 16.3 100.0 116.3 -83.8

Germany 29.3 558.7 88.0 -29.5

United Kingdom 41.5 43.5 85.0 -1.9

South Korea 27.9 40.3 68.2 -12.4

Taiwan 24.4 40.5 64.9 -16.1

France 21.0 29.0 50.0 -8.0

Singapore 17.4 19.6 37.0 -2.2


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The Nationality of the World’s 100 Largest Industrial Corporations (by country of origin)

1963 1979 1984 1990 1993 1995 1996 2000

United States 67 47 47 33 32 24 24 36

Germany 13 13 8 12 14 14 13 12

Britain 7 7 5 6 4 1 2 5

France 4 11 5 10 6 12 13 11

Japan 3 7 12 18 23 37 29 22

Italy 2 3 3 4 4 3 4 3

Netherlands-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 3

Argentina -- -- 1 -- -- -- -- --

Belgium -- 1 1 -- -- -- -- 1

Brazil -- 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


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U.S. Current Account by Major Components, 1990-1999 ($ billions)

1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

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 98.7 101.6 104.4 112.7c. Balance +6.6 +2.0 -1.0 +0.8 +1.4 +5.9 +29.6 +37.9 +52.1 +60.0 +61.8

SOURCES: Survey of Current Business, U.S. Department of Commerce,

Bureau of Economic Analysis. http://www.stat-usa.gov/BEN/heal/sch.html.

Februarly 1998

Irwin/McGraw-Hill


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U.S. Current Account by Major Components, 1983-96 ($ billions)

1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

International Investment Income a. 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 83.4 105.6 138.9 139.6 122.1 109.9 109.0c. 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 Services a. 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 accountbalance -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.


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Buying Boom for Asia, 1995-2000 billions)

What the added Between 1993 and

middle class will 1995 2000

buy (In million)

73.3

Millions of households approaching $18,000 per year buying power Indexed to Singapore prices

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

32.5

14.4

1991

1995

2000

SOURCE: Bill Saporito, “Where the Global Action Is.” Fortune, Autumn-Winter 1993, p.64.


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The Price of Protectionism billions)

Industry Total Costs to Number of Cost per

Consumers 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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