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International Marketing. Tim Beal Lecture 3 25 July 2007. Today. Housekeeping The political framework of the global economy DVD Paul Vaughan Changing social fabric. Housekeeping. Tutorials started this week Details on coursepage Blackboard only leads you to coursepage

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international marketing

International Marketing

Tim Beal

Lecture 3

25 July 2007

  • Housekeeping
  • The political framework of the global economy
  • DVD Paul Vaughan
  • Changing social fabric
  • Tutorials started this week
  • Details on coursepage
    • Blackboard only leads you to coursepage
  • Coursepage has all the information
  • If you are not in a tutorial see me
the political framework
The Political Framework

Why is politics important to IM?

Liberalisation and globalisation




Issues, doubts and problems

why is politics important
Why is politics important?
  • Politics can prohibit trade
    • US sanctions and embargoes on Iraq, North Korea, Cuba…
  • Politics can restrain trade
    • US controls on advanced computers to China
    • Australian restrictions on NZ apples (SPS)
    • US and EU restrictions on agricultural imports to protect local industry
    • NZ restrictions on Korean whiteware to protect local industry
yesterday auckland airport
Yesterday -Auckland airport
  • What will happen to Auckland airport?
    • Who wants to buy it?
    • Who’s opposing that and why?
    • What does this mean for IM?
restraint liberalisation and facilitation
Restraint>liberalisation and facilitation
  • Governments can restrict trade
    • military, local interest groups, economic (eg trade balance)
  • Governments can also liberalise trade
    • remove restrictions
  • Governments can facilitate trade
    • incentives/support for
      • exporters
      • foreign investors
      • importers (eg Japan)
  • Lack of incentives hampering foreign investment/ work in NZ
  • Lack of incentives blamed as Bollywood calls 'cut'
liberalisation and globalisation
Liberalisation and globalisation
  • Liberalisation is the political expression and facilitator of globalisation
  • Conflict between liberalisation and protectionism
  • Globalisation>> winners and losers
    • Countries
    • Industries
    • Companies
    • People
  • Continuing struggle
global liberalisation
Global liberalisation
  • 1930s – protectionism as response to depression
  • ‘beggar my neighbour’ approach
  • Bretton Woods 1944
      • Resort in new Hampshire
    • United Nations Monetary and Financial Conference
    • Established global framework
bretton woods
Bretton Woods
  • International Monetary Fund (IMF)
  • International Bank for Reconstruction and Development
  • >>part of World Bank
world bank
World Bank
  • Important actor
    • Aid, etc.
  • Source of information
  • In news recently because of its president
    • Architect of invasion of Iraq
    • Anti-corruption evangelist who got fired for corruption
world bank14
World Bank
  • World Bank
back to bretton woods
Back to Bretton Woods
  • International currency framework
    • Stable exchange rates, linked to gold
    • US$ as reserve currency
    • Collapsed in 1971
  • Liberalisation>>GATT
  • General Agreement on Tariffs and Trade
  • Policy of reduction of tariffs, quotas and subsidies
    • Tariff – tax on imports
    • Quota – quantitative restriction on imports
    • Subsidy – financial support for production/export
stages of the gatt
Stages of the GATT
  • Divided in ‘rounds’
    • Eg Tokyo Round, Uruguay Round
  • First phase 1947-50 establishment
  • Second phase – 1979 – reduction of tariffs on manufactures
  • Third phase - Uruguay Round 1986-1993
uruguay round
Uruguay Round
  • Moved into intellectuals property, services, capital, and agriculture
  • Agriculture – Cairns Group set up in 1986
    • Very important to NZ
    • Cairns Group website
gatt wto
  • `1995 World Trade Organization
  • Two contestants for 2nd Director General
    • Thailand’s Supachai Panitchpakdi
    • And this man…
director generals of wto
Director Generals of WTO
  • Italy’s Renato Ruggiero 1995-99
  • Former NZ PM Mike Moore 1999-2002
  • Thailand’s Supachai Panitchpakdi 02-05
  • France’s Pascal Lamy 1995-
  • Important actor in world trade, but problems
  • Doha Round suspended July 2006
    • Disagreement between EU, US, India, Brazil on opening up I & B to agricultural and industrial products, farms subsidies in US & EU
wto website
WTO website
  • WTO also important source of information on world trade
global regional bilateral
  • Regional
    • EU
    • 25
    • NAFTA
    • Mercosur…and others
  • APEC
    • Asia-Pacific Economic Cooperation
  • Australian initiative 1989
  • Forum in which NZ important member
    • Hosted APEC 1999
  • China and Taiwan both members
    • Also in WTO, not UN, etc)
  • Association of Southeast Asian Countries
  • 1967 – now all ten state in SE Asia
  • AFTA – ASEAN Free Trade Area
  • ASEAN + 3
    • China, Japan, South Korea
  • >>>East Asia Summit
  • Because of difficulties in multilateral fora (WTO, APEC) attention turned to Free Trade Agreements
nz and ftas
NZ and FTAs
  • MFAT on trade agreements
  • PM Clark in Indonesia last week, signed a TIFA
    • story on links page
  • Left/Greens, etc.
  • Eg Green party and Buy Kiwi Made campaign
  • But now also from right
  • Wall Street Journal
the big issue
The BIG issue
  • Is globalisation GOOD or BAD?
  • Is it stoppable or changeable?
  • How can the opportunities be realised, the negative effects minamised?
  • etc. etc.
  • Ongoing debate
trade policy and globalisation issues
Trade policy and globalisation issues
  • Debate on trade policy and globalisation will continue to have great impact on IM
  • Marketers need to monitor what is going on
  • Market access does not guarantee market success
  • market access is necessary but not sufficient
  • IM needs knowledge about markets and products to satisfy them
changing social fabric
Changing social fabric
  • Marketing takes place within society
  • Consumer behaviour course discussed interaction between individual CB and social environment
    • families, reference groups, lifestyle changes, attitudes…
  • What happens in a particular society (eg NZ) happens globally
    • extremely complex manner
four examples
Four examples
  • Immigration
  • Social issues –Green market, pink market, ethics
  • aging society – Silver market
  • changing (globalising) tastes
  • Why is it important to IM?
  • old identification of a country with an ethnic/cultural group is becoming increasingly invalid
  • in many countries immigration is main social trend
main social trend of 1990s in britain
Main social trend of 1990s in Britain..
  • in Britain immigration much more important than natural population growth
    • ‘consequences for ethnic mix and age structure’
  • In NZ?
  • Cultural diversity in NZ
  • on increase in EU, USA, etc.
  • creation of multiethnic societies
  • write down some marketing implications of changes in ethic composition
  • Tourism has somewhat similar effects
    • 700 million international tourism arrivals in 2000
    • 2003 – 6% of global exports of G&S
  • in many countries a large part of the market is made up of permanent or temporary ‘foreigners’
    • eg China’s tourism market is important for NZ exports
      • they want to eat familiar foods, drink wine
international students
International students
  • Important financially to host countries
  • Learn and spread news tastes and customs
  • Often develop business links when return home
social issues
Social issues
  • Environment – green market
  • Sex – pink market
  • Ethics
    • Labour standards
    • Child labour
    • Opposition to country policies
      • Consumer boycotts
    • some examples
ageing society
Ageing society
  • part of general issue of changing age structure in societies
  • why is age structure important for marketing?
  • population pyramids; the case of Japan
    • Japan is foremost example of aging society
  • Japanese population pyramids
japan s ageing society
Japan’s ageing society
  • implications for NZ?
    • What change in products?
      • Goods and services
  • China moving that way
globalisation of tastes
Globalisation of tastes
  • McDonalds -Epitome of globalisation – few countries where they yet to penetrate
  • Who hasn’t had a Big Mac?
  • other examples – Coke, Pepsi, jeans….
  • Often connected with American cultural hegemony
    • The American dream
has mcdonalds peaked
Has McDonalds peaked?
  • McDonald’s Korea Closes First Outlet
but other things move as well
but other things move as well
  • Chinese food, Italian food…etc
    • NZ wine
transmitted by
Transmitted by
  • media (films, TV) (images)
  • migration, tourism..(people)
  • Companies themselves ..IM programmes
  • result is that tastes do change and can be changed
  • Change is the key word
  • Societies are changing around the world
    • getting older, better educated, more aware of global trends…
  • Some products are facing shrinking markets
  • Generating demand for new products marketed in new ways
    • marketing strategies need to be constantly reexamined
  • Today
    • Political framework of globalisation
    • Changes in society –
  • Next week – Education and marketing of services