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Introduction to International Marketing

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  1. Introduction to International Marketing • Ch 1: The Global Marketing Imperative • Ch 2: Trade Institutions and Trade Policy • Ch 4: The Economic Environment

  2. What is International Marketing? • Needs, Market, Marketing, International Marketing • Text book definition:”…the process of planning and conducting transactions across national borders to create exchanges that satisfy the objectives of individuals and organizations.” • 2004 American Marketing Association definition: “Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.”

  3. The Marketing Process Marketing Mix Product Price Promotion Place Target Market Marketer Feedback

  4. Marketing and the Environment Economic Social Demographic Marketing Mix Product Price Promotion Place Marketer Target Market Political Cultural Feedback Technological Legal

  5. International Marketing Basics • Basics of marketing (in international context) • Target Market Selection • Marketing Management • The Marketing Process • Geographical Perspectives • Location matters in business and trade • Climate, terrain and topography • Population and demography • A global village in the making? • Can international business/marketing bring world peace?

  6. Environment and Marketing Mix

  7. Classification of International Markets • G-8 Nations • Emerging markets (The Economist list) • Oil Exporting nationals • Other groups: North-South, developing and developed

  8. Analyzing Market Characteristics • Population/demographics • Age distribution • Life expectancy • Household size • Urbanization • Income • Distribution of low, medium, and high incomes • Gross domestic product per capita • Inflation and debt • Consumption patterns • Income spent on necessities and luxuries • Product saturation or diffusion • Consumer Price Index • Availability and quality of infrastructure • Distribution infrastructure • Internet • Availability of electricity

  9. Impact of trade and development on social life Human Development Index (HDI): Income, adult literacy (education), life expectancy Physical Quality of Life(PQOL): Life expectancy, infant morality, adult literacy (education) Analyzing Market Characteristics

  10. The Importance of World Trade • World trade has grown from $200 billion to more than $15 trillion in 2008 over a thirty-year period • Socialism has been replaced by capitalism since the fall of the Berlin Wall • Today, firms invest on a global scale, increasingly making it difficult to determine “where” products come from • Integration and trading blocs are emerging: EU, NAFTA, CAFTA, ASEAN plus one, MERCOSUR • Global linkages (dependence and interdependence) bind countries, institutions, and individuals more closely then ever

  11. 1 out of every 3 U.S. farm acres is producing for export 1 of every 6 U.S. manufacturing jobs produces for export $1 of every $7 of U.S. sales goes aboard 1 of every 3 cars, 9 out of 10 TVs, 2 out of 3 suits, and every VCR sold in the U.S. is imported. Travel and tourism is the #1 source of U.S. foreign exchange. It is the largest industry in the world. $1 of every $4 of U.S. bonds and notes is issued to foreigners. Dependence/Interdependence

  12. The Global Network for Ford’s European Manufacturing of the Escort

  13. History of International Trade and Institutions • Egyptian, Sumerian, and Babylonian trade practices • Roman empire and the Pax Romana • Trade by Arabs, Moguls, and Chinese • Middle Ages: Rise of capitalism and decline feudalism • Colonialism/imperialism, WWI and its decline • Post WWII: Rise of Soviet Union and global division • Rise of multinationals and international trade, investment, and production: rose of American, European, Japanese, and Third World Multinationals on a timeline |__________|_________|_________|________|________|__________I 1950 1960 1970 1980 1990 2000 200?

  14. Global Governance • World Trade Organization (WTO): International Trade • International Monetary Fund (IMF): Money and Finance • World Bank: International Development • United Nations: Peace and Stability • G8 Nations (USA, Canada, UK, France, Germany, Italy, Japan, and Russia) • Trade Blocks: EU, NAFTA, MERCOSUR, ASEAN, • Regional Institutions

  15. U.S. Trade and Investment Position • A continuous deficit • An erosion of U.S. share of world exports, not gaining • U.S. Investments Position: Inflow vs. Outflow • Policy Responses to Trade Problems: Arguments for and against Protectionism

  16. Levels of Regional Economic Integration • Regional Cooperation for Development • Free Trade Area: no internal tariff • Customs Union: no internal tariff, common external tariff • Common Market: no internal tariff, common external tariff, factor mobility • Economic Union: no internal tariff, common external tariff, factor mobility, common fiscal and monetary policy

  17. Regional Integration and Institutions • European Union (EU) • North American Free Trade Agreement (NAFTA) • MERCOSUR – Latin America • Association of South East Asian Nations (ASEAN) • Gulf Cooperation Council (GCC) • South Asian Association for Regional Cooperation (SAARC) • Other trade groups

  18. Studying Regional Groups