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International Marketing

International Marketing. Perspectives & Paradigms. Borders Have Become Meaningless & there’s no place to hide…. Trans-National* Cross-Cultural High Speed/ Low Cost Transportation & Communication. The entire globe is now tied together as a single community operating 24/7/365.

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International Marketing

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  1. International Marketing Perspectives & Paradigms

  2. Borders Have Become Meaningless & there’s no place to hide… Trans-National* Cross-Cultural High Speed/ Low Cost Transportation & Communication • The entire globe is now tied together as a single community operating 24/7/365

  3. The Journey to the Global Village • After more than a century of electric technology, we have extended our central nervous system in a global embrace, abolishing both space & time” • -Marshall McLuhan, Understanding Media- 1955

  4. The Global Village Driver • The further & faster people are able to travel & communicate… • the greater the amount ofinteraction & influence

  5. Cable TelevisionPay Television ServicesDirect Broadcast Satellite [DBS]MMDS and LMDSDigital TelevisionStreaming MediaDigital RadioMultimedia Computers and Video GamesThe Internet and World Wide WebInternet CommerceOffice TechnologiesVirtual RealityHome VideoDigital AudioDistance LearningLocal and Long Distance TelephonyWireless TelephonyBroadband NetworksResidential Gatewaysand Home NetworksSatellite Communications source >> Future Technologies Inc. [www.fti.com] Digital agecommunication technologies

  6. Rise of the “Global Village” • … not just the “shrinking” of time & space • The new electronic media have transcended time & space w/ “virtual mobility”

  7. Time, Mobility & Economic Growth http://www.flexibility.co.uk/issues/transport/time-mobility.htm

  8. Birth of the Global Village 25 20 15 10 5 0 25.000.000 20.000.000 COMPUTERS HOSTS IN INTERNET (MILLONS) 5.000.000 130.000 4 1969 JUL. 1992 MAR. 1994 JUL. 1995 SEP. 1996 JUL. 1997 JUL. 1989 SEP. 1991 OCT. 1993 ENER. 1995 ABR 1996 FEB. 1997 NOV. 1997

  9. Growth Global Data Exchange Tbit/s 6 Data traffic 5 4 Total telephone traffic International telephone traffic Source: Arthur D. Little, 1999

  10. % 100 New “E”conomy U.S. GDP 75 50 IndustrialEconomy 25 0 ’72 ’78 ’84 ’90 ’96 ’02 ’08 The eEconomy projected to dominate GDP of United States w/in 3 years

  11. The Global Economy The Global Village DismalScientist

  12. One Big World Market: The Global Economy • …the increasing tendency of economies around the world to interact w/ one another as one market instead of many national markets

  13. Along w/ collapse of Time & Space …the collapse of Communism the GLOBALIZATION OF MARKETS AND ECONOMIES accelerated by acceptance of free enterprise/market system….

  14. Other Driversof Evolution of Global Economy • Gov’t Liberalization / Deregulation • Explosion in International Trade Agreements / Regional Economic Intergration

  15. Economic Integration thru 130+ Trade Agreements Ranging From: Economic Unions Common Markets Customs Unions Free Trade Areas Common External Trade Policy $ /Labor Mobility Total Political-Economic Integration

  16. US Trade Agreements

  17. World Market Connections

  18. INTERNATIONAL LINKAGES Goods & Services Trade Flows Capital & Labor Resource Flows Information &Technology Money

  19. One Big World Market: The Global Economy The weekly volume of international trade in currencies exceeds theannual value of trade in goods & services.

  20. Daily international financial flows now exceed $1.2 trillion. From 1990 to 2000, world GDP grew ~ 30% Total world exports of merchandise & services increased by 80 %. This year- World exports of goods & services predicted to reach $11.4 trillion (24% of world GDP). One Big World Market: The Global Economy World Bank

  21. Exports Amount Imports Amount THE UNITED STATES & WORLD TRADE Principal U.S. Exports & Imports Automobiles $114.1 Petroleum 103.6 Computers 75.3 Household Appliances 66.4 Clothing 64.3 Chemicals 33.1 Consumer Electronics 32.8 Semiconductors 26.0 Telecommunications 23.2 Iron and Steel 17.7 Chemicals $49.8 Semiconductors 42.3 Consumer Durables 40.1 Computers 38.6 Generating Equipment 27.6 Aircraft 26.7 Telecommunications 22.2 Automobiles 20.5 Grains 14.4 Nonferrous Metals 12.2

  22. Industrial Countries $38B Developing Countries 302 Total $683 Industrial Countries $594B Developing Countries 573 Total $1167 THE UNITED STATES & WORLD TRADE U.S. Exports & Imports of Goods Exports to: Imports from:

  23. Imports Exceed Exports By $484 Billion (2002) Industrial Countries $381 Developing Countries 301 Total $683 That’s over 9,680,000 Jobs at $50,000 Each! Industrial Countries $594 Developing Countries 573 Total $1167 THE UNITED STATES & WORLD TRADE U.S. Exports & Imports of Goods Imports Exceeded Exports by $346 Billion in 1999

  24. China • In 2003, China accounted for more than 60% of growth in world trade • Every week, more than $1 billion in FDI flows into China • ~15%b annual growth in foreign trade since 1978 • 2003 - world’s 4th largest exporter: $438b after US, Germany and Japan • 2003 - world’s 6th largest importer: $412b

  25. The Global Economy The Global Corporation The Global Village

  26. Evolution of MNC’s & Management Strategies • Multinational corporations (MNCs) • Companies that maintain significant operations in two or more countries simultaneously but are based in one home country • UN databases

  27. ACHIEVING GLOBAL SYNERGIES LEVERAGING ASSETS AND POSITION STRATEGIC FLEXIBILITY • Production Shifting • Multiple Sourcing • Transfer Pricing • Managing Cash Flow • Scale Efficiencies • Coordination and Integration • Transfer of Ideas, Experience and Know-how Global Strategy

  28. Multinational Corporations • In 1970, of the 7,000 multinationals identified by the United Nations, more than 1/2were from -- the United States & Britain. • By 1995, less than half of the 36,000 multinationals identified by the United Nations came from four countries: the United States, Japan, Germany, and Switzerland.

  29. Multinational Corporations • At present, there are 65,000 MNCs* w/ 850,000 affiliates in foreign countries • MNCs’ total sales amount to almost $19 trillion. *The U.S. government defines a multinational corporations (MNC) … as a company that owns or controls 10% .. of at least one foreign business enterprise.

  30. Multinational Corporations • 2/3sof world trade in goods and services is controlled by multinational companies. • Of the 100 largest economies in the world, 51 are corporations. • The sovereignty of nations will perhaps continue to weaken due to multinationals & increasing integration of world economies.

  31. Evolution of the International Firm Exporter Multi-National Trans-National Global

  32. Multinational corporations (MNCs) • Companies that maintain significant operations in two or more countries simultaneously but are based in one home country • Transnational (TNC) corporation • A company that maintains significant operations in more than one country simultaneously and decentralizes decision making in each operation to the local country • Global corporations… take an integrated approach across countries and regions and manage for worldwide business leverage & competitive advantage …

  33. The Global Corporation • Global Vision • Global Leverage • Global Sourcing • Global Competitive Moves • Global Partnerships

  34. The Global Corporation- A Global Mindset • Global Identity • Single Corporate Language • Global Ethical Standards • Multi-Country Careers • Cross-Cultural Training • Cross National employment .. especially management at all levels

  35. The Global Economy Global Marketing Strategy The Global Corporation The Global Village

  36. Global Marketing Strategy Drivers • Common customer needs • Global customers • Global Distribution & Communication channels

  37. Global Marketing Evolution Core Concepts & Values Develop CoreBusiness Strategy Translate/Execute strategy in selected countries.. Country A Country B Country C Country D Integrate & leverage global assets & alliances

  38. Requisite Global Marketer Expertise Country/ Market Knowledge Cross-Cultural Knowledge Cross-Border Transactions Knowledge

  39. Risk Direct Invest- ment Joint Venture Contract Manu- facturing Licensing Export Return/Control COUNTRY / MARKET KNOWLEDGE • Research & Intelligence • Global Marketing Opportunity & Target Market Assessment • Market Entry Planning & Strategy

  40. CROSS-BORDERTRANSACTIONS NOWLEDGE • Currency Risk/ Pricing/ Getting Paid • Standards, Regulations & Product Liability Risk to Exporter Least RiskHighest Risk Confirmed Irrevocable Bank BankCash in Irrevocable Letter of Collection Collection Open Advance Letter of Credit Credit Sight Draft Time Draft Account Cost to Buyer Highest CostLeast Cost

  41. CROSS CULTURAL KNOWLEDGE Cross-Cultural Understanding, Sensitivity Language Proficiency • Cross- • Cultural • Negotiation • Skills Social Responsibility & Government Relations

  42. The Global Village Globalization: + & -Cultural Impacts The Global Economy Political * Legal & Regulatory Considerations Regional Economic Integration Global Marketing Strategy Global Pricing & Distribution Considerations International Marketing Communication NEXT WEEK: Globalization: As a Business & Marketing Strategy The Global Corporation Culture * Customs & Business Practices

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