Unit 10: International Marketing

1. Unit 10: International Marketing

2. Globalization and Marketing

3. Global Marketplace • The whole world is connected due to globalization • No longer possible to just depend on resources from own country—WE MUST TRADE—WORLDWIDE INTERDEPENDENCE • Due to increase in technology and transportation • Internet, airplanes

4. The United States and International Trade • We have the worlds largest economy • International trade • Imports: purchased from other countries and brought in • Exports: sold to other countries and sent out • The changing nature of international trade • Used to be mainly raw materials • Transitioned to services

5. Why Businesses Are Going Global • Changing markets and competition • Competition becomes too intense in own country • Want the opportunity • Increase demand • Assistance with international marketing • Governments are supporting • Embassies and programs

6. The Importance of Marketing in International Trade • Balance of trade • Imports—Exports=Balance of Trade • Problem when your balance becomes negative • US BOT in August 2014, -40.1 billion • Negative BOT since 1980

7. Multinational Companies • Businesses that have operations throughout the world and that conduct planning for worldwide markets are multinational companies. • THEY THINK GLOBALLY, no longer belong to just one country

8. The World’s Largest Multinational Companies

9. Entering Foreign Markets

10. Culture and Customs Technology Consumer Characteristics Economic Environment Political andLegal Structure Information Needed for International Markets Market Information Needs

11. Finding the Right Marketing Mixfor Foreign Markets • Consumer characteristics—How are they different? • Culture and customs—What is normal to them? What will gain their attention? • Technology—What is their standard? • Political and legal structure—government and economy

12. Things to think about when going international • Gathering market information • Adjusting the marketing mix and marketing functions • Product/service management • Distribution • Selling • Financing • Pricing • Promotion

13. Examining International Economies to Know Consumers • Economies can be put into 3 categories: • Industrial economies: based on manufacturing • Preindustrial economies: based on agriculture and mining; low standard of living • Postindustrial economies: mix of good and services produced and marketed globally

14. Examining International Economies to Know Consumers • Ways to measure economic strength • Gross domestic product (GDP): all goods and services produced within a country in a year • Gross national product (GNP): all goods and services produced by a country in a year including foreign investments • Example: US GDP $13,351,000,000,000 US GNP $16,000,000,000,000 • Standard Living: quality of life for citizens • Housing, clothing, transportation, employment

15. Barriers to Trade • Quotas: limits on the numbers of specific types of products that foreign companies can sell in the country • Tariffs: taxes placed on imported products • Embargos: bans of trading with a certain country • Ex: U.S has an embargo with Cuba • Protectionism: Government policy that restricts imports to protect domestic industries

16. Assisting Trade • Alliances: goal is to facilitate trading of goods/services between countries • NAFTA: North American Free Trade Agreement • EU: European Union • WTO: World Trade Organization • OPEC: Organization Petroleum Exporting Countries • Instructions: select one alliance from above and explain the following: • Who is involved • The purpose of the alliance • How it helps international business

17. Alliances EU US, Canada, Mexico Rules for trade between countries No tariffs Grown the economies 28 Countries in Europe No tariffs Beneficial to consumers in Europe Established the Euro NAFTA Chapter 18

18. Alliances OPEC Most countries Smooth trading around the world Cannot ban trade based on ethical reasons like child labor Middle East, Indonesia, Nigeria, Venezuela Control oil prices Guarantee financing for countries in alliance WTO Chapter 18

19. Alliances Pacific Alliance Arabian Peninsula and Iraq Help with finance, trade and admin No war with each other No trade barriers Chile, Mexico, Columbia, Peru Enhance free trade Grow economies Increased GDP GCC Chapter 18

20. Alliances Most nations involved Consider peace in nations and consumers UN Chapter 18

21. Activity • With your table: • Label a sheet of notebook paper with your trade alliance and member names • Answer the following questions: • 1. What countries are involved in your trade alliance? • 2. How was this alliance meant to facilitate trade of a specific product or within a specific region? • 3. What are the general terms of the agreement between the nations in alliance? • 4. Has this alliance created any negative outcomes? Explain.

22. Market Entry Strategies • Exporting • Joint Venture • Licensing/Franchising • Foreign Investment • Foreign Production

23. Ways to Participate in International Marketing • Foreign production: own and operate production facility in another country • Foreign investment: own all or part of an existing company in another country • Joint ventures: a company joins up with another company to go international • Licensing: allows foreign businesses to manufacture a product for a fixed term in a specific market • Franchising: allows independent business owners to purchase rights to operate your business in another country • Typical in fast food

24. The Importance of Marketing in International Trade • Easy way to get involved in international trade is through importing and exporting: • Indirect exporting: marketing business represent exporting company • Direct exporting: with experience companies market/trade their own products