Ch 2. The Global Economic Environment

1. Ch 2. The Global Economic Environment • The World Economy – An Overview • Economic Systems • Stages of Market Development • Balance of Payments • Trade Patterns

2. The World Economy – An Overview • Capital movements replaces trade as driving force • Production uncoupled from employment • The world economy dominates the scene • The struggle between capitalism and socialism is over • The growth of e-commerce diminishes national barriers

3. Economic Systems • Market Capitalism – North America and Western Europe • Centrally-Planned Socialism – China, the former Soviet Union, and India • Centrally-Planned Capitalism – Sweden, and Japan • Market Socialism – Singapore and Sierra Leone

4. Stages of Market Development • Big Emerging Markets (BEMs) – Mexico, Brazil, China, and India • Low-Income Countries – GNP per capita of $785 or less - Bangladesh • Lower Middle Income Countries – per capita $786-$3,125 – Poland, Turkey, and Indonesia • Upper Middle Income Countries – per capita $3,126-$9,655 –Malaysia, Brazil, Chile, and Hungary

5. Marketing Opportunities in LDCs and DCs • Look beyond per capita GNP • Consider LDC and DCs collectively • Weight the cost and benefits of the first to enter their markets • Set realistic goals and deadlines for entry

6. High Income Countries(with GNP higher than $9656) • Group of Seven (G-7): USA, Japan, Germany, France, U.K., Canada, and Italy • OECD – 29 nations • Triad – Japan, Western Europe, and USA

7. Marketing Implications of the Stages of Development • Product Saturation Levels

8. Balance of Payments • Current Account and Capital Accounts • Trade Deficit vs. Trade Surplus

9. Trade Patterns • World Trade Flows – Figure 2-3 • Merchandise Trade vs. Service Trade