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International Marketing BMS- Semester IV
Syllabus <ul><li>Theories of International trade, Globalisation, its implications, WTO, growing concern on ecology and env...
International Trade and International Marketing <ul><li>Buying and selling of goods and services across national frontiers...
International Trade Theories <ul><li>Mercantilist Theory </li></ul><ul><li>Theory of absolute advantage </li></ul><ul><li>...
Mercantilist Theory <ul><li>Theory developed - 1500 to 1800 AD </li></ul><ul><li>Country’s wealth measured in terms of gol...
Theory of absolute advantage <ul><li>Put forward by Adam Smith </li></ul><ul><li>Believes that every country has an absolu...
<ul><li>Eg. Japan has an advantage in production of high quality steel while India has huge reserves of iron and coal mine...
Theory of country size <ul><li>It says that the size of the country decides how much and what type of products to trade in...
Theory of comparative advantage <ul><li>Improved version of absolute advantage theory, by David Ricardo </li></ul><ul><li>...
Factors Proportion Theory <ul><li>It says that factors of production that are in abundance are cheaper than those in relat...
The Product Life Cycle Theory <ul><li>Stages in PLC: </li></ul><ul><li>Introduction </li></ul><ul><li>Growth </li></ul><ul...
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1.Introduction & Theories Of International Trade

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all about International marketing:)..cheers

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  • ALL PRESENTATIONS ARE VERY USEFUL
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  • thanku sir for sharing presentations they are quick to learn and easy to understand
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  • An international trade theory can be seen as a measure to address problems in a country with a weak macro economy, high unemployment and inflation. International commitment to a free market economy will bring prosperity to the world economic system. Since 1970, the time of Adam Smith, economists have shown that free trade is efficient and leads to economic welfare.
    http://www.absolutewealth.com/media-events/
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  • Very very useful presentation
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  • I enjoyed your presentation, well made.
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Transcript of "1.Introduction & Theories Of International Trade"

  1. 1. International Marketing BMS- Semester IV
  2. 2. Syllabus <ul><li>Theories of International trade, Globalisation, its implications, WTO, growing concern on ecology and environment, tariffs-covert and overt and efforts to eliminate them, ethical and social responsibilities </li></ul><ul><li>Role of foreign multinationals, Indian MNCs, Competitive strategies, re-engineering companies to effectively face competition-internal and external, international marketing concepts, studying the environment for identifying opportunities and threats and devising appropriate strategies, products and pricing, advertising for international impact, crucial need to increase exports, India institutions and facilities to promote exports </li></ul>
  3. 3. International Trade and International Marketing <ul><li>Buying and selling of goods and services across national frontiers refers to International Trade </li></ul><ul><li>Selling of goods to other countries refers to exports, while buying the goods from a foreign country is imports </li></ul><ul><li>Marketing of such goods and services across between two or more nations, is International Marketing </li></ul><ul><ul><ul><li>Various theories of international trade attempt to explain the reasons why trade takes place between two or more countries </li></ul></ul></ul>
  4. 4. International Trade Theories <ul><li>Mercantilist Theory </li></ul><ul><li>Theory of absolute advantage </li></ul><ul><li>Theory of country size </li></ul><ul><li>Theory of comparative advantage </li></ul><ul><li>Factors proportion theory </li></ul><ul><li>Product life cycle theory </li></ul>
  5. 5. Mercantilist Theory <ul><li>Theory developed - 1500 to 1800 AD </li></ul><ul><li>Country’s wealth measured in terms of gold holdings </li></ul><ul><li>Encouraged exports and discouraged imports </li></ul><ul><li>Imports were taxed and thus restricted </li></ul><ul><li>Exports were encouraged to gain maximum gold </li></ul><ul><li>During colonial rule, colony masters imported raw material from colonies and exported finished goods </li></ul><ul><li>The theory ignores the fact that imports are necessary at times </li></ul><ul><li>If the imports are restricted too much, the country’s population has to do without some of the commodities </li></ul>
  6. 6. Theory of absolute advantage <ul><li>Put forward by Adam Smith </li></ul><ul><li>Believes that every country has an absolute advantage in supplying certain products </li></ul><ul><li>Hence, the country must specialise in export of those products only </li></ul><ul><li>It should import goods from countries, which have an absolute advantage in exporting the products, and hence get them at a cheaper rate </li></ul>
  7. 7. <ul><li>Eg. Japan has an advantage in production of high quality steel while India has huge reserves of iron and coal mines. This advantage can be used to complement each other </li></ul><ul><li>In practicality, it is not possible for only one country to have absolute advantage in terms of cost or otherwise for a particular product </li></ul>
  8. 8. Theory of country size <ul><li>It says that the size of the country decides how much and what type of products to trade in </li></ul><ul><li>Larger countries have varied climates and natural resources </li></ul><ul><li>It makes them self sufficient, due to which they import and export less </li></ul><ul><li>In these countries, transportation is costlier to larger expanse of land, compared to smaller countries </li></ul><ul><li>Since transport cost is less in smaller countries (due to less distance in production units and end markets), they have an advantage in international trade </li></ul>
  9. 9. Theory of comparative advantage <ul><li>Improved version of absolute advantage theory, by David Ricardo </li></ul><ul><li>In case a country has an absolute advantage or absolute disadvantage in production of all the goods it consumes, it cannot export or import each product </li></ul><ul><li>Hence, it needs to trade in goods in which it has a comparative advantage </li></ul><ul><li>It involves redirecting the resources to more efficient uses </li></ul><ul><li>When two countries need to consume a product, the country which produces it in lowest cost/using least resources will have a comparative advantage over the other country </li></ul>
  10. 10. Factors Proportion Theory <ul><li>It says that factors of production that are in abundance are cheaper than those in relative scarcity </li></ul><ul><li>In capital abundant countries, cost of capital is low, while in labour abundant countries, manpower is available at a low cost </li></ul><ul><li>Hence, a country can trade in factors which are found in abundance </li></ul><ul><li>India exports software professionals to US of A due to cheap labour availability </li></ul><ul><ul><ul><li>Australia and Canada have abundance land and hence concentrate on agriculture </li></ul></ul></ul>
  11. 11. The Product Life Cycle Theory <ul><li>Stages in PLC: </li></ul><ul><li>Introduction </li></ul><ul><li>Growth </li></ul><ul><li>Maturity </li></ul><ul><li>Decline </li></ul>
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