Ch 1 2 ppt introduction to international marketing

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Ch 1 2 ppt introduction to international marketing

  1. 1. Introduction to International Marketing  Ch. 1: Scope and Challenge of International Marketing  Ch.2: The Dynamic Environment of International Trade
  2. 2. Understanding International MarketingUnderstanding International Marketing  Market, Marketing, International marketingMarket, Marketing, International marketing  Domestic vs. International MarketingDomestic vs. International Marketing  Strategic Orientation: domestic,Strategic Orientation: domestic, multidomestic, and globalmultidomestic, and global  Marketing mix: 4 PsMarketing mix: 4 Ps  Environmental forces:Environmental forces: controllables vs.controllables vs. uncontrollablesuncontrollables  Environment and the marketing mixEnvironment and the marketing mix
  3. 3. 7 The International Marketing MixThe International Marketing Mix Political/legal forces Economic forces 1 2 Environmental uncontrollables country market A Environmental uncontrollables country market B Environmental uncontrollables country market C Competitive structure Competitive Forces Level of Technology Price Product Promotion Channels of distribution Geography and Infrastructure Foreign environment (uncontrollable) Structure of distribution Economic climate Cultural forces 3 4 5 6 7 Political/ legal forces Domestic environment (uncontrollable) (controllable)
  4. 4. Environment and Marketing mixEnvironment and Marketing mix Environment Product Price Promotion Place   Economic           Competitive           Technological           Demographic           Geographic           Cultural           Political/legal          
  5. 5. Understanding International MarketingUnderstanding International Marketing  International MarketingInternational Marketing……. developing a mindset?. developing a mindset?  Developing awarenessDeveloping awareness  Self-Reference Criterion (SRC)Self-Reference Criterion (SRC)  Adapting to local cultureAdapting to local culture  FPs’ Globalization IndexFPs’ Globalization Index  Economic integrationEconomic integration  Personal contactPersonal contact  Political engagementPolitical engagement  Technological connectivityTechnological connectivity
  6. 6. Global GovernanceGlobal Governance  Politics/PeacePolitics/Peace- United Nations- United Nations  TradeTrade- World Trade Organization (WTO)- World Trade Organization (WTO)  Money/FinanceMoney/Finance- International Monetary Fund- International Monetary Fund (IMF)(IMF)  DevelopmentDevelopment- World Bank- World Bank  OverallOverall- G8 Nations (USA, Canada, UK,- G8 Nations (USA, Canada, UK, France, Germany, Italy, Japan, and Russia)France, Germany, Italy, Japan, and Russia)  Other international institutions/bodiesOther international institutions/bodies
  7. 7. Institutions in International TradeInstitutions in International Trade  World Economic and Trade Environment  WTO, IMF, and World Bank in the World Economy  Role of the organizations  Easing trade restrictions  Protest against globalization  Multinationals in the global economy  Role of American, European, Japanese, and Third World multinationals on a timeline |_______|________|_______|_______|_______|_______I 1950 1960 1970 1980 1990 2000 2010
  8. 8. Protectionism and Trade BarriersProtectionism and Trade Barriers  Protectionism and Tariff BarriersProtectionism and Tariff Barriers  Cost of protectionism: arguments for and againstCost of protectionism: arguments for and against  Nontariff Barriers:Nontariff Barriers:  Quota and Import LicensesQuota and Import Licenses  Domestic Subsidy and Economic StimuliDomestic Subsidy and Economic Stimuli  Standards and documentation requirementsStandards and documentation requirements  Boycotts and EmbargoesBoycotts and Embargoes  Monetary barriersMonetary barriers  Antidumping PenaltiesAntidumping Penalties
  9. 9. Balance of Payments (BOP) AccountBalance of Payments (BOP) Account A. Current AccountA. Current Account Merchandise TradeMerchandise Trade ServicesServices Unilateral TransferUnilateral Transfer C. International ReserveC. International Reserve Gold, Silver, and Precious MetalsGold, Silver, and Precious Metals Foreign CurrencyForeign Currency Special Drawing Rights (SDR)Special Drawing Rights (SDR) B. Capital AccountB. Capital Account Portfolio InvestmentPortfolio Investment Direct InvestmentDirect Investment Short term loansShort term loans D. Net StatisticalD. Net Statistical DiscrepancyDiscrepancy BOP Account must balance,BOP Account must balance, Equation: A+B = C+DEquation: A+B = C+D
  10. 10. Ch 1 and 2: Questions for DiscussionCh 1 and 2: Questions for Discussion 1.1. What is international marketing? How does it differWhat is international marketing? How does it differ from domestic marketing?from domestic marketing? 2.2. What is “developing a mindset” in internationalWhat is “developing a mindset” in international marketing? How is it related to self-referencemarketing? How is it related to self-reference criteria?criteria? 3.3. What is protectionism? Is it good (or bad) for anWhat is protectionism? Is it good (or bad) for an economy? How?economy? How? 4.4. Explain how nontraiff barriers affect trade.Explain how nontraiff barriers affect trade. 5.5. What is subsidy? What is the effect of subsidy onWhat is subsidy? What is the effect of subsidy on trade and economy?trade and economy? 6.6. What is a BOP account? Explain the four subheadsWhat is a BOP account? Explain the four subheads of a BOP account. Why should an internationalof a BOP account. Why should an international marketing manager study the BOP account of amarketing manager study the BOP account of a country?country?
  11. 11. Top Ten 2000 U.S. Trading Partners ($ billions) Canada $176.4 $229.2 $405.6 -$52.8 Mexico 111.7 135.9 247.6 -24.2 Japan 65.3 146.5 211.8 -81.3 China 16.3 100.0 116.3 -83.8 Germany 29.3 558.7 88.0 -29.5 United Kingdom 41.5 43.5 85.0 -1.9 South Korea 27.9 40.3 68.2 -12.4 Taiwan 24.4 40.5 64.9 -16.1 France 21.0 29.0 50.0 -8.0 Singapore 17.4 19.6 37.0 -2.2 Country U.S. Exports U.S. Imports Total Surplus/ Deficit
  12. 12. The Nationality of the World’s 100 Largest Industrial Corporations (by country of origin) United States 67 47 47 33 32 24 24 36 Germany 13 13 8 12 14 14 13 12 Britain 7 7 5 6 4 1 2 5 France 4 11 5 10 6 12 13 11 Japan 3 7 12 18 23 37 29 22 Italy 2 3 3 4 4 3 4 3 Netherlands-United Kingdom 2 2 2 2 2 2 2 -- Netherlands 1 3 1 1 1 2 2 5 Switzerland 1 1 2 3 3 3 5 3 Argentina -- -- 1 -- -- -- -- -- Belgium -- 1 1 -- -- -- -- 1 Brazil -- 1 -- 1 1 -- -- -- Canada -- 2 3 -- -- -- -- -- India -- -- 1 -- -- -- -- -- Kuwait -- -- 1 -- -- -- -- -- Mexico -- 1 1 1 1 -- 1 -- Venezuela -- 1 1 1 1 -- 1 -- South Korea -- -- 4 2 4 2 4 -- Sweden -- -- 1 2 1 -- -- -- South Africa -- -- 1 1 -- -- -- -- Spain -- -- -- 2 2 -- -- -- Turkey -- -- -- -- 1 -- -- -- China -- -- -- -- -- -- -- 2 1963 1979 1984 1990 1993 1995 1996 2000
  13. 13. U.S. Current Account by Major Components, 1990-1999 ($ billions) Merchandise Trade a. Exports $201.8 $219.9 $215.9 $224.0 $246.6 $319.9 $362.1 $389.3 $416.9 $440.4 $456.9 b. Imports 268.9 332.4 338.1 368.5 409.9 446.4 477.4 498.3 491.0 536.5 589.4 c. Balance -67.1 -112.5 -122.2 -144.5 -160.3 -126.5 -115.2 -109.0 -74.1 -96.1 -132.5 Business Services a. Exports 42.3 44.3 46.2 51.8 59.4 69.1 116.5 136.6 153.7 164.4 174.5 b. Imports 35.8 42.3 47.2 51.0 58.0 63.2 86.9 98.7 101.6 104.4 112.7 c. Balance +6.6 +2.0 -1.0 +0.8 +1.4 +5.9 +29.6 +37.9 +52.1 +60.0 +61.8 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 SOURCES: Survey of Current Business, U.S. Department of Commerce, Bureau of Economic Analysis. http://www.stat-usa.gov/BEN/heal/sch.html. Februarly 1998Irwin/McGraw-Hill
  14. 14. 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 U.S. Current Account by Major Components, 1983-96 ($ billions) International Investment Income a. Receipts 77.3 85.9 88.8 90.1 103.8 108.2 152.5 160.3 136.9 114.4 113.9 b. Payments 52.4 67.4 62.9 67.0 83.4 105.6 138.9 139.6 122.1 109.9 109.0 c. Balance +24.9 +18.5 +25.9 +23.1 +20.4 +2.6 +13.6 +20.7 +14.8 +4.5 +4.0 Total Goods and Services a. Exports 334.4 360.8 360.6 375.0 424.8 507.8 641.4 696.8 717.0 731.4 755.6 b. Imports 371.2 455.6 460.7 498.6 565.3 629.6 718.2 754.9 730.7 767.3 827.3 c. Balance -36.8 -94.8 -100.1 -123.6 -140.5 -121.8 -76.7 -58.1 -13.7 -35.9 -71.7 Net unilateral transfers -9.5 -12.2 -15.0 -15.3 -13.4 -13.6 -26.1 -33.7 +6.7 -31.9 -32.0 Current account balance -46.2 -107.0 -115.1 -138.9 -153.9 -135.4 -102.8 -91.8 -7.0 -67.8 -103.7 SOURCES: Survey of Current Business, U.S. Department of Commerce, Bureau of Economic Analysis. http://www.stat-usa.gov/BEN/heal/sch.html. February 1998.
  15. 15. Buying Boom for Asia, 1995-2000 Millions of households approaching $18,000 per year buying power Indexed to Singapore prices 14.4 32.5 73.3 1991 1995 2000 What the added Between 1993 and middle class will 1995 2000 buy (In million) Bedrooms 32 116 Living Rooms 16 58 Kitchens 16 58 Bathrooms 32 116 Living space (sq.m.) 1,200 4,350 Large appliances 16 58 Televisions 24 87 Telephones 24 87 Cars 16 58 SOURCE: Bill Saporito, “Where the Global Action Is.” Fortune, Autumn-Winter 1993, p.64.
  16. 16. The Price of Protectionism Industry Total Costs to Number of Cost per Consumers Jobs Saved Job Saved (in $ millions) Textiles and apparel $27,000 640,000 $ 42,000 Carbon Steel 6,800 9,000 $ 750,000 Autos 5,800 55,000 $ 105,000 Dairy products 5,500 25,000 $ 220,000 Shipping 3,000 11,000 $ 270,000 Meat 1,800 11,000 $ 160,000 SOURCE: Michael McFadden, “Protectionism Can’t Protect Jobs,” Fortune, May11, 1987, pp. 125.

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