1. The Global Marketplace
Chapter Fifteen
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2. Looking Ahead After studying this chapter you should be able to:
Discuss how the international trade system, economic, politico-legal, and cultural environments affect a company’s international marketing decisions
Describe three key approaches to entering international markets
Explain how companies adapt their marketing mixes for international markets
Identify the three major forms of international marketing organization
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3. Importance of International Trade
International trade is very important to Canadian businesses
Exports made up 45% of our GDP in 2000 versus 25% for the U.S.
Depend on imports for wide range of goods and services
Encourages competitive pricing
Creates jobs for Canadians; 1 in 3 jobs is tied to trade
Stimulates technological advances, improves learning and productivity
Can be risky
Environmental factors supporting trade
Faster communication, transportation, and financial flows make the world “smaller”
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4. Major Decisions in Global Marketing
Looking at the
global marketing
environment
Deciding
whether to go
international
Deciding
which markets
to enter
Deciding on the
global marketing
organization
Deciding on the
global marketing
program
Deciding how
to enter
the market
Figure 15-1
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5. The International Trade System
Restrictions to trade
Tariff
Quota
Embargo
Exchange controls
Nontariff barriers
World Trade Organization (WTO)
Voluntary trade association, 144 members doing 90% of world trade
Succeeded General Agreement on Trade and Tariffs (GATT), in effect since 1948
Objective to promote international trade by removing barriers through negotiation
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6. The International Trade System (continued)
Economic communities
Groups of nations working toward common goal
Regional free trade zones
European Economic Community (EEC); adoption of common currency to facilitate trade
North American Free Trade Agreement (NAFTA)
Economic environment
Industrial structures
Subsistence economies
Raw-material exporting economies
Industrializing economies
Industrial economies
Income distribution
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7. The International Trade System (continued)
Politico-legal environment
Attitudes towards international buying
Government bureaucracy
Political stability
Monetary regulations
Ethical issues between cultures
Cultural environment
Differences in consumption between countries
Differences in language, norms of behaviour, taboos, customs, and attitudes
Need to be sensitive to avoid mistakes
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8. Indicators of Market Potential
Demographic characteristics
Size/density of population, rate of growth, degree of urbanization, age structure and composition
Geographic characteristics
Physical size, topography, climate conditions
Economic factors
GNP per capita, income distribution, growth, investment
Technological factors
Skills, production and consumption technology, education
Sociocultural factors
Values, lifestyles, ethnic groups, linguistic fragmentation
National goals and plans
Industry priorities, infrastructure investment plans
Table 15-1
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9. Market Entry Strategies
Exporting
Indirect
Direct
Joint venturing
Licensing
Contract
manufacturing
Management
contracting
Joint ownership
Direct investment
Assembly facilities
Manufacturing
facilities
Amount of commitment, risk, control, and profit potential
Figure 15-2
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10. International Product & Promotion Strategies
Don’t change
product
Adapt
product
Develop new
product
Promotion
Don’t change
promotion
Straight
extension
Product
adaptation
Product
invention
Adapt
promotion
Communication
adaptation
Dual
adaptation
Figure 15-1
©Copyright 2004, Pearson Education Canada Inc.

11. Distribution Channels
Seller
Seller’s
headquarters
organization
for
international
marketing
Channels
between
nations
Channels
within
nations
Final
user or
buyer
Whole-Channel Concept for International Marketing
Figure 15-4
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12. The Global Marketing Organization
Organize an export department
Create an international division
Becoming a global organization
©Copyright 2004, Pearson Education Canada Inc.

13. Looking Back International trade system
Economic, politico-legal, cultural environments
3 key approaches to international markets
Adapting the marketing mix
3 forms of international marketing organization
©Copyright 2004, Pearson Education Canada Inc.