GCSE Business Studies Unit 1 Starting a Business Marketing: International Business

International Business Learning outcomes to be covered: Explain the advantages and disadvantages of international trade to a business Explain how the marketing mix of a business would be affected by international trade, including: The product may need to change due to legal and/ or cultural differences The price may need to change to reflect exchange rate differences and taxes Images © thinkstockphotos.co.uk

International Business Learning outcomes to be covered: Describe and explain how promotion may need to change to suit language and or cultural differences Describe and explain how transport methods and e-business may affect place Discuss the implications of the global market for business in the local economy Explain and evaluate the role of the European Union Images © thinkstockphotos.co.uk

What is International Trade? International Trade – the exchange of goods and services between different countries e.g. Ireland and America Exports from Northern Ireland include: goods such as machinery and transport equipment, food and live animals, chemicals and related products Imports include: manufactured articles, food and live animals, manufactured goods Images © thinkstockphotos.co.uk

Images © thinkstockphotos.co.uk Activity – 10 minutes Working in small groups draw out a table like the one below. Identify as many advantages and disadvantages of businesses trading internationally. Advantages Disadvantages Images © thinkstockphotos.co.uk

Images © thinkstockphotos.co.uk International Trade Advantages Larger market Economies of scale Increase variety of goods and choice More jobs Diversification new markets and customers Development of transport and communications Images © thinkstockphotos.co.uk

Images © thinkstockphotos.co.uk International Trade Disadvantages Lower profits because a company may have to cut costs due to increased competition Cost increases due to higher levels of production, staff and transport Distribution challenges; need to use or find international companies More detailed documentation to cover international regulations or legislation Language and cultural differences need to be taken into account Currency fluctuations impacting on costs and sales Images © thinkstockphotos.co.uk

Impact of International Trade on Marketing Mix Product Alterations: Legal requirements Technical issues Consumer tastes Price Set appropriate to local market Take account of exchange rate Promotion Alterations: Language Cultural differences Place Available to target market Transportation Images © thinkstockphotos.co.uk

Implications of global markets on the local economy Opportunity to sell on worldwide basis Increased employment opportunities Increased investment Increased competition, similar products in other countries Businesses need training and assistance in global trade Businesses need to be able to use technology Businesses need to research the market thoroughly Innovation Quality Images © thinkstockphotos.co.uk

Images © thinkstockphotos.co.uk European Union (EU) Activity – 5 minutes Individually list as many members of the European Union as you can Share these with the class to make sure you have covered them all. Austria Belgium Bulgaria Croatia Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom Images © thinkstockphotos.co.uk

Images © thinkstockphotos.co.uk Role of the EU To promote social and economic progress among its members To set directives for member states As a single market it allows: Free movement of goods Free movement of services Free movement of people Free trade, no tariffs or quotas on trade Common standards Images © thinkstockphotos.co.uk

Images © thinkstockphotos.co.uk Sample Questions Working individually complete the following questions: Sarah’s Bears plc is a medium-size company which makes bears from recycled material. Customers send in old clothes, table cloths, curtains and these are turned into bears. The company is based just outside Belfast. Sarah’s reclaimed bears plc is looking to trade on the international market. Give two advantages and two disadvantages of trading internationally for Sarah – 4 marks Explain the effect of international trade on each element of the marketing mix (product, price, promotion and place) – 8 marks (2 per marketing mix) Images © thinkstockphotos.co.uk

Images © thinkstockphotos.co.uk Learning Check Do you know: What the advantages and disadvantages of international trade are to a business? What factors need to be considered when selling and marketing a product internationally? How exchange rates may influence the price of a product? How the global economy impacts on businesses locally? Who the current members of the European Union are? Images © thinkstockphotos.co.uk

Images © thinkstockphotos.co.uk Useful Websites www.bbc.co.uk/education/guides/zgfrd2p/revision https://en.wikipedia.org/wiki/European_Union www.bbc.co.uk/guides/zgjwtyc Images © thinkstockphotos.co.uk