International Marketing: Chapter 10 Key Concepts u Multinational market regions u Criteria for successful economic unions u Types of multinational market regions u Key multinational market regions –Europe –Eastern Europe and Baltic States –Commonwealth of Independent States –Africa –Middle East u Strategic implications of multinational market regions

Multinational Market Regions u Groups of countries that seek mutual economic benefit by reducing interregional trade and tariff barriers u Examples: –NAFTA –European Union

Criteria for Successful Economic Union u Economic Factors u Political Factors u Cultural Factors u Geographic Factors

Patterns of Multinational Cooperation Regional Cooperation Groups Free Trade Area Customs Union Common Market Political Union

Global Markets & Multinational Market Groups u Globalization of markets u Enhanced global competition u Market potential needs to be viewed in the context of regions of the world rather than country by country

Regions of the World: Multinational Market Groups u Europe u Eastern Europe & the Baltic States u Commonwealth of Independent States u Africa u Middle East

Economic and Monetary Union (EMU) u Set up common currency for the EU, the “Euro” u Set up timetable for “Euro” implementation u Set up central bank in 2002 u Completed circulation of Euro bank notes & coins u Cancelled bank notes and coins of member nations u Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxemburg, the Netherlands, Portugal, and Spain began using Euro (January 1, 2001)

u Twelve (12) members –Ukraine, Russia, Belarus, Armenia, Moldova, Azerbaijan, Uzbekistan, Turkmenistan, Tajikistan, Kazakhstan, Kyrgyzstan, Georgia u A loose economic and political alliance with open borders but no central government u Common history of central planning Commonwealth of Independent States (CIS)

Africa u Attempts at economic integration –Hampered by governmental inexperience, undeveloped resources, labor problems, and chronic product shortage u Little actual economic integration –Political instability in recent decades –Unstable economic base u All the countries on the continent (except Morocco) have joined a loosely defined African Union

Middle East u Less aggressive in the formation of multinational market groups u Long history of border disputes and persisting ideological differences u Greater Arab Free Trade Area (GAFTA) u Economic Cooperation Organization (ECO) u Creation of the Organization of the Islamic Conference (OIC) –60 countries and over 650 million Muslims worldwide –Vast natural resources, substantial capital, and cheap labor

Strategic Implications of Market Integration u Opportunities –Creates large mass markets –Economic growth programs –Improved regional infrastructure –Reduced marketing costs –Integrated distribution systems u Market Barriers –Protectionist measures against foreign exporters –Increased regulations