Copyright © 2007 Pearson Education Canada 19-1 International Trade and Canada 1. 1/3 of our jobs depend on international trade. 2. 9,00 new jobs created for each additional $1 billion of exports. 3. Nearly half of our manufacturing is exported 4. 85% of our exports go to the U.S. The importance of international trade:
Copyright © 2007 Pearson Education Canada 19-2 Movement to Global Markets Global opportunities are attractive due to: 1.Low growth in domestic markets. 2.The formation of common market and trading agreements.
Copyright © 2007 Pearson Education Canada 19-3 Analyzing Global Opportunities The external environments of the foreign market must be analyzed before deciding to enter. Economic Consumer Political Legal Technical Competition Economic Consumer Political Legal Technical Competition Marketing Strategy Marketing Strategy
Copyright © 2007 Pearson Education Canada 19-4 Global Consumers Significant variations in culture creates a need for diverse marketing strategies in foreign markets. Culture Language Needs and Motivations
Copyright © 2007 Pearson Education Canada 19-5 Politics and Business Governments, laws and regulations must be abided by. New governments can change the rules. Nationalization A form of expropriation; government takes control of a foreign company. Protectionism Foreign trade is restricted to protect local industries.
Copyright © 2007 Pearson Education Canada 19-6 Trade Restrictions To restrict trade a country can resort to a variety of tactics: Tariff Quota Local Content Law Embargo Boycott Raleigh Canada is lobbying the Canadian government for a 48% tariff on Asian-made bicycles.
Copyright © 2007 Pearson Education Canada 19-7 Competitive Trade Influences Cartel Orderly Marketing Agreement Orderly Marketing Agreement Common Market Common Market Firms or countries band together to conduct trade. Barriers are eliminated among partner countries; others face barriers. Trade agreement among geographical grouping of countries.
Copyright © 2007 Pearson Education Canada 19-8 Market Entry Strategies Export Joint Venture Joint Venture Direct Investment Direct Investment Risk Commitment Cost Risk Commitment Cost Increases Direct (self) or indirect (use distributors) Licensing, franchising, contract marketing Start-up or acquire
Copyright © 2007 Pearson Education Canada 19-9 Marketing Strategy Global Country- Centered Country- Centered Glocalize Same marketing strategy everywhere. Unique marketing strategy for each country. Global products customized to local tastes.
Copyright © 2007 Pearson Education Canada Product Strategy There are three commonly used product strategies: Standardized Product Standardized Product Adapted Product Adapted Product Local Product Local Product Same product offered in all foreign markets; digital cameras. Product altered to local tastes; common in fast food industry. Evaluate local tastes and develop accordingly.
Copyright © 2007 Pearson Education Canada Price Strategy Foreign market conditions influence price: Local competition Value of currency Tariffs Dumping: much lower prices for goods in a foreign market, is often an issue among local competitors.
Copyright © 2007 Pearson Education Canada Marketing Communications Standardized advertising is provided in order to protect brand image. It may not be effective due to: Cultural differences Language differences
Copyright © 2007 Pearson Education Canada Marketing Channels An organization can use existing channels or develop new ones. Direct Sales Force Foreign Distributors Consumers Foreign Subsidiary Trading Company Foreign Distributors Local Distributors Consumers