The Global Marketplace Chapter Fifteen Lecture Slides Express Version Course Professor Date

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 ©Copyright 2004, Pearson Education Canada Inc.

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” ©Copyright 2004, Pearson Education Canada Inc.

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 ©Copyright 2004, Pearson Education Canada Inc.

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 ©Copyright 2004, Pearson Education Canada Inc.

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 ©Copyright 2004, Pearson Education Canada Inc.

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 ©Copyright 2004, Pearson Education Canada Inc.

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 ©Copyright 2004, Pearson Education Canada Inc.

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 ©Copyright 2004, Pearson Education Canada Inc.

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.

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 ©Copyright 2004, Pearson Education Canada Inc.

The Global Marketing Organization Organize an export department Create an international division Becoming a global organization ©Copyright 2004, Pearson Education Canada Inc.

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.