1. Unit 10: International Marketing

2. Globalization and Marketing

3. Global Marketplace The whole world is connected due to globalization
No longer possible to just depend on resources from own country—WE MUST TRADE—WORLDWIDE INTERDEPENDENCE
Due to increase in technology and transportation
Internet, airplanes

4. The United States and International Trade
We have the worlds largest economy
International trade
Imports: purchased from other countries and brought in
Exports: sold to other countries and sent out
The changing nature of international trade
Used to be mainly raw materials
Transitioned to services

5. Why Businesses Are Going Global
Changing markets and competition
Competition becomes too intense in own country
Want the opportunity
Increase demand
Assistance with international marketing
Governments are supporting
Embassies and programs

6. The Importance of Marketing in International Trade
Balance of trade
Imports—Exports=Balance of Trade
Problem when your balance becomes negative
US BOT in August 2014, billion
Negative BOT since 1980

7. Multinational Companies
Businesses that have operations throughout the world and that conduct planning for worldwide markets are multinational companies.
THEY THINK GLOBALLY, no longer belong to just one country

8. The World’s Largest Multinational Companies
Company
Home Country
No. of Employees
Wal-Mart Stores
United States
1,900,000
China National Petroleum
China
1,086,966
U.S. Postal Service
796,199
Sinopec
681,900
McDonald’s
465,000
Agricultural Bank of China
452,464

9. Entering Foreign Markets

10. Information Needed for International Markets
Culture and Customs
Consumer Characteristics
Technology
Economic Environment
Political and Legal Structure
Market Information Needs

11. Finding the Right Marketing Mix for Foreign Markets
Consumer characteristics—How are they different?
Culture and customs—What is normal to them? What will gain their attention?
Technology—What is their standard?
Political and legal structure—government and economy

12. Things to think about when going international
Gathering market information
Adjusting the marketing mix and marketing functions
Product/service management
Distribution
Selling
Financing
Pricing
Promotion

13. Examining International Economies to Know Consumers
Economies can be put into 3 categories:
Industrial economies: based on manufacturing
Preindustrial economies: based on agriculture and mining; low standard of living
Postindustrial economies: mix of good and services produced and marketed globally

14. Examining International Economies to Know Consumers
Ways to measure economic strength
Gross domestic product (GDP): all goods and services produced within a country in a year
Gross national product (GNP): all goods and services produced by a country in a year including foreign investments
Example: US GDP $13,351,000,000, US GNP $16,000,000,000,000
Standard Living: quality of life for citizens
Housing, clothing, transportation, employment

15. Barriers to Trade
Quotas: limits on the numbers of specific types of products that foreign companies can sell in the country
Tariffs: taxes placed on imported products
Embargos: bans of trading with a certain country
Ex: U.S has an embargo with Cuba
Protectionism: Government policy that restricts imports to protect domestic industries

16. Assisting Trade
Alliances: goal is to facilitate trading of goods/services between countries
NAFTA: North American Free Trade Agreement
EU: European Union
WTO: World Trade Organization
OPEC: Organization Petroleum Exporting Countries
Instructions: select one alliance from above and explain the following:
Who is involved
The purpose of the alliance
How it helps international business

17. Alliances NAFTA EU US, Canada, Mexico
Rules for trade between countries
No tariffs
Grown the economies
28 Countries in Europe
No tariffs
Beneficial to consumers in Europe
Established the Euro
Chapter 18

18. Alliances WTO OPEC Most countries Smooth trading around the world
Cannot ban trade based on ethical reasons like child labor
Middle East, Indonesia, Nigeria, Venezuela
Control oil prices
Guarantee financing for countries in alliance
Chapter 18

19. Alliances GCC Pacific Alliance Arabian Peninsula and Iraq
Help with finance, trade and admin
No war with each other
No trade barriers
Chile, Mexico, Columbia, Peru
Enhance free trade
Grow economies
Increased GDP
Chapter 18

20. Alliances UN Most nations involved
Consider peace in nations and consumers
Chapter 18

21. Activity With your table:
Label a sheet of notebook paper with your trade alliance and member names
Answer the following questions:
1. What countries are involved in your trade alliance?
2. How was this alliance meant to facilitate trade of a specific product or within a specific region?
3. What are the general terms of the agreement between the nations in alliance?
4. Has this alliance created any negative outcomes? Explain.

22. Market Entry Strategies
Exporting
Joint Venture
Licensing/Franchising
Foreign Investment
Foreign Production

23. Ways to Participate in International Marketing
Foreign production: own and operate production facility in another country
Foreign investment: own all or part of an existing company in another country
Joint ventures: a company joins up with another company to go international
Licensing: allows foreign businesses to manufacture a product for a fixed term in a specific market
Franchising: allows independent business owners to purchase rights to operate your business in another country
Typical in fast food

24. The Importance of Marketing in International Trade
Easy way to get involved in international trade is through importing and exporting:
Indirect exporting: marketing business represent exporting company
Direct exporting: with experience companies market/trade their own products