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2.  Global Perspective DYNAMICS OF WORLD TRADE WORLD TRADE FLOWS LO1  United States Perspective Countertrade Trade Feedback Effect Gross Domestic Product (GDP) Balance of Trade 7-2

3.  Porter’s “Diamond” DYNAMICS OF WORLD TRADE COMPETITIVE ADVANTAGE OF NATIONS LO1 Factor Conditions Demand Conditions Company Strategy, Structure, and Rivalry Related and Supporting Industries  Economic Espionage Act (1996) Economic Espionage Act (1996) 7-3

4. FIGURE 7-2 FIGURE 7-2 Porter’s diamond of national competitive advantage: 4 key elements on why some countries become world leaders 7-4

5. MARKETING IN A BORDERLESS ECONOMIC WORLD TREND 1—DECLINE OF ECONOMIC PROTECTIONISM LO3  Protectionism Protectionism  Tariffs Tariffs  Quota Quota  General Agreement on Tariffs and Trade (GATT) General Agreement on Tariffs and Trade (GATT)  World Trade Organization (WTO) World Trade Organization (WTO) 7-5

6. FIGURE 7-3 FIGURE 7-3 Protectionism hinders world trade through tariffs and quotas policies of countries, raising prices and limiting supply 7-6

7. MARKETING IN A BORDERLESS ECONOMIC WORLD TREND 2—RISE OF ECONOMIC INTEGRATION LO3  European Union  Asian Free Trade Agreements Euro  North American Free Trade Agreement (NAFTA) North American Free Trade Agreement (NAFTA) 7-7

8. MARKETING IN A BORDERLESS ECONOMIC WORLD TREND 3—GLOBAL COMPETITION LO3  Global Competition Global Competition  Strategic Alliances Strategic Alliances 7-8

9. FIGURE 7-A FIGURE 7-A Global companies and marketing strategy 7-9

10.  International Firms International Firms  Transnational Firms  Multinational Firms MARKETING IN A BORDERLESS ECONOMIC WORLD TREND 3—GLOBAL COMPANIES LO3 Multidomestic Marketing Strategy Global Marketing Strategy 7-10

11. A GLOBAL ENVIRONMENTAL SCAN CULTURAL DIVERSITY LO3  Cross-Cultural Analysis Cross-Cultural Analysis  Values Values  Customs Customs 7-11

12. FIGURE 7-B FIGURE 7-B Cultural appreciation 7-12

13. A GLOBAL ENVIRONMENTAL SCAN CULTURAL DIVERSITY LO3 Semiotics  Cultural Symbols Cultural Symbols #13 7-13

14. A GLOBAL ENVIRONMENTAL SCAN CULTURAL DIVERSITY LO3  Language Unintended Meanings Back Translation  Consumer Ethnocentrism Consumer Ethnocentrism 7-14

15. A GLOBAL ENVIRONMENTAL SCAN ECONOMIC CONSIDERATIONS LO3  Stage of Economic Development Developed Countries: Japan Developing Countries  Made the Move: Brazil  Remain Locked: Tanzania Bottom of the Pyramid 7-15

16. A GLOBAL ENVIRONMENTAL SCAN ECONOMIC CONSIDERATIONS LO3  Economic Infrastructure Microfinance: India Microfinance: India  Consumer Income and Purchasing Power  Currency Exchange Rate Currency Exchange Rate 7-16

17. FIGURE 7-5 FIGURE 7-5 A comparison of the purchasing power differences around the world 7-17

18. A GLOBAL ENVIRONMENTAL SCAN POLITICAL-REGULATORY CLIMATE LO3  Political Stability  Trade Regulations 7-18

19. FIGURE 7-6 FIGURE 7-6 Alternative global market-entry strategies 7-19

20.  Exporting Exporting COMPARING GLOBAL MARKET-ENTRY STRATEGIES EXPORTING LO4 Indirect Exporting Direct Exporting 7-20

21.  Contract Manufacturing Contract Manufacturing COMPARING GLOBAL MARKET-ENTRY STRATEGIES LICENSING LO4  Contract Assembly Contract Assembly  Franchising Franchising 7-21

22.  Joint Venture Joint Venture COMPARING GLOBAL MARKET-ENTRY STRATEGIES JOINT VENTURE AND DIRECT INVESTMENT LO4  Direct Investment Direct Investment 7-22

23.  Product Extension CRAFTING A WORLDWIDE MARKETING PROGRAM PRODUCT STRATEGIES LO5  Product Adaptation  Product Invention 7-23

24. FIGURE 7-7 FIGURE 7-7 Five product and promotion strategies for global marketing 7-24

25.  Communication Adaptation CRAFTING A WORLDWIDE MARKETING PROGRAM PROMOTION STRATEGIES LO5  Dual Adaptation  Identical Message 7-25

26.  Countries Impose Pricing Constraints CRAFTING A WORLDWIDE MARKETING PROGRAM DISTRIBUTION AND PRICING STRATEGIES LO5  Channels Usually Long and Complex  Prices May Be Too High or Too Low Dumping Gray Market 7-26

27. FIGURE 7-8 FIGURE 7-8 Channels of distribution in global marketing 7-27