Ch. 19 The Global Marketplace.docx - Ch. 19 The Global...

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Ch. 19 The Global MarketplaceI.Global Marketing Todaya.Global Firm:A firm that, by operating in more than one country, gainR&D, production, marketing, and financial advantages in its costsand reputation that are not available to purely domestic competitors.i.b.Elements of the Global Marketing Environment:i.The International Trade System:1.A firm may face restrictions on trade between nations,governments may charge tariffs or duties, or taxes.2.Countries may set quotas to conserve on foreign exchangeand protect local industry and employment.3.Firm control limits the amount of foreign exchange and theexchange rate against other currencies.4.Nontariff barriers such as biases against its bids, restrictiveproduct standards, or excessive host-country regulations.a.Ex. India5.World Trade Organization (WTO).The General Agreementon Tariffs and Trade (GATT), established in 1947 andmodified in 1994, was designed to promote world trade byreducing tariffs and other international trade barriers.a.It established WTO, which replaced GATT in 1995and oversees original GATT provisions.6.Regional Free Trade Zones.Certain countries have formedfree trade zones oreconomic communities.EuropeanUnion (EU), formed in 1957, set out to create a singleEuropean market by reducing barriers to the free flow ofproducts, services, finances, and labor among membercountries and developing policies on trade with nonmembernations. Represents one of the world’s largest singlemarkersa.Economic Community:A group of nations organizedto work toward common goals in the regulation ofinternational trade.b.North American Free Trade Agreement (NAFTA)
c.Central American Trade Association (CAFTA)d.Union of South American Nations (UNASUR)ii.Economic Environment:1.Two economic factors reflect the country’s attractiveness asa market: its industrial structure and its income distribution.2.The industrial structure shapes its product and serviceneeds, income levels, and employment levels.a.Subsistence Economies, simple agriculture,consume output, and barter. Offer fewer marketopportunities and require special marketing efforts.Ex. Many African countriesb.Industrial Economiesare major importers andexporters of goods and services. The variedmanufacturing activities and large middle class makethem rich markets. Ex. The U.S., Japan, and WesterEuropec.Emerging Economiesexperience rapid economicgrowth and industrialization. Creates a new rich classand a growing middle class, both demanding newtypes of goods and services.Ex. BRICS countries—Brazil, Russia, India, China, and South Africa—andMENA countries (Middle east and North AfricaRegion).3.The second economic factor is the country’s incomedistributiona.Industrialized nations may have low-, medium-, andhigh-income house holdsb.Subsistence nations consist of mostly very low-income householdsiii.Political-Legal Environment:1.A company should consider factors such as the country’sattitudes toward international buying, government

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Term
Spring
Professor
lydia clark
Tags
International Trade, World Trade Organization

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