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MKTG2201 Chapter 15.docx - Chapter 15: The Global...

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Chapter 15: The Global MarketplaceGlobal Marketing TodayThe world is rapidly changing in terms of faster digital communication, transportation, financial offlows. And as a result, marketers are constantly affected.a.International trade has boomed over the past 3 decades. Since 1990, the number of MNEs hasmore than doubled to a total number of 65000 enterprises.b.Despite the large opportunities, there are as many risks and threats involved.Global Firm:A firm that, by operating in more than one country, gains R&D, production, marketing,and financial advantages in its costs and reputation that are not available to purely domesticcompetitors.Looking at the Global Marketing EnvironmentThe International Trade SystemMainly refers to the restrictions that a company may face when entering a new environment.1.Tariffs and quotas2.Non tariff trade barriersa.Biases against bidsb.Restrictive product standardsThe World Trade Organization (WTO)WTO is the product of the GATT (General Agreement on Tariffs and Trade)1.GATT was established in 1947 and WTO was established in 19952.Houses currently 161 countries3.The countries have met in 8 negotiations and through 7 negotiations, the average worldwidetariffs on manufactured goods have dropped to 5% from 45%.4.Latest round of negotiation is currently being held in Qatar, Doha, and is currently ongoing.Regional Free Trade ZonesEconomic Community:A group of nations organized to work toward common goals in the regulationof international trade.a.Examples:i.The EU (European Union) which was formed in 1957 and now hosts and oversees 28countries with Croatia being its latest addition.ii.NAFTA (North American Free Trade Agreement) was established in 1994.Economic EnvironmentThe international marketer must study each country’s economy. The 2 economic factors that reflectthe country’s attractiveness as a market are:1.Its industrial structure.2.Income Distribution.a.Depending on the country and their industrial structure, there are assumptions madeabout their income distribution levels.i.For example, in an subsistence economy, there is a large prevalence of low-income earners.
The country’s industrial structure shapes its product and service needs, income levels, andemployment levels. The four types of industrial structures are as follows:1.Subsistence Economies: In a subsistence economy, the vast majority of people engage insimple agriculture. They consume most of their output and barter the rest for simple goodsand services. These economies offer few market opportunities. Many African countries fallinto this category.

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Term
Fall
Professor
JM
Tags
Marketing, International Trade, World Trade Organization

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