Global firm:A firm that, by operating in more than one country, gains marketing, production, research and development, and financial advantages that are not available to purely domestic competitors.But the world is becoming smaller, and every company operating in a global industry—whether large orsmall—must assess and establish its place in world marketsA company faces six major decisionsin international marketing:When selling to another country, a firm may face restrictions on trade between nations. Governments may charge tariffs, taxes on certain imported products designed to raise revenue or protect domestic firms.Countries may set quotas; limits on the amount of foreign imports they will accept in certain product categories.
A company also may face nontariff trade barriers,such as biases against its bids, restrictive product standards, or excessive host-country regulations.GATT, first signed in 1947, is a treaty designed to promote world trade by reducing tariffs and other international trade barriers.The WTOacts as an umbrella organization, overseeing GATT, mediating global disputes, helping developing countries build trade capacity, and imposing trade sanctions.Economic community:A group of nations organized to work toward common goals in the regulation of international trade.In 1994, the North American Free Trade Agreement (NAFTA)established a free trade zone among the United States, Mexico, and CanadaThe international marketer must study each country’s economy. Two economic factors reflect the country’s attractiveness as a market: its industrial structure andits income distribution.The country’s industrial structureshapes its product and service needs, income levels, and employment levels:oSubsistence economies:In a subsistence economy, the vast majority of people engage in simpleagricultureoRaw material exporting economies:These economies are rich in one or more natural resources but poor in other waysoEmerging economies (industrializing economies):In an emerging economy, fast growth in manufacturing results in rapid overall economic growth i.e. Brazil, Russia, India, and China.oIndustrial economies: Industrial economies are major exporters of manufactured goods, services, and investment funds i.e. United States, Japan, and Norway.Nations differ greatly in their political-legal environments; a company should consider factors such as the country’s attitudes toward international buying, government bureaucracy, political stability, and monetary regulations.Companies that understand cultural nuances can use them to their advantage when positioning products and preparing campaigns internationally.Understanding cultural traditions, preferences, and behaviours can help companies not only avoid embarrassing mistakes but also take advantage of cross-cultural opportunitiesGlobalization is a two-way street. If globalization has Mickey Mouse ears, it is also wearing a French beret, talking on a Nokia cellphone, buying furniture at IKEA, driving a Toyota Camry, and watching a Samsung plasma TVAny of several factors may draw a company into the international arena: Global competitors may attack the company’s home market by offering better products or lower prices, the company may want to
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