GLOBAL MARKETING

INTERNATIONAL TRADE SYSTEMTariffsQuotasExchange controls

European Union (EU)• Customs union that is moving in the

direction of an economic union by:– Adopting a common currency– Removing trade restrictions– Permitting free flow of goods and

workers throughout the member nations• Goal is to remove all barriers to free

trade among its members

North American Free Trade Agreement (NAFTA)

• Accord removing trade barriers among Canada, Mexico, and the United States

• Particularly important to U.S. marketers because Canada and Mexico are two of its largest trading partners

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GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT) International trade accord that has helped reduce world tariffs

In 1994, Uruguay round produced several important outcomes Reduced farm subsidies Increased protection for patents, copyrights, and trademarks

Included services under international trading rules

Phased out import quotas on textiles and clothing from developing nations

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WORLD TRADE ORGANIZATION (WTO) Succeeded GATT Oversees GATT agreementsServes as a forum for trade negotiationsMediates trade disputesMonitors national trade policies Works to reduce trade barriers throughout the world

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WORLD TRADE ORGANIZATION (WTO) WTO has made slow progress toward its major policy initiativesLiberalizing world financial servicesTelecommunicationsMaritime markets

ECONOMIC ENVIRONMENT1. Industrial Structure Subsistence economies Raw material exporting economies Emerging economies Industrial economies2. Income Distribution

POLITICAL –LEGAL ENVIRONMENTFACTORS:- Government bureaucracyPolitical stabilityMonetary regulations

CULTURAL ENVIRONMENTThe impact of culture on marketing strategy

The impact of marketing strategy on cultures

DECIDING WHICH MARKETS TO ENTERMarketing objectives and policies what volume of foreign sales it wantsHow many countries it wants to marketDecide on the type of countries to enter

DECIDING HOW TO ENTER THE MARKET1. EXPORTING2. JOINT VENTURING LICENSING CONTRACT MANUFACTRING MANAGEMENT MANUFACTURING JOINT OWNERSHIP3. DIRECT INVESTMENT

PRODUCTSTRAIGHT PRODUCT EXTENSIONPRODUCT ADAPTIONPRODUCT INVENTION

PROMOTIONCOMMUNICATION ADAPTION

DISTRIBUTION CHANNELS

DECIDING ON THE GLOBAL MARKETING ORGANIZATIONFirst organize an export departmentCreate an international divisionFinally become a global organization

MULTILATERAL PERSPECTIVES5 Strategic points1.Technological

2.Organizational

3.Personal

4.International

5.Cultural

EXPORT OPPORTUNITIES

Licensing - Share of know-How, Good and Services

Wholly owned Subsidiary – Full Control, Profits, Huge Capital investments.

Joint Ventures – Middle ground for Licensing and owned Subsidiary.

LICENSOR PROVISIONS Training Personnel

Quality Control

Technological Information

Sales Promotion

Raw Materials

PLANNINGEconomic Information1.Foreign Markets

2.Data on Competition

3.Review Of Marketing

4.Manufacturing Considerations

ONE MATERIAL REPLACES ANOTHER, AND NEW PRODUCTS REPLACE OLD ONES, COMPANIES WHICH STAND STILL FIND THEIR PROFITS VANISHING.

EXPANSION Product Line Extension - Adding Flavors, form, colors, package size.

Geographical Development

It is universally accepted that a firm cannot secure its profits without continual expansion of its activities.

PLANNINGEntry In Market

1.Licensing2.Joint Venture3.Subsidiary

Capital AllocationMan PowerManagerial SkillsProduct Adaptation Program

TOTAL MARKETING APPROACH – USE OF KNOWLEDGE DEVELOPED IN MARKETING RESEARCH AND CAPABILITY TO MANUFACTURING EXISTING AND POTENTIAL PRODUCTS COMPATIBLE WITH ITS TARGET MARKETS.

ROLE OF MULTILATERAL ENTERPRISES - SOCIETYThe biggest challenge confronting the whole world today is to use the advances in research and technology to solve man’s economic and social problems in order to narrow the gap between rich and poor.