International Marketing © Thomson/South-Western ChapterChapter The International Political Economy...

International Marketing© Thomson/South-Western

ChapterChapterChapterChapter

The International Political Economy4.1 National Demographics4.1 National Demographics

4.2 Economic Environment4.2 Economic Environment

4.3 Political and Legal Environments4.3 Political and Legal Environments

44

Chapter 4Slide 2


Winning Strategies

Europe had a history of warfare and conflict between countries and cultures.

The second half of the 20th century is one of the longest periods of piece Europe has ever seen.

From Conflict to Unity

Chapter 4Slide 3


Winning Strategies (continued)

In 1950, six countries formed an alliance to combine the coal and steel industries of Western Europe.

Treaties of Rome European Economic Community (EEC) European Community (EC)


Chapter 4Slide 4


Winning Strategies (continued)

European Union (EU) a group of democratic European countries that

use treaties to work together economically and politically trade agreements some political control over economic policies helped ensure peace and economic development raised living standards euro stronger political voice


Chapter 4Slide 5


Lesson 4.1

National Demographics

Goals Explain the importance of demographics

to international marketing. Describe the effect of population and

class on international marketing.

Chapter 4Slide 6


Terms

developed countries newly industrialized countries developing countries Lorenz curve population pyramid social class

Chapter 4Slide 7


IMPORTANCE OF DEMOGRAPHICS demographic factors

income age social status education

Chapter 4Slide 8


IMPORTANCE OF DEMOGRAPHICS (continued)

developed countries first world countries

newly industrialized countries second world countries

developing countries third world countries

hard to classify countries

Chapter 4Slide 9


Income Distribution per capita income Lorenz curve

quintiles line of absolute equality line of absolute inequality

Chapter 4Slide 10


Chapter 4Slide 11


Education

The educational level of a country suggests two things. An educated workforce makes it easier for

an international company to expand into a market.

Individuals with higher educational levels are more likely to purchase the same types of products.

Chapter 4Slide 12


>> C H E C K P O I N T

List the three levels of country development.

Chapter 4Slide 13


POPULATION current world population is over 6.5

billion people projections of over 9 billion people by

2050 population pyramid

Chapter 4Slide 14


Population Pyramid

High birth rate and high death rate

Youngest

Oldest

Chapter 4Slide 15


Population Pyramid (continued)

A lower birth rate and a lower death rate

Youngest

Oldest

Chapter 4Slide 16


Social Class Criteria to distinguish social class

include: income net worth education family history political power lifestyle

Chapter 4Slide 17


Class Mobility Class mobility is the ability of

individuals to change social classes. Marketers sell products that allow

individuals to appear to belong to higher social classes.

Chapter 4Slide 18



Define social class and social mobility.

Chapter 4Slide 19


Lesson 4.2

Economic Environment

Goals Describe the four types of economic

systems. Explain the effects of economic

integration on international marketing.

Chapter 4Slide 20


Terms

economic system market economy mixed economy planned economy traditional economy free trade area

Chapter 4Slide 21


THE POLITICAL ECONOMY

political economy mixed economy republic

Chapter 4Slide 22


Economic Systems

market economy mixed economy

socialism

planned economy command economy

traditional economy

A country’s economic system governs how it controls the production, distribution, and consumption of goods and services.

Chapter 4Slide 23



List the four types of economic systems.

Chapter 4Slide 24


ECONOMIC INTEGRATION

Global economic integration refers to the development of trading partnerships through the elimination of restrictions on trade.

Chapter 4Slide 25


ECONOMIC INTEGRATION (continued)

free trade area customs union common market

economic union

Chapter 4Slide 26


The Americas

North American Free Trade Agreement (NAFTA) a free trade zone linking Canada, the U.S.,

and Mexico

Chapter 4Slide 27


The Americas (continued)

Central America Free Trade Agreement (CAFTA) links the U.S. with Costa Rica, El Salvador,

Guatemala, Honduras, Nicaragua, and the Dominican Republic

Free Trade Area of the Americas (FTAA) proposed

partner all countries in the Americas except Cuba

Chapter 4Slide 28



Name two types of free trade areas.

Chapter 4Slide 29


Lesson 4.3

Political and Legal Environments

Goals Describe the different types of political

systems. Describe the different types of legal

systems.

Chapter 4Slide 30


Terms political system democracy republic one-party state theocracy political risk legal system contract sustainability

Chapter 4Slide 31


POLITICAL SYSTEMS

A political system sets the laws under which businesses operate. sovereign states protectorates

Chapter 4Slide 32


Types of Political Systems democracy

direct elections by country’s citizens

republic citizens elect representatives

representatives vote on laws

Chapter 4Slide 33


Types of Political Systems (continued)

one-party states only one political party communism

theocracy religion or faith plays a dominant role

Chapter 4Slide 34


Political Risk When there is uncertainty about the

stability of a political or legal system, businesses face increased political risk. impact on long term planning

Chapter 4Slide 35


Political Economy Movement

Chapter 4Slide 36



Name the four types of political systems.

Chapter 4Slide 37


LEGAL SYSTEMS A legal system creates, interprets, and

enforces the laws of a country. statutory law

tries to put every specific legal issue into a specific law

Chapter 4Slide 38


LEGAL SYSTEMS (continued)

case law allows for the interpretation of statutes to

specific laws

corruption misuse of an official position for one’s own

benefit

Chapter 4Slide 39


Contract Law

A contract is any legally enforceable promise or set of promises made by one party to another.

Chapter 4Slide 40


Sustainability Sustainability is a worldwide movement

to allow for economic development while minimizing negative impacts on the environment. “green” laws Kyoto Protocol

Chapter 4Slide 41



Describe the two types of legal systems.

International Marketing © Thomson/South-Western ChapterChapter The International Political Economy...

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