International Marketing : Fall 2000 (260361)

Instructor : Dr. G.M Naidu

• Welcome

• Why study international marketing ?

• What are your expectations of the course?

• What are my expectations of you?- High learning course- Professionalism

- Globally competent workforce

• Course structure and format

• UW-Whitewater has excellent resources for the course- Software- Videos- GBRC- Journals and Internet

CHAPTER 1

Learning Objectives :

• Understand the role of international marketing : Retrospect and Prospect

• Evolution of international marketing and definition• Importance of trade to economic development• International constraints that exist on domestic economic policy and policy makers

• The international marketing environment

• Geographical perspectives on international marketing

THE INTERNATIONAL MARKETING IMPERATIVE

Definition of international marketing

“ The process of planning and conducting transactions across national borders to create exchanges that satisfy the objectives of individuals and organizations”.

Key international marketing questions faced by a firm:• How will my product or service fit into the international market?

• What marketing adjustments are or will be necessary?

• What global competitive threats should I expect?

• How can I work with these threats and turn them into opportunities?

• What are my strategic global alternatives?

• Trade = Exports + Imports of all goods and services between countries

• If exports from a country are greater than imports, it results in trade surplus

• If exports from a country are lower than imports, it results in trade deficit

• USA has trade deficit in merchandise (goods) trade and trade surplus in services

• Overall trade deficit for USA in 1999 was over $268 billions.

• Monthly trade statistics influence stock market fluctuations.

• One billion $ exports create over 20,000 jobs in any year.

The Importance Of World Trade

• World trade has grown from $200 billion to more than $6 trillion in the past three decades.

• World trade was $ 6.9 trillion in 1999 and will exceed $7 trillion in 2000 • The iron curtain is gone and capitalism has replaced the old economic doctrines.

• Firms invest on a global scale and offshore production far exceeds exports. • Increasingly more difficult to define “where” products came from.

• New trading blocks (like NAFTA, EU) are emerging. • Global linkages bind countries, institutions, and individuals more closely than ever.

• World trade opens up entirely new business horizons.

• The composition of merchandise exports is shifting from commodities to manufactured goods (see fig. 1.2 p.8)

Domestic Policy Repercussions • One out of every 3 U.S farm acres is producing for export

• One out of 6 U.S manufacturing jobs produces for export• $1 out of $7 in U.S sales goes abroad

• 1 out of 3 cars, 9 out of 10Tvs, 2 out of 3 suits, and every VCR sold in the U.S is imported.• Travel and tourism is the #1 source of U.S foreign exchange.

• $1 out of $4 of U.S bonds and notes is issued to foreigners. • U.S moved from world’s net creditor to world’s debtor

Opportunities And Challenges In International Marketing

• International environment is dynamic and each of the changes require active response.

• International activity may be crucial to a firm’s survival and growth.

• Firms and individuals must be capable of adapting to the environment.

• Countries are interdependent and isolation is impossible today.

• Interdependence and the global economy.

The Marketing Environment

• Uncontrollable environment

- Socio-economic and demographic environment - Cultural environment - Technological environment - Political and legal environment - Financial environment

• Controllable environment- Product- Place- Price - Promotion

• The marketing process- Analysis- Planning - Implementation

Geographical Perspectives On International Marketing

• Location

• Place

• Interaction

• Movement

• Region

Place

- Geological characteristics- Climate

• Human Features - Population

- Built Environment

• Natural Features