Chapter 4.2

Bell Ringer

Complete the Cultural Sensitivity Quiz

Objectives

0422.11.6 Analyze how cultural, economic and political factors impact businesses engaged in international trade.

Doing Business Internationally Growing with increased acceptance

of capitalism around world Advances in technology (Internet) Reduction of Trade Barriers Instantaneous global news coverage

Ways to Get Involved in International Trade Importing Exporting Licensing Contract Manufacturing Joint Ventures

Foreign Direct Investment Multinationals Mini-nationals

Ways to Get Involved in International Trade Importing – purchasing goods from a

foreign country Meet same standards as domestic

products Quota’s can limit entry of some

products Hire Customs Broker – specialists

licensed by US Treasury Department Know laws, procedures and tariffs Handle 90% of all imports

Ways to Get Involved in International Trade Exporting – selling domestic goods

in a foreign country Minimal risk and control Help from government through

BuyUSA site

Ways to Get Involved in International Trade Licensing – letting another

company us a trademark, patent, special formula, company name or other intellectual property for a fee or royalty

Franchising

Intellectual property is divided into two categories: Industrial property, which includes

inventions (patents), trademarks, industrial designs, and geographic indications of source

Copyright, which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs

Ways to Get Involved in International Trade Contract Manufacturing – hiring a

foreign manufacturer to make your products according to your specifications

Pay lower wages Proprietary information must be

given to foreign companies Golf club head molds stolen in China and

copies of knockoff made

Ways to Get Involved in International Trade Joint Venture – business enterprise

that companies set up together Some countries do not allow foreign

investors to own 100% of a business Companies must find a “local”

business partner

Ways to Get Involved in International Trade Foreign Direct Investment –

establishment of a business in a foreign country

Sony – Japanese company $8 billion in China 11 manufacturing plants in United States

Ways to Get Involved in International Trade Multinationals – large corporations

that have operations in several countries

Proctor & Gamble Nike PepsiCo Coca-Cola

Ways to Get Involved in International Trade Mini-Nationals – midsize or smaller

companies that have operations in foreign countries

Difference in investment in factories, offices, other facilities

Graphic Organizer

Prepare a graphic organizer that lists the factors that are used to evaluate a countries marketing opportunities and threats. Political Factors Trade Regulations and Laws Economic Factors Socio-Cultural Factors Technical Factors

Global Environmental ScanPolitical Factors Government Stability Type of Government Trade Agreements Foreign Investment Opportunities

Global Environmental ScanTrade Regulations & Laws Percentage of Business Ownership

Allowed Laws to protect Intellectual Property

Global Environmental ScanEconomic Factors Infrastructure Labor Force Employee Benefits Taxes Standard of Living Foreign Exchange Rate

Global Environmental ScanSocio-Cultural Factors Language & Symbols Holidays & Religious Observances Social & Business Etiquette

Global Environmental ScanTechnological Factors Measurement System Electrical Voltage Standards Telephone/Internet Access Computers/Faxes/Voice Mail/Cellular

Phones Radio/Television

CIA's World Fact Book web site

Global Marketing Strategies Globalization Adaptation Customization

Global Marketing Strategies Globalization – selling the same

product and using the same promotion methods in all countries

Common need that transcends different cultures

Coca-Cola Microsoft

Global Marketing Strategies Adaptation – using an existing product

and/or promotion with changes made to better suite the characteristics of a country or region

Product Adaption – change some aspect of actual product for different markets

Promotion Adaption – change some part of promotional message for different markets Chevy Nova means “no go” in Spanish

Global Marketing Strategies Customization – creating specially

designed products or promotions for certain countries or regions

Global Marketing Strategies Activity Textbook page 88 Global Marketing

Strategies Read the examples listed. What is your first impression of each

product advertisement?

Review Assignment

Textbook page 89 After You Read Questions #1, 2, & 3

Answer questions in complete sentences on the back of the global scan graphic

Textbook page 91 Review Facts and Ideas Questions # 6, 8, 9, & 10

Answer questions in complete sentences

Assignment

Chapter 4 Vocabulary Review and Fact and Idea Review – workbook pages 29 & 30

Writing Review Assignment Explain the difference between

customization, globalization and adaptation.

Mini-Quiz

1. _____ refers to the fact that all countries depend on each other for resources that they themselves lack.

2. Two types of advantages in international trade are comparative and ____.

3. A trade deficit occurs when a country’s ____ are greater than its ____.

Mini-Quiz

4. The business activity in the global market that carries the lowest risk is _____.

5. Offering a product for sale world-wide without making any changes or modifications to the product is called ____.

Mini-Quiz

1. Interdependence refers to the fact that all countries depend on each other for resources that they themselves lack.

2. Two types of advantages in international trade are comparative and absolute.

3. A trade deficit occurs when a country’s imports are greater than its exports.

Mini-Quiz

4. The business activity in the global market that carries the lowest risk is exporting.

5. Offering a product for sale world-wide without making any changes or modifications to the product is called globalization.