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Page 1: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Product Place Price Promotion

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International MarketingWeek 2

Page 2: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Course Objectives

• The Benefits of International Markets

• The scope of the International Marketing Task

• The Importance of Self-Reference Criterion (SRC)

• The increasing importance of global awareness

• The Progression of Becoming a Global Market

• The Importance of Gatt and The WTO, IMF and World Bank

• The Evolution of the EU and strategic implications

• Marketing Opportunities in EU/Africa/Middle East

• Importance of the Bottom-of-the-Pyramid Market

• Diversity Across the Region

Page 3: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Objective

• Explain what is Marketing Mix

• The scope of the International Marketing Task

• The Importance of Self-Reference Criterion (SRC)

• The increasing importance of global awareness

• The Progression of Becoming a Global Market

• The Importance of Gatt and The WTO, IMF and World Bank

• The Evolution of the EU and strategic implications

• Marketing Opportunities in EU/Africa/Middle East

• Importance of the Bottom-of-the-Pyramid Market

• Diversity Across the Region

• The Benefits of International Markets

Page 4: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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• The Benefits of International Markets

No company in the world can participate

in international business without

escaping the effects of increasing numbers of

competitors from home and abroad

••

Globalization have created a

borderless world where trade, commerce,

business are created in the

most unthinkable situations

••

International marketing helps prosperity and

brings development to every corner of the world if there

are favourable conditions

••

Today, most business

activities are global in scope and managers,

CEOs, policy makers must be in possess of up to date global

awareness

••

Global strategic plans need to be

developed because being global is not any more a luxury

but an obligation for economic survival

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International Marketing: Why is so important for development of an economy

Page 5: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Introduction to International Marketing

BENEFITS AND CONSIDERATIONS OF INTERNATIONAL MARKETING

• • •

Global Commerce needs peace among countries in order to develop

Political stability, stable and steady economy, ideal social and cultural infrastructure

Access to quality education, heavy investment in Research and Development, and Innovation in Science and Technology

Competitive edge, strong government support, daring private entrepreneurship, availability of funds, global vision

• •

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Page 6: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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4 Most important Factors affecting International Marketing

There are many factors influencing and creating International Marketing

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Page 7: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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There are many factors influencing and creating International Marketing

There is mandate to manage the resources and global environment properly for the generation to come and invest heavily in Research and Development of renewable energies

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4 Most important Factors affecting International Marketing

Page 8: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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There are many factors influencing and creating International Marketing

The burgeoning impact of the Internet, mobile phones, and other global media have accelerated the disappearance of borders

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4 Most important Factors affecting International Marketing

Page 9: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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There are many factors influencing and creating International Marketing

Developing countries in order to progress are forces, by globalization, to open up their borders to global trade. In doing so, they have increased the dependence to import-export system and in controlling their economic growth

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4 Most important Factors affecting International Marketing

Page 10: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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The World Trade organization, the World Bank, the International Monetary Fund and the proliferation of free trade agreements have created an interwoven global market where no country can survive alone or in isolation

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4 Most important Factors affecting International Marketing

There are many factors influencing and creating International Marketing

Page 11: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Marketing Mix In International Market

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Page 12: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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International Marketing System

Exporting Countries (collection of sellers)

Communication

Goods / Services

Money

Information

Importing Countries

(collection of buyers)

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Page 13: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Simple Marketing System

Industry (collection of sellers)

Communication

Goods / Services

Money

Information

Market (collection of buyers)

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Page 14: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Objective

• The Benefits of International Markets

• Explain the 4 Ps and 4 Cs of Marketing Mix

• The Importance of Self-Reference Criterion (SRC)

• The increasing importance of global awareness

• The Progression of Becoming a Global Market

• The Importance of Gatt and The WTO, IMF and World Bank

• The Evolution of the EU and strategic implications

• Marketing Opportunities in EU/Africa/Middle East

• Importance of the Bottom-of-the-Pyramid Market

• Diversity Across the Region

• The scope of the International Marketing Task

Page 15: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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The Scope of International Marketing

• International Marketing is the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit.

• The only difference between the definition of domestic marketing and international marketing is that, in the latter case, marketing activities take place in more than one country.

• Therefore, International Marketing is more complex, diverse, and challenging (unpredictable).

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International Marketing

Page 16: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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The Business Goal of International Marketing

• The business goal is to make a profit by promoting, pricing, and distributing products for which there is a market.

• The difference with domestic market is that the global environment which is the scenario where all marketing plans must be implemented.

• The challenges come from the unfamiliar terrain determined by competition, legal system, government controls, weather, consumers and other unpredictable elements

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Business Goal of International Marketing

Page 17: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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4 Ps

Marketing mix is the combination of four elements. They are:

Pro

du

ct

Pla

ce

Pri

ce Pro

mo

tio

n

These are known as the 4 Ps of marketing.

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Page 18: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Additional PsSome marketers also consider an additional four Ps to the original 4 Ps that you learnt. These are:

Peo

ple

Ph

ysi

cal

Pre

sen

ce

Pro

cess

Ph

ysi

cal

Evi

den

ce

How your staff, are different from those in a competitor’s organization, and how your clients are different from your competitor’s clients.

How your shop or website looks.

How your product is built and delivered, or how your service is sold, delivered and accessed.

How your service becomes tangible. e.g. policies & brochures are something the customers can touch and hold.

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Page 19: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Price

Product

Promotion

Place

4 Ps and 4 Cs

Now-a-days, the Four Ps is being replaced by the Four Cs model,

consisting of :

The Four Cs model is more consumer-oriented and fits better in the

movement from mass marketing to niche marketing.

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Page 20: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Elements of 4 Cs Model

The elements of the four Cs model are:

Product- Customer /Consumer

Place- Convenience

Price- Cost

Promotion- Communication

Let’s look at each in detail.

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Page 21: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Product - Customer/Consumer

In the four Cs model, the product part of the Four Ps model is replaced by customer or consumer which shifts the focus to satisfying the consumer.

PRODUCT

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Page 22: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Place - Convenience

In the Four Cs model, the place part of the Four Ps model is replaced by the convenience function. Place is no longer as relevant as before due to the rise of internet and hybrid models of purchasing. Convenience takes into account the ease to buy a product, find a product, find information about a product, and several other considerations.

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Page 23: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Price - Cost

In the Four Cs model, the price part of the Four Ps model is replaced by cost, reflecting the reality of the total cost of ownership.

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Page 24: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Promotion - Communication

Finally, in the Four Cs model, the promotion part of the Four Ps model is replaced by communication. Communications represents a broader focus than simply promotions. Communications includes any form of communication between the firm and the consumer such as advertising, public relations, personal selling, viral advertising etc.

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Page 25: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Marketing Decision Factors

There may be two types of Marketing Decision Factors:

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Page 26: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Controllable Market Decision Factors

• The Characteristics of the Firm

• The pricing of the product• The product development

and manufacturing• Promotional Strategy• Channels of Distribution• Research

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Page 27: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Uncontrollable Market Decision Factors

• Competition and Market System• Government Law• Political Environment• Social Structure• Economic Climate• Education and Technology• Cultural Forces

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DomesticEnvironment

Foreign Environment

Page 28: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Aspects of Domestic Environment

All domestic environment uncontrollable:1. Foreign policy decision effecting a firm’s international marketing success2. Domestic Economic Climate3. Domestic Competition4. Social culture and structure

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Page 29: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Aspects of the Foreign Environment

All foreign environment uncontrollable:

1. Political Stability, Political Forces, Political System2. Class Structure, Income Distribution, Social Development3. Economic Climate, Business Culture, Trading infrastructure4. Banking and Financial System5. Level of Education and Technology6. Level of Understanding and knowledge of the targeted foreign market

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Page 30: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Objective

• The Benefits of International Markets

• The scope of the International Marketing Task

• Explain what is Viral Marketing

• The increasing importance of global awareness

• The Progression of Becoming a Global Market

• The Importance of Gatt and The WTO, IMF and World Bank

• The Evolution of the EU and strategic implications

• Marketing Opportunities in EU/Africa/Middle East

• Diversity Across the Region

• The Importance of Self-Reference Criterion (SRC)

• Importance of the Bottom-of-the-Pyramid Market

Page 31: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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What is Self-Reference Criterion

SRC

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Page 32: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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SRC and International Marketing

SRC

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Page 33: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Cross Cultural Analysis Framework

• Define the business problem or goal in home country cultural traits, habits, or norms

• Define the business problem or goal in foreign country cultural traits, habits, or norms through consultation with natives of the target country. Make no value judgements

• Isolate the SRC influence in the problem and examine it carefully to see how it complicates the problem

• Redefine the problem without the SRC influence and solve for the optimum business goal situation

• This approach requires an understanding of the culture of the foreign market as well as one’s culture. Before understanding other cultures it is important to be aware of our own.

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Page 34: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Objective

• The Benefits of International Markets

• The scope of the International Marketing Task

• The Importance of Self-Reference Criterion (SRC)

• Explain Extended Marketing Mix

• The Progression of Becoming a Global Market

• The Importance of Gatt and The WTO, IMF and World Bank

• The Evolution of the EU and strategic implications

• Marketing Opportunities in EU/Africa/Middle East•

• Importance of the Bottom-of-the-Pyramid Market

• Diversity Across the Region

• The increasing importance of global awareness

Page 35: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Importance Global Awareness

OpportunitiesUnlimited opportunities await for the international marketer prepared to confront the challenges of cultural aspects of global marketing

Global Awareness

Target Segment

Tolerance

Being Knowledgeable

Global Knowledge

Global Network

Opportunities

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Page 36: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Importance Global Awareness

Global Awareness1) Tolerance of cultural differences2) Knowledge of cultures, history, world

market potential and global economic, social and political needs

Cost

Opportunities

Tolerance

Being Knowledgeable

Global Knowledge

Global Network

Global Awareness

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Importance Global Awareness

ToleranceFor cultural differences is critical. It is understanding cultural differences and accepting and working with others whose behaviour and values may be different from ours

Global Awareness

Opportunities

Competition

Being Knowledgeable

Global Knowledge

Global Network

Tolerance

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Importance Global Awareness

Global Awareness

Opportunities

Tolerance

Society & Law

Global Knowledge

Global Network

Being Knowledgeable

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Being KnowledgeableBeing Knowledgeable: It is important • To understand behaviour in the

marketplace, • To comprehend the way people think

and interact with each other, • to be abreast of economic, social and

political trends• To be able to change or shift strategy

to better fit the market

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Importance Global Awareness

Being KnowledgeableGlobal Knowledge: It is important • to be aware of the geo-political shifts

happening continuously • To analyse the past with the eyes of

the present to predict tomorrow’s shifts

• To realize that the uncontrollable factors need to be observed and forecasted

Global Awareness

Opportunities

Tolerance

Being Knowledgeable

Variant Prices

Global Network

Global Knowledge

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Importance Global Awareness

Global Network: It is the ability of growing professional connections within the global community, in the foreign target markets, with international partners with the purpose of having solid cooperation and network based on understanding and acceptance

Global Awareness

Opportunities

Tolerance

Being Knowledgeable

Global Knowledge

Discount PolicyGlobal Network

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Page 41: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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Objective

• The Benefits of International Markets

• The scope of the International Marketing Task

• The Importance of Self-Reference Criterion (SRC)

• The increasing importance of global awareness

• Explain 7Ps & 7Cs of Marketing Mix

• The Importance of Gatt and The WTO, IMF and World Bank

• The Evolution of the EU and strategic implications

• Importance of the Bottom-of-the-Pyramid Market

• Diversity Across the Region

• The Progression of Becoming a Global Market

• Importance of the Bottom-of-the-Pyramid Market

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Stages of International Marketing Involvement

• No Direct Foreign Marketing: A company in this stage does not actively , cultivate customers outside national border; however, this company’s products may reach foreign markets. Sales can be made by trading companies as well as foreign customers who directly contact the firm.

• Infrequent Foreign Marketing: Temporary surpluses caused by variations in production levels or demand may result in infrequent marketing overseas. The surpluses are characterised by their temporary nature; therefore sales to foreign market are made available with little or no serious intention to continue or maintain market representation

• Regular Foreign Marketing: The firm has permanent production capacity devoted to the production of goods and services to be marketed to foreign markets, Firms employs domestic or foreign international marketers to expand further

• Global Marketing: The company is completely oriented towards foreign markets and plan global marketing activities. The home and foreign market are considered one market and the marketing research and strategy is uniformly applied

• International Marketing: Companies are more involved and committed to international marketing, always seek for new markets and produce goods to fit the target markets. Companies go into joint venture or form of partnerships with firms in the foreign target market

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Page 43: International Marketing Week 2 · PDF file• International Marketing is the performance of business activities designed to plan, price, promote, and direct the

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KOF Globalization Index Measures

The KOF Globalization Index measures the three main dimensions of globalization:• economic• social• and political.In addition to three indices measuring these dimensions, it calculates an overall index of globalization and sub-indices referring to• actual economic flows• economic restrictions• data on information flows• data on personal contact• and data on cultural proximity.

Let’s look at each in detail.

Economic Measures

Social Measures

Political Measures

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http://globalization.kof.ethz.ch/query/

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KOF Globalization Index – Economic Measures

• Trade flows and balance of trade• Foreign Direct Investment Flows• Income Payment for Foreigners• Mean Tariff Rates• Taxes on International Trade

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KOF Globalization Index – Social Measures

Telecommunication Technologies and servicesInternational TourismForeign PopulationInternet UsersTelevision and Mass Media

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KOF Globalization Index – Political Measures

• Embassies in the Country• Membership in International Organizations• International Treaties• Participation in UN Missions

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*

*The Marketing

EnvironmentThe MARKETING ENVIRONMENT

LG4

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Objective

• The Benefits of International Markets

• The scope of the International Marketing Task

• The Importance of Self-Reference Criterion (SRC)

• The increasing importance of global awareness

• The Progression of Becoming a Global Market

• Describe the Characteristics of Marketing Mix

• The Evolution of the EU and strategic implications

• Marketing Opportunities in EU/Africa/Middle East

• Importance of the Bottom-of-the-Pyramid Market

• Diversity Across the Region

• The Importance of Gatt and The WTO, IMF and World Bank

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General Agreement on Tariff and Trade

1 What is GATT 2

4Eight rounds of Tariffs Negotiations

6Trade Related Aspects of Intellectual Property Rights

3

5

10

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3 Basic Elements

General Agreement on Trade in Services

Trade Related Investment Measures

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What is GATT

It is an agreement made by the USA and other 22 countries and it provided a process to reduce tariffs and an agency to serve as a watchdog over world trade. Countries with trade disputes can ask to resolve their disputes through GATT’s advisory boards.GATT is just an advisory body created by agreement and help to solve by agreement. If members fail to solve their disputes or reject the GATT ‘s recommendations, there is no enforcement policy or powers of legal obligation from GATT

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General Agreement on Tariff and Trade

2 3 Basic Elements

6Trade Related Aspects of Intellectual Property Rights

1 What is GATT

4Eight rounds of Tariffs Negotiations

General Agreement on Trade in Services

Trade Related Investment Measures

3

5

Copyright © 2008 - 2012 managementstudyguide.com. All rights

reserved.

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3 Basic Elements

The GATT agreement covers these 3 basic elements of trade:1) Trade shall be conducted on a non discriminatory basis2) Protection shall be given to domestic industries through customs tariffs,

not through such commercial measures as import quotas3) Consultation shall be the primary method to solve global problem

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8 rounds of tariffs negotiations

3

2 3 Basic Elements

6Trade Related Aspects of Intellectual Property Rights

1 What is GATT

4General Agreement on Trade in Services

Trade Related Investment Measures5

Copyright © 2008 - 2012 managementstudyguide.com. All rights

reserved.

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General Agreement on Tariff and Trade

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8 rounds of tariffs negotiations

1. Geneva Round 1947 in Switzerland called the foundation round. USA + 22 countries focused on tariffs and lasted 7 months

2. Annecy Round 1949 in France between 34 countries and also focused on tariffs3. Torquay Round 1950 in England between 34 countries and focused to cut tariffs

between member of 25% 4. Genera Round II 1956 in Switzerland between 22 countries and focused on tariffs

and admission of Japan5. Dillon 1960 in Switzerland between 44 countries and almost 5 USD Billion of

tariffs concessions6. Kennedy 1964 in Switzerland between 48 countries and focused on anti-

dumping and more than 40 USD billion of world trade achieved7. Tokyo 1973 in Japan between 102 countries and focused on Tariffs, non-tariff

measures, "framework" agreement and Tariff reductions worth more than $300 billion achieved

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8th Final Round and creation of WTO

URUGUAY ROUND 1986123 COUNTRIES

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8th Final Round and creation of WTO

• Tariffs, non-tariff measures, rules, services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO, etc.

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8th Final Round and creation of WTO

• The round led to the creation of WTO, and extended the range of trade negotiations, leading to major reductions in tariffs (about 40%) and agricultural subsidies, an agreement to allow full access for textilesand clothing from developing countries, and an extension of intellectual property rights.

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4General Agreement on Trade in Services

Eight rounds of Tariffs Negotiations3

2 3 Basic Elements

6Trade Related Aspects of Intellectual Property Rights

1 What is GATT

Trade Related Investment Measures5

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General Agreement on Tariff and Trade

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3 Main Agreements of GATT

The GATT members, before the creation of WTO, have reached 3 multilateral agreements on various major trading aspects formalized in the:1. General Agreement on Trade in Services

(GATS)2. Trade-Related Investment Measures

(TRIMs)3. Trade Related Intellectual Property

Rights (TRIPs)

Let’s look at each in detail.

GATS

TRIMs

TRIPs

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1. General Agreement on Trade in Services (GATS)

1st multilateral, legally enforceable agreement covering trade and investment in the services sector. It provides a legal basis for future negotiations for the elimination of barriers that discriminate against foreign services and deny them market access. It also covers trade and investment in services like telecommunications, technology and research among members.

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Trade Related Aspects of Intellectual Property Rights5

4General Agreement on Trade in Services

Eight rounds of Tariffs Negotiations3

2 3 Basic Elements

6

1 What is GATT

Trade Related Investment Measures

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General Agreement on Tariff and Trade

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3. Trade Related Intellectual Property Rights (TRIPs)This agreement establishes high standards of protection for a full range of intellectual property rights (patents, copyrights, trademarks, trade secrets, industrial designs, and technologic innovations).

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6 Trade Related Investment Measures

Trade Related Aspects of Intellectual Property Rights5

4General Agreement on Trade in Services

Eight rounds of Tariffs Negotiations3

2 3 Basic Elements1 What is GATT

8

9

12

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General Agreement on Tariff and Trade

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2. Trade-Related Investment Measures (TRIMs)

This Agreement establishes the basic principle that investment restriction can be made major trade barriers like • foreign multinationals opening joint-venture or

partnerships with local enterprises to access the market,

• fair labour or employment practices, • respect of the legal system and full compliance with

it, • most of the production must be for export, • buying production supplies from local suppliers even

if they are more expensive.

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World Trade Organization

deals with regulation of trade between

participating countries by providing a framework for

negotiating trade agreements and a dispute resolutionprocess aimed at

enforcing participants' adherence to WTO

agreements

••

oversees the implementation,

administration and operation of the

covered agreements and provides a forum for negotiations and for settling disputes

••facilitate the

implementation, administration and

operation and further the objectives of the

Multilateral Trade Agreements, and shall also provide the frame

work for the implementation,

administration and operation of the

multilateral Trade Agreements

••provide the forum

for negotiations among its members

concerning their multilateral trade

relations in matters dealt with under the Agreement of

Membership

••

cooperate, as appropriate, with the international Monetary Fund

(IMF) and with the International Bank for Reconstruction and Development

(IBRD) and its affiliated agencies

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Established during the session of Marrakech in Morocco in 194 of Uruguay Round (1986). is an intergovernmental organization that regulates international trade. The WTO officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by 123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade (GATT), which

commenced in 1948. Mr. Roberto Azevedo

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5 Principles of Trading in WTO

Non DiscriminationIt has two major components: the most favored nation (MFN) rule, and the national treatment policy. The MFN rule requires that a WTO member must apply the same conditions on all trade with other WTO members. National treatment means that imported goods should be treated no less favorably than domestically produced goods (at least after the foreign goods have entered the market)

Reciprocity

Target Segment

Binding

Transparency

Safety Values

three types of provision

Non Discrimination

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Importance Global Awareness

RECIPROCITY

• It reflects both a desire to limit the scope of free-riding that may arise because of the MFN rule,

• and a desire to obtain better access to foreign markets.

• A related point is that for a nation to negotiate,

• it is necessary that the gain from doing so be greater than the gain available from unilateral liberalization;

• reciprocal concessions intend to ensure that such gains will materialize

Cost

Non Discrimination

Binding

Transparency

Safety Values

three types of provision

Reciprocity

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Importance Global Awareness

BINDING• The tariff commitments made by

WTO members in a multilateral trade negotiation and on accession are enumerated in a schedule (list) of concessions.

• These schedules establish "ceiling bindings": a country can change its bindings, but only after negotiating with its trading partners, which could mean compensating them for loss of trade

Reciprocity

Non Discrimination

Competition

Transparency

Safety Values

three types of provision

Binding

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Importance Global Awareness

Reciprocity

Non Discrimination

Binding

Society & Law

Safety Values

three types of provision

Transparency

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TRANSPARENCYmembers are required to publish their trade regulations, to maintain institutions allowing for the review of administrative decisions affecting trade, to respond to requests for information by other members, and to notify changes in trade policies to the WTO

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Importance Global Awareness

SAFETY VALUESWTO's agreements permit members to take measures to protect not only the environment but also public health, animal health and plant health

Reciprocity

Non Discrimination

Binding

Transparency

Variant Prices

three types of provision

Safety Values

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Importance Global Awareness

1. articles allowing for the use of trade measures to attain non-economic objectives;

2. articles aimed at ensuring "fair competition"; members must not use environmental protection measures as a means of disguising protectionist policies.

3. provisions permitting intervention in trade for economic reasons

Reciprocity

Non Discrimination

Binding

Transparency

Safety Values

Discount Policythree types of provision

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International Monetary Fund IMF

It now plays a central role in the management of balance of payments

difficulties and international financial

crises. Countries contribute funds to a pool through a quota

system from which countries experiencing balance of payments problems can borrow

money

••

to promote international monetary co-

operation, international trade, high employment,

exchange-rate stability, sustainable economic growth,

and making resources available

to member countries in financial difficulty

••providing policy,

advice and financing the members, by

working with developing nations to

help them achieve macroeconomic

stability and reduce poverty

••The rationale for

this is that private international

capital markets function

imperfectly and many countries

have limited access to financial markets

••

Such market imperfections, together with

balance-of-payments financing,

provide the justification for

official financing ]

The IMF provides alternate sources of

financing.

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An international organization headquartered in Washington, D.C., of "189 countries . Formed in 1944 at the Bretton Woods Conference primarily by the ideas of Harry Dexter White and John Maynard Keynes, and its current director is Christine Lagarde. Foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

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3 Primary Functions of IMF

• to oversee the fixed exchange rate arrangements between countries

• national governments manage their exchange rates

• provide short-term capital to aid the balance of payments. This assistance was meant to prevent the spread of international economic crises

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Surveillance of the global economy

The IMF is mandated to oversee the international monetary and financial system and monitor the economic and financial policies of its member countries. This activity is known as surveillance and facilitates international co-operation:

The General Data Dissemination System (GDDS): data dissemination standards with the view of guiding IMF member countries to disseminate their economic and financial data to the public

Special Data Dissemination Standard (SDDS).This is an upgraded statistical system of the GDDS

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Conditionality of Loans

1. IMF conditionality is a set of policies or conditions that the IMF requires in exchange for financial resources

2. The IMF does require collateral from countries for loans but also requires the government seeking assistance to correct its macroeconomic imbalances in the form of policy reform.

3. If the conditions are not met, the funds are withheld. The concept of conditionality was introduced in a 1952 Executive Board decision and later incorporated into the Articles of Agreement.

4. Conditionality is associated with economic theory as well as an enforcement mechanism for repayment. Stemming primarily from the work of Jacques Polak, the theoretical underpinning of conditionality was the "monetary approach to the balance of payments".

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IMF Structure Adjustment for Conditionality of Loans

These are the Macroeconomic Structure of IMF for granting loans to Members

Cutting expenditures,

also known as austerity

Focusing economic output on

direct export and resource

extraction

Devaluation of currencies

Trade liberalization,

or lifting import and

export restrictions

Increasing the stability of

investment (by supplementing foreign direct

investment with the opening of domestic

stock markets),

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IMF Structure Adjustment for Conditionality of Loans

These are the Macroeconomic Structure of IMF for granting loans to Members

Balancing budgets and

not overspending,

Removing price controls

and state subsidies

Privatization, or divestiture of all or part

of state-owned

enterprises

Enhancing the rights of foreign

investors vis-a-vis national laws

Improving governance and

fighting corruption.

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79

World Bank Group

World Bank

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(IBRD) International Bank for

Reconstruction and Development

(IDA) International Development Association

(IFC) International Finance Corporation

(MIGA) Multinational Investment Guarantee Association

(ICSID) International Centre for Settlement of Investment Disputes

Structure of the World Bank Group

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CRITERIA OF THE WORLD BANK

The following are some of the Criteria of the World Bank:

Eradicate Extreme

Poverty and Hunger

Achieve Universal Primary

Education

Promote Gender Equality

Improve Maternal

Health

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Reduce Child

Mortality

Combat HIV/AIDS,

Malaria, and Other Diseases

Ensure Environmental Sustainability and Develop a Global

Partnership for Development

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Objective

• The Benefits of International Markets

• The scope of the International Marketing Task

• The Importance of Self-Reference Criterion (SRC)

• The increasing importance of global awareness

• The Progression of Becoming a Global Market

• The Importance of Gatt and The WTO, IMF and World Bank

• Explain Marketing Planning Process

• Marketing Opportunities in EU/Africa/Middle East

• Importance of the Bottom-of-the-Pyramid Market

• Diversity Across the Region

• The Evolution of the EU and strategic implications

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Factors of concern for the International Marketer

Globalization of

the Markets

Restructuring of the Eastern

European Bloc

New emerging states become

market economies

The birth of Russia from the end of

USSR

Worldwide cooperation and

competition

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Fast facts of the European Union

an internal single market through a standardized system of laws

ensure the free movement of people, goods, services, and capital within the internal market

A monetary union composed of 19 EU member states which use the euro currency

The European Union (EU) is a political and economic union of 28 member states

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The Maastricht Treaty established the European Union in 1993 and introduced European citizenship

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Organizational Structure

Donald Tusk

President of

the

European

Council

since 2014

Jean-Claude

Juncker

President of

the

European

Commission

since 2014

Antonio

Tajani

President of

the

European

Parliament

since 2017

Mario

Draghi

President of

the

European

Central

Bank

Since 2011

Jeroen Dijsselbloem

President of the

Euro Group and

President of the Board of

Governors of the European Stability

Mechanism (ESM)

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Organizational Structure

European Union

European Union

Court of Justice of the

European Union

Court of Justice of the

European Union

Council of the European

Union

Council of the European

Union

European Council

European Council

European Commission

European Commission

European ParliamentEuropean

Parliament

European Central Bank

European Central Bank

European Court of Auditors

European Court of Auditors

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Bases for Segmentation

European Council

sets the general political directions and priorities of the Union by gathering together its member states' heads of state/government

Council of the European Union

executive meeting of ministers of member states governments' departments. It is the Upper House

Court of Justice of the European Union

ensures the uniform application of EU law and resolves disputes

manages and directs the Commission's permanent civil service

European Commission

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European Parliament

consists of 751 directly elected representatives, forming the EU's lower house

Bases for Segmentation

European Central Bank

responsible for monetary stability within member states

European Court of Auditors

investigates the proper management of finances

Behavioral Segmentation

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Aspects regulated by the EU

Military SupportMilitary Support

Humanitarian Aid

Humanitarian Aid

Internal MarketInternal Market

Monetary Union

Monetary Union

EnergyEnergy

InfrastructureInfrastructureCompetitionCompetition

Cultural PolicyCultural Policy

SportSport

MediaMedia

AgricultureAgriculture

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Objective

• The Benefits of International Markets

• The scope of the International Marketing Task

• The Importance of Self-Reference Criterion (SRC)

• The increasing importance of global awareness

• The Progression of Becoming a Global Market

• The Importance of Gatt and The WTO, IMF and World Bank

• The Evolution of the EU and strategic implications

• Explain AIDA

• Importance of the Bottom-of-the-Pyramid Market

• Diversity Across the Region

• Marketing Opportunities in EU/Africa/Middle East

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NAFTA (North America Free Trade Agreement)

It is agreement signed by Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994It regulates trade of goods and services, movement of capitals, banking and financing, movement of people, educational and cultural exchanges, environment protection policies, research and development and cooperation between Canada, Mexico and USA

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ASIA PACIFIC TRADE ASSOCIATIONS

Association of Southern Asian Nationsa regional intergovernmental organization comprising ten Southeast Asian states which promotes Pan-Asianism and intergovernmental cooperation and facilitates economic, political, military, educational and cultural integration amongst its members and Asian states.

AFTA

Target Segment

ASEAN + 3

APEC

ASEAN

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Importance Global Awareness

ASEAN FREE TRADE AREA

• a trade bloc agreement by the Association of Southeast Asian Nations supporting local manufacturing in all ASEAN countries.

• was signed on 28 January 1992 in Singapore

The primary goals of AFTA seek to:• Increase ASEAN's competitive edge as a

production base in the world market through the elimination, within ASEAN, of tariffs and non-tariff barriers; and

• Attract more foreign direct investment to ASEAN.

Cost

ASEAN

ASEAN + 3

APEC

AFTA

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Importance Global Awareness

ASEAN + 3• ASEAN Plus Three (APT) is a forum that

functions as a coordinator of co-operation between the Association of Southeast Asian Nations and the three East Asia nations of China, Japan, and South Korea.

• has been credited as forming the basis for financial stability in Asia

• The Asian Currency Unit (ACU) is a proposed weighted index of currencies for ASEAN+3.

• The Asia Development Bank is charged with the task to create the ACU

AFTA

ASEAN

Competition

APEC

ASEAN + 3

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Importance Global Awareness

AFTA

ASEAN

ASEAN + 3

Society & LawAPEC

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APEC Asia-Pacific Economic Cooperation (APEC) is a forum for 21 Pacific Rim member economies[that promotes free trade throughout the Asia-Pacific region. It was established in 1989 in response to the growing interdependence of Asia-Pacific economies and the advent of regional trade blocs in other parts of the world; to defuse fears that highly industrialized Japan (a member of G8) would come to dominate economic activity in the Asia-Pacific region; and to establish new markets for agricultural products and raw materials beyond Europe

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Marketing Opportunities

1 Strategic Implications 2

4Market Barriers

6Level of Market Development

3

5

10

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Opportunities

Marketing Mix Implications

Demand in Developing Countries

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Strategic Implications

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General Agreement on Tariff and Trade

2 Opportunities

6Level of Market Development

1 Strategic Implications

4Market Barriers Marketing Mix Implications

Demand in developing countries

3

5

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reserved.

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Opportunities

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Market Barriers

3

2 Opportunities

6Level of Market Development

1 Strategic Implications

4Marketing Mix Implications

Demand in developing countries5

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General Agreement on Tariff and Trade

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Market Barriers

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4Marketing Mix ImplicationsMarket Barriers

3

2 Opportunities

6Level of Market Development

1 Strategic Implications

Demand in developing countries5

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General Agreement on Tariff and Trade

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Market Mix Implications

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Level of Market Development

5

4Marketing Mix ImplicationsMarket Barriers

3

2 Opportunities

6

1 Strategic Implications

Demand in developing countries

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General Agreement on Tariff and Trade

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Levels of Marketing Development

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6 Demand in Developing Countries

Level of Market Development

5

4Marketing Mix ImplicationsMarket Barriers

3

2 Opportunities1 Strategic Implications

8

9

12

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General Agreement on Tariff and Trade

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Demand in Developing Countries

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Objective

• The Benefits of International Markets

• The scope of the International Marketing Task

• The Importance of Self-Reference Criterion (SRC)

• The increasing importance of global awareness

• The Progression of Becoming a Global Market

• The Importance of Gatt and The WTO, IMF and World Bank

• The Evolution of the EU and strategic implications

• Marketing Opportunities in EU/Africa/Middle East

• Explain SWOT Analysis

• Diversity Across the Region

• Importance of the Bottom-of-the-Pyramid Market

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Bottom of the Pyramid Market

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Bottom of the Pyramid Market

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Theory of Bottom of the Pyramid Market

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The wealth pyramid. As we move higher and higher up in wealth we find fewer and fewer people having that wealth and vice versa.

The pyramid is a graphical depiction of inverse relationship between two variables as one increases the other decreases.

We find that the percent of world wealth and the percent of world population controlling it are related with each other in an inverse relation

The standards and benchmarks developed - for example less than $2.5 a day - always tell us about the upper limit of what we call the BoP, and not actually about its base or bottom.

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Examples of BoP Businesses

Microcredit

"lend tiny amounts of money to people with even tinier assets"

Market-specific products

Products designed and packaged for the poor and low income consumers

Innovation in the BoP

Relative advantage and Complexity must be attributes on innovation for the BoPs Markets

several social venture funds are already active, true Venture Capital (VC) funds are now emerging.

Venture capital

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Examples of BoP Businesses

Brand in the bottom of the pyramid market

Brand influences the new product adoption in the Bottom of Pyramid market

Brand may positively influence the relative advantage of an innovation

Relative advantage and Complexity must be attributes on innovation for the BoPs Markets

Partnerships between firms and BoP markets are encouraged for the development of products and services able to address the needs of consumption related to those markets

Business and community partnerships

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Examples of BoP Businesses

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Objective

• The Benefits of International Markets

• The scope of the International Marketing Task

• The Importance of Self-Reference Criterion (SRC)

• The increasing importance of global awareness

• The Progression of Becoming a Global Market

• The Importance of Gatt and The WTO, IMF and World Bank

• The Evolution of the EU and strategic implications

• Marketing Opportunities in EU/Africa/Middle East

• Importance of the Bottom-of-the-Pyramid Market

• Compare Old-School vs. Predictive Marketing Mix Analysis• Diversity Across the Region

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Big Emerging Markets BEMs

• All geographically large

• Have significant population

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• Are sizeable markets for wide range of products and services

• Have strong rates of growth or the potential to achieve higher standards of living

• Have strong plan for economic reform already in planning

• Have political leadership and are considered regional economic drivers in their region, and seek to

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Summary

In this module you learnt that:

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The globalization of markets and competition requires that managers pay attention to global environment

International Marketing is defined as the performance of business activities, including pricing, promotion, product, and distribution decisions across national borders

The Task of International Marketing is made more daunting and complex due to uncontrollable factors in domestic and foreign environments. The various differences of environment must be carefully studied, analyzed, considered and faced as challenges but not as obstacles

SRC and Ethnocentrism may impede the full comprehension of the social, economic, political, and cultural differences of the foreign target markets

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Summary

In this module you learnt that:

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Three different strategies are used by international marketers:

International Marketing is ancillary to domestic market

International Marketing is crucial for generating sales revenue but the firm consider each market separately and applies tailor made marketing strategy focused on each market

Global Marketing may change and force the company to consider the domestic and foreign markets as a single market and all marketing efforts are strategically globalized to meet the needs and wants of the global consumer