mktg 106

• International Marketing  is the process of planning and conducting transactions across national boarders to create exchanges that satisfy the objectives of individuals and organizations.
• Export - import trade - turnkey operations

  Licensing - management contracts

  Joint ventures

  Wholly owned subsidiaries
• Basic tenets of marketing

  Satisfaction

  Exchange
• International marketer is a subject to anew set of macro environmental factors, to different constraints, to quite frequent conflicts resulting from different laws, culture and societies.
• Issues in going global

  If all these issues are integrated into each decision made by individuals and firms, international markets can be source of growth, profit, satisfaction, needs and quality of life
• Controllable

  Firm characteristics

  price

  product

  Promotion

  Channel of distribution

  research
• Domestic environment (uncontrollable)

  Political/legal forces

  Economic climate

  Competitive structure
• Foreign environment (uncontrollable

  Cultural forces

  Political/legal forces

  Economic forces

  Competitive forces

  Geography and infrastructure

  Level of technology

  Structure of distribution
• Stages of international marketing involvement

  1. No-direct foreign marketing

  2. Infrequent foreign marketing

  3. Regular foreign marketing

  4. International marketing

  5. Global marketing
• No-direct foreign marketing a company in this stage does not actively cultivate customer  outside national boundaries
• Infrequent foreign marketing - with little or no intention of maintaining continuous market representation
• Regular foreign marketing - firm has permanent productive capacity devoted to the production of goods and services to be marketed in foreign markets
• International marketing - at this stage, companies are fully committed to and involves in international marketing activities.
• Global marketing - companies treat the world, including their home market as one market
• World trade has given rise to global linkages to markets, technology, living standards the were previously unknown and unanticipated
• Transnational institutions affecting world trade

  i. World trade organizations

  ii. International monetary fund

  iii. World bank

  iv. Regional institution
• World trade organizations

  > created on January 1, 1995, marked the biggest reform of international trade since the end of world war 2\
• World trade organizations

  > place where member governments try to sort out the trade problem they face with each other
• World trade organizations

  > 164 member states
• World trade organizations

  > is the only global international organization dealing with the rule of trade between nations
• International monetary fund

  > conceived in 1944 during the bretton woods conference with 44 representative but created in 1945
• International monetary fund

  > foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth and reduce poverty around the world.
• International monetary fund

  > primary purpose is to ensure the international monetary system - system of exchange rates and international payments that enable countries to transact with each other.
• International monetary fund

  > fundamental mission in three ways: surveillance, lending and capacity development
• International monetary fund

  > 190 member countries
• World bank

  > is a unique global partnership working for sustainable solutions that reduce poverty and build shared prosperity in developing countries
• World bank

  > 189 member countries
• World bank

  > initially formed in 1944 also during bretton woods conference to aid countries suffering from the destruction of the war
• 5 institution of world bank

  > international bank for reconstruction and development

  > international development association

  > international finance corporation

  > multilateral investment guarantee agency

  > international centre for settlement of investment disputes
• Regional institutions - in a sense, international organization, as they incorporate international membership and encompass geopolitical entities that operationally transcend a single nation state.
• Regional institutions

  > association of south east Asian nation

  > north america free trade agreement

  > mercosur

  > gulf cooperation council
• Exports are special because they can affect currency values, the fiscals and monetary policies of government, shape public perception of competitiveness and determine the level of imports a country can afford
• Foreign direct investment - tends to be concentrated in specific sector, where foreign investors believe they are able to contribute the best and benefit the most from their investments
• Market characteristics

  > population

  > income

  > consumption patterns
• Population

  > figure themselves must be broken down into meaningful categories in order for marketer to take better advantage of them
• Population

  > an important variable for the international marketer is the size of the household
• Income

  > is most indicative of market potential for most consumer and industrial products and services
• Consumption patterns

  > Engel’s law state that as a family’s income increase, the percentage spent on food will decrease, the percentage spent on housing and household operation will be roughly constant, and the amount saved or spent on other purchases will increase
• The Physical Quality of Life Index - is a composite measure of the level of welfare in a country. It has 3 components: life expectancy, infant mortality and adult literacy
• Levels of Economic Integration

  1. Economic union

  2. Common market

  3. Customs union

  4. Free trade agreement

  5. Preferential agreement