Marketing Management 2 Miss/ Eman Elfar Section 4 Spring 2017/2018

Global Marketing Today A global firm is one, that by operating in more than one country, gains marketing, production, R&D, and financial advantages that are not available to purely domestic competitors The global firm sees the world as one market

what are the basics decision the company should take when enter a global market? Global firms ask a number of basic questions What market position should we try to establish in our own country, in our economic region, and globally? Who will our global competitors be, and what are their strategies and resources? Where should we produce or source our product? What strategic alliances should we form with other firms around the world?

Looking at the Global Marketing Environment The International Trade System Restrictions on trade between nations include: Tariffs Quotas Exchange controls Nontariff trade barriers

What are the basic restrictions on trade between nations? Tariffs: are taxes on certain imported products designed to raise revenue or to protect domestic firms Quotas : are limits on the amount of foreign imports a country will accept in certain product categories to conserve on foreign exchange and protect domestic industry and employment Exchange controls are a limit on the amount of foreign exchange and the exchange rate against other currencies Nontariff trade barriers are biases against bids or restrictive product standards that go against American product features

The World Trade Organization and GATT The General Agreement on Tariffs and Trade (GATT) is a 59-year-old treaty designed to promote world trade by reducing tariffs and other international trade barriers Uruguay Round reduced merchandise tariffs by 30 percent and set up the World Trade Organization to enforce GATT rules World Trade Organization roles : Enforces GATT rules Mediates disputes Imposes trade sanctions

Regional Free Trade Zones Economic communities are free trade zones created by nations to work toward common goals in the regulation of international trade like: European Union (EU) North American Free Trade Agreement (NAFTA) Caribbean Free Trade Agreement (CAFTA) South American Community of Nations (CSN)

Economic Environment Economic factors reflect a country’s attractiveness as a market: Industrial structure Subsistence economies Raw material exporting economies Industrializing economies Industrial economies Income distribution

Economic Environment: Industrial Structure Subsistence economies have a large majority of people engaged in agriculture. They consume most of their output and barter the rest for simple goods and services. They offer few market opportunities. Raw material exporting economies are rich in one or more natural resources. They are good markets for large equipment, tools, supplies, and trucks. If there is a wealthy upper class, then they are also a market for luxury goods. Industrializing economies have manufacturing that represents 10 percent to 20 percent of the economy and need more imports of raw textile materials, steel, and heavy machinery and fewer imports of finished textiles, paper products, and automobiles. These economies create a rich upper class and a small but growing middle class that demand new types of imported goods. Industrial economies are major exporters of manufactured goods, services, and investment funds. They trade among themselves and export to other economies. They represent an attractive market for all types of goods and services.

Economic Environment: Income Distribution There are three levels based on the income they have : Low-income households Middle-income households High-income households