Chapter Global Markets and Marketing Global Markets and Marketing 5 The significance of international marketing to firms. What makes foreign markets attractive. Challenges in designing marketing strategies. Developing Global Brands

The Significance of International Trade Access to products otherwise unavailable –Foodstuffs –Minerals and other natural resources What don’t we have in U.S.? Comparative Advantage –Advantage in natural resources –Advantage in human resources

Exports as a Percent of GDP in Selected Countries (2006) Country Exports as a % of GPD United States 11% United Kingdom28 France 27 Germany45 Japan16 Canada 36 Mexico28 China39 Source: Year:

International Trade Balance Info.

The Role of International Trade Balances balance of paymentsA country’s balance of payments is an accounting record of all its transactions with all the other nations in the world. trade balanceA country’s trade balance is the difference between what it exports and what it imports. trade surplus –When exports exceed imports, trade surplus trade deficit –When imports exceed exports, trade deficit

A country’s expenditures across all categories must equal income across all categories If total expenditures are more than total income, the country must borrow to make up the difference. If a country’s debt grows, it is faced with pressure to raise taxes and lower government spending.

The U.S. has large expenditures in four categories that significantly affect its balance of payments. Military forces stationed overseas Foreign aid Oil imports American tourist travel abroad To offset these expenditures and maintain equilibrium in the balance of payments, U.S. businesses need to generate a substantial trade balance.