1. SCOPE AND CHALLENGES OF INTERNATIONAL MARKETING
Marketing decision factors
The marketing environment
Domestic
Foreign
Trade policy

2. The International Marketing Task
Marketing Decision Factors
Price
Promotion
Product
Distribution
The Domestic Environment
The Foreign Environment

3. Domestic Environment Political/legal forces Competitive structure
Economic climate

4. Foreign Environment Political/legal Economic Culture
Geography/infrastructure
Distribution
Competition
Technology

5. Some Obstacles Ethnocentrism Self-reference criterion Solutions
Explicit
Implicit
Solutions

6. Some Stages in International Marketing
No direct foreign marketing
Infrequent
Regular
International Marketing
Global Marketing
No firm boundaries between stages
Note time issue
Opportunities
Resources
Planning
No one approach is best for all companies

7. Obstacles to Trade: Protectionism
Differing interests of consumers and manufacturers
Benefits of trade tend to be more diffused than benefits to specific groups of protectionism
Although a large number of consumers would tend to benefit by from more global trade, powerful interests would prefer that the supply be limited as much as possible to domestic products. In Japan, for example, farmers are, politically speaking, a very powerful group who appear to have a greater influence on government policy than the much larger group of consumers. Since these groups have much more at stake, they are much more likely to lobby the government. The fact that a family could save the equivalent of several hundred, if not thousands, of dollars each year does not provide the same incentive as farmers whose whole businesses depend on protection.
In the United States, various groups, such as sugar growers, the auto industry, and certain labor unions, have a great deal to gain on restricting foreign supply and invest quite heavily in lobbying.

8. Approaches to Protectionism
Tariffs
Quotas
“Voluntary” export restrictions
Subsidies to domestic producers/exporters
Non-tariff barriers
legal obstacles
differential treatment

9. U.S. Protectionism--justified or not...
Defense industry
Agricultural products--e.g., beef, sugar
Textiles
Automobiles (“voluntary” import restrictions)
Steel

10. Justifications for Protectionism
Protect infant industry
Resist “unfair” or inappropriate competition
Protect home market (ensure that product can be produced domestically)--defense
Intervene into temporary imbalance
Maintain domestic living standards
Preserve jobs
Bargaining power/retaliation (Super-301 provision in U.S.)
There are several defenses offered by countries that practice protectionism. Understandably, countries are reluctant to be dependent on foreign suppliers for vital industries such as defense. Also, there is often an interest in protecting “infant” industries which have not yet advanced against the experience curve.
In some cases, domestic manufacturers or interest groups may raise concerns about “unfair” foreign competition, as foreign employees may receive very low salaries. Thus, some U.S. manufacturers and politicians will object to U.S. firms having to compete with foreign firms which can employ people at a fraction of the cost of U.S. firms. Also, a number of people object to the practice of certain foreign firms of using child labor.
By far the most common calls for protectionism, however, tend to come from special interest groups--typically affected industries and organized labor. Automobiles, for example, could hardly be said to be an “infant” industry in the late seventies and early eighties, but they lobbied effectively that free trade would entail the loss of a great deal of jobs.
Note that protectionism can come back to haunt you in the long run. Many people have speculated that American firms have become complacent as foreign competition has been artificially held back. Also notice that we cannot in any way protect our products outside our home markets. That is, no matter how effective we are at protecting our home markets, this complacency may lead to loss of foreign competitive ability.

11. Effects of Protectionism
Reduced competition ---> inflation
More tariffs
Weaken balance of payments (have to pay more in own currency)
Reduce choice to consumers
May induce global trade wars (vicious cycle)
As mentioned, a significant problem with protectionism is that it tends to increase prices consumers pay, and thus increases inflationary pressure. With reduced competition, consumers also have less choice, and there is less incentive to improve product quality.
Protectionism frequently provokes retaliation, which can result in a viscous cycle where each sequential tariff encourages another.