1. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 The Global Marketing Imperative Principles of International Marketing 9 th Edition

2. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. What is International Marketing? International marketing consists of the activity, institutions, and processes across national borders that create, communicate, deliver, and exchange offerings that have value for stakeholders and society. Forms of international marketing include e xport–import trade, licensing, joint ventures, wholly owned subsidiaries, turnkey operations, and management contracts. Marketing serves as a key agent of societal change and as a key instrument for the development of societally responsive business strategy.

3. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Questions to consider to deal with international issues and repercussions and make appropriate decisions: –Does my market have borders? –Should I obtain my supplies domestically or from abroad? –What marketing adjustments are or will be necessary? What is International Marketing?

4. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Questions to consider to deal with international issues and repercussions and make appropriate decisions: –What threats from global competition should I expect? –How can I work with these threats to turn them into opportunities? –What are my strategic global alternatives? What is International Marketing?

5. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Importance of World Trade World trade in merchandise has expanded from $6.2 trillion in 2000 to over $15.1 trillion in 2008. World trade in services has expanded from $1.5 trillion to $3.3 trillion. Global growth of trade has outperformed the growth of domestic economies in the past few decades. Provides new marketing opportunities such as investment on a global scale, international specialization and cross-sourcing, use of technology to enhance business functioning.

6. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Importance of World Trade Trading blocs encourage trade relations between their members through rules and standards, and also affect the trade and investment flows of nonmember countries. Trading blocs include the European Union in Europe, NAFTA in North America, Mercosur in Latin America, and ASEAN in Asia.

7. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Linkages Global linkages bind countries, institutions, and individuals closely. These linkages have also become more intense on an individual level. –Communication has built new international bridges. –New products have attained international appeal. –Transportation linkages let individuals from different countries see and meet each other with unprecedented ease.

8. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Linkages World trade is also bringing about a global reorientation of corporate processes, which opens up entirely new horizons. The level of global investment has –Resulted in the buildup of international debt by governments. –Affected the international value of currencies. –Provided foreign capital for firms. –Triggered major foreign direct-investment activities’.

9. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Global Linkages Realignments taking place on both micro and macro levels make past trade orientations partially obsolete. The growth in the overall volume and value of both merchandise and services trade has had a major impact on firms, countries, and individuals.

10. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Domestic Policy Repercussions Currency flows set exchange rates, which are the values of currencies relative to each other. Exchange rates have begun to determine the level of trade.

11. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Domestic Policy Repercussions The global market imposes increasingly tight limits on national economic regulation and sovereignty. Policymakers have sought to restrict the impact of global trade and financial flows by erecting barriers, charging tariff s, designing quotas, and implementing other import regulations. These measures too have been restrained by international agreements that regulate trade restrictions, particularly through the World Trade Organization (WTO).

12. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Domestic Policy Repercussions Though closer economic relations result in many positive effects, interdependence decreases a nation’s capability to do things its own way. The key task for the international marketer is to stimulate societal acceptance of the long-term benefits of interdependence.

13. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Opportunities and Challenges in International Marketing To handle newly emerging forces and dangers of unforeseen influences from abroad, firms need to: –Be prepared and develop active responses. –Envision new strategies. –Develop new plans. –Change the way of doing business.

14. © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Opportunities and Challenges in International Marketing The growth of global business activities offers increased opportunities. Knowledge transfer around the globe helps an international firm to build and strengthen its competitive position. International opportunities require an awareness of global developments, an understanding of their meaning, and a development of capabilities to adjust to change.