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Find a recent article - within the past year - that discusses any of the topics of the chapters attached below. It's generally about international marketing. Again, please relate the articles to the topics discussed above. 

1. Choose two separate articles within the past year that discusses international marketing and specifically the topics attached below.
2. Post a link to each of the articles.
3. Write a 2 paragraph summary about each of articles.
4. Write a short 1 paragraph opinion on each of articles and how it relates to the topics below. 


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International Marketing 11e: Terpstra, Foley, Sarathy 1 Distinguish between international and domestic marketing. Describe the global environment in which marketing takes place. Show a variety of ways in which a firm may practice international marketing. Discuss current global trends affecting global marketing. International Marketing 11e: Terpstra, Foley, Sarathy 2 1 of 3 The key difference between international and domestic marketing is that international marketing crosses borders. International marketing and domestic marketing share the same issues, also known as the 4 P’s of Marketing: • Product: Does product meet needs of customers? • Price: What is the price of my product and what are my competitors charging? • Promotion: Do people know about my product? • Place: Is the product properly distributed so my customers can purchase it? International Marketing 11e: Terpstra, Foley, Sarathy 3 2 of 3 Marketing - the collection of activities undertaken by a firm to assess and satisfy customer needs, wants, and desires. Marketing Management - the planning and coordinating of activities to achieve a successfully integrated marketing program. International Marketing 11e: Terpstra, Foley, Sarathy 4 3 of 3 International Marketing - the act of marketing across borders including marketing between countries as well as within each country. • International marketing crosses national borders but addresses similar issues as in domestic marketing, including customer identification, product development, product distribution, promotion, and pricing. • The international marketer moves products across national boundaries in addition to moving products within each market the company serves. International Marketing 11e: Terpstra, Foley, Sarathy 5 The objectives of International Marketing include: Identifying and understanding global consumer needs Recognizing the constraints of the global environment Coordinating marketing activities International Marketing 11e: Terpstra, Foley, Sarathy Satisfying customer needs Being better than the competition 6 1 of 5 Identifying and Understanding Global Consumer Needs International Marketing 11e: Terpstra, Foley, Sarathy Research helps a firm understand consumer needs in different markets and determine whether those needs are different from those of the customers it currently serves. Companies also need to analyze market segments across countries to be able to position their products appropriately for entry into international markets. 7 2 of 5 Satisfying Customer Needs International Marketing 11e: Terpstra, Foley, Sarathy Well-developed distribution is needed to make sufficient quantities of goods and services available at the point of sale (POS). If needs differ across countries and regions, a company must consider how to adapt its products and the various elements of the marketing mix to best satisfy customers. 8 3 of 5 Being Better than the Competition International Marketing 11e: Terpstra, Foley, Sarathy Firms must contend with competitors in their home markets and competitors in the foreign markets in which they operate. Multinational companies have a more extensive set of experiences to draw upon and generally have access to additional resources. 9 4 of 5 Coordinating Marketing Activities International Marketing 11e: Terpstra, Foley, Sarathy International marketing creates a new level of complexity because firms must coordinate their marketing activities across countries. 10 5 of 5 Complexity increases as the number of markets served increases. Recognizing Constraints of the Global Environment International Marketing 11e: Terpstra, Foley, Sarathy Differences exist in culture and economic conditions, marketing infrastructure, government policy, and financial issues. 11 Competitors come from all over the world Global competition requires greater flexibility within a firm to be successful Competitors have different strengths and weaknesses International Marketing 11e: Terpstra, Foley, Sarathy Global competition presents a need for an infinitely more complex marketing strategy than is needed for dealing with domestic markets 12 1 of 2 In the global environment, international marketing managers must be sensitive to different forms of government, cultures, and income levels. Overall, global managers must deal with all uncontrollable and controllable factors as well as the differences between these factors from country to country. International Marketing 11e: Terpstra, Foley, Sarathy 13 2 of 2 Controllable elements include the 4 P’s of marketing although some elements are not totally under the marketer’s influence. Uncontrollable elements include things such as the legal environment and the different kinds of risk associated with international marketing (political, legal, economic, and financial). Marketers can exert pressure on and effect change in these “uncontrollable” elements. International Marketing 11e: Terpstra, Foley, Sarathy 14 The principle rationale of MNCs is that synergy is created within international operations through the implementation of a division of labor and a transfer of knowledge. As a result, the • Foreign Marketing - marketing within foreign countries. international marketing • Global Marketing - coordinating marketing in multiple markets in manager has a dual the face of global competition. responsibility: This dual responsibility creates concern over issues in BOTH domestic and international markets. International Marketing 11e: Terpstra, Foley, Sarathy 15 International Marketing 11e: Terpstra, Foley, Sarathy 16 Where the Buyers Are Where the Ideas Are Sometimes foreign markets may be the only markets in which a company’s products can be sold. Sometimes, the best ideas and innovations occur in foreign markets as opposed to only the domestic market. Success may stem from combining an overseas product with local technology to develop an entirely new line of products. International Marketing 11e: Terpstra, Foley, Sarathy Risks and Differences of Foreign Markets Ben & Jerry’s and Walmart examples show challenges with logistics, partner selection, consumer preferences, and pricing when doing business in Russia and Germany. 17 Developing new products Developing relationships with suppliers, distributors, and customers Fewer but stronger global competitors Growing price competition Greater regional integration and government regulation Developing a marketing culture International Marketing 11e: Terpstra, Foley, Sarathy 18 1 of 4 The textbook provides a number of examples of companies that have expanded internationally: • • • • • Disney Robotech Mattel Maui Jim Walmart International Marketing 11e: Terpstra, Foley, Sarathy • • • • Iconics, Inc. Gantec, Inc. Ben & Jerry's Starbucks 19 2 of 4 Firms have a variety of motives to expand internationally: Taking advantage of the potential of world markets Diversifying geographically Using experience-curve economies and economies of scale Extending the life cycle of a product Overseas markets are a source of new products and ideas Foreign companies may provide capital and/or market access International Marketing 11e: Terpstra, Foley, Sarathy 20 3 of 4 Past success does not necessarily mean future success and strategies may need changing: • Walmart’s failure in Germany demonstrates how even large, experienced companies cannot always repeat prior success. • Strategies used in the home market may need to be adapted for local consumers as shown in the Disneyland Paris example. • The entry strategy used by a firm can vary considerably from simply exporting to more complex and risky investments involving marketing, distribution, and manufacturing. International Marketing 11e: Terpstra, Foley, Sarathy 21 4 of 4 Developing universal products can be very difficult International Marketing 11e: Terpstra, Foley, Sarathy Each international market has its own tastes and preferences. These can be extremely hard to identify. Disney struggled with Disneyland Paris when it tried to give European consumers the same experience it gives American consumers. 22 1 of 8 Provides enormous opportunities to companies seeking to expand Also generates new global competitors The growing middle classes in China and India have increased the number of consumers for international firms and their domestic competitors. The role of emerging (and emerged) economies as both consumer and competitor has increased International Marketing 11e: Terpstra, Foley, Sarathy 23 2 of 8 The service sector is the fastest-growing segment of internationalization, representing about 20 percent of world trade. The United States has a trade surplus in services, but a trade deficit in products. This is especially true for services like transportation and healthcare. Continued growth and strength of the service sector International Marketing 11e: Terpstra, Foley, Sarathy 24 3 of 8 Many countries, such as Brazil, are opening up their markets to foreign franchises, and evidence suggests that foreign franchises have tremendous growth opportunities Franchising offers growth opportunities Some franchises in Brazil: http://www.franchisedirect.com/internationalfranchises/brazil/30/ International Marketing 11e: Terpstra, Foley, Sarathy 25 4 of 8 The global business environment continues to change as communication becomes cheaper, product development cycles shorten, and competitors become more numerous These changes result in a greater need for resources, speed, and flexibility This changing environment puts even greater pressure on the international marketing manager to understand these changes Ongoing change and increasing risk are the new normal International Marketing 11e: Terpstra, Foley, Sarathy 26 5 of 8 It means lower trade barriers and low costs of doing business It can also mean new competitors It also means an increase in economic agreements like NAFTA, ASEAN, and MERCOSUR Marketing managers must look to current events for news, like what is happening with the EU, that could impact the firm negatively or positively Increasing economic integration and cooperation between countries includes opportunity and risk International Marketing 11e: Terpstra, Foley, Sarathy 27 6 of 8 Renewed concerns about globalization Workers question open borders while facing job losses and government deficits Businesses need the benefits of globalization, but they must defend their actions to workers and politicians. The global financial crisis of 2008-2009 has undermined any growing support for globalization International Marketing 11e: Terpstra, Foley, Sarathy 28 7 of 8 Small can be big New communication technologies and social media are important influences International Marketing 11e: Terpstra, Foley, Sarathy relatively small companies can be big international players marketers must recognize their growing influence, and integrate new technologies into their global business plan 29 8 of 8 Product life cycles are shortening Import and export regulations are increasing International Marketing 11e: Terpstra, Foley, Sarathy consumers are increasingly demanding the “best and latest” terrorism concerns and the need to limit weapons of mass destruction mean governments will continue to enforce and likely increase import and export regulations 30 International Marketing 11e: Terpstra, Foley, Sarathy 1 Discuss how the global economic environment differs from the domestic economic environment. Analyze different international trade theories and their influence on government policies in support or constraint of trade. Discuss the balance of payments (BoP) as a leading indicator of the international economic health of a country. Describe how the World Trade Organization (WTO), the United Nations Conference on Trade and Development (UNCTAD), and other global organizations influence trade. Detail the five levels of regional economic integration and their implications for the international marketing manager. International Marketing 11e: Terpstra, Foley, Sarathy 2 International Trade Theory Balance of Payments Government Policy and Trade Institutions in the World Economy Regional Economic Integration International Marketing 11e: Terpstra, Foley, Sarathy 3 1 of 5 International Trade Theory Firms expanding internationally must appreciate how their international activities match with a country’s goals for international trade. International Marketing 11e: Terpstra, Foley, Sarathy 4 2 of 5 Balance of Payments A leading indicator of the international economic health of a country and may directly influence a firm’s expansion decisions. International Marketing 11e: Terpstra, Foley, Sarathy 5 3 of 5 Government Policy and Trade Firms are directly impacted by government policies in areas such as tariffs and non-tariff barriers. International Marketing 11e: Terpstra, Foley, Sarathy 6 4 of 5 Institutions such as the World Trade Organization and the World Bank greatly influence trade policies, and ultimately can influence a firm’s global strategy. Institutions in the World Economy International Marketing 11e: Terpstra, Foley, Sarathy 7 5 of 5 Firms generally benefit from economic integration through lower costs of doing business. However it can also lead to stronger competitors. Regional Economic Integration International Marketing 11e: Terpstra, Foley, Sarathy 8 International trade theory seeks to answer two basic questions: Three key international trade theories: Why do nations trade? Absolute Advantage absolute efficiency of production What goods do they trade? Comparative Advantage relative efficiency of production Product Life Cycle trade patterns and production over time International Marketing 11e: Terpstra, Foley, Sarathy 9 Absolute Advantage - a country's ability to produce a good at a lower cost, in terms of real resources, than another country. Comparative Advantage - a country's ability to produce a good at a lower cost, relative to other goods, compared to another country; a country tends to produce and export those goods in which it has the greatest comparative advantage and import those goods in which it has the least comparative advantage. International Marketing 11e: Terpstra, Foley, Sarathy 10 1 of 4 Four Phases of the Product Life Cycle Phase 2: foreign production starts Phase 3: foreign production becomes competitive in export markets Phase 4: import competition begins Phase 1: the U.S. exports the product International Marketing 11e: Terpstra, Foley, Sarathy 11 2 of 4 Quantity Developed Nation Time International Marketing 11e: Terpstra, Foley, Sarathy 12 3 of 4 Quantity Developing Nation Time International Marketing 11e: Terpstra, Foley, Sarathy 13 4 of 4 The Product Life Cycle may not explain trade and production patterns as well anymore due to: Short gap between phases “Born globals” may skip some phases Born Globals - a term used to refer to companies that begin operations with both domestic and foreign sales from the outset. International Marketing 11e: Terpstra, Foley, Sarathy 14 1 of 5 Balance of Payments (BoP) - statements of the economic transactions between one country and all other countries over a period of time, usually one year. The BoP is the principal source of information about a country’s international trading activity It essentially indicates how much money is going into and out of a country When a country receives money, it is a ‘credit’ to the BoP When a country pays out money, it is a ‘debit’ to the BoP International Marketing 11e: Terpstra, Foley, Sarathy 15 2 of 5 Deficits - in the context of balance of payments, the shortfall that results when country-level spending exceeds country-level saving. Surpluses - in the context of balance of payments, an overage that results when country-level saving exceeds country-level spending. International Marketing 11e: Terpstra, Foley, Sarathy 16 3 of 5 Current Account - a specific balance of payment account that includes transactions in manufactured goods and services as well as unilateral transfers. Goods (Merchandise) Services Unilateral Transfers Capital Account - a specific balance of payment account that includes flows such as direct and portfolio investments, private placements, and bank and government loans. International Marketing 11e: Terpstra, Foley, Sarathy 17 4 of 5 Impact on marketing decisions International Marketing 11e: Terpstra, Foley, Sarathy BoP is an indicator of a country’s economic health BoP data can help the marketing manager identify competitors’ and consumers’ locations 18 5 of 5 The capital account, over time, reflects a country’s solvency Financial considerations Steady loss of foreign exchange reserves may lead to trade restrictions such as exchange controls A firm’s pricing policies and profit repatriation may also be impacted by a country’s BoP International Marketing 11e: Terpstra, Foley, Sarathy 19 1 of 3 Commercial Policy - government regulations dealing with foreign trade. Primary tools of commercial policy are tariffs, quotas, exchange controls, and non-tariff barriers Tariff - a tax on products imported from other countries. Earns revenue and makes foreign goods more expensive Firms may use tariff engineering to minimize the impact of tariffs on their products International Marketing 11e: Terpstra, Foley, Sarathy Trade agreements and the GATT/WTO have significantly reduced tariffs over the past 50 years 20 2 of 3 Specific Duty - a tariff levied based on quantity. Ad Valorem Duty - a tariff levied as a percentage of the value of the goods. Tariff Engineering - a process of minimizing the impact of tariffs by modifying the form in which the product is imported. International Marketing 11e: Terpstra, Foley, Sarathy 21 3 of 3 Quotas - quantitative restrictions that limit the amount of goods that may enter a country. • Fewer options for firms to ‘work around’ quotas Exchange Control - a government monopoly on all dealings in foreign exchange, often resulting in a government’s rationing it out according to its own priorities. • Government monopoly on foreign trade • Foreign trade is administered through a central office Non-tariff Barriers (NTBs) - trade barriers that include customs documentation requirements, marks of origin, food and drug laws, labeling laws, antidumping laws, “buy national” policies, and subsidies. International Marketing 11e: Terpstra, Foley, Sarathy 22 World Trade Organization (WTO) International Monetary Fund (IMF) United Nations Conference on Trade and Development (UNCTAD) International Marketing 11e: Terpstra, Foley, Sarathy Organization for Economic Cooperation and Development (OECD) The World Bank Group 23 1 of 2 World Trade Organization (WTO) - an association of over 150 countries focused on cooperation and agreements concerning the trade of goods and services. Its primary goal is to provide a framework for multilateral trade negotiations. Promotes the reduction of trade barriers WTO Originally called the GATT, there have been 8 major rounds of trade negotiations since 1947 Calls for nondiscrimination: each WTO member must grant each other WTO member ‘most favored nation’ status International Marketing 11e: Terpstra, Foley, Sarathy 24 2 of 2 Nondiscrimination - a policy such that each contracting party must grant all others the same rate of import duty; a trade concession granted to one trading partner must be extended to all members. • WTO provides forums for consultation, mediation, and rulings on trade disputes between members Consultation - a stage in the WTO process for managing trade disputes between countries whereby the countries have a chance to talk to each other and attempt to resolve the dispute before it goes to a mediator or a panel of experts. International Marketing 11e: Terpstra, Foley, Sarathy 25 UNCTAD - the United Nations Conference on Trade and Development; a permanent organ of the United Nations General Assembly with the primary goal to further the development of emerging nations. Benefits to increased world trade have not been distributed equally and developing countries have been growing dissatisfied with the WTO process UNCTAD UNCTAD has established a tariff preference system favoring the export of manufactured goods from developing economies UNCTAD has succeeded in securing preferential tariff treatment from developed economies like the U.S. and EU International Marketing 11e: Terpstra, Foley, Sarathy 26 The WTO’s success has meant that a foreign firm is more price competitive in host countries and is more likely to work with a host government when issues arise. UNCTAD also impacts a firm’s strategy: • An international firm that combines expertise from its home market with resources of the local market can create a powerful local competitor. • International firms can also bring innovative marketing strategies to the local market. International Marketing 11e: Terpstra, Foley, Sarathy 27 International Monetary Fund (IMF) - an organization that acts as a forum for monetary and fiscal discussions that affect the world economy and that supplies financial assistance (loans) and technical assistance (economic consultants). IMF Originally designed to help nations control exchange rate (currency) fluctuations and thereby stabilize trade The system failed in the 1970s, and now most currencies ‘float’ or vary by supply and demand The IMF now provides: • A forum for global monetary and fiscal discussions • Financial assistance (loans) to countries with BoP issues • Technical assistance and economic consultants to countries to help them design and implement sound economic policies International Marketing 11e: Terpstra, Foley, Sarathy 28 Exchange rate instability: • Results from large changes in the exchange rate between a country’s currency and that of another currency • Exchange rates between currencies are difficult to predict • Exchange rate instability makes doing business in that country more difficult Foreign Exchange Rate - the domestic price of a foreign currency. • In other words, the amount of $US it will cost to buy (or exchange for) foreign currency • Changes in the exchange rate changes the cost of imported goods (into the home country) and exported goods (into a firm’s international markets) International Marketing 11e: Terpstra, Foley, Sarathy 29 World Bank - an institution whose goal is to promote economic growth, to provide loans for infrastructure development, and to improve the living conditions of the world’s population. World Bank Originally called the International Bank for Reconstruction and Development (IBRD), its primary mission was to help rebuild infrastructure after World War II The World Bank still provides loans for infrastructure development, mostly in developing economies World Bank Group includes: • • • • • The IBRD The International Development Association (IDA) The International Finance Corporation (IFC) The International Centre for Settlement of Investment Disputes (ICSID) The Multilateral Investment International Marketing 11e: Terpstra, Foley, SarathyGuarantee Agency (MIGA) 30 Organization for Economic Cooperation and Development (OECD) - a membership organization of over 30 countries committed to democracy and market economics, with a focus on research and a sharing of policies and best practices. Although it is a small organization, OECD has a powerful global voice on employment issues, living standards, financial security, sustainable economic growth, and trade issues OECD OECD provides statistics, up-to-date publications on economics and public policy, and information on the key industries of member countries Being an OECD member can bring more foreign investment from firms International Marketing 11e: Terpstra, Foley, Sarathy 31 1 of 4 Regional Economic Integration - economic cooperation within geographic regions to pursue common economic gains. There has been tremendous growth in regional economic integration in the last 50 years. Free Trade Area The five major levels of integration are: Customs Union Common Market Economic Union Political Union International Marketing 11e: Terpstra, Foley, Sarathy 32 2 of 4 Multilateral trade agreement - trade agreement between more than two countries. Bilateral trade agreement trade agreement between two countries. International Marketing 11e: Terpstra, Foley, Sarathy 33 3 of 4 International Marketing 11e: Terpstra, Foley, Sarathy 34 4 of 4 International Marketing 11e: Terpstra, Foley, Sarathy 35 Rise of regional groupings means that fewer but larger economic entities are gradually replacing nearly 200 national markets. A firm's operations within a regional group will tend to be more uniform and self-contained than they would be in ungrouped national markets. In response to global forces and economic integration, a firm's marketing program will be modified over time. International Marketing 11e: Terpstra, Foley, Sarathy 36 International Marketing 11e: Terpstra, Foley, Sarathy 1 Discuss concepts critical to nations, such as sovereignty and security, in order to understand political risk. Describe the role of firms in the political and legal environment—how firms are shaped by it and how firms shape the laws and politics of a nation. Identify the areas of the home country environment that affect a firm’s international marketing. Explain how U.S. export controls, antitrust laws, and tax laws affect the feasibility and profitability of a U.S. firm’s international marketing. Discuss the effect of international organizations such as the IMF and the WTO and regional groups such as the EU on the international legal environment. Describe international conventions designed to protect intellectual property. International Marketing 11e: Terpstra, Foley, Sarathy 2 1 of 2 Political Environment - any national or international political factors that can affect the operations of a business. Political Environment is typically related to relations between host and home countries of an international firm, or host country and international firm. • Crisis in the EU: What will happen in Spain, Portugal, Italy, and Greece? • Arab Spring: How to operate safely around continuing turmoil • Expropriation of companies by local governments International Marketing 11e: Terpstra, Foley, Sarathy 3 2 of 2 Host Country Political Environment • Host country national interests • Government actions: quotas, exchange control, expropriation, nationalization Political Risk Assessment International Political Environment International Marketing 11e: Terpstra, Foley, Sarathy • Possibility that government actions adversely impact businesses • A firm’s profile in the country is related to its risk • Country relationships with each other • Membership in NGOs 4 1 of 2 Host Country National Interests: National Sovereignty - a nation's right to govern itself without outside interference. Positive impact of foreign firms to the economic, social, and/or technological welfare of the nation Entry restrictions Potential Problems: Trade barriers (quotas and tariffs) Exchange controls Forced asset transfer International Marketing 11e: Terpstra, Foley, Sarathy 5 2 of 2 Confiscation - government seizure of assets without remuneration. Expropriation - government seizure of assets with some compensation, usually less than fair market value or the firm's valuation of the assets. Nationalization - government seizure of entire industries, regardless of nationality. International Marketing 11e: Terpstra, Foley, Sarathy 6 1 of 6 Political Risk - the possibility that actions or policies by a government may adversely affect a firm’s operations and profits. Assessing political risk is a difficult task for the international marketing manager. Encompasses the whole of a country’s business environment and includes risks due to forced asset transfer, terrorism, social unrest, regulatory change, political instability, trade policies, etc. External resources are available to help determine political risk such as U.S. Department of Commerce and private companies (e.g., Euler Hermes, PRS Group, and Moody’s). International Marketing 11e: Terpstra, Foley, Sarathy 7 2 of 6 International Marketing 11e: Terpstra, Foley, Sarathy 8 3 of 6 Firm’s home country Product or industry External Factors that Impact Political Risk Size and location of operations Visibility of the firm Host country political situation International Marketing 11e: Terpstra, Foley, Sarathy 9 4 of 6 Company behavior Contributions of the firm to the host country Localization of operations Company Factors that Impact Political Risk Subsidiary dependence International Marketing 11e: Terpstra, Foley, Sarathy 10 5 of 6 International Marketing 11e: Terpstra, Foley, Sarathy 11 6 of 6 (continued) International Marketing 11e: Terpstra, Foley, Sarathy 12 The International Political Environment involves political relations between two or more countries. An international firm becomes involved in a host country’s relations which may increase political risk. Challenges exist when: • Host and home country do not have good relations • Host country has poor relations with other countries • Host country is not a member of any NGO’s, which reflects the ease of doing business with the host International Marketing 11e: Terpstra, Foley, Sarathy 13 The Home Country Political Environment can: • Constrain international and domestic operations, like South Africa after the U.S. left and Myanmar when PepsiCo left • Limit growth into other countries • Affect third country (not host or home country) relations, like the boycott against Nestle in the 1970s International Marketing 11e: Terpstra, Foley, Sarathy 14 There are three dimensions to the legal environment in international marketing: U.S. Laws Export controls, antitrust controls, etc. International Law In some cases, they have conflicting goals and laws. International Marketing 11e: Terpstra, Foley, Sarathy Domestic Laws in each of the Firm’s Foreign Markets Tax treaties, international organizations, standards organizations, and intellectual property protection Legal systems, contract considerations, impact on the 4 P’s 15 1 of 2 Export Controls - laws enacted by a government that determine what products may be exported and to which countries and buyers. • Military and weapons technology • Commercial goods with ‘dual-use’ Dual-use Goods - products that have both commercial and military or weapons proliferation applications. • Fines and other penalties, including criminal charges, are applied for firms and individuals not following U.S. export regulations International Marketing 11e: Terpstra, Foley, Sarathy 16 2 of 2 U.S. Department of Commerce – Bureau of Industry and Security U.S. Customs and Border Protection U.S. Department of the Treasury – Office of Foreign Assets Control U.S. Department of State – The Directorate of Defense Trade Controls • Controls exports of dual use goods and technology, and maintains directory of individuals and companies of concern to the U.S. • Helps keep U.S. safe by preventing illegal entry of goods • Ensures counterfeit goods are not imported • Maintains system for electronic entry of exports (AES Direct) • Enforces U.S. economic and trade sanctions such as the Cuba embargo • Regulates exports of defense articles and services International Marketing 11e: Terpstra, Foley, Sarathy 17 1 of 2 U.S. courts have jurisdiction if the act produces consequences in the United States • When a U.S. firm acquires a foreign firm Three situations are particularly relevant: • When it engages in a joint venture with a foreign firm • When it enters into an overseas marketing agreement with a foreign firm International Marketing 11e: Terpstra, Foley, Sarathy 18 2 of 2 Two agencies have jurisdiction over antitrust regulations: • The Department of Justice • The Federal Trade Commission Predatory Pricing - the practice of pricing a product at a very low price, sometimes below cost, to gain market share and take business away from competitors. Foreign agencies may also have to approve certain activities (e.g., GE-Honeywell merger) International Marketing 11e: Terpstra, Foley, Sarathy 19 1 of 2 Foreign Corrupt Practices Act (FCPA) - U.S. law that prohibits U.S. firms or its subsidiaries from paying bribes to foreign officials for the purpose of obtaining or keeping business. • Prohibits U.S. companies from paying bribes to get business • Focuses on bribes to foreign officials, not private businesses Anti-terrorism regulation: • Includes a variety of U.S. laws designed to monitor terrorism and stop financing terrorism • USA PATRIOT Act expands reporting requirements and increases scrutiny on U.S. and foreign companies International Marketing 11e: Terpstra, Foley, Sarathy 20 2 of 2 Antiboycott Regulations - laws enacted to prohibit U.S. firms from participating in foreign government boycotts that thee United States did not sanction. • Arab league boycott of Israel: U.S. companies cannot boycott trade with Israel if requested by a member of the Arab League. • The regulations apply to any boycott in place the U.S. does not support. • Violations carry significant fines including a fine of $6 million against Baxter International – a medical products manufacturer. International Marketing 11e: Terpstra, Foley, Sarathy 21 International Marketing 11e: Terpstra, Foley, Sarathy 22 1 of 7 International Law: • Comprises the collection of treaties, conventions, and agreements between nations that carry, more or less, the force of law • Involves ‘mutuality’ of two or more countries agreeing on regulations or standards Tax treaties Aspects of International Law include: International organizations (IMF, WTO, UN, OECD, etc.) Standards organizations Intellectual property rights International Marketing 11e: Terpstra, Foley, Sarathy 23 2 of 7 Tax treaties • Often reduce or eliminate double taxation • May be bilateral or multilateral International Marketing 11e: Terpstra, Foley, Sarathy 24 3 of 7 IMF and WTO • Both organizations are multilateral agreements among members to improve world trade and increase economic growth and stability International Marketing 11e: Terpstra, Foley, Sarathy 25 4 of 7 UN, OECD, and Other International Organizations • Often concerned about economic and social well-being International Marketing 11e: Terpstra, Foley, Sarathy 26 5 of 7 • International Standards Organization (ISO) promotes worldwide standards • Regional and national product safety standards exist (e.g., CE and UL marks) Standards Organizations International Marketing 11e: Terpstra, Foley, Sarathy 27 6 of 7 Intellectual Property exists in four major forms: Patents - intellectual property protection for products, technology, and inventions. Trademarks - intellectual property protection for words, phrases, symbols, and designs that distinguish one product from another. Copyrights - intellectual property protection for artistic or literary works such as books, paintings, music, and software. Trade Secrets - proprietary company information that is highly secret to the company but not officially registered with a patent, trademark, or copyright. Intellectual property rights International Marketing 11e: Terpstra, Foley, Sarathy 28 7 of 7 Lack of Intellectual Property (IP) protection hurts International Firms: • • • • Lost sales Less innovation Potential risks for consumers Loss of reputation and brand name International Marketing 11e: Terpstra, Foley, Sarathy 29 1 of 2 Paris Union - a multilateral agreement offering trademark and patent protection among member countries. The agreement offers extended time in which to file for IPP in a member country. • includes 173 nations and allows registration in one country to result in short-term IP protection in other member countries (after which the firm needs to apply for protection in those countries). Berne Convention - a multilateral agreement offering protection of literary and artistic works among member countries. • includes 161 members. Madrid Agreement - a multilateral agreement offering a single international application for trademark protection. • includes 70 member nations. International Marketing 11e: Terpstra, Foley, Sarathy 30 2 of 2 Patent Cooperation Treaty (PCT) - a cooperative union for the filing of patents among member countries. • provides a cooperative union for 120 member nations to file applications for patents. World Intellectual Property Organization (WIPO) - part of the United Nations and focuses on intellectual property protection. World Trade Organization (WTO) - an association of over 150 countries focused on cooperation and agreements concerning the trade of goods and services. • also requires some IP protection amongst member nations. International Marketing 11e: Terpstra, Foley, Sarathy 31 Each foreign market a firm enters has laws that impact a firm’s business activities, especially differing legal systems: Common Law English (UK) in origin Case law oriented (based on precedent) Civil or Code Law Extensive and comprehensive set of written laws Relies on detailed contracts and the “letter of the law” Islamic Law Usually a mix of civil, common, religious, and indigenous laws Often based on Shari’a, or Islamic law International Marketing 11e: Terpstra, Foley, Sarathy 32 1 of 2 Foreign Laws Challenge the International Marketing Manager on each of the 4 P’s: Product • Product safety, labeling, and brand and trademark registration Pricing Resale Price Maintenance (RPM) - the effect of rules imposed on manufacturers, wholesalers, or retailers on their own products to prevent them from competing too fiercely on price and thus driving profits down from the reselling activity. International Marketing 11e: Terpstra, Foley, Sarathy 33 2 of 2 Foreign Laws Challenge the International Marketing Manager on each of the 4 P’s: International Marketing 11e: Terpstra, Foley, Sarathy Distribution (Place) • Not all channels may be available, regulations and laws on distributors and agents vary Promotion • Advertising restrictions vary widely as do sales promotion techniques such as contests and free samples 34 1 of 2 Whose Law? Whose Courts? • When conducting business across borders, which legal system settles commercial disputes? • Jurisdiction is often determined by who is suing whom • Choice of Law clauses in contracts pre-specify which country’s legal system will address disputes International Marketing 11e: Terpstra, Foley, Sarathy 35 2 of 2 Arbitration or Litigation? • Arbitration involves a neutral 3rd party to resolve disputes • The ICC in Paris is a common arbiter of disputes • The International Centre for Dispute Resolution (ICDR) has cooperative agreements with 62 agencies in 44 countries International Marketing 11e: Terpstra, Foley, Sarathy 36 1 of 2 • Privacy (e.g., protection of customers’ records) Growing ecommerce and internet sales have created new legal issues and challenges: • Taxation (e.g., governments’ increasing enforcement of tax policies that have previously been avoided by internet sales) • Internet and email marketing extends the firm beyond the borders of the countries where it has a physical presence International Marketing 11e: Terpstra, Foley, Sarathy 37 2 of 2 The Marketer is Not a Lawyer • Hiring a legal expert is necessary to navigate complex international law • As the international legal world becomes more complex, firms are beginning to have both international lawyers at headquarters and local lawyers in foreign subsidiaries International Marketing 11e: Terpstra, Foley, Sarathy 38 International Marketing 11e: Terpstra, Foley, Sarathy 1 1 of 2 Identify a framework in which a firm may develop its global strategy. Discuss strategy issues specific to global marketing. Identify the foundational analysis used to develop a global strategy: organizational, structural, and country/regional analysis. Discuss the relationship between competitive advantage and a firm’s value chain and address their impact on global strategy. International Marketing 11e: Terpstra, Foley, Sarathy 2 2 of 2 Detail the way a global marketing strategy is implemented and various strategic perspectives that may be used in support of that implementation. Identify the impact of competitors and global strategy. Discuss the pressure to standardize or adapt products and services when developing the global marketing strategy. Discuss how the global marketing system must be coordinated. International Marketing 11e: Terpstra, Foley, Sarathy 3 1 of 4 International Marketing 11e: Terpstra, Foley, Sarathy 4 2 of 4 (Continued) International Marketing 11e: Terpstra, Foley, Sarathy 5 3 of 4 (Continued) International Marketing 11e: Terpstra, Foley, Sarathy 6 4 of 4 (Continued) International Marketing 11e: Terpstra, Foley, Sarathy 7 Situational Analysis is used to identify internal issues that will impact the firm. Internal situational analysis should include all departments and identify strengths and weaknesses for the firm as it grows internationally. International Marketing 11e: Terpstra, Foley, Sarathy The Internal assessment is sometimes called the “organizational readiness to export”. 8 1 of 3 Situational Analysis is used to identify external issues that will impact the firm. • Porter’s Five Forces Industry Analysis • Identify competitors, barriers to entry, consumers, and trends • Porter: low cost, differentiation, niche International Marketing 11e: Terpstra, Foley, Sarathy 9 2 of 3 Competitive Advantage and the Value Chain Firms need to evaluate which activities to perform and which to outsource. Which activities create competitive advantage? Where to perform each activity? • Principles of comparative advantage may come into play Competitive Advantage - in the context of firm-level strategy, this reflects the firm’s basis or ability to compete, generally by becoming the lowest cost producer, providing a differentiated product or service, and/or focusing on a niche opportunity. Value Chain - the sum of activities a firm performs to create value (profitability). International Marketing 11e: Terpstra, Foley, Sarathy 10 3 of 3 Separate product strategies or one global strategy? How homogenous or different is each product line? International Marketing 11e: Terpstra, Foley, Sarathy 11 International Marketing 11e: Terpstra, Foley, Sarathy 12 After organizational and situational analysis, a firm must consider individual markets (either countries or regions). What are the goals – and corresponding strategies to meet the goals – of each product line and each market? Global marketing involves all of a firm’s foreign markets and understanding commonalities and synergies between them. International Marketing 11e: Terpstra, Foley, Sarathy The interaction between productline goals and environmental analysis is recursive and leads to more integrated global marketing strategy. Do marketspecific differences cause the firm to change its marketing policies and activities? 13 1 of 2 Strategies must be correctly implemented. How well they are implemented depends on organizational structure and personnel assigned to a given country. Feedback on results is critical for continued monitoring. The global environment changes over time, as do the company’s competitive advantages. International Marketing 11e: Terpstra, Foley, Sarathy 14 2 of 2 Products developed in home market extended to foreign markets Market-extension Perspective - a firm’s Each market treated as independent, not interdependent Multidomestic Perspective- a firm's Markets treated as interdependent international expansion philosophy highlighted by unplanned and short-term exploitation of foreign markets while the domestic market remains the focus of the company. international expansion philosophy highlighted by careful consideration of foreign markets and with a clearly separate orientation toward each country market. Global Perspective- a firm’s international expansion philosophy highlighted by formulating its strategic plans in order to direct special attention to the interdependence among national markets and competitors’ actions in those markets. International Marketing 11e: Terpstra, Foley, Sarathy 15 Assessing Global Competition • Sources of competition and likely responses to competition • Review competition’s strengths and weaknesses • National champions may require special treatment National Champions - firms that have dominant positions in their national markets and often receive government support. Where Do Global Competitors Originate? • From domestic markets to foreign markets • From other product markets to new product markets • Forward or backward integration International Marketing 11e: Terpstra, Foley, Sarathy 16 Global marketing strategy cannot be separated from overall corporate strategy. Buyer profiles Marketing infrastructure Standardization or Adaptation: Market Differences Transportation and communications systems Different legal provisions Distribution systems Standardization reduces complexity but some local adaptations are usually necessary The real question is how much to adapt? International Marketing 11e: Terpstra, Foley, Sarathy 17 International Marketing 11e: Terpstra, Foley, Sarathy 18 Coordination of global marketing activities is essential and can take place in the following ways. Using similar methods to carry out marketing activities across countries. Transferring marketing know-how and experience from one country to another, particularly from lead markets to other countries. International Marketing 11e: Terpstra, Foley, Sarathy Sequencing marketing programs so that successful elements are gradually introduced into different markets. Integrating efforts across countries so that international clients with operations in many countries can be offered the same service in each country. A firm must also determine whether its strategy is effective or requires modifications as the business environment changes (see Chapter 15). 19
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International Marketing
World Economic Outlook
As per the of the world’s economic outlook forecast of April 2018, the global economic
growth is expected to expand at a less even rate and among the emerging markets as well as
developing economies, the prices of oil are expected to rise and escalating trade tensions
(International Monetary Fund 1). Oil exporters in regions like North Africa, Middle East,
Pakistani and Afghanstan have enjoyed benefits in the increased oil prices and this is due to the
product being used at international level (International Monetary Fund 5). Besides, most
commodities in the sub-Saharan Africa are experiencing price rises.
Policies in different areas in the world have been prioritized as far as economic growth is
concerned and multilateral corporations within a rule based trade system which are open play a...


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