International Marketing: International Marketing Tim Beal Lecture 3 25 July 2007


Today: Today Housekeeping The political framework of the global economy DVD Paul Vaughan Changing social fabric


Housekeeping: Housekeeping Tutorials started this week Details on coursepage Blackboard only leads you to coursepage Coursepage has all the information If you are not in a tutorial see me


The Political Framework: The Political Framework Why is politics important to IM? Liberalisation and globalisation Global Regional Bilateral Issues, doubts and problems


Why is politics important?: Why is politics important? Politics can prohibit trade US sanctions and embargoes on Iraq, North Korea, Cuba… Politics can restrain trade US controls on advanced computers to China Australian restrictions on NZ apples (SPS) US and EU restrictions on agricultural imports to protect local industry NZ restrictions on Korean whiteware to protect local industry


Yesterday -Auckland airport: Yesterday -Auckland airport What will happen to Auckland airport? Who wants to buy it? Who’s opposing that and why? What does this mean for IM?


Restraint>liberalisation and facilitation: Restraint>liberalisation and facilitation Governments can restrict trade military, local interest groups, economic (eg trade balance) Governments can also liberalise trade remove restrictions Governments can facilitate trade incentives/support for exporters foreign investors importers (eg Japan)


Incentives: Incentives Lack of incentives hampering foreign investment/ work in NZ Lack of incentives blamed as Bollywood calls 'cut'


Liberalisation and globalisation: Liberalisation and globalisation Liberalisation is the political expression and facilitator of globalisation Conflict between liberalisation and protectionism Globalisation>> winners and losers Countries Industries Companies People Continuing struggle


Global liberalisation: Global liberalisation 1930s – protectionism as response to depression ‘beggar my neighbour’ approach Bretton Woods 1944 Resort in new Hampshire United Nations Monetary and Financial Conference Established global framework


Bretton Woods: Bretton Woods International Monetary Fund (IMF) International Bank for Reconstruction and Development >>part of World Bank


World Bank: World Bank Important actor Aid, etc. Source of information In news recently because of its president Architect of invasion of Iraq Anti-corruption evangelist who got fired for corruption


Paul Wolfowitz: Paul Wolfowitz


World Bank: World Bank World Bank


Back to Bretton Woods: Back to Bretton Woods International currency framework Stable exchange rates, linked to gold US$ as reserve currency Collapsed in 1971 Liberalisation>>GATT


GATT: GATT General Agreement on Tariffs and Trade Policy of reduction of tariffs, quotas and subsidies Tariff – tax on imports Quota – quantitative restriction on imports Subsidy – financial support for production/export


Stages of the GATT: Stages of the GATT Divided in ‘rounds’ Eg Tokyo Round, Uruguay Round First phase 1947-50 establishment Second phase – 1979 – reduction of tariffs on manufactures Third phase - Uruguay Round 1986-1993


Uruguay Round: Uruguay Round Moved into intellectuals property, services, capital, and agriculture Agriculture – Cairns Group set up in 1986 Very important to NZ Cairns Group website


GATT>>WTO: GATT>>WTO `1995 World Trade Organization Two contestants for 2nd Director General Thailand’s Supachai Panitchpakdi And this man…


Director Generals of WTO: Director Generals of WTO Italy’s Renato Ruggiero 1995-99 Former NZ PM Mike Moore 1999-2002 Thailand’s Supachai Panitchpakdi 02-05 France’s Pascal Lamy 1995-


WTO: WTO Important actor in world trade, but problems Doha Round suspended July 2006 Disagreement between EU, US, India, Brazil on opening up I & B to agricultural and industrial products, farms subsidies in US & EU


WTO website: WTO website WTO also important source of information on world trade http://www.wto.org/


Global>>regional/bilateral: Global>>regional/bilateral Regional EU 25 NAFTA Mercosur…and others APEC Asia-Pacific Economic Cooperation


APEC: APEC Australian initiative 1989 Forum in which NZ important member Hosted APEC 1999 China and Taiwan both members Also in WTO, not UN, etc) http://www.apec.org/


ASEAN: ASEAN Association of Southeast Asian Countries 1967 – now all ten state in SE Asia AFTA – ASEAN Free Trade Area ASEAN + 3 China, Japan, South Korea >>>East Asia Summit


East Asia Summit: East Asia Summit


>>FTAs: >>FTAs Because of difficulties in multilateral fora (WTO, APEC) attention turned to Free Trade Agreements


NZ and FTAs: NZ and FTAs MFAT on trade agreements PM Clark in Indonesia last week, signed a TIFA story on links page


Liberalisation/Globalisation>>>: Liberalisation/Globalisation>>>


Opposition: Opposition Left/Greens, etc. Eg Green party and Buy Kiwi Made campaign But now also from right Wall Street Journal


The BIG issue: The BIG issue Is globalisation GOOD or BAD? Is it stoppable or changeable? How can the opportunities be realised, the negative effects minamised? etc. etc. Ongoing debate


Trade policy and globalisation issues: Trade policy and globalisation issues Debate on trade policy and globalisation will continue to have great impact on IM Marketers need to monitor what is going on Market access does not guarantee market success market access is necessary but not sufficient IM needs knowledge about markets and products to satisfy them


DVD Paul Vaughan: DVD Paul Vaughan


Changing social fabric: Changing social fabric Marketing takes place within society Consumer behaviour course discussed interaction between individual CB and social environment families, reference groups, lifestyle changes, attitudes… What happens in a particular society (eg NZ) happens globally extremely complex manner


Four examples: Four examples Immigration Social issues –Green market, pink market, ethics aging society – Silver market changing (globalising) tastes


Immigration: Immigration Why is it important to IM? old identification of a country with an ethnic/cultural group is becoming increasingly invalid in many countries immigration is main social trend


Main social trend of 1990s in Britain..: Main social trend of 1990s in Britain.. in Britain immigration much more important than natural population growth ‘consequences for ethnic mix and age structure’ In NZ? Cultural diversity in NZ


Immigration: Immigration on increase in EU, USA, etc. creation of multiethnic societies write down some marketing implications of changes in ethic composition


Tourism: Tourism Tourism has somewhat similar effects 700 million international tourism arrivals in 2000 2003 – 6% of global exports of G&S in many countries a large part of the market is made up of permanent or temporary ‘foreigners’ eg China’s tourism market is important for NZ exports they want to eat familiar foods, drink wine


International students: International students Important financially to host countries Learn and spread news tastes and customs Often develop business links when return home


Social issues: Social issues Environment – green market Sex – pink market Ethics Labour standards Child labour Opposition to country policies Consumer boycotts some examples


Ageing society: Ageing society part of general issue of changing age structure in societies why is age structure important for marketing? population pyramids; the case of Japan Japan is foremost example of aging society Japanese population pyramids


Japan’s ageing society: Japan’s ageing society implications for NZ? What change in products? Goods and services China moving that way


Globalisation of tastes: Globalisation of tastes McDonalds -Epitome of globalisation – few countries where they yet to penetrate http://www.mcdonalds.com/home.html Who hasn’t had a Big Mac? other examples – Coke, Pepsi, jeans…. Often connected with American cultural hegemony The American dream


Has McDonalds peaked?: Has McDonalds peaked? McDonald’s Korea Closes First Outlet


but other things move as well: but other things move as well Chinese food, Italian food…etc NZ wine


NZ wine in HK: NZ wine in HK


Transmitted by: Transmitted by media (films, TV) (images) migration, tourism..(people) Companies themselves ..IM programmes result is that tastes do change and can be changed


Change: Change Change is the key word Societies are changing around the world getting older, better educated, more aware of global trends… Some products are facing shrinking markets Generating demand for new products marketed in new ways marketing strategies need to be constantly reexamined


Programme: Programme Today Political framework of globalisation Changes in society – Next week – Education and marketing of services