Slide1: Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Chapter 20 Global Marketing


Slide2: ç Balance of Trade and Payments Balance of Trade and Payments Balance of Trade The relationship between a country’s exports and its imports. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-1 Balance of Payments The flow of money into or out of a country.


Slide3: ç Exchange Rate Exchange Rate The rate at which a nation’s currency can be exchanged for other currencies or gold. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-2


Slide4: ç Devaluation Devaluation Situation in which a nation reduces the value of its currency in relation to gold or some other currency. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-3


Slide5: ç Revaluation Revaluation Situation in which a country adjusts the value of its currency upward. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-4


Slide6: ç Absolute and Comparative Advantage (Slide 1 of 2) Absolute and Comparative Advantage Absolute Advantage A nation has an absolute advantage in the marketing of a product if it is the sole producer or can produce a product for less than anyone else. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-5A


Slide7: ç Absolute and Comparative Advantage (Slide 2 of 2) Absolute and Comparative Advantage Comparative Advantage A nation has a comparative advantage if it can produce a given product more efficiently per unit of output than it can produce other products. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-5B


Slide8: ç Competing in the International Market Competing in the International Market Buyer Behaviour Economic and Societal Factors Political and Legal Factors Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-6


Slide9: ç Local Content Laws Local Content Laws Laws specifying the portion of a product that must come from domestic sources. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-7


Slide10: ç Cartel Cartel The monopolistic organization of a group of firms. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-8


Slide11: ç Friendship, Commerce, and Navigation (FCN) Treaties Friendship, Commerce, and Navigation (FCN) Treaties Treaties that address many aspects of commercial relations with other countries; such treaties constitute international law. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-9


Slide12: ç Marketing Mix in the Global Setting Marketing Mix in the Global Setting Product Decisions Pricing Decisions Marketing Communications Distribution Decisions Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-10


Slide13: ç Company Approaches to Global Marketing (Slide 1 of 2) Company Approaches to Global Marketing Ethnocentric Company Firm that assumes that its way of doing business in its home market is the proper way to operate, and tries to replicate this in foreign markets. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-11A Polycentric Company Firm that assumes that every country is different and that a specific marketing approach should be developed for each separate country.


Slide14: ç Company Approaches to Global Marketing (Slide 2 of 2) Company Approaches to Global Marketing Regiocentric Company Firm that recognizes that countries with similar cultures and economic conditions can be served with a similar marketing mix. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-11B Geocentric Company Firm that develops a marketing mix that meets the needs of target consumers in all markets.


Slide15: ç Modes of International Activity Modes of International Activity Indirect Exporting and Importing Direct Exporting and Importing Licensing Joint Venture Foreign Production and Marketing Multinational Enterprise Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-12


Slide16: ç World Trade Organization (WTO) World Trade Organization (WTO) The international body that deals with the rules of trade between nations. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-13


Slide17: ç Principles of the Trading System Principles of the Trading System Without discrimination Freer Predictable More competitive More beneficial for less developed countries Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-14


Slide18: ç Integration of World Markets (Slide 1 of 2) Integration of World Markets Free Trade Area Area established by agreement among two or more nations within which participants agree to free trade of goods and services among themselves. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-15A Customs Union Agreement among two or more nations that establishes a free trade area, plus a uniform tariff with nonmember nations.


Slide19: ç Integration of World Markets (Slide 2 of 2) Integration of World Markets Common Market A customs union that also allows factors of production such as labour, capital, and technology to flow freely among members. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-15B Economic Union A common market that also requires members to harmonize monetary policies, taxation, and government spending. In addition, a common currency is used by members.


Slide20: ç North American Free Trade Agreement (NAFTA) North American Free Trade Agreement (NAFTA) The agreement establishing a free trade area among Canada, the United States, and Mexico that followed the FTA. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-16


Slide21: ç Tariff Tariff A tax levied against products imported from abroad. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-17


Slide22: ç Import Quota Import Quota A limit set on the amount of products that may be imported in a certain category. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-18


Slide23: ç Embargo Embargo A complete ban on importing a particular product. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-19


Slide24: ç Exchange Control Exchange Control Requirement that firms gaining foreign exchange by exporting must sell their foreign exchange to the central bank or agency, and importers must buy foreign exchange from the same organization. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-20


Slide25: ç Dumping Dumping Practice of selling products at significantly lower prices in a foreign market than in a nation’s own domestic market. Copyright © 2000 by Harcourt Canada Ltd. All rights reserved. Slide 20-21