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Chapter 17- Global Marketing.docx

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Chapter 17 Global MarketingGlobalization Refers to the process by which goods services capital people information and ideas flow across national bordersGlobal markets are the result of several fundamental changes such as reductions or eliminations of trade barriers by country governments the decreasing concerns of distance and time with regards to moving products and ideas across countries the standardization of laws across borders and globally integrated production processesWhen examining countries as potential markets for global products companies must realize that these different countries exist at very different stages of globalizationGrowth of the Global Economy Globalization of Marketing and ProductionChanges in technology especially communications technology have been the driving force for growth in global markets for decades Globalization of production offshoring manufacturers procurement of goods and services from around the globe to take advantage of national differences in the cost and quality of various factors of production eg labor energy land capitalOriginally it was focused on relocation for manufacturing purposes now days it also includes products of the knowledge economy medical services financial services technological services and consultingGlobalizing production allows companies to lower their costs and therefore create better value for customers Paradox the problem of invisible beneficiaries and very visible losersPeople who have lost their jobs to offshoring are the losers and consumers who now benefit from the lower cost of goods are the invisible winners There are also organizations that are designed to oversee the functioning of global marketsGeneral Agreement on Tariffs and Trade GATT Organization established to lower trade barriers such as high tariffs on imported goods and restrictions on the number of types of imported products that inhibited the free flow of goods across borders The GATT also included the founding of the International Monetary Fund IMF Established with the original General Agreement on Tariffs and Trade GATT primary purpose is to promote international monetary cooperation and facilitate the expansion and growth of international trade In 1994 the GATT was replaced byWorld Trade Organization WTO Differs from the GATT in that WTO is an established institution based in Geneva Switzerland instead of simply an agreement represents the only international organization that deals with the global rules of trade among nations World Bank Group a development bank that provides loans policy advice technical assistance and knowledgesharing services to low and middleincome countries in an attempt to reduce poverty in the developing world The financing assistance provided by both the World Bank and the IMF make it possible for firms in the developed world to market their products to developing countriesAssessing Global MarketsA situational analysis is required to assess the viability of various potential market entriesPESTPoliticallegal factorsEconomic factorsSociocultural factorsTechnological factorsAnalyzing the Political and Legal EnvironmentGovernment as well as nongovernmental political groups can influence firms ability to sell goods and services because they often result in regulationsPolicies aimed at restricting trade and global marketing are called protectionist policiesPolicies that encourage global trade and marketing are referred to as trade liberalization policies1 ProtectionistTrade SanctionsPenalties or restrictions imposed by one country over another country for importing and exporting goods services and investmentsAn embargo is a form of trade sanction that prohibits trading with a certain country or trading in specific goods by other signatory countries
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