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Chapter 8

CHAPTER 8.docx

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Department
Administrative Studies
Course
ADMS 3920
Professor
All Professors
Semester
Fall

Description
Friday, September 28, 12 CHAPTER 8: GLOBAL MARKETING In many industries, innovation is essential to competitiveness, giving a small company an advantage over its large-firm counterparts.  Small businesses that invest heavily in research and development often outperform their large competitors.  But as R&D costs rise, they often cannot be recovered from domestic sales, and hence small firms are forced to go abroad to cover the investment costs.  Companies now are focusing on emerging markets such as China and India, due to their high level of populations and potential demand. GLOBAL CHALLENGES Companies doing business abroad are facing the following obstacles:  Obtaining adequate knowledge about exporting  Identifying viable sales prospect abroad  Understanding business protocols in other countries  Selecting suitable and most profitable target markets  Broader security regulations due to political events such as 9/11  Overwhelming trade barriers around the world Free Trade Agreement (FTA) – an accord that eases trade restrictions between Canada and the United States, which was signed in 1989. North American Free Trade Agreement (NAFTA) – an accord that eases trade restrictions among Canada, the United States, and Mexico, which was signed in 1993. General Agreement on Tariffs and Trade (GATT) – an international agreement that aims to reduce tariffs and other trade barriers among countries. Friday, September 28, 12 World Trade Organization (WTO) – an international organization that administers General Agreement on Tariffs and Trade and works to lower tariffs and trade barriers worldwide. INITIAL PREPARATIONS FOR GLOBAL MARKETING 1. Researching the foreign market and setting: Decide if the firm is up to the task of globalization, which implies that they first need to obtain adequate, initial exporting information.  Study the different cultural, political & business practices in foreign markets.  Identify viable sales prospects abroad  Understand business protocols  Be prepared to modify products to meet design specifications that may vary from country to country.  Finally, select suitable target markets abroad 2. Setting up a sales and distribution plan. The Department of Foreign Affairs and International Trade (DFAIT): primary Canadian government agency responsible for assisting exporters. Services offered by DFAIT include:  Export Information Kit  Export Counseling  World Information Network for Exporters (WINS): a list of over 30,000 Canadian exporters that would like to export.  International Trade Data Bank: information about international trade  Overseas Trade Fairs: Financial assistance to participate in a foreign trade fair.  Trade Leads and Trade Missions: essential in identifying potential customers in target markets.  Internet Resources www.international.gc.ca Trade Missions: a planned visit to a potential foreign market to introduce Canadian firms to appropriate foreign buyers and government officials, and to establish exporting relationships. Usually co
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