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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