INTERNATIONAL MARKETING Chapter 4 The Economic Environment
The Economic Environment Chapter 4 INTERNATIONAL MARKETING
The Foreign Market Environment Group of five ■ Group of ten ■ United states The Group of Seven Britain plus ■ france Sweden 1 Germany the netherlands jApan ■ Group of seven The group of five, plus ■ Italy ■ Canada
The Foreign Market Environment ◼ Group of Five ◼ United States ◼ Britain ◼ France ◼ Germany ◼ Japan ◼ Group of Seven ◼ The Group of Five, plus ◼ Italy ◼ Canada ◼ Group of Ten ◼ The Group of Seven, plus ◼ Sweden ◼ the Netherlands ◼ Belgium
Market Characteristics Population demographics Age distribution, life expectancies household size. urbanization Income Distribution of low, medium, and high incomes Gross domestic product per capita Purchasing power parity a Consumption patterns Income spent on necessities and luxuries Product saturation or diffusion Product form differences
Market Characteristics ◼ Population demographics ◼ Age distribution, life expectancies, household size, urbanization ◼ Income ◼ Distribution of low, medium, and high incomes ◼ Gross domestic product per capita ◼ Purchasing power parity ◼ Consumption patterns ◼ Income spent on necessities and luxuries ◼ Product saturation or diffusion ◼ Product form differences
Market Characteristics continued Availability and quality of infrastructure Rail traffic networks for distribution capabilities Communication systems for marketing Energy(electrical and fuel)consumption ■上 oreign involvement in the economy Degree of foreign direct investment in country or in a specific industry Rules governing foreign investment a Impact of the economic environment on social development Urbanization, life expectancy, literacy rates, etc Physical Quality of Life Index Poli
Market Characteristics… continued ◼ Availability and quality of infrastructure ◼ Rail traffic networks for distribution capabilities ◼ Communication systems for marketing ◼ Energy (electrical and fuel) consumption ◼ Foreign involvement in the economy ◼ Degree of foreign direct investment in country or in a specific industry ◼ Rules governing foreign investment ◼ Impact of the economic environment on social development ◼ Urbanization, life expectancy, literacy rates, etc. ◼ Physical Quality of Life Index (PQLI)
Regional Economic Integration Levels of economic integration F ree rade Area a Goods and services are freely trades among all members. Each country maintains its own trade barriers vis-a-vis nonmembers Customs Union Members establish a common trade policy with respect to nonmembers Common market a Factors of production mobility is emphasized. A common al tariff is adopted P ■ Economic union Integration and harmonization of economic and monetary policies 1s achieved leading to poltical union
Regional Economic Integration ◼ Levels of economic integration ◼ Free Trade Area ◼ Goods and services are freely trades among all members. Each country maintains its own trade barriers vis-à-vis nonmembers. ◼ Customs Union ◼ Members establish a common trade policy with respect to nonmembers. ◼ Common Market ◼ Factors of production mobility is emphasized. A common external tariff is adopted ◼ Economic Union ◼ Integration and harmonization of economic and monetary policies is achieved leading to political union
The free Trade area Eliminates tariff and quota barriers among member countries a Each country is free to set its own tariff and quota barriers against nonmember countries Can be formed for certain classes of goods or services only
The Free Trade Area ◼ Eliminates tariff and quota barriers among member countries ◼ Each country is free to set its own tariff and quota barriers against nonmember countries ◼ Can be formed for certain classes of goods or services only
The Customs Union a Tariff and quota barriers among member countries are eliminated Member countries establish common tariff and trade barriers against nonmember countries a Tariff revenues are shared among members according to a prescribed formula
The Customs Union ◼ Tariff and quota barriers among member countries are eliminated ◼ Member countries establish common tariff and trade barriers against nonmember countries ◼ Tariff revenues are shared among members according to a prescribed formula
The common market a No trade barriers among member nations No restriction on the movement of labor, capital, or technology across borders Member countries establish common tariff and trade barriers against nonmember countries
The Common Market ◼ No trade barriers among member nations ◼ No restriction on the movement of labor, capital, or technology across borders ◼ Member countries establish common tariff and trade barriers against nonmember countries
The Economic union has all the characteristics of a common market harmonizes taxation harmonizes government spending, and harmonizes monetary policies, establiShes a common currency
The Economic Union ◼ has all the characteristics of a common market, ◼ harmonizes taxation, ◼ harmonizes government spending, and ◼ harmonizes monetary policies, ◼ establishes a common currency
Economic Integration in Regional Markets Economic union Common Market Customs union Free Trade Area Common external Trade polic Factor mobility Harmonization of Economic policies
Economic Integration in Regional Markets Free Trade Area Economic Union Customs Union Common Market Harmonization of Economic Policies Factor Mobility Common External Trade Policy
