The Global Economy
“Its All Relative”
Copyright © Texas Education Agency, 2015. All rights reserved.
OBJECTIVES:
• Understand the impact of global trade on the U.S.
economy
• Explain the role of balance of trade in relation to
imports and exports
• Compare and contrast emerging economies with
existing economies
• Evaluate the growth of multinational companies
• Discuss preindustrial and postindustrial economic
systems
• Explain the importance of finding the right mix for
foreign markets
Copyright © Texas Education Agency, 2015. All rights reserved.
TERMINOLOGY:
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NAFTA: North American Free Trade Agreement
WTO: World Trade Organization
EU: European Union
International Trade: The sale of products/services to people in
other countries
Imports: Products/services purchased from another country
Exports: Products/services sold to another country
Indirect Exporting: Marketers with exporting experience
represent the exporting company – arranges for the sale of
products in other countries
Direct Exporting: Company handles all responsibilities to
market products in other countries
Copyright © Texas Education Agency, 2015. All rights reserved.
• Balance of Trade: The difference between a country’s imports
and exports
• Foreign Production: A company owns and operates production
facilities in another country
• Joint Venture: Two or more companies in different countries
with common interests develop a relationship to join in
common business activities
• Multinational Companies: Businesses that have operations all
over the world and conduct planning for worldwide markets
• Preindustrial Economy: Based on agriculture and raw material
development; low standard of living
• Postindustrial Economy: Based on mix of business and
consumer products/services produced and marketed in the
global marketplace
• Gross Domestic Product: The total $ value of all good/services
produced within a country in one year
• Gross National Product: The total $ value of all goods/services
produced
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• Quota: Limits the number of certain types of products foreign
companies can sell in a country
• Tariffs: Taxes placed on imported products to increase the
selling price
• Subsidy: Money provided to a business to help in the
development and sale of products
• Standard of Living: A measure of the quality of life for the
citizens of a country
• Productivity: The average output by workers for a specified
period of time
• Purchasing Power: The amount of goods/services that can be
bought with a specific $ amount of money
• Consumer Price Index: The variance in the cost of a specified
set of goods over time
• Business Cycle: Consists of four stages: Prosperity, Recession,
Depression and Inflation
Copyright © Texas Education Agency, 2015. All rights reserved.
I. U.S. and International Trade
• World Interdependence
– Approximately 1/3 of worldwide production is
sold outside of the “home” country
– The bulk of products Americans use daily are
imported
– U.S. exports music, movies, cars, airplanes, and
food items
• International Trade is Changing
– Raw materials once were an abundant
commodity; today it makes up less than 1/3 of
world’s exports
– Manufactured goods/services are most popular
Copyright © Texas Education Agency, 2015. All rights reserved.
• Services (communications, travel, education and financial)
are the most popular exchanges between countries
• Data is transferred via phone, fiber optics, or satellite on a
daily basis
II. Businesses
are Going Global
• Markets are Changing
– Foreign markets are enticing to domestic businesses
who experience dropping sales and profit
– Another way to expand competition
– Increasing worldwide demand for products
• Benefits of international marketing
– Government support is available
Copyright © Texas Education Agency, 2015. All rights reserved.
Importance of International Trade
• U.S. Economy: over 250,000 businesses export products
– Accounts for over 11% of GNP
• 95% of U.S. exporting businesses are small to medium
sized
• Manufacturers export over $500 billion products
• Wholesalers export over $100 billion products
• U.S. is the second largest exporter
• Germany is the #1 exporter of produdcts
• U.S. is #1 the importer of products
• Germany is the #2 importer of products
• U.S. had 1st trade deficit of 20th Century in 1971 (imports
exceeded exports by over $1 billion that year)
Copyright © Texas Education Agency, 2015. All rights reserved.
III. How does this concern photography?
A photographer working to create an advertisement
or photograph must know about the demographics of
their targeted audience. Just imagine the difference
between a target audience in Florida vs. Alaska. Or
designing a t-shirt for a three-year old vs. a 35-year
old. Or even a male vs. a female. Or if they come from
a wealthy area or impoverished?
All these things make a difference in how a
photographer or advertiser approaches them.
• If you’re unsure of this information, ask for a “creative brief” from your
art director or do some research on your product!
Copyright © Texas Education Agency, 2015. All rights reserved.
Continued – Demographics
This includes:
• WHERE they live.
• Types of professions, skills, jobs.
• Their level of education.
• Their average income.
• Their living conditions.
• The geographic environment with regards
to weather, temperature, landscape,
coastal, inland, etc.
• Percent in urban vs. rural.
• Average age of population.
• Percent married.
• Average family size, number of children.
• Typical health and welfare of citizens.
Copyright © Texas Education Agency, 2015. All rights reserved.
Bottom Line…
• Knowing your target audience’s
demographics will help with the success of
your advertising campaign.
• Advertising snow plows to Floridians may
not result in too many sales!
Copyright © Texas Education Agency, 2015. All rights reserved.