Matakuliah : J0474 International Marketing
Tahun
: 2009
Multinational Market Regions and Market Groups
Chapter 8
Learning Outcome
• La Raison d’Etre
• Patterns of Multinational Cooperation
• Global Markets and Multinational Market Group
• Europe
• The Americas
• Asian-Pacific Rim
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La Raison d’ Etre
Economic Factors
Every type of economic union shares the development and
enlargement of market opportunities as a basic orientation,
Usually, markets are enlarge through preferential tariff
treatment for participating members, common tariff barriers
against outsiders, or both.
The European Union includes
countries with diverse economic,
distinctive monetary systems,
developed agricultural bases, and
different natural resources.
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La Raison d’ Etre
Political Factors
Political amenability among countries is another basic requisite
for development of a supranational market arrangement.
State sovereignty is one of the most cherished possessions
of any nation and is relinquished only for a promise of significant
improvement of the national position through cooperation.
The uniting of the original European Union countries was partially
a response to the outside threat of the Soviet Union’s great
political and economic power.
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La Raison d’Etre
Geographic and Temporal Proximity
Although geography and temporal proximity are not absolutely
imperative for cooperating members of a custom union,
such closeness does facilitate the functioning of a common market.,
Transportation networks ( basic to any marketing systems) are likely
To be interrelated and well develop when countries are close together.
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La Raison d’ Etre
Cultural Factors
The more similar the culture, the more likely an agreement is
to succeed, because members understand the outlook and
viewpoints of their colleagues.
Language, as a part of culture, has not created as much a barrier
For EU countries as was expected. Nearly every educated European
can do business in at least two or three languages, so the linguistic
Diversity of several major language did not impede trade.
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Patterns of Multinational Cooperation
There are five fundamental groupings for regional economic
integration, ranging from regional cooperation for development,
which requires the least amount of integration, to the ultimate
integration of political union.
Regional Cooperation Groups,
Regional Cooperation for Development (RCD)
Free Trade Area (FTA)
Customs Union
Common Market
Political Union
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Global Markets and
Multinational Market Groups
Europe
The European Union’s institutions form a federal pattern with
executive, parliamentary, and judicial branches :
The European Commission, the Council of Ministers, the European Parliament
and the Court of Justice.
Their decision-making processes have legal status and extensive powers in
fields covered by common policies.
The European Union uses three legal instruments :
1. Regulations binding the member states directly and having the same strength as
National laws,
2. Directives also binding the member states but allowing them to cloose the means
of execution.
3. Decisions addressed to a government, an enterprise, or an individual, binding the
Parties named.
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Global Markets and
Multinational Market Groups
European Free Trade Association (EFTA)
European Economic Area (European Union)
Economic and Monetary Union( EMU)
Treaty of Amsterdam
Expansion of the European Union
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Global Markets and
Multinational Market Groups
The Americas
North American Free Trade Agreement
The United States, Mexico and Canada had the World’s largest bilateral trade
agreement to further support trade activity, the two countries established
the United States-Canada Free Trade Area (CFTA).
United States-Central American Free Trade AgreementDominican Republic Free Trade Agreement (CAFTA),
In August 2005, President Bush signed into law a comprehensive free trade
agreement among Costa Rica, Dominican Republic, El Salvador, Guatemala,
Honduras, Nicaragua, and the United States.
Southern Cone Free Trade Area ( Mercosur),
Mercosur I including Argentina, Bolivia, Brazil, Chile, Paraguay and Uruguay) is
the second-largest common market agreement in Americas after NAFTA.
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Global Markets and
Multinational Market Groups
Asian-Pacific Rim
Association of Southeast Asian Nations.
The goals of the group are economic integration and cooperation
through complementary industry programs; preferential trading, including reduced
tariff and non tariff barriers; guaranteed member access to markets
throughout the region.
Asia-Pacific Economic Cooperation
APEC is a unique forum that has evolved into the primary regional vehicle for
promoting trade liberalization and economic cooperation.
United Nations Economic Commission for Africa (ECA)
Economic Community of West African States (ECOWAS)
Southern African Development Community (SADC)
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Summary
• The experiences of the multinational market groups developed
since World War II point up both the successes and the
hazards such groups encounter.
• For companies the economic benefit, possible through
cooperation relate to more efficient marketing and production.
• Market groupings make it economically feasible to enter new
markets and to employ new marketing strategies that could not
be applied to the smaller markets represented by individual
countries. At the same time, market grouping intensify
competition by protectionism within a market group but may
foster greater protectionism between regional markets.
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