Chapter 4.2
THE GLOBAL MARKETPLACE
Bell Ringer
 Complete the Cultural Sensitivity Quiz
Objectives
 0422.11.6
Analyze how cultural,
economic and political factors impact
businesses engaged in international trade.
Doing Business Internationally
 Growing with increased acceptance of
capitalism around world
 Advances in technology (Internet)
 Reduction of Trade Barriers
 Instantaneous global news coverage
Ways to Get Involved in
International Trade
 Importing
 Exporting
 Licensing
 Contract Manufacturing
 Joint Ventures
 Foreign Direct Investment
 Multinationals
 Mini-nationals
Ways to Get Involved in
International Trade
 Importing – purchasing goods from a foreign
country
 Meet same standards as domestic products
 Quota’s can limit entry of some products
 Hire Customs Broker – specialists licensed by
US Treasury Department
 Know laws, procedures and tariffs
 Handle 90% of all imports
Ways to Get Involved in
International Trade
 Exporting – selling domestic goods in a
foreign country
 Minimal risk and control
 Help from government through BuyUSA site
Ways to Get Involved in
International Trade
 Licensing – letting another company us a
trademark, patent, special formula, company
name or other intellectual property for a fee
or royalty
 Franchising
Intellectual property is
divided into two categories:
 Industrial property, which includes inventions
(patents), trademarks, industrial designs, and
geographic indications of source
 Copyright, which includes literary and artistic
works such as novels, poems and plays, films,
musical works, artistic works such as
drawings, paintings, photographs and
sculptures, and architectural designs
Ways to Get Involved in
International Trade
 Contract Manufacturing – hiring a foreign
manufacturer to make your products
according to your specifications
 Pay lower wages
 Proprietary information must be given to
foreign companies
 Golf club head molds stolen in China and copies of
knockoff made
Ways to Get Involved in
International Trade
 Joint Venture – business enterprise that
companies set up together
 Some countries do not allow foreign investors
to own 100% of a business
 Companies must find a “local” business
partner
Ways to Get Involved in
International Trade
 Foreign Direct Investment – establishment
of a business in a foreign country
 Sony – Japanese company
 $8 billion in China
 11 manufacturing plants in United States
Ways to Get Involved in
International Trade
 Multinationals – large corporations that have
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operations in several countries
Proctor & Gamble
Nike
PepsiCo
Coca-Cola
Ways to Get Involved in
International Trade
 Mini-Nationals – midsize or smaller
companies that have operations in foreign
countries
 Difference in investment in factories, offices,
other facilities
Graphic Organizer
 Prepare a graphic organizer that lists the
factors that are used to evaluate a countries
marketing opportunities and threats.
 Political Factors
 Trade Regulations and Laws
 Economic Factors
 Socio-Cultural Factors
 Technical Factors
Global Environmental Scan
Political Factors
 Government Stability
 Type of Government
 Trade Agreements
 Foreign Investment Opportunities
Global Environmental Scan
Trade Regulations & Laws
 Percentage of Business Ownership Allowed
 Laws to protect Intellectual Property
Global Environmental Scan
Economic Factors
 Infrastructure
 Labor Force
 Employee Benefits
 Taxes
 Standard of Living
 Foreign Exchange Rate
Global Environmental Scan
Socio-Cultural Factors
 Language & Symbols
 Holidays & Religious Observances
 Social & Business Etiquette
Global Environmental Scan
Technological Factors
 Measurement System
 Electrical Voltage Standards
 Telephone/Internet Access
 Computers/Faxes/Voice Mail/Cellular Phones
 Radio/Television
 CIA's World Fact Book web site
Global Marketing Strategies
 Globalization
 Adaptation
 Customization
Global Marketing Strategies
 Globalization – selling the same product and
using the same promotion methods in all
countries
 Common need that transcends different
cultures
 Coca-Cola
 Microsoft
Global Marketing Strategies
 Adaptation – using an existing product
and/or promotion with changes made to
better suite the characteristics of a country or
region
 Product Adaption – change some aspect of
actual product for different markets
 Promotion Adaption – change some part of
promotional message for different markets
 Chevy Nova means “no go” in Spanish
Global Marketing Strategies
 Customization – creating specially designed
products or promotions for certain countries
or regions
Global Marketing Strategies
Activity
 Textbook page 88 Global Marketing
Strategies
 Read the examples listed.
 What is your first impression of each product
advertisement?
Review Assignment
 Textbook page 89 After You Read Questions
#1, 2, & 3
 Answer questions in complete sentences on
the back of the global scan graphic
 Textbook page 91 Review Facts and Ideas
Questions # 6, 8, 9, & 10
 Answer questions in complete sentences
Assignment
 Chapter 4 Vocabulary Review and Fact and
Idea Review – workbook pages 29 & 30
Writing Review Assignment
 Explain the difference between
customization, globalization and adaptation.
Mini-Quiz
 1. _____ refers to the fact that all countries
depend on each other for resources that they
themselves lack.
 2. Two types of advantages in international
trade are comparative and ____.
 3. A trade deficit occurs when a country’s
____ are greater than its ____.
Mini-Quiz
 4. The business activity in the global market
that carries the lowest risk is _____.
 5. Offering a product for sale world-wide
without making any changes or modifications
to the product is called ____.
Mini-Quiz
 1. Interdependence refers to the fact that all
countries depend on each other for resources
that they themselves lack.
 2. Two types of advantages in international
trade are comparative and absolute.
 3. A trade deficit occurs when a country’s
imports are greater than its exports.
Mini-Quiz
 4. The business activity in the global market
that carries the lowest risk is exporting.
 5. Offering a product for sale world-wide
without making any changes or modifications
to the product is called globalization.