MKTG209 Textbook Notes

Chapter 1
International marketing is important: economic isolation has become impossible.
International marketing: Process of planning and conducting transactions across national
borders to create exchanges that satisfy the objectives of individuals and organisations.
Different constraints, conflicts, laws, cultures, societies new macro-environmental factors.
International markets source of growth, profit, needs satisfaction, quality of life.
Environmental issues and social sustainability
Tyranny of distance Australias distance from other countries diminished by advances in
transportation and communication.
International marketing lower costs, higher profits, stability from lack of dependence on any
particular market , learn from competitors, wider range of employee
SMEs: Small and medium enterprises
New Exporter Development Program (NEDP): helps SMEs enter international market.
Increased environmental concerns.
Food miles: distance a product is transported from production place to retail outlet, hence its
contribution to greenhouse gases.
1999-2008: global exports from $5.7 trill to $16.1trill US dollars.
Trading blocs exist to encourage trade relations between their members
Diasporic communities: Communities of people living outside their original homeland and who
retain ties, linguistic, cultural, religious.
Global linkages financial hardships in one country felt in others.
Firms operate in a market space rather than a marketplace.
UK used to be the major export destination. But then they joined the European Common
Marketplace (ECC)
Japan become more important
Now Asia and India.
4 Dragons Taiwan, South Korea, Singapore, HK.
Importance of manufactured goods increased and services
Globalisation has domestic policy repercussions policies increasingly being influenced by
overseas. Eg interest rates
To regain power, barriers like tariffs, quotas, and other import regulations may be put in place.
(Sometimes these are restrained by WTO)
Opportunities: build and strengthen competitive position by becoming and international firm.
More customer reach, avoid market saturation, shift production sites to different countries,
cooperative agreements formed to enable all parties to bring major strengths better
products/ideas. Multinational corporations lower risk of insolvency, pay higher wages.
Adaptation to the market is key.
Challenges:
Chapter 2
Average wealth has risen
Per capita GDP is an important measure because it indicates the affluence of the market
Increased imperative to go overseas for more opportunities
MKTG209 Textbook Notes
Newly industrialised countries - Singapore and Taiwan and Korea Hong Kong Brazil and Mexico
Newly industrializing economies
RBIC - Brazil, Russia, India, China.
Organization of petroleum exporting countries- Opec
Less developed countries, debt problems and falling commodity prices = market development
difficult
Less developed: primarily agrarian/extractive economies. High birth rates, limited
infrastructures = low per capita income. Low electricity usage.
Early developing: Have begun initial development of an infrastructure, infant industries.
Electricity consumption still modest.
Semideveloped: Accelerated expansion of infrastructure and wide industrial diversification. Per
capita income/electricity usage growing. greater ownership of vehicles/electric appliances.
Developed: well developed infrastructures, high incomes, electricity, large scale industrial
diversification. Low population and economic growth.
Population good indicator of market size and potential demand.
High population densities and living standards, advanced logistics good for marketers.
Marketers should consider the sizes of households.
Growth in number of households, decline in average size of households divorce, sole survivor.
Degree of urbanisation distribution, market potential, buying habits.
Urban customers might be more responsive to marketing efforts because of exposure to other
consumers and media.
Urbanisation has different meanings for different countries.
Income most indicative of market potential
Per capita GNP indicator of purchasing power.
Very low family incomes: Subsistence economies rural populations, consumption relies on
personal output or barter.
Very low, very high family incomes: Bimodal income distributions. Majority live barely above
subsistence level, strong market in urban centre, growing middle class. Affluent are really rich.
Low, medium, high family incomes: Industrialisation emerging middle class, low/high tend to
remain for tradition reasons of social class barriers.
Mostly medium family incomes: Advanced industrial nations institutions and policies that
reduce extremes in income distribution big middle class
Engels law: as family income increase, % spent on food reduces, % on housing/household
operations same, amount saved/spend on others will increase.
Low rates of product diffusion market opportunity/lack of opportunity from low income
levels, lack of acceptance, or substitute products.
Deflation- problem for marketers why buy today when it will be cheaper tmr?
Debt problem a countrys ability to repay their debt measured in GNI debts crush buying
power, force imports down and exports up to meet interest payments.
Availability and quality of infrastructure evaluating marketing operations abroad.
Energy consumption per capita market potential for electrical markets
Infrastructure essential to the delivery of goods to market.
Communication essential
Digital Divide
MKTG209 Textbook Notes
Economic growth infrastructure limits, labour shortages, demands for greater political
freedom, environmental destruction, urban congestion, drug addiction.
Physical Quality of Life Index (PQLI): composite measure of the level of welfare in a country
life expectancy, infant mortality, adult literacy rates.
Product strategies influenced by degree of urbanisation.
Firms may need extensive adaptations to match to the expectations and the more narrow
consumption experiences of rural populations.
Economic integration trading blocs
Free trade area: least restrictive and loosest form of integration all trade barriers removed
g/s traded freely among member countries. (NAFTA, EFTA)
Customs union: Remove barriers to trade among members. Establishes a common trade policy
with respect to non-members. (Southern African Customs Union)
Common market: a customs union covering exchange of g/s, prohibition of duties in
export/imports between members, adoption of a common external tariff in respect to non-
members. FOP are mobile among member countries (factor mobility).-->FOP employed in their
most productive uses. Restriction on immigration/cross-border investment abolished.
Relies on cooperation in monetary, fiscal and employment policies. (Single European Act 1987)
Economic union: requires integration of economic policies in addition to the free movement of
goods, services, FOP across borders. Harmonise monetary policies, taxation, government
spending, common currency political union (European Union)
Benefits of integration eliminate costs of border patrols, custom procedures, economic
growth from economies of scale, increased competition among companies in the union,
common currency cheaper transaction costs, reduced currency risks, price transparency,
increased price based competition, larger market share.
Formation of EU hit Australia hard Fortress Europe.
EU still hugely attractive.
North American Integration Canada, Mexico, USA.
Import substitution: a policy involves developing industries to produce goods that were
formerly imported.
Mercosur: Latin American common market economic convergence targets
Free Trade Area of the Americas (FTAA): ultimately they aim to achieve a free trade zone.
AFTA: ASEAN Free Trade Area reduction in tariffs and to create a customs union by 2010.
SAARC: South Asian Association for Regional Cooperation. Indian type countries.
APEC: Asia Pacific Economic Cooperation
Aust constant fear of being excluded from the booming Asian region have been active in
negotiating bilateral FTAs with Asians.
AANZFTA ASEAN-Aust-NZ-FTA: 600mil people, $US 2.3tril.
ECOWAS Economic Community of West African States: aim to form custom unions and
common market.
Gulf Cooperation Council (GCC): Middle Eastern countries that aim to achieve FTA with
European nations.
Benefits to international marketers
Economic integration may impact a companys entry mode by favouring direct investment.
Regulations may be standardised
MKTG209 Textbook Notes
Consider degrees of change
Economic crises consumer confidence decreases, consumer spending
Marketers may need to abandon markets or increase their efforts adaptive positioning or by
altering the product or packaging. Eg reducing the sizes to make them cheaper
Chapter 3
Global comprehensive WTO
WB
IMF
Global selective Organisation for Economic Cooperation and Development OECD
G20
G77
UN Conference of Trade and Development
Global sectoral UN World Tourism Organisation (UNWTO)
Food and Agricultural Organisation of the UN (FAO)
Global sectoral promotion Organisation of the Petroleum Exporting Countries (OPEC)
Cairns Group
Regional European Union (EU)
Association of Southeast Asian Nations (ASEAN)
Multi-regional ASEAN-Aust-NZ-FTA (AANZTFA)
East Asia Summit (EAS)
APEC
Regional country ASEAN- India Trade in Goods Agreement (TIG)
Bilateral Aus-US FTA
NZ-China FTA
Korea-US FTA

History of trade relations
Roman Peace aka Pax Romana ensured safe travel on roads with protection by troops.
Established common coinage to ensure easy transactions and a central market place.
City nations and tribes wanted to join into the market. Cost of international distribution was
reduced because fewer goods were lost to pirates lower prices larger demand.
European feudalism delivered portions of their earnings to protectors so that theyd protect
their harvests and retain most of their harvest for sale.
1930s Smoot-Hawley Act raised duties to reduce volume of imports into US in hopes of
restoring domestic employment but it lead to the raising of barriers to imports in other trading
nations worldwide depression.
1948- International Trade Organisation charter signed following belief that international trade
was a key to worldwide prosperity.
General Agreement on Tariffs and Trade (GATT) purpose of reducing tariffs among countries.
WB and IMF created.


MKTG209 Textbook Notes
General Agreement on Tariffs and Trade (GATT)
Born in 1947 as set of rules for non-discrimination, transparent procedures and settlement of
disputes in international trade.
Used the Most Favoured Nation clause calls for each member country to grant every other
member country the most favourable treatment it accords to any other country for ex/imports.
Achieved free trade in 50k products.
Nations started developing new non-tariff tools to restrain trade (sneaky!) and there were too
many members.
Uruguay round ratified in 1995 to make WTO.
World Trade Organisation (WTO)
Originated from GATT in 1995.
GATT became part of WTO
Speedier dispute settlement procedures
Deals with intellectual property rights, trade-related investment measures, admin of
international trade and investment accords.
2001 Doha Round aimed to hasten implementation of liberalisation and help poor and
developing nations.
2006 Doha failed
International Monetary Fund (IMF)
Born in 1944
Designed to provide stability for the international monetary framework, international liquidity
and facilitating international trade.
Funds used to provide countries with protection against temporary fluctuations in value of their
currency.
Macro level
World Bank
International Bank for Reconstruction and Development
Born in 1944
Aids world development by assisting new economies to participate in a modern economic trade
framework.
Sometimes works with IMF to resolve debt problems of the developing world.
Effectiveness of some investments questionable some projects producing little in terms of
economic progress.
Micro level
Regional institutions and FTAs
Economic blocs that integrated the economic and political activities of nations.
MKTG209 Textbook Notes
Private sector also develops blocs eg Transatlantic Business Dialogue which is a non-govt
organisation composed of business leaders from Europe and US attempts to achieve mutual
recognition agreements on an industry basis.
Also attempt to align international standards and regulations.
APEC Asia Pacific Economic Cooperation
1993: Paul Keating tried to create APEC, but could not get Malaysia to attend.
2008: K Rudd created APEC to deal with security, economic and resource challenges (regional
cooperation on security, tree trade, long-term security of energy, good, resource supplies).
APEC in competition with Japans proposed idea of East Asian Community.
Supports sustainable economic growth and prosperity in the Asia-Pacific regions.
Non-binding commitments, open dialogue, equal respect for all participants.
21 Members
ASEAN
Born in 1967
Primarily a political group that has taken on an economic role.

US, UK, Aus, NZ experienced significant decline in share of world trade.
Japan and China increased.
US focuses on foreign economic investment but is globally ignorant
New firms are born global
Aus, NZ, US have deficits
Attainment of economies of scale is a benefit of exporting
Traditional exports of Aus and NZ threatened.
Almost 1 in 7 manufacturing employees in US work for a foreign affiliate.
Trade policies essential for governments attempts to deal with international trade.
Imports may compete with local production may result in loss of jobs.
Exports may deprive local market force prices up.
Restrictions to imports- voluntary import restraints, non-tariff barriers, tariffs Page 135.
Reasons for export promotion assistance:
- National need to earn foreign currency.
- Encourages domestic employment
- Increases domestic economic activity
US Perspective:
- Quality/quantity of info govt & businesses share must be improved.
- closer govt/business collaboration is needed
- US industry must overcome short-term financial orientation
- must invest in education of people
Aussie and NZ perspective
- Mineral reserves
- Financial hub for Asia
MKTG209 Textbook Notes
- NZ/China FTA facilitates trade
- Aus/NZ CER

Chapter 4
Manager needs to consider political and legal circumstances of home country and host country,
bilateral and multilateral agreements, treaties and laws governing the relations between
host/home countries.
Greenwash: pretending to be green when you arent.
Food miles: Distance for travels between production and table.
Locavores: People who only want to eat locally grown food.
Water footprint: amount of water used to produce and transport a product.

Home country policies and legalities can disadvantage firms that compete globally
Lack of intellectual property rights in China
Grey market: aka parallel importing is when goods enter the market in ways not desired by their
manufacturers. Companies may be hurt by their own product if they reach the consumer via
uncontrolled distribution channels.
Embargoes and sanctions: governmental actions that distort the free flow of trade in g/s/ideas
for adversarial and political rather than strictly economic purposes.
Can be enforced by the UN as a punishment inflicts great economic damage.
Often initiated by US against small countries Cuba, Iraq, North Korea.
US loses about 20 bil in lost exports due to sanctions
Export control systems impede upon acquisition of goods by adversaries, primarily used by US
Established in Aust and NZ although involvement in the Wassenaar.