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International Marketing

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International Marketing ­ MKT630
VU
Lesson # 13
ROLE OF GOVERNMENTS IN INTERNATIONAL MARKETS
Type of trading environments in countries:
There are two types of trade regimes in countries around the world;
· Free Trade
­ National governments exert minimal influence on exporting and importing decisions of private
firms and individuals
· Managed Trade (also called fair trade)
­ National governments intervene to ensure that exports / international business of local firms have
equitable share of foreign markets ­ to minimize domestic job losses and market share in specific
industries
Rationales for trade intervention by governments:
Governments intervene in trade in their countries and abroad for a variety of reasons. The most common
reasons are discussed below;
Industry-level needs
­ National defense argument ­ to promote local defense industry.
­
Strategic industry argument ­ to support development of essential industry in the country (such as
textiles in Pakistan)
­
Infant industry argument ­ to support emerging industry in the country, to protect it in the infancy
stage from foreign competition.
­
Maintenance of existing jobs ­ governments intervene to support certain industries to maintain
existing jobs in the economy.
­
Government also intervene to help make local firms compete internationally, so that the export
from the country increase.
National-level needs
­ Governments also intervene as part of the economic development programs
· import substitution / export promotion
­ Government also intervene as a result of public choice (to pacify pressures from various interest
groups)
· unemployment level
· political/interest group pressures
­ Governments also intervene in trade to ensure required revenue earnings to manage the
government and its programs.
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International Marketing ­ MKT630
VU
­ Intervention in trade is also done for regulating demand of certain products (cigarettes, alcohol
etc.).
­ Government also intervene in trade to influence economic relationships with other countries
· trade deficit / political or reactionary measures
Other needs
­
For achieving balance of payments adjustments.
­
For price-control objectives.
­
For maintaining spheres of influence by the countries and their governments.
­
For preserving national identities in certain industries.
­
Governments also intervene due to mere bureaucratic attitude
Forms of government controls:
Government exercise various types of tools to control / regulate foreign businesses;
Control over foreign owned businesses through
­ Taxes, ownership controls, controls on profit remittances, controls on borrowings / investments
­ licenses
Tariff (taxes placed on goods involved in international trade)
­ export duties
­ import duties
­ transit tariff
Form of taxes on international trade can be
­ % of value (ad valorem)
­ fixed amount on some unit of measurement (specific duty)
­ a combination (compound tariff)
Non tariff barriers can be
­ direct price influences
export subsidies
·
customs valuation
·
other direct price influences
·
­ quantity controls
import / export quotas
·
buy-local legislation
·
voluntary export restraint (VER)
·
embargo
·
­ other controls
licensing, foreign exchange controls, administrative delays, reciprocal requirements,
·
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International Marketing ­ MKT630
VU
restriction on services, technical & govt. regulations
Promotion of exports by governments:
Governments work to promote exports in a variety of ways. The common forms are given in the
following;
Export subsidies
­ tax breaks
­ direct payments to producers
­ product price support
­ cheaper resources (i.e. land, utilities)
­ public services provided at lower cost
Establishment of export trade / processing zones
Export financing programs
Training / assistance programs
Other governmental assistance
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Table of Contents:
  1. OVERVIEW OF INTERNATIONAL MARKETING:Domestic marketing, Multinational marketing, Globalization of markets
  2. INETRNATIONAL MARKETING PROCESS:Situation Analysis, Implementation and Control, Relationship
  3. INETRNATIONAL MARKETING PROCESS:The Product Concept, The Societal Marketing Concept
  4. INETRNATIONAL MARKETING PROCESS
  5. ENGAGING IN INETRNATIONAL MARKETS:Expansion of technology, Merchandize export and import
  6. INTERNATIONAL TRADE & INVESTMENT THEORIES:Theory of Comparative Advantage, Country Similarity Theory
  7. INTERNATIONAL TRADE & INVESTMENT THEORIES:Global Strategic Rivalry Theory,
  8. INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:Foreign exchange info
  9. INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:The Product
  10. FOREIGN NATIONAL ENVIRONMENTS:Political systems in the world, Political risks in international markets
  11. FOREIGN NATIONAL ENVIRONMENTS:Types of legal systems,
  12. FOREIGN NATIONAL ENVIRONMENTS:Conciliation, Mediation, Global relevance
  13. ROLE OF GOVERNMENTS IN INTERNATIONAL MARKETS:Industry-level needs, Promotion of exports by governments
  14. INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS:The concept of culture, Attitudes & beliefs,
  15. INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS:Culture is a human medium
  16. DETERMINING EXPORT POTENTIAL IN INTERNATIONAL MARKETS:Political Environment
  17. DETERMINING EXPORT POTENTIAL IN INTERNATIONAL MARKETS:Product Potential
  18. INTERNATIONAL MARKETING RESEARCH PROCESS:market structure, Implementing the research plan
  19. INTERNATIONAL MARKETING RESEARCH PROCESS:Identify alternative information sources
  20. INTERNATIONAL MARKETING RESEARCH PROCESS:Issues with primary global research:
  21. INTERNATIONAL MARKETING RESEARCH PROCESS:Problems with data, Comparative Analysis
  22. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Export intermediaries, Export and import management
  23. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Licensing contract, Licensing risks
  24. MODES OF ENTRY INTO INTERNATIONAL MARKETS:The franchiser’s balance,
  25. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Forms of countertrade, Specialized entry modes
  26. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Demand factors, Political factors
  27. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Drivers behind successful joint ventures
  28. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Distribution agreements, Critical mass & optimism traps
  29. INTERNATIONAL STRATEGIC ALLIANCES:Impetus for international alliances, Management of strategic alliances
  30. INTERNATIONAL CONSUMER MARKETS:Model of Consumer BehaviorThe Buyer Decision Process
  31. INTERNATIONAL BUSINESS MARKETS:Nature of buying unit, Major influences on international business buyers
  32. INTERNATIONAL TARGET MARKETING:Market segmentation, Market positioning
  33. INTERNATIONAL MARKET SEGMENTATION:Geographic, Behavioral, Situational factors
  34. INTERNATIONAL MARKET SEGMENTATION:Basis for country segmentation, Stages of economics development
  35. INTERNATIONAL MARKET SEGMENTATION:Cultural Variables,
  36. INTERNATIONAL MARKET SEGMENTATION:Market coverage strategy, Socio-economic variables
  37. INTERNATIONAL MARKETING MIX - PRODUCT POLICY:Individual product decisions, Branding
  38. INTERNATIONAL MARKETING MIX – PRODUCT POLICY:
  39. INTERNATIONAL MARKETING MIX - PRODUCT POLICY:Modular Approach
  40. INTERNATIONAL MARKETING MIX – PRODUCT POLICY:Issues in labeling, Pricing, Distribution
  41. INTRODUCING NEW PRODUCTS IN INTERNATIONAL MARKETS:The new product development process
  42. PRICING IN INTERNATIONAL MARKETS:Factors influencing international pricing,
  43. ITERNATIONAL MARKETING CHANNELS:Channel membership, Vertical marketing, Control over distribution
  44. PROMOTING IN INTERNATIONAL MARKETS:Advertising, Direct marketing, Public Relationing
  45. REVISION