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Chapter 20 The Future Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. The International Marketing Environment • Conditions of Change – Change is increasing in speed as real-time access to information and knowledge about suppliers, customers, competitors and markets grows. – Change is universalpolitical, financial,societal, and technological. Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Planned versus Market Economies • Central European opportunities – Export controls have been reduced. – Demand for consumer products is high. – High demand for foreign direct investment. • Problems to be overcome – Lack knowledge about the rules and practices of market economies and marketing. – Lack of protection from corruption and respect for property rights and contractual agreements. – Outside investment will occur selectively. – Fear of outsiders will slow economic recovery. – Liquidity shortages will continue to impede trade Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. North-South Relationships • Characteristics – The disparities between developed and less developed countries (LDCs) will continue. – There is an increasing potential for political and economic conflict. – Governmental entities will bear the burden of providing developmental capital funds to LDCs. – Relationships between the developed countries and new markets will be greatly influenced by environmental protection issues. • Divergent trends have resulted in three emerging relationship scenarios – Continued international cooperation. – Confrontation. – Isolation. Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. The International Financial Environment • International debt and low commodity prices will slow growth in LDCs. • Developed nations have strong market and security incentives to help developing areas. • The U.S. dollar will continue as the predominant international currency. • The market system of floating currency exchange rates for rather than government actions will determine currency valuations. • Shocks in one financial market will rapidly impact other markets. Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Population Patterns • The rate of growth will put more emphasis on population stabilization within governmental policies. • Population balance along with age could create manpower shortages that will impact a country’s ability to develop. • The expectation-reality gap will continue to plague LDCs. Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. The Technological Environment • Communications in all forms will – Become increasingly important as information management becomes as important as the information. – New information and data analysis technologies will have major impact on business relationships. • The exponential growth in technology will – Be a volatile area of economic activity. – Create the need for strategic alliances to share the enormous cost of new technology. Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. The Trade Framework • Can the WTO resolve new trade challenges? • Multilateral trade negotiations are essential and will grow in importance. • Regional trading blocs will get stronger • New participants will restructure the composition of trade. • Restructuring of existing economic sectors will occur, particularly, for agricultural cash crops and industrial products. Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Governmental Policy • Government management of trade is increasing. • Governments will try to coordinate policies affecting the international marketing environment. • Governments will make domestic policy in light of international trade issues. • Governmental-corporate collaboration will become a part of policy development. Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. The Future of International Marketing Management • International markets – source of high profits – cushion slack in domestic markets – impacted heavily by terrorist attacks of September 11, 2001 • Common sense for a new global age as emerged characterized by – vulnerability – outrage – collaboration – politics – connection Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. International Planning and Research • Customer focus will remain the major factor in marketing. • Trade portfolios are being developed to limit dependency and develop markets to balance risk, exposure and a fallback plan. • The divergent needs of foreign customers will create market niches for international firms to exploit. • Marketers will increasingly encounter high demands for social responsibility as they attempt to balance the results of their market activities. • More emphasis will be placed on corporate reputation management. Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. International Product Policy • Product planning for international markets – Will be impacted by concerns for the natural environment. – With the worldwide introduction of products shorten product life cycles may result. – Will deliver more mass customization. – Will cause comparative advantages in production technology to flow to low-cost countries. – Create more strategic alliances for product development, sourcing, and production. – Require customer product bundles to meet mass customization requirements. Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. International Communications • Advances in communications will increase the use and dependence on by firms of real-time communications • Communication networks allow firms to become “virtual,” with no requirements for fixed locations from which to conduct operations. • Data, information,and knowledge sharing be transferred faster and become more concentrated. Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Distribution and Logistics Strategies • Innovative approaches will shift traditional distribution channels to new globally networked channels. • The internet will continue to supply avenues for alternative approaches to order entry, just-in-time (JIT) inventory, lean manufacturing practices and distribution control systems. • Firm and product security will continue to be a major focus, developing job opportunities along the way. Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. International Pricing • Commodity pricing, forward pricing and price competition will increase with minimal price differences becoming crucial in making international sales. • Government management of trade will influence pricing. • International marketers will continue to attempt to differentiate themselves on a non-price basis. Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Careers in International Marketing • Careers in international marketing require: – knowledge and expertise – being well versed in specific business functions – language capabilities – understanding of different peoples and cultures • International experience will be crucial for career advancement and executive success. • Graduating from business schools or universities abroad the specialize in international business. Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Employment Opportunities • Employment with large firms – Specialized knowledge in languages. – Employees firmly grounded in the practice and management of business. • Employment with small- or medium-sized firms – Have a recently developed international outlook. – Newly hired employees get in on the “ground floor.” • Self-employment – Become a consultant or establish a trading firm. • Opportunities for women – May have advantages in the overseas management positions. – Upward trend for women in global management roles . Developed by Cool Pictures & MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.