Transcript Chapter 21

Chapter 21
North America
NAFTA: North American Free Trade Agreement
• Abolishes within 10 years tariffs on 99 percent of the goods
traded between Mexico, Canada, and the United States
• Removes most barriers on the cross-border flow of services,
allowing financial institutions
• Protect intellectual property
• Removes restrictions on foreign direct investments between
the three member countries, although special treatment
protection
• Allows each country to apply its own environmental
standards, provided such standards have scientific basis
United States of America
Country Characteristics
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Population: 267,954,764 (July 1997 est)
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Land Area: 9,158,960 sq. km
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Languages: English, Spanish
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Literacy Rate: 97%
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Religion: Protestants (56%), Roman Catholic (28%), Jewish
(6%), other (4%), none (10%)
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GDP: Purchasing power parity: $7.61 trillion (1996 est.)
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GDP per capita: Purchasing power parity: $28,600 (1996)
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GDP real growth rate: 2.4% (1996 est.)
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Inflation rate: Consumer Price Index: 3 % (1996 est.)
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The US has less than 5 percent of the world’s population and
less than one-fourth of its gross domestic product
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The world’s fastest growing markets are overseas - in Asia and
Latin America
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Foreign competitors of the U.S. companies are not only
marketing in the U.S., but in third-party countries worldwide.
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Many US companies-indeed, entire industries-face a saturated,
highly competitive U.S. market.
Culture
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Many U.S. entrepreneurs are highly individualistic, timeconscious, goal-oriented people.
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The use of colors, numbers, and shapes can symbolize different
things in different cultures.
• Example: In the U.S. red, white and blue are patriotic colors, but in
China, blue and white are funeral colors, and red ink suggests bad luck in
South Korea
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The English spoken in the United States is different from that
spoken in the united Kingdom and Australia.
Mexico
Country Characteristics
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Population: 97,563,374 (July 1997 est)
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Land Area: 1,923,040 sq. km
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Languages: Spanish, various Mayan dialects
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Literacy Rate: 89.6%
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Religion: Roman Catholic (89%), Protestants (6%)
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GDP: Purchasing power parity: $777.3 billion (1996 est.)
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GDP per capita: Purchasing power parity: $8,100 (1996)
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GDP real growth rate: 5.1% (1996 est.)
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Inflation rate: Consumer Price Index: 28 % (1996 est.)
About Mexican Culture
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Literacy has increased to 84%, urbanization has boosted to 65%
Mexicans are warm and hospitable people
To a Mexican, the uniqueness of the individual should be
recognized
Family plays a chief role in an average Mexican’s life and
emphasis is placed on knowing one’s family ties.
Most Mexican’s speak in a circumculatory manner and often
avoid any direct references or conversations
Mexicans tend to be fatalistic and attribute emphasis on the
“right time”
When approaching the organizational structure, it is important to
note the hierarchy within the company
Machismo- the concept of masculinity that infiltrates into
business dealings as well
Conducting Market Research in Mexico
• Gifts and not money to be used as incentives, paying money is
not very appealing
• Improvement in telecommunications means that it should not
be a problem for a researcher to contact potential respondents
over the phone or fax, but reliability of the connections cannot
be guaranteed
• Postal system not very effective, hence mail surveys may not
be very effective
• Information regarding the 32 states and close to 2,403
municipalities are available, so collecting secondary information
is not difficult
Canada
Country Characteristics
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Population: 30,337,334 (July 1997 est)
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Land Area: 9,221,970 sq. km
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Languages: English,French
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Literacy Rate: 97%
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Religion: Roman Catholic (45%), United Church (12%)
Anglican (8%), other (35%)
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GDP: Purchasing power parity: $721 billion (1996 est.)
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GDP per capita: Purchasing power parity: $25,000 (1996)
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GDP real growth rate: 1.4% (1996 est.)
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Inflation rate: Consumer Price Index: 1.4 % (1996 est.)
Business Characteristics
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When conducting business with Canadians it would be
advisable not to make any comparisons with the US
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It is important to not the difference between English speaking
Canada and the French regions like Quebec. Eg: While English
Canadians adopt a more cooperative strategy in complying with
the foreign party, The French Canadians compete in order to
obtain the best possible strategy
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The business culture thrives of establishing ties with the rest of
the industry.
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The culture in Canada is markedly influenced by European
norms. It becomes imperative for the marketer to address the
regions separately.
Conducting Marketing Research in Canada
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It is easy to conduct research in Canada because of the longstanding ties between the U.S. and Canada
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Telecommunications infrastructure in Canada is considered to be
extremely advanced and conducting surveys over telephone, fax
or the Internet is relatively expedient and accurate
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One of the main problems that several companies face is that
consumer groups complain regarding the invasion of privacy
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Conducting focus groups as well as personal interviews is
feasible if a compensation is offered to the respondent
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Most often, qualitative interviews help the researcher to arrive at
a more specific niche in such a variegated market, to target at.
• Country characteristics
• Business characteristics
• Conducting marketing research in
Canada