LESSON 1
B) Uncontrollable (Domestic Environment)
Marketing – total sum of business activities designed
to plan, promote, price and distribute want-satisfying
product to its target market to achieve organizational
objectives
Marketing Mix
4P’s of Marketing
1. Price
2. Place
3. Product
4. Promotion
Requirements to do business overseas
1. Financial Resources
2. Time
3. Networking
4. International people and services
Risks when doing business internationally
1. Company might not understand customer
preferences and fair to offer competitive product
2. Might not understand foreign business culture or
know how to deal effectively with foreign
nationality
3. Might underestimate foreign regulations and
incur unexpected cost
4. Might realize that it lacks managers with
international experiences
5. Foreign country might change its commercial
laws, value of its currency or undergo political
revolution
Specific Reasons why companies go overseas
1. Potential demands in foreign markets
2. Saturation of domestic markets
3. Comparative advantage (edge)
4. Technological advantage
Environment – big differences of domestic and
international market
Different Environmental Factor
A) Controllable (Firm Characteristics)
1. Price
2. Product
3. Promotion
4. Distribution
5. Research
1. Competitive structure
2. Political/legal forces
3. Economic climate
C) Risks (Foreign environment)
1. Political/legal forces
2. Economic forces
3. Cultural forces
4. Competitive forces
5. Geography/ infrastructure
6. Structure of distribution
7. Level of technology
Major obstacles when going to cope, adopt and
adjust
1. Self-reference Criterion – unconscious reference
to one’s cultural values, experience and
knowledge as a basis for a decision
2. Ethnocentrism – notion that people in one’s
company, culture and country knows best on
how to do things; barriers to be culturally open
minded
Developing global awareness
a. Knowledge
b. Tolerance
Stages of Marketing Involvement
1. Reactive – Reacting to stimulus
a. No direct foreign marketing – company
has very little knowledge that their product
will go overseas
b. Infrequent foreign marketing – kung
kelan lang ma supply tsaka lang
magbebenta abroad
2. Exporters – nagpapadala sa ibang bansa ng
product nila
a. Regular foreign marketing – steady
supply exporters
b. International marketing – fully
committed to and involved in marketing
activity
c. Global Marketing – no longer consider the
market segment; world is their whole
market; defined y income and usage level
LESSON 2
Certain wants and needs are created by new products.
Global business – benefits by customers in the way
that they can sell goods to more market
Customers – benefits from global businesses by having
more access to a wide variety of choices
Balance of payment – system of accounts that
records a nation’s international financial transactions;
plus side are exports; minus side are imports
Three accounts in the balance of payment
1. Current account – a record of all merchandise
exports, imports and services plus unilateral
transfers of funds
2. Capital Account – record of direct investment,
portfolio investment, and short-term capital
movements to and from countries
3. Reserve account – a record of exports and
imports of gold, increases or decreases from
foreign exchange, and increases or decreases in
liabilities to foreign central banks
Protectionism – the use of nations of legal barriers t o
refrain entry of goods and services from other countries
Trade Barriers
1. Tariffs – based on value and quantity; arbitrary;
discriminatory; frequently changing; require
constant administration and supervision; tax
imposed by a government on goods entering at
its borders
2. Non-tariffs
Types of custom Duties
1. Ad valorem duties – based on percentage of the
determined value of the imported goods
2. Specific duties – stipulated amount per unit
weight or some other measure of quantity
3. Compound duty – combines both specific and a
valorem taxes on a particular item
Effects of Tariffs
Increase Inflationary pressures
Special interests’ privileges
Government control and political considerations
in economic matters
The number of tariffs
Weaken Balance of payments
Supply and demand patterns
International relations
Restrict Manufacturers’ supply sources
Choices available to customers
Competition
Types of Non-tariff barrier
1. Quotas – specific unit or dollar limit applied to a
particular type of good
2. Import licenses – licensing limits quantities on
a case by case basis
3. Voluntary Export Restraints – an agreement
between the importing country and the
exporting country for the restriction on the
volume of exports
4. Boycotts and Embargoes – absolute
restriction against the purchase and importation
of certain goods and services from other
countries
5. Monetary Barriers – (1) Blocked Currency –
refusing to allow importer to exchange its
national currency for the seller’s currency. (2)
Government Approval – requires government
approval before mag exchange ng currency
6. Standards – standards to protect health, safety
and product quality
7. Antidumping Penalties – designed to prevent
foreign producers from “predatory pricing”
(dumping) – a practice whereby a foreign
producer intentionally sells its product abroad
for less than the cost of producer to undermine
the competition and take the control of the
market
8. Domestic subsidies – amount of money given
directly to firms by the government to
encourage products and consumptions
International Trade Agreement and Organizations
1. GATT (General Agreement on Tariffs and Trade)
– multilateral agreement regulating international
trade
2. WTO (World Trade Organization)
3. IMF (International Monetary Fund) – seeks to
promote international economic cooperation,
trade, employment and exchange rate stability
4. World Bank – financial institution that provides
loans to developing countries
5. APEC (Asia Pacific Economic Cooperation) –
forum for 21 pacific-rim countries that seeks to
promote free trade and economic cooperation
throughout the Asia Pacific
6. ASEAN (Association f South-East Asian Nations)
– 10 member organizations; regional
intergovernmental origin in SEAsia; promotes
cooperation and facilitates economic political,
security, military and socio-cultural integration