?2005PrenticeHall1-1Chapter1

Introductionto

GlobalMarketingPowerPointbyKristopherBlanchardNorthCentralUniversity?2005PrenticeHall1-1Chapter?2005PrenticeHall1-21.MarketingandglobalmarketingMarketingProcessofplanningandexecutingtheconceptionpricing,promotionanddistributionofideas,goodsandservicestocreateexchangesthatsatisfyindividualandorganizationgoalsGlobalMarketingFocusesresourcesonglobalmarketopportunitiesandthreats;themaindifferenceisthescopeofactivitiesbecauseglobalmarketingoccursinmarketsoutsidetheorganization’shomecountry?2005PrenticeHall1-21.Marke?2005PrenticeHall1-3ReasonsforGlobalMarketingGrowthAccesstonewmarketsAccesstoresourcesSurvivalAgainstcompetitorswithlowercosts(duetoincreasedaccesstoresources)?2005PrenticeHall1-3Reasons?2005PrenticeHall1-42.OverviewofMarketingOneofthefunctionalareasofabusinessthatisdistinctfromfinanceandoperationsPrimarytoolsinmarketingareproduct,price,place,andpromotionMarketingisanactivitythatcomprisesthefirm’svaluechainCurrenttrendistoinvolvemarketersinallvalue-relateddecisions–calledboundarylessmarketing?2005PrenticeHall1-42.Overv?2005PrenticeHall1-5BoundarylessMarketingGoalistoeliminatecommunicationbarriersbetweenmarketingandotherbusinessfunctionalareasProperlyimplementeditensuresthatamarketorientationpermeatesallvaluecreatingactivities?2005PrenticeHall1-5Boundar?2005PrenticeHall1-6GoalofMarketingSurpassthecompetitionatthetaskofcreatingperceivedvalueforcustomersTheGuidelineisthevalueequation–Value=Benefits/Price(Money,Time,Effort,Etc.)?2005PrenticeHall1-6Goalof?2005PrenticeHall1-7ValueChainandBoundarylessMarketing?2005PrenticeHall1-7ValueC?2005PrenticeHall1-8CompetitiveAdvantageSuccessovercompetitioninindustryatvaluecreationAchievedbyintegratingandleveraging杠桿作用operationsonaworldwidescale?2005PrenticeHall1-8Competi?2005PrenticeHall1-9GlobalizationGlobalizationistheinexorableintegrationofmarkets,nation-states,andtechnologiestoadegreeneverwitnessedbefore-inawaythatisenablingindividuals,corporations,andnation-statestoreacharoundtheworldfarther,faster,deeperandcheaperthaneverbefore,andinawaythatisenablingtheworldtoreachintoindividuals,corporations,andnation-statesfarther,faster,deeper,andcheaperthaneverbefore?2005PrenticeHall1-9Globali?2005PrenticeHall1-10GlobalIndustriesAglobalindustryisoneinwhichcompetitiveadvantagecanbeachievedbyintegratingandleveragingoperationsonaworldwidescale.Indicatorsofglobalization:Ratioofcross-bordertradetototalworldwideproductionRatioofcross-borderinvestmenttototalcapitalinvestmentProportionofindustryrevenuegeneratedbycompaniesthatcompeteinkeyworldregions?2005PrenticeHall1-10Global?2005PrenticeHall1-11CompetitiveAdvantage,GlobalizationandGlobalIndustriesFocusConcentrationandattentiononcorebusinessandcompetenceNestleisfocused:Wearefoodandbeverages.Wearenotrunningbicycleshops.Eveninfoodwearenotinallfields.Therearecertainareaswedonottouch…..WehavenosoftdrinksbecauseIhavesaidwewilleitherbuyCoca-Colaorweleaveitalone.Thisisfocus.?2005PrenticeHall1-11Compet?2005PrenticeHall1-123.Globalmarketing:whatitisandwhatitisn’t

Animportanttaskinglobalmarketingislearningtorecognizetheextenttowhichmarketingplansandprogramscaneextendedworldwide,aswellastheextenttowhichtheymustbeadapted.Globalmarketingstrategy(GMS)addressestwofundamentalissues:globalmarketparticipation,standardizationversusadaptation.?2005PrenticeHall1-123.Glo?2005PrenticeHall1-13GMShasthreeadditionaldimensionsthatpertaintomarketingmanagement.Concentrationofmarketingactivitiesistheextenttowhichactivitiesrelatedtothemarketingmixareperformedinoneorafewcountrylocations.Coordinationofmarketingactivitiesreferstotheextenttowhichmarketingactivitiesrelatedtothemarketingmixareplannedandexecutedinterdependentlyaroundtheglobe.Integrationofcompetitivemovesistheextenttowhichafirm’scompetitivemarketingtacticsindifferentpartsoftheworldareinterdependent.?2005PrenticeHall1-13GMSha?2005PrenticeHall1-14StandardizationversusAdaptationGlobalization(Standardization)DevelopingstandardizedproductsmarketedworldwidewithastandardizedmarketingmixEssenceofmassmarketingGloballocalization(Adaptation)MixingstandardizationandcustomizationinawaythatminimizescostswhilemaximizingsatisfactionEssenceofsegmentationThinkglobally,actlocally?2005PrenticeHall1-14Standa?2005PrenticeHall1-15StandardizationversusAdaptation?2005PrenticeHall1-15Standa?2005PrenticeHall1-16TheImportanceofGlobalMarketingForUS-basedcompanies,75%ofsalespotentialisoutsidetheUS.About90%ofCoca-Cola’soperatingincomeisgeneratedoutsidetheUS.ForJapanesecompanies,85%ofpotentialisoutsideJapan.ForGermanandEUcompanies,94%ofpotentialisoutsideGermany.?2005PrenticeHall1-16TheIm?2005PrenticeHall1-174.ManagementorientationsEthnocentricorientation:Homecountryissuperior,SeessimilaritiesinforeignCountries.Regiocentricorientation:Seessimilaritiesanddifferencesinaworldregion;isethnocentricorpolycentricinitsviewoftherestoftheworldGeocentricorientation:worldview,seessimilaritiesanddifferencesinhomeandhostcountries.Polycentricorientation:Eachhostcountryisunique,SeesdifferencesinforeignCountries.?2005PrenticeHall1-174.Man?2005PrenticeHall1-18EthnocentricorientationApersonwhoassumesthathisorherhomecountryissuperiortotherestoftheworldissaidtohaveanethnocentricorientation.Companypersonnelwithanethnocentricorientationseeonlysimilaritiesinmarkets,andassumethatproductsandpracticesthatsucceedinthehomecountrywillbesuccessfulanywhere.Suchcompaniesarecalleddomesticcompanies.Ethnocentriccompaniesthatconductbusinessoutsidethehomecountrycanbedescribedasinternationalcompanies;theyadheretothenotionthattheproductsthatsucceedinthehomecountryaresuperior.Thispointofviewleadstoastandardizedorextensionapproachtomarketing.?2005PrenticeHall1-18Ethnoc?2005PrenticeHall1-19PolycentricorientationThetermpolycentricdescribesmanagement’sbelieforassumptionthateachcountryinwhichacompanydoesbusinessisunique.Thispointofviewleadstoalocalizedoradaptationapproachthatassumesproductsmustbeadaptedinresponsetodifferentmarketconditions.—multinationalcompany.?2005PrenticeHall1-19Polyce?2005PrenticeHall1-20RegiocentricorientationandGeocentricorientationInacompanywitharegiocentricorientationaregionbecomestherelevantgeographicunit;management’sgoalistodevelopanintegratedregionalstrategy.Acompanywithageocentricorientationviewstheentireworldasapotentialmarketandstrivestodevelopintegratedworldmarketstrategies.AglobalortransnationalcompanyTheregiocentricandgeocentriccompaniesareintegratedonaregionalandglobalscale.?2005PrenticeHall1-20Regioc?2005PrenticeHall1-21AglobalortransnationalcompanyAglobalcompanycanbedescribedasonethatpursueseitherastrategyofservingworldmarketsfromasinglecountry,orthatsourcesgloballyforthepurposesoffocusingonselectcountrymarkets.Inaddition,globalcompaniestendtoretaintheirassociationwithaparticularheadquarterscountry.Transnationalcompaniesbothserveglobalmarketsandsourceglobally;inaddition,thereisoftenablurringofnationalidentity.?2005PrenticeHall1-21Aglob?2005PrenticeHall1-22c)Atglobalandtransnationalcompanies,managementusesacombinationofstandardizedandlocalizedelementsinthemarketingprogram.Inaddition,globaloperationsareintegratedandcoordinated.d)Onewaytoassesstheextenttowhichacompanyistransnationalistocomputeanaverageofthreefigures:salesoutsidethehomecountrytototalsales;assetsoutsidethehomecountrytototalassets;andemployeesoutsidethehomecountrytototalemployees.?2005PrenticeHall1-22c)At?2005PrenticeHall1-235.Forcesaffectingglobalintegrationandglobalmarketing

DrivingforcesGlobalIntegrationAndGlobalmarketingRestrainingforces?2005PrenticeHall1-235.For?2005PrenticeHall1-24DrivingforcesRegionaleconomicagreements:NAFTA,EU,etc.Convergingmarketneedsandwantsadtheinformationrevolution:thecommonelementsinhumannatureprovideanunderlyingbasisfortheopportunitytocreateandserveglobalmarkets.TransportationandcommunicationimprovementsProductdevelopmentcostsQuality?2005PrenticeHall1-24Drivin?2005PrenticeHall1-25WorldeconomictrendsEconomicgrowthinkeydevelopingcountrieshascreatedmarketopportunitiesthatprovideamajorincentiveforcompaniestoexpandglobally.Economicgrowthhasreducedresistancethatmightotherwisehavedevelopedinresponsetotheentryofforeignfirmsintodomesticeconomies.Theworldwidemovementtowardfreemarkets,deregulation,andprivatization?2005PrenticeHall1-25World?2005PrenticeHall1-26Leverage:leveragemeanssometypeofadvantagethatacompanyenjoysbyvirtueofthefactthatithasexperienceinmorethanonecountry.ExperiencetransfersScaleeconomiesResourceutilizationGlobalstrategy:aglobalstrategyisbuiltonaninformationsystemthatscanstheworldbusinessenvironmenttoidentifyopportunities,trends,threats,andresources.Butaglobalstrategyisnoguaranteeofongoingorganizationalsuccess.?2005PrenticeHall1-26Levera?2005PrenticeHall1-27RestrainingforcesThemarketdifferencesManagementmyopiaandorganizationalcultureNationalcontrolsOppositiontoglobalization?2005PrenticeHall1-27Restra2-28Chapter2

TheGlobalEconomicEnvironmentPowerPointbyKristopherBlanchardNorthCentralUniversity2-28Chapter2

TheGlobalEcono2-29IntroductiontoChapterMarketdefinition–Peopleororganizationswithneedsandwants;bothhavethewillingnessandabilitytobuyorsellTheglobaleconomicenvironmentplaysalargeroleinthedevelopmentofnewmarketsfororganizations2-29IntroductiontoChapterMar2-30TheWorldEconomy–AnOverviewThenewrealities:CapitalmovementshavereplacedtradeasthedrivingforceoftheworldeconomyProductionhasbecomeuncoupledfromemploymentTheworldeconomy,notindividualcountries,isthedominatingfactor2-30TheWorldEconomy–AnOve2-31TheWorldEconomy–AnOverviewThenewrealitiescontinued:75-yearstrugglebetweencapitalismandsocialismhasalmostendedE-Commercediminishestheimportanceofnationalbarriersandforcescompaniestore-evaluatebusinessmodels2-31TheWorldEconomy–AnOve2-32EconomicSystems4maintypesofeconomicsystemsMarketCapitalismCentrallyplannedsocialismCentrallyplannedcapitalismMarketsocialism2-32EconomicSystems4maintyp2-33EconomicSystemsMarket CommandMarketCapitalism

CentrallyPlannedCapitalismMarketSocialismCentrallyPlannedSocialismPrivateResourceOwnershipStateResourceAllocation2-33EconomicSystemsMarket2-34EconomicFreedomRankingsofeconomicfreedomamongcountriesRangesfrom“free”to“repressed”Variablesconsideredincludesuchthingsas:TradepolicyTaxationpolicyBankingpolicyWageandpricecontrolsPropertyrights2-34EconomicFreedomRankingso2-35EconomicFreedomFreeHongKongSingaporeIrelandNewZealandUnitedStatesUnitedKingdomNetherlandsAustraliaSwitzerlandRepressedBosniaVietnamLaosIranCubaIraqLibyaNorthKoreaCongo2-35EconomicFreedomFreeRepres2-36StagesofMarketDevelopmentWorldBankhasdefinedfourcategoriesofdevelopmentHigh-incomecountriesUpper-middleincomecountriesLower-middleincomecountriesLow-incomecountriesBaseduponGrossNationalProduct(GNP)2-36StagesofMarketDevelopme2-37StagesofMarketDevelopment2-37StagesofMarketDevelopme2-38BigEmergingMarketsChinaIndiaIndonesiaSouthKoreaBrazilMexicoArgentinaSouthAfricaPolandTurkey2-38BigEmergingMarketsChina2-39MarketingOpportunitiesinLDCsCharacterizedbyashortageofgoodsandservicesLong-termopportunitiesmustbenurturedinthesecountriesLookbeyondpercapitaGNPConsidertheLDCscollectivelyratherthanindividuallyConsiderfirstmoveradvantageSetrealisticDeadlines2-39MarketingOpportunitiesin2-40InfluencingtheWorldEconomyGroupofSeven(G-7)OrganizationforEconomicCooperationandDevelopmentTheTriad2-40InfluencingtheWorldEcon2-41MarketingImplicationsoftheStagesofDevelopmentProductSaturationLevelsThepercentageofpotentialbuyersorhouseholdsthatownaparticularproductGraphshowsthatinIndiaaprivatephoneisownedby1%ofthepopulation2-41MarketingImplicationsof2-42BalanceofPaymentsRecordofalleconomictransactionsbetweentheresidentsofacountryandtherestoftheworldCurrentaccount–recordofallrecurringtradeinmerchandiseandservices,privategifts,andpublicaidbetweencountriestradedeficittradesurplusCapitalaccount–recordofalllong-termdirectinvestment,portfolioinvestment,andcapitalflows2-42BalanceofPaymentsRecord2-43BalanceofPaymentsU.S.balanceofpaymentsstatisticsfortheperiod1999to20032-43BalanceofPaymentsU.S.ba2-44OverviewofInternationalFinanceForeignexchangemakesitpossibletodobusinessacrosstheboundaryofanationalcurrencyCurrencyofvariouscountriesaretradedforbothimmediate(spot)andfuture(forward)deliveryIncreasestherisktoorganizationsthatareinvolvedinglobalmarketing2-44OverviewofInternational2-45ManagedDirtyFloat?DefinitionsFloatreferstothesystemoffluctuatingexchangeratesManagedreferstothespecificuseoffiscalandmonetarypolicybygovernmentstoinfluenceexchangeratesDevaluationisareductioninthevalueofthelocalcurrencyagainstothercurrencies2-45ManagedDirtyFloat?Defini2-46ManagedDirtyFloat?DefinitionsDirtyreferstothefactthatcentralbanks,aswellascurrencytraders,buyandsellcurrencytoinfluenceexchangerates2-46ManagedDirtyFloat?Defini2-47ForeignExchangeMarketDynamicsSupplyandDemandinteractionCountrysellsmoregoods/servicesthanitbuysThereisagreaterdemandforthecurrencyThecurrencywillappreciateinvalue2-47ForeignExchangeMarketDy2-48PurchasingPowerParity(PPP)–TheBigMacIndexIsacertaincurrencyover/under-valuedcomparedtoanother?AssumptionisthattheBigMacinanycountryshouldequalthepriceoftheBigMacintheUSafterbeingconvertedtoadollarprice2-48PurchasingPowerParity(P2-49ManagingEconomicExposureEconomicexposurereferstotheimpactofcurrencyfluctuationsonthepresentvalueofthecompany’sfuturecashflowsTransactionexposureisfromsales/purchasesRealoperatingexposureariseswhencurrencyfluctuations,togetherwithpricechanges,alteracompany’sfuturerevenuesandcosts2-49ManagingEconomicExposure2-50ManagingEconomicExposureNumeroustechniquesandstrategieshavebeendevelopedtoreduceexchangerateriskHedginginvolvesbalancingtheriskoflossinonecurrencywithacorrespondinggaininanothercurrencyForwardContractssetthepriceoftheexchangerateatsomepointinthefuturetoeliminatesomerisk2-50ManagingEconomicExposure2-51LookingAheadChapter3–TheGlobalTradeEnvironment:RegionalMarketCharacteristicsandPreferentialTradeAgreements2-51LookingAheadChapter3–T2-52MarketCapitalismIndividualsandfirmsallocateresourcesProductionresourcesareprivatelyownedDrivenbyconsumersGovernmentshouldpromotecompetitionamongfirmsandensureconsumerprotectionReturn2-52MarketCapitalismIndividua2-53CentrallyPlannedSocialismOppositeofmarketcapitalismStateholdsbroadpowerstoservethepublicinterest;decideswhatgoodsandservicesareproducedandinwhatquantitiesConsumerscanspendonwhatisavailableGovernmentownsentireindustriesDemandtypicallyexceedssupplyLittlerelianceonproductdifferentiation,advertising,pricingstrategyReturn2-53CentrallyPlannedSocialis2-54Centrally-PlannedCapitalismEconomicsysteminwhichcommandresourceallocationisusedextensivelyinanenvironmentofprivateresourceownershipExamples:SwedenJapanReturn2-54Centrally-PlannedCapitali2-55MarketSocialismEconomicsysteminwhichmarketallocationpoliciesarepermittedwithinanoverallenvironmentofstateownershipExamples:ChinaIndiaReturn2-55MarketSocialismEconomics2-56Low-IncomeCountriesGNPpercapitaof$785orlessCharacteristicsLimitedindustrializationHighpercentageofpopulationinvolvedinfarmingHighbirthratesLowliteracyratesHeavyrelianceonforeignaidPoliticalinstabilityandunrestOfthese,onlyChinaandIndiaareBEMsReturn2-56Low-IncomeCountriesGNPpe2-57Lower-Middle-IncomeCountriesGNPpercapitabetween$786and$3,125Sometimescalledless-developedcountries(LDCs)CharacteristicsEarlystagesofindustrializationCheaplabormarketsFactoriessupplyitemssuchasclothing,tires,buildingmaterials,andpackagedfoods3BEMs:Poland,Turkey,IndonesiaReturn2-57Lower-Middle-IncomeCountr2-58Upper-Middle-IncomeCountriesGNPpercapitabetween$3,126to$9,655CharacteristicsRapidlyindustrializingRisingwagesHighratesofliteracyandadvancededucationLowerwagecoststhanadvancedcountriesSometimescallednewlyindustrializingeconomies(NIEs)3BEMs:Argentina,Brazil,Mexico,SouthAfricaReturn2-58Upper-Middle-IncomeCountr2-59High-IncomeCountriesGNPpercapitaabove$9,656Sometimesreferredtoaspost-industrialcountriesCharacteristicsImportanceofservicesector,informationprocessingandexchange,andintellectualtechnologyKnowledgeaskeystrategicresourceOrientationtowardthefutureReturn2-59High-IncomeCountriesGNPp2-60GroupofSeven(G-7)LeadersfromthesehighincomecountriesworktoestablishprosperityandensuremonetarystabilityUnitedStatesJapanGermanyFranceBritainCanadaItalyReturn2-60GroupofSeven(G-7)Leader2-61OrganizationforEconomicCooperationandDevelopment30nationseachwithmarket-allocationeconomicsystemsMission:toenableitsmemberstoachievethehighestsustainableeconomicgrowthandimprovetheeconomicandsocialwell-beingoftheirpopulationsReturn2-61OrganizationforEconomic2-62TheTriadDominanteconomiccentersoftheworldJapanWesternEuropeUnitedStatesExpandedTriadPacificRegionNorthAmericaEuropeanUnionReturn2-62TheTriadDominanteconomic?2005PrenticeHall

3-63Chapter3

TheGlobalTradeEnvironment:RegionalMarketCharacteristicsandPreferentialTradeAgreementsPowerPointbyKristopherBlanchardNorthCentralUniversity?2005PrenticeHall3-63Chapt?2005PrenticeHall3-64GATTGeneralAgreementonTariffsandTradetreatyamongnationstopromotetradeamongmembersHandledtradedisputesLackedenforcementpowerReplacedbyWorldTradeOrganizationin1995?2005PrenticeHall3-64GATTGe?2005PrenticeHall3-65TheWorldTradeOrganizationProvidesforumfortrade-relatednegotiationsamong141membersbasedinGenevaservesasdisputemediatorsempoweredwithabilitytoenforcerulingsCountriesfoundinviolationofWTOrulesareexpectedtochangepoliciesorelsefacesanctions?2005PrenticeHall3-65TheWo?2005PrenticeHall3-66RecentWTOCases?2005PrenticeHall3-66Recent?2005PrenticeHall3-67PreferentialTradeAgreementsManycountriesseektolowerbarrierstotradewithintheirregionsFreeTradeAreasCustomsUnionsCommonMarketEconomicUnions?2005PrenticeHall3-67Prefer?2005PrenticeHall3-68NorthAmericaCanada,UnitedStates,MexicoNAFTAestablishedfreetradeareaallthreenationspledgetopromoteeconomicgrowththroughtariffreductionsandexpandedtradeandinvestmentnocommonexternaltariffsrestrictionsonlaborandothermovementsremain?2005PrenticeHall3-68North?2005PrenticeHall3-69NAFTAIncomeandPopulation?2005PrenticeHall3-69NAFTA?2005PrenticeHall3-70LatinAmericaCaribbean,Central,andSouthAmerica4preferentialtradeagreementsinplaceCentralAmericanIntegrationSystemAndeanCommunityCommonMarketoftheSouthCaribbeanCommunityandCommonMarket?2005PrenticeHall3-70Latin?2005PrenticeHall3-71AndeanCommunityBolivia,Colombia,Ecuador,Peru,VenezuelaCustomsunionAgreementabolishedforeignexchange,financialandfiscalincentives,andexportsubsidiesCommonexternaltariffswereestablished?2005PrenticeHall3-71Andean?2005PrenticeHall3-72CommonMarketoftheSouth

(Mercosur)Argentina,Brazil,Paraguay,UruguayCustomsunion,seekstobecomecommonmarketinternaltariffseliminatedcommonexternaltariffsupto20%establishedintime,factorsofproductionwillmovefreelythroughmembercountriesChileandBolivia-associatemembersparticipationinfreetradeareabutnotcustomsunion?2005PrenticeHall3-72Common?2005PrenticeHall3-73CaribbeanCommunityand

CommonMarket(CARICOM)Antigua,Barbuda,Bahamas,Barbados,Belize,Dominica,Grenada,Guyana,Haiti,Jamaica,Montserrat,St.Kitts,St.Lucia,St.Vincent,theGrenadines,Trinidad,TobagoReplacedCaribbeanFreeTradeAssociationAgreedtoestablisheconomicunionwithcommoncurrencyin1998?2005PrenticeHall3-73Caribb?2005PrenticeHall3-74Asia-PacificIncludes23countriesand56%ofworldpopulationJapanNewlyindustrializingeconomiesAssociationofSoutheastAsianNations?2005PrenticeHall3-74Asia-P?2005PrenticeHall3-75JapanGenerates14%ofworld’sGNPKeyfactorspopulationdensitygeographicisolationRecenteconomicstrugglesdespitestatusashighincomecountryStrongculturerequiresflexibilityandcommitmentfromglobalmarketers?2005PrenticeHall3-75JapanG?2005PrenticeHall3-76NewlyIndustrializingEconomies(NIEs)Strongeconomicgrowthinrecentdecadesforeigninvestmentexport-drivenindustrialdevelopmentSometimescalledthe4TigersofAsiaSouthKoreaTaiwanSingaporeHongKong?2005PrenticeHall3-76Newly?2005PrenticeHall3-77AssociationofSoutheastAsianNations(ASEAN)Brunei,Indonesia,Malaysia,Philippines,Singapore,Thailand,Vietnam,Cambodia,Laos,BurmaGoaltoimplementafreetradeareaby2003Tariffsof20+%willbereducedto0-5%SingaporerepresentsgreatsuccessamongASEANnations?2005PrenticeHall3-77Associ?2005PrenticeHall3-78EuropeEuropeanUnionEuropeanFreeTradeAreaEuropeanEconomicAreaTheLomeConventionCentralEuropeanFreeTradeAssociation(CEFTA)?2005PrenticeHall3-78Europe?2005PrenticeHall3-79EuropeanUnionInitiallybeganwiththe1958TreatyofRomeObjectivetoharmonizenationallawsandregulationssothatgoods,services,peopleandmoneycouldflowfreelyacrossnationalboundaries1991MaastrichtTreatysetstagefortransitiontoaneconomicunionwithacentralbankandsinglecurrency(theEuro)?2005PrenticeHall3-79Europe?2005PrenticeHall3-80EuropeanFreeTradeAreaandtheEuropeanEconomicAreaAustria,Finland,Sweden,Norway,Iceland,Liechtenstein,SwitzerlandFreetradeareaMembers(excludingSwitzerland)chosetoestablishEuropeanEconomicArea(EEA)Non-EUmembersoftheEEAareexpectedtoadoptEUguidelinesNorway,Iceland,Liechtenstein,andSwitzerlandmaintainfreetradeagreementswithothercountriesaswell?2005PrenticeHall3-80Europe?2005PrenticeHall3-81TheLomeConventionAnaccordbetweenEUand71countriesinAfrica,Caribbean,andthePacificPromotestradeandprovidespoorcountrieswithfinancialassistancefromaEuropeanDevelopmentFundCurrentlyworkingtoestablishasuccessoragreement?2005PrenticeHall3-81TheLo?2005PrenticeHall3-82CentralEuropeanFreeTradeAssociation(CEFTA)Hungary,Poland,CzechoslovakiaAllowsforcooperationinmanyareasincluding:infrastructureandtelecommunicationssub-regionalprojectsinter-enterprisecooperationtourismandretailtrade?2005PrenticeHall3-82Centra?2005PrenticeHall3-83TheMiddleEastAfghanistan,Cyprus,Bahrain,Egypt,Iran,Iraq,Israel,Jordan,Kuwait,Lebanon,Oman,Qatar,SaudiArabia,Syria,theUnitedArabEmirates,YemenPrimarilyArab,somePersianandJews95%Muslim3keyregionalorganizationsGulfCooperationCouncilArabMaghrebUnionArabCooperationCouncil?2005PrenticeHall3-83TheMi?2005PrenticeHall3-84Africa53nationsoverthreedistinctareasRepublicofSouthAfricaNorthAfricaBlackAfricaRegionalagreementsEconomicCommunityofWestAfricanStatesEastAfricanCooperationSouthAfricanDevelopmentCommunity?2005PrenticeHall3-84Africa?2005PrenticeHall3-85EconomicCommunityof

WestAfricanStates(ECOWAS)Benin,BurkinaFaso,CapeVerde,TheGambia,Ghana,Guinea,Guinea-Bissau,IvoryCoast,Liberia,Mali,Mauritania,Niger,Nigeria,Senegal,SierraLeone,TogoFreetradeareawithunifiedmonetaryzone?2005PrenticeHall3-85Econom?2005PrenticeHall3-86EastAfricanCooperationKenya,Uganda,TanzaniaFreetradeareawithpossibilityofexpansiontoacustomsunion?2005PrenticeHall3-86EastA?2005PrenticeHall3-87SouthAfricanDevelopmentCommunity(SADC)Angola,Botswana,Congo,Lesotho,Malawi,Mauritius,Mozambique,Namibia,SouthAfrica,Seychelles,Swaziland,Tanzania,Zambia,ZimbabweMechanismtopromotetrade,cooperation,andeconomicintegrationbyblack-ruledstatesUltimatelyseekstoformcustomsunion?2005PrenticeHall3-87South?2005PrenticeHall3-88LookingAheadtoChapter4SocialandCulturalEnvironments?2005PrenticeHall3-88Lookin?2005PrenticeHall3-89FreeTradeAreasTwoormorecountriesagreetoabolishallinternalbarrierstotradeamongstthemselvesCountriescontinueindependenttradepolicieswithcountriesoutsideagreement?2005PrenticeHall3-89FreeT?2005PrenticeHall3-90FreeTradeAreasReturn?2005PrenticeHall3-90FreeT?2005PrenticeHall3-91CustomsUnionsEvolutionofFreeTradeAreaIncludestheeliminationofinternalbarriers