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International Marketing© Thomson/South-Western
ChapterChapterChapterChapter
The International Political Economy4.1 National Demographics4.1 National Demographics
4.2 Economic Environment4.2 Economic Environment
4.3 Political and Legal Environments4.3 Political and Legal Environments
44
Chapter 4Slide 2
International Marketing© Thomson/South-Western
Winning Strategies
Europe had a history of warfare and conflict between countries and cultures.
The second half of the 20th century is one of the longest periods of piece Europe has ever seen.
From Conflict to Unity
Chapter 4Slide 3
International Marketing© Thomson/South-Western
Winning Strategies (continued)
In 1950, six countries formed an alliance to combine the coal and steel industries of Western Europe.
Treaties of Rome European Economic Community (EEC) European Community (EC)
From Conflict to Unity
Chapter 4Slide 4
International Marketing© Thomson/South-Western
Winning Strategies (continued)
European Union (EU) a group of democratic European countries that
use treaties to work together economically and politically trade agreements some political control over economic policies helped ensure peace and economic development raised living standards euro stronger political voice
From Conflict to Unity
Chapter 4Slide 5
International Marketing© Thomson/South-Western
Lesson 4.1
National Demographics
Goals Explain the importance of demographics
to international marketing. Describe the effect of population and
class on international marketing.
Chapter 4Slide 6
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Terms
developed countries newly industrialized countries developing countries Lorenz curve population pyramid social class
Chapter 4Slide 7
International Marketing© Thomson/South-Western
IMPORTANCE OF DEMOGRAPHICS demographic factors
income age social status education
Chapter 4Slide 8
International Marketing© Thomson/South-Western
IMPORTANCE OF DEMOGRAPHICS (continued)
developed countries first world countries
newly industrialized countries second world countries
developing countries third world countries
hard to classify countries
Chapter 4Slide 9
International Marketing© Thomson/South-Western
Income Distribution per capita income Lorenz curve
quintiles line of absolute equality line of absolute inequality
Chapter 4Slide 10
International Marketing© Thomson/South-Western
Chapter 4Slide 11
International Marketing© Thomson/South-Western
Education
The educational level of a country suggests two things. An educated workforce makes it easier for
an international company to expand into a market.
Individuals with higher educational levels are more likely to purchase the same types of products.
Chapter 4Slide 12
International Marketing© Thomson/South-Western
>> C H E C K P O I N T
List the three levels of country development.
Chapter 4Slide 13
International Marketing© Thomson/South-Western
POPULATION current world population is over 6.5
billion people projections of over 9 billion people by
2050 population pyramid
Chapter 4Slide 14
International Marketing© Thomson/South-Western
Population Pyramid
High birth rate and high death rate
Youngest
Oldest
Chapter 4Slide 15
International Marketing© Thomson/South-Western
Population Pyramid (continued)
A lower birth rate and a lower death rate
Youngest
Oldest
Chapter 4Slide 16
International Marketing© Thomson/South-Western
Social Class Criteria to distinguish social class
include: income net worth education family history political power lifestyle
Chapter 4Slide 17
International Marketing© Thomson/South-Western
Class Mobility Class mobility is the ability of
individuals to change social classes. Marketers sell products that allow
individuals to appear to belong to higher social classes.
Chapter 4Slide 18
International Marketing© Thomson/South-Western
>> C H E C K P O I N T
Define social class and social mobility.
Chapter 4Slide 19
International Marketing© Thomson/South-Western
Lesson 4.2
Economic Environment
Goals Describe the four types of economic
systems. Explain the effects of economic
integration on international marketing.
Chapter 4Slide 20
International Marketing© Thomson/South-Western
Terms
economic system market economy mixed economy planned economy traditional economy free trade area
Chapter 4Slide 21
International Marketing© Thomson/South-Western
THE POLITICAL ECONOMY
political economy mixed economy republic
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International Marketing© Thomson/South-Western
Economic Systems
market economy mixed economy
socialism
planned economy command economy
traditional economy
A country’s economic system governs how it controls the production, distribution, and consumption of goods and services.
Chapter 4Slide 23
International Marketing© Thomson/South-Western
>> C H E C K P O I N T
List the four types of economic systems.
Chapter 4Slide 24
International Marketing© Thomson/South-Western
ECONOMIC INTEGRATION
Global economic integration refers to the development of trading partnerships through the elimination of restrictions on trade.
Chapter 4Slide 25
International Marketing© Thomson/South-Western
ECONOMIC INTEGRATION (continued)
free trade area customs union common market
economic union
Chapter 4Slide 26
International Marketing© Thomson/South-Western
The Americas
North American Free Trade Agreement (NAFTA) a free trade zone linking Canada, the U.S.,
and Mexico
Chapter 4Slide 27
International Marketing© Thomson/South-Western
The Americas (continued)
Central America Free Trade Agreement (CAFTA) links the U.S. with Costa Rica, El Salvador,
Guatemala, Honduras, Nicaragua, and the Dominican Republic
Free Trade Area of the Americas (FTAA) proposed
partner all countries in the Americas except Cuba
Chapter 4Slide 28
International Marketing© Thomson/South-Western
>> C H E C K P O I N T
Name two types of free trade areas.
Chapter 4Slide 29
International Marketing© Thomson/South-Western
Lesson 4.3
Political and Legal Environments
Goals Describe the different types of political
systems. Describe the different types of legal
systems.
Chapter 4Slide 30
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Terms political system democracy republic one-party state theocracy political risk legal system contract sustainability
Chapter 4Slide 31
International Marketing© Thomson/South-Western
POLITICAL SYSTEMS
A political system sets the laws under which businesses operate. sovereign states protectorates
Chapter 4Slide 32
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Types of Political Systems democracy
direct elections by country’s citizens
republic citizens elect representatives
representatives vote on laws
Chapter 4Slide 33
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Types of Political Systems (continued)
one-party states only one political party communism
theocracy religion or faith plays a dominant role
Chapter 4Slide 34
International Marketing© Thomson/South-Western
Political Risk When there is uncertainty about the
stability of a political or legal system, businesses face increased political risk. impact on long term planning
Chapter 4Slide 35
International Marketing© Thomson/South-Western
Political Economy Movement
Chapter 4Slide 36
International Marketing© Thomson/South-Western
>> C H E C K P O I N T
Name the four types of political systems.
Chapter 4Slide 37
International Marketing© Thomson/South-Western
LEGAL SYSTEMS A legal system creates, interprets, and
enforces the laws of a country. statutory law
tries to put every specific legal issue into a specific law
Chapter 4Slide 38
International Marketing© Thomson/South-Western
LEGAL SYSTEMS (continued)
case law allows for the interpretation of statutes to
specific laws
corruption misuse of an official position for one’s own
benefit
Chapter 4Slide 39
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Contract Law
A contract is any legally enforceable promise or set of promises made by one party to another.
Chapter 4Slide 40
International Marketing© Thomson/South-Western
Sustainability Sustainability is a worldwide movement
to allow for economic development while minimizing negative impacts on the environment. “green” laws Kyoto Protocol
Chapter 4Slide 41
International Marketing© Thomson/South-Western
>> C H E C K P O I N T
Describe the two types of legal systems.
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