Uluslararası Pazarlama THE GLOBAL MARKETING ENVIRONMENT lecture 2 &2. The Global Economic Environment August 1998 – Crisis in Russia The ruble is plunging • The government is defaulting on its goreign debt obligations • Russians are facing wage cuts and layoffs • Savings are wiping out as banks are collapsing • The meltdown sent shocks waves through global finacial markets • http://www.businessweek.com/magazine/content/08_50/b4112068224001.htm?chan=investing_investi ng+european+investorRussia was down but it was not out. In the years since the crisis Russia’s economy has experienced substantial growth. By 2003, a country that had teetered on brink of bankruptcy could boast $ 60 billion in foreign cureency reserves. “ reasons for the rebounding economy ” High world prices for oil and gas • Politics • (Putin’s reform program were including a new tax code, streamlined custom regulations and other improvements in business climate)“ reasons for the rebounding economy ” Stimulated local production of a wide • range of goodsAt the same time, wealthy Russians continued to spend lavishly on luxury imports such as German cars, French wine, Italian designer fashions. Moreover, during the 1990s, Russia’s wealthy business people were sending a great deal of money out of the country; annual outflows of private capital were estimated to be as high as $30 billion. Oleg Deripaska, who controls aluminum producer United Company RUSAL among a host of infrastructure, energy and financial asstes, tops the latest Forbes list with a fortune of $28.6 billion — $11.8 billion more than he was worth last year. http://www.google.com.tr/imgres?imgurl=http://www.impactlab.com/wp-content/uploads/2008/04/russian- billionaire.jpg&imgrefurl=http:// One fifth of the top 100 have an interest in mining and metals. Mordashov, 42, was the biggest gainer among Russia’s richest, adding $12.4 billion to more than double his fortune . to $24.5 billion. Alisher Usmanov is a well known Russian billionaire businessman who didn’t make the top 10 list. One billion dollars is no longer enough to gain entry to Russia’s rich list. http://www.google.com.tr/imgres?imgurl=http://www.impactlab.com/wp-content/uploads/2008/04/russian- billionaire.jpg&imgrefurl=http://The collapse of Russia’s economy in 1998, and its subsequent rebound in the first years of the new millennium, vividly illustrate the dynamic nature of today’s economic environment. Companies engage in global marketing in a effort to reach new customers outside the home country and thereby increase sales, profits and market share. Today, Russia represents a major growth opportunity for global companies. İ dentify the most salient characteristics of the world economic environment: Overview of the world economy, 1. A survey of economic system types, 2. Discuss market development stages, 3. balance of payments and foreign exchange. THE WORLD ECONOMY-AN OVERV İ EWTHE WORLD ECONOMY-AN OVERV İ EWTHE WORLD ECONOMY-AN OVERV İ EW Global competitors, responding to new opportunities, have replaced local ones. THE WORLD ECONOMY-AN OVERV İ EW The integration of the world economy has increased profoundly. Today it is approximately %50 . THE WORLD ECONOMY-AN OVERV İ EW To achieve success, executives and marketers must take into account the following new realities: Capital movements have replaced trade as the driving • force of the world economy, Production has become “ uncoupled ” from employment, • The world economy dominates the scene; individual • country economies play a subordinate role, The 75-year struggle between capitalism and socialism is • largely over, The growth of e-commerce diminishes the importance of • national barriers. the increased volume of capital movements $ value of world trade in merchandise is running at roughly $9,2. The London foreign exchange market turns over $450 billion each working day. Foreign exchange transactions are running at approximately $ 1,5 trillion per day worldwide. Today its capital movements and trade that determine currency value. the relationship between productivity and employment Although employment in manufacturing remains steady or has declined, productivity continues to grow. “ One recen study of 20 large economies found that, between 1995-2002 million factory jobs have been eliminated. ” Manufacturing is not in decline; its employment in manufacturing that is in decline. the emergence of the world economy as the dominant economic union Company executiver and national leaders who recognize this have the greatest chance of success. f.e. The real secret of the economic success of Germany and Japan is the fact that business leaders and policy makers focus on world markets and their respective conutries’ competitive positions in the world economy. The end of the global war The overwhelmingly superior performance of the world’s market economies has given leaders in socialist countries little choice but to renounce their ideology. Communism failed and capitalism seems to be on the brink of collapse: Can human beings come up with a better way to organize society? http://worldmeets.us/gazetaru000002.shtmlthe advent of the Internet Era .......have in some way diminished the importance of national boundaries. http://images.businessweek.com/ss/09/06/0604_innovation_interrupted/1.htmECONOMIC SYSTEMS Market Capitalism • Centrally Planned Socialism • Centrally Planned Capitalism • Market Socialism •Market Capitalism is an economic system in which individuals and companies allocate resources and production resources are privately owned. Centrally Planned Socialism The state has broad powers to serve the public interest a it sees fit. State planners make “ top-down ” decisions about what goods and services are produced and in what quantities; consumers can spend their money on what is available. Entire industries are owned by government. Because demand exceeds supply, the elements of 4p are not used as strategic variables. Centrally Planned Capitalism .......an economic system in which command resource allocation is utilised extensively in an environment of private resorce ownership. 2/3 of all expenditures are controlled by the government, resource allocation is more “ command ” oriented than “ market ” oriented. Market Socialism ......a system, where market allocation policies are permitted within an overall environment of state ownership.“ capitalism with a human face ”Market reforms and nascent capitalism in many parts of the world are creating opportunities for large-scale investments by global companies. Coca-Cola returned to India in 1994. STAGES OF MARKET DEVELOPMENT Gross national product (GNP) per capita is the dollar value of a country’s final output of goods and services in a year, divided by its population. It reflects the average income of a country’s citizens. http://www.worldbank.org/depweb/english/modules/economic/gnp/index.htmlBEM COUNTRIES CHINA, INDIA, INDONESIA, SOUTH KOREA, BRAZIL, MEXICO, ARGENTINA, SOUTH AFRICA, POLAND, TURKEYSTAGES OF MARKET DEVELOPMENT 2003 2003 % of 2003 Income group GNP GNP per World Population by per capita GNP ($m) Capita $ GNP (m) High-income countries GNP per capita $9,266 27,370,922 28,396 80.0 964 Upper-middle income countries GNP per capita $2,995 but $9,266 2,750,743 4,723 8.1 582 Lower-middle income countries GNP per capita $755 but $2,995 2,642,056 1,254 7.8 2,106 Low- income countries GNP per capita $ 755 1,107,982 434 3.2 2,554 GDP - per capita (PPP) Kazakhstan - $11,800 (2009 est.) Turkey - $11,400 (2009 est.) Russia - $15,100 (2009 est.) https://www.cia.gov/library/publications/the-world-factbook/geos/tu.htmllow-income countries Limited industrializaton and a high % of • the population engaged in agriculture and subsistence farming, High birth rates, • Heavy reliance on foreign aid, • Political instability and unrest, • Concentration in Africa south of the • Sahara. Although about %40 of the world’s population in included in this economic category, many low income countries represent limited markets for products. lower-middle-income countries Expanding of consumer markets,cheap labor forces, competitive advantage in making toys and textile; China upper-middle-income countries The % of population engaged in agriculture drops as people move to the industrial sector and the degree of urbanization increases. upper-middle-income countries Malaysia, Brazil, Chile, Hungary are rapidly industrializing. Rising wages, ? High rates of literacy, ? Advanced education. ?Member of NATO High inflation – 2000 (a 3-year plan was launched to bring inflation to single digits) Germany is Turkey’s top trading partner A major issue is whether the EU will extend an offer of membership to Turkey. Marketing opportunities in LDCs and developing contries Least developing countries and developed countries, it is possible to nurture long-term market opportunities. “ 2-billion-foot market ” – China Misconceptions about marketing opportunities in LDCs and developing countries Mistaken assumption 1: THE POOR HAVE NO MONEY. Total buying power of poor communities can be substantial. Misconceptions about marketing opportunities in LDCs and developing countries Mistaken assumption 2: THE POORS ARE TOO CONCERNED WITH FULFILLING BASIC NEEDS TO “ WASTE ” MONEY ON NON ESSENTIAL GOODS. Misconceptions about marketing opportunities in LDCs and developing countries Mistaken assumption 3: THE GOODS SOLD IN DEVELOPING MARKETS ARE SO INEXPENSIVE THAT THERE IS NO ROOM FOR A NEW MARKET ENTRANT TO MAKE A PROFIT. In fact, because the poor often pay higher prices for many goods, there is an opportunity for efficient competitors to realize attractive margins by offering quality and low prices. Misconceptions about marketing opportunities in LDCs and developing countries Mistaken assumption 1: PEOPLE IN THESE MARKETS CANNOT USE ADVANCED TECHNOLOGY. Misconceptions about marketing opportunities in LDCs and developing countries Mistaken assumption 1: GLOBAL COMPANIES THAT TARGET THESE MARKETS WILL BE CRITICIZED BY EXPLOITING THE POOR. A GLOBAL COMPANY OFFERING BASIC GOODS AND SERVICES THAT IMPROVE A COUNTRY’S STANDARD OF LIVING CAN EARN A REASONABLE RETURN WHILE BENEFETING SOCIETY. high-income countries ADVANCED, ? DEVELOPED, ? INDSUTRIALIZED, ? POST-INDUSTRIAL ? COUNTRIEShigh-income countries THE USA, JAPAN, SWEDEN high-income countries G-7 Finance ministers, central bankers, and heads of states from the seven nations have worked together for a quarter of a century in an effort to steer the global economy in the direction of prosperity and to ensure monetary stability. high-income countries OECD ( www.oecd.org ) 30 nations that belong to OECD believe in market – allocation systems and pluralistic democracy. “ enable its members to achieve the highest sustainable economic growth and improve the economic and social well-being of their populations ”high-income countries OECD is based in Paris and evolved from a group of European nations that worked together after World War 2 to rebuild the region’s economy. Canada and USA-1961 Japan-1964 China, India, Indonesia, Brasil, and Russia - announced their intention to join the OECDBALANCE OF PAYMENTS is a record of all economic transactions between the residents of a country and the rest of the world. http://www.todayszaman.com/tz-web/columnists-147565-balance-of-payments-changing-figures-and composition.htmlForeign exchange Instruments , such as paper currency , notes , and checks , used to make payments between countries .