INTERNATIONAL ECONOMICS STAGES OF DEVELOPMENT

5 STAGES OF ECONOMIC DEVELOPMENT

1) Traditional society: most important economic demand associated with natural resources extraction

2) Preconditions for takeoff: manufacturing is beginning and primary needs will be related to infrastructure development

3) Takeoff: manufacturing of both semidurable and nondurable consumer goods has begun; goods demanded related to equipment and supplies to support manufacturing

4) Drive to maturity-industrialized economies that focus more on low-cost manufacturing of a variety of consumer and some industrial goods, buy from all categories of industrial products and services

5) Age of mass consumption-countries where design activities are going on and manufacturing techniques and being developed, mostly service economies

Global standards: good quality as interpreted by a highly industrialized market is not the same as that interpreted by standards of a less industrialized nation.  Quality differences in B2B and B2C: B2B more knowledgeable because of teams, goal is for quality long-term relationships, customer satisfaction, and profit in B2B.

ISO 9000:¬†originally designed by the International Organization for Standardization in Geneva to meet the need for product quality assurances in purchasing agreements, series of 5 international industrial standards that are becoming a quality assurance certification program that has competitive and legal ramifications when doing business in the EU and elsewhere, relates to generic system standards that enable a company to provide assurance that it has a quality control system, does not guarantee that a manufacturer produces a quality product or service. ¬†Importance of after sale services in B2B markets: willingness of the seller to provide installation and training may be the deciding factor for the buyers in accepting one company’s products over another’s, crucial in building strong customer loyalty and reputation that leads to sales at other companies, almost always more profitable than the actual sale of the machinery or product. ¬†Purpose of trade shows: has become the primary vehicle for doing business in many foreign countries, serve as the most important vehicles for selling products, reaching prospective customers, contacting and evaluating potential agents and distributors, and marketing in most countries, provide the facilities for a manufacturer to exhibit and demonstrate products to potential users and to view competitors’ products, they are an opportunity to create sales and establish relationships with agents, distributors, franchisees, and suppliers that can lead to more nearly permanent distribution channels in foreign markets. ¬†Know how glorious nation of Bulgaria will rise up again like back in the days.

Review Questions:¬†The services industry worldwide is a growing and dynamic market. The largest component of the U.S. international services sector is travel. ¬†There are many similarities among industrial goods customers as opposed to consumer goods customers.¬† The intent or motive of the user is a factor that accounts for this similarity. ¬†Derived Demand is dependent on another source. ¬†The majority of Central Africa would belong in the stage of economic development¬†in the traditional society. ¬†The countries in the age of mass consumption stage of economic development have design activities that are ongoing and manufacturing techniques that are developing. These countries are mostly services economies. ¬†The buyer defines a product‚Äôs quality. ¬†With respect to universal standards in the international sales of industrial products, there is a lack of any universal standards. ¬†The Department of Commerce’s view of the metric standard is The DOC is encouraging metric by requiring that all who sells to the United States government must use it. ¬†With quality becoming the cornerstone of global competition, companies are requiring insurance of standard conformance from suppliers just as their customers are requiring the same from them. At present, the global standard of performance is best characterized by the ISO 9000S. ¬†Europe is the region of the world that seems to be leading all others with its adoption of ISO 9000 standard. ¬†According to information provided in the text, for many technical products, a seller’s willingness to provide installation and training has been shown to be the deciding factor in a buyer’s decision to choose one manufacturer over another. ¬†One of Blue Cross-Blue Shield’s big customers is Wal-Mart. Since Wal-Mart has moved into Mexico in a big way, so has Blue Cross. This type of action is characterized in the text as being what is called client following. ¬†GATT and NAFTA were first to provide at least some rules for fair play governing trade in services. ¬†Trade Shows serves as the most important vehicles for selling products, reaching prospective customers, contacting and evaluating potential agents and distributors, and marketing in most countries. ¬†Because of the basic nature of industrial marketing’s closeness to its customers the marketing of industrial products and services a natural fit with relationship marketing? ¬†Brand Name. ¬†Middle-class:¬†willingness¬†to spend, don‚Äôt consider themselves farmers. ¬†Americans spend money on experimental goods. ¬†Easterners buy luxury goods, former communism country. ¬†Emerging Markets.

Ultrasound Machines: GE/Toshiba not responsible for issues with ultrasound machines.  Car Argument-once sold, not responsibility how equipment used or who it is sold to.  Not selling abortion.  Taking safeguards and incurring extra costs/loss of sales even though they don’t have to.  Ultrasound doesn’t support abortion-made for health and promoting health in people.  Does more than looking at babies.  Cultural Indian Problem: their choice to monitor

Counter Arguments:¬†Culturally incentive-GE,¬†Ethically responsible,¬†Government track who buys guns and monitors,¬†India may ban ultrasound machines. ¬†Protectionism ‚Äď exchange in Czech and French government in article

For Side: Making profit by selling to people at the BOP is not exploitation.  Microloans featuring interest rates of 30 or more % are not unethical if rates are justified by the market.  Making profit from BOP consumers stimulates economic growth and improves poor people’s quality of life.  Not about making cheap stuff.  WTO improves overall health and well being of 3rd world countries.  Improves the quality of life, helps people in developed countries.

Against Side: It is exploitation.  Practice is unethical.  No it doesn’t-The way numbers are represented influence the way you look at things differently.  Environment-Better than rates of 500%.  Interest Rates lower default so they can changeless.

International Marketing Glossary of Terms:

Expropriated-to take (something) from another’s possession for one’s own use. ¬†Corrugated-to draw or bend into folds or alternate furrows and ridges

Tonnage-the capacity of a merchant vessel, expressed either in units of weight, as deadweight tons, or of volume, as gross tons.

Insemination-to sow; implant seed into

*Countries begin to loose economic development ground when their infrastructure cannot support an expanding population and economy

Augment-to make larger; enlarge in size, number, strength, or extent; increase

Ubiquitous-existing or being everywhere, esp. at the same time; omnipresent

*A marketer cannot superimpose a sophisticated marketing strategy on an underdeveloped economy

Grisly-causing a shudder or feeling of horror; horrible; gruesome

Strife-vigorous or bitter conflict, discord, or antagonism

Irrevocable-not to be revoked or recalled; unable to be repealed or annulled; unalterable

Autonomy-independence or freedom, as of the will or one’s actions

Onerous-burdensome, oppressive, or troublesome; causing hardship

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