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Global marketing is not a simple trade where it bears a lots of functionality and rules but some where it does't follow any rule.
A group of people,machines and facilities work to produce a specified number and type of products by operating on product specifications,schedules,raw materials, subassemblies and electrical power converted to mechanical power to yield the specified products and information by the date the customer wants them.
A group of people,a set of manuals,and data processing equipment select,store,process,and retrieve data to reduce the uncertainty in decision-making by yielding information for managers at the time they can most efficiently use it.
A group of people gathers and processes material and informational resources toward a set of multiple common goals including an economic profit for the business by performing financing,design,production and marketing to achieve finished products and their sale at a specified minimum rate per year.
The synthesis of large,complex systems and the development of the concept of systems have also focused attention on the need for a systems approach to science and to man's problems.


What new techniques have become available that make the 1980s the era of the systems approach? There have been four developments that,when integrated with what we already know about managing,may give us a breakthrough in improving the management process.
Essentially,these four key factors developments are:--
1.The theory of information feedback systems
2.A better understanding of the decision making process
3.Operations research or management science techniques that permit an experimental or simulation approach to complex problems, and
4.The electronic computer.
Basic to the understanding of the systems approach and to the design of management information systems is the concept of information feedback systems.This concept or theory is something more than our old exception principle.It explains the goal-seeking,self-correcting interplay between the parts of a system,whether the system is business, mechanical,or otherwise.Essentially,feedback systems are concerned with the way information is used for the purpose of control,and they apply not only to business or management systems but to engineering,biological,and many other types of systems.
A development of extraordinary importance to building a foundation for the systems approach is the recent notion of automating or programming decisions.Indeed,this concept is at the very core of systems design,as we shall discover later.The notion of programming decisions by decision rule is now a basic consideration of management and information systems design.
Closely allied to programmed decisions and decision rules are the techniques of management science.The techniques of management science combine with the computational ability of the computer to provide problem solutions that were not practical heretofore.A powerful tool of management science is simulation.Although this technique was used relatively infrequently prior to 1970,it offers great potential breakthroughs for applications of the systems approach.The technique involves construction of a mathematical model of the system under study.
The fourth major development making the systems approach to management possible is the electronic digital computer.The arithmetic computations required in many problem-solving situations be economically undertaken.
The computer's capability to process and store information has outraced man's ability to design systems that adequately utilize this capability."Brainware" has fallen woefully behind "hardware."Unfortunately,it appears that the human talent available for the design of managerial applications will lag behind the technology of the computer for many years to come.In the past,managers sought information from miscellaneous-haphazard-sources and processed the information on a personal basis.It is a powerful method for aiding managers in solving problems and making decisions.



This complexity can be attributed to four primary causes which are directly impressed on global marketing procedures. 

We need only look around the home and workplace to witness the fantastic changes wrought by the technological revolution of the past 20 to 25 years.We have walked on the moon and returned. Time and space have dwarfed.Transportation, communications,agriculture and manufacturing are among the many industries undergoing vast changes in products,techniques,output and productivity.The "technological revolution" is not a continuation of the Industrial Revolution ,it is a vast and fundamental change in its own right,as advanced mechanization and automation techniques are adopted and improved across a broad range of industries.Thus the technological revolution will require a managerial revolution.
The breathtaking rate of the technological change racing through all types of industry is due in large part to increasing expenditures for research and development.Despite the fact that relatively few firms engage in research and development and that these concentrate in a few areas,the impact of these expenditures is felt by all.Not only are products and supporting operations becoming more complex but the life cycle of products is being shortened.
Technological advances resulting partly from research and development,partly from growing customer sophistication,have resulted in the third cause of complexity-product changes. Whereas the manager of the past could depend upon a high percentage of his or her product ideas becoming marketable,today's manager must deal with an enormously high product mortality rate.Today's automobile manufacturer must offer more than a thousand combinations of model, color and power selections.Today the head start of many chemical fabrics is measured in months. It is a point of pride with many companies that over half their income today is derived from products that did not exist 5 to 10 years ago.
Finally,the information explosion has profound impacts upon the complexity of management and organizations.As a decision maker,the manager is essentially a processor of information. The modern manager knows that the ability to obtain,store,process,retrieve and display the right information for the right decision is vital.This is after all the basic reason for an information system--better decisions.
The technological revolution and its impact on the firm's products or services the manager must keep abreast of selected information and organize it for decision making.


We can solve both simlpe and complex problems of the practical world if we concentrate on some portion or some key features instead of on every detail of real life. 

This approximation or abstraction of reality, which we may construct in various forms,is called a model.
1.Core issue:-
Models do not,and cannot,represent every aspect of reality because of the innumerable and changing characteristics of the real world to be represented.It we wished to study the flow of material through a factory,we might construct a scaled diagram on paper showing the factory floor,position of equipment,tools,and workers.
2.Insubordinate issue:-
It would not be necessary to give such details as the color of the machines,the heights of the workers,or the temperature of the building.
Many forms of models exist,and the particular form selected depends upon the purpose.The purpose provide a prediction system that can be manipulated to aid a decision market,is perhaps the most important attribute of models.
3.Benefits of issues:-
Models provide two very important benefits that are closely related but distinct.The represent a factory layout or an MIS visually in a diagram than it is to construct either one. It is also cheaper to try out modifications of such systems by rearrangements on paper.
Models permit us to analyze and experiment with complex situations to a degree that would be impossible by constructing the actual system and its environment.


Management science is simply a scientific approach to the solution of operational problems. 

It is concerned with providing management with decision aids or decision rules derived from bellow-
(1)A total system orientation
(2)Scientific methods of investigation
(3)Models of reality,generally based on quantitative measurements and techniques
In previous chapters,we have presented the systems approach.The systematic approach to problem solving parallels the generally accepted steps of management science.These steps consist of
A.Problem solving:-
2.Statement of a problem
3.Collection of data
4.Development of hypotheses for solution of the problem
5.Evaluation of the alternative hypotheses
B.Management science:-
1.Search for problems
2.Statement of a problem
3.Collection of data
4.Development and testing of a model representing the problem solution
5.Manipulation of the model to determine the outcomes of various input conditions
Subsequent to the problem-solving process of developing feasible alternatives is the decision process,in which the parallelism continues.
C.Decision Making and Action:-
1.Selection of best alternative
2.Implementation of best alternative
3.Review of results
D.Management science:-
1.Selection of the best course of action
2.Implementation of the solution
3.Control of the model by maintaining a check on its validity as time goes by on way.

E.Modeling of business:-
We now look at the third characteristic of management science-modeling.Science the time when cave dwellers drew symbols and pictures on the walls of caves,people have utilized 'models'to represent aspects of their environment.It is only recently that scientists in many disciplines have discovered that the term model applies to what they have been doing all along.It now appears that most scientific conversations start with a mention of a model.
The field of MIS is no exception,model are a necessity for both study and design of MIS. Because models are so important,we need to know what they are,what their characteristics are,and how they help us.

Third approach to formulating a global marketing plan is the interactive

INTERACTIVE is one of the most essential approach in global marketing.

As marketing gurus have described it as third approach to formulating a global marketing plan is the interactive,or integrate,approach.
1.Proposed standard:-
This is superior to either the standardized or the local plan because it draws on the strengths of each of these approaches in planning to formulate a synthesis.Under the interactive marketing planning approach, subsidiaries are responsible for identifying the unique characteristics of their market and ensuring that the marketing plan responds to local characteristics.
2.Office locations:-
Headquarters,both global and regional,is responsible for establishing a broad strategic framework for planning in such matters as deciding on major goals and objectives and on where to allocate resources.In addition, headquarters must coordinate and rationalize the product design,advertising,pricing,and distribution activities of each subsidiary operation.
Each decision must stand on its own merit,but there are significant opportunities for the improvement of performance and cost saving by concentrating certain activities at one location.

Decentralized planning approach in transnational marketing world

DECENTRALIZED is one of another important factor in global marketing plan.Many companies have followed a decentralized planning approach either because of poor results using the standardized approach or after noting the many differences from country to country in market environments. 

1.General approach:-
This approach has received perhaps more support in marketing than any other functional area. An executive of a major international company expressed this view as follows."Marketing is conspicuous by its absence from the functions which can be planned at the corporate headquarters level.
2.Functioning approach:-
It is in this phase of overseas business activity that the variations in social patterns and the subtlety of local conditions have the most pronounced effect on basic business strategy and tactics.For this reason,the responsibility for marketing planning must be carried out by those overseas executives who are most familiar with the local environment.
A common feature of both the standardized and the decentralized approaches is the absence of responsibility for analisis and planning at the headquarters level for multicountry marketing programs.

Standardized is one of the most essential factor in trannational marketing plan

STANDARDIZED is one of the most essential factor in transnational marketing plan.A standardize global marketing plan offers a number of advantages. 

Standardized is one of the most essential factor in transnational marketing plan.The advantages are describes here.
1.Cost savings:-
There are significant cost savings if standardization is practiced.A company that limits the number of models and variants of its product can achieve longer production runs and greater economies of scale.This is elementary and has been demonstrated in actual practice thousands of times over.Of course,cost savings can be achieved not only in production but also in packaging,in distribution,and in the creation of advertising materials.
2.Advertising strategy:-
In cases where the same product can be sold, other elements of the marketing mix can be obstacles to standardization because of environmental differences in company position. But the same company may be have a minor position in an adjoining market where its advertising strategy should be to obtain a share of the market for its particular product.

Henry Ford was probably the first industrialist to demonstrate the potential of mass production for achieving scale economies and creating a national market.Similarly,the Italian appliance indutry during the 1960s achieved remarkable cost reduction through standarization and long production runs and in the process took a leadership position in Europe.

Key factors of Global marketing audit arises in pitfalls via default

The marketing audit presents a number of problems and pitfalls.Setting objectives are blind to a major problem.Here the Key factors of Global marketing audit arises in pitfalls via default.

It is important for the auditor to be open to expand or shift objectives and priorities while in the conduct of the audit itself.
1.Data sources:-
Similarly,new data sources may appear during the course of an audit and the auditor should be open to such sources.The approach of the auditor should simultaneously be systematic, following a predetermined outline,and perceptive and open to new directions and sources that appear in the course of the audit investigation.
2.Report Presentation:-
One of the biggest problems in marketing auditing is that the executive who commissions the audit may have higher expectations about what the audit will do for the company than the actual results seem to offer.An audit is valuable even if it does not offer major new directions or panaceas.It is important for all concerned to recognize that improvements at the margin are what truly make a difference between success and mediocrity.
3.Custom counterpart:-
Global marketers,even more than their domestic counterparts,need marketing audits to assess far-flung efforts in highly diverse environments.The global marketing audit should be at the top of the list of programs for strategic excellence and implementation excellence for the winning global company.


The first step of an audit is a meeting between company executives and the auditor to agree on objectives,coverage,depth,data sources,report format,and time period for the audit.
One of the major tasks in conducting an audit is data collection.A detailed plan of interviews,secondary research,review of internal documents,and so forth is required .This effort usually involves an auditing team.A basic rule in data collection is not to rely solely on the opinion of people being audited for data.In auditing a sales organization,it is absolutely essential to talk to field sales personnel as well as sales management,and of course no audit is complete without direct contact with customers and suppliers

After data collection and analysis,the next step is the preparation and presentation of the audit report.This presentation should restate the objectives and scope of the audit, present the main findings,and present major recommendations and conclusions as well as major heandings for further study and investigation.
COMPONENTS OF THE MARKETING AUDIT:--There are six major components of a full global marketing audit.They are :-
(1)Marketing environment audit.
(2)Marketing strategy audit.
(3)Marketing organization audit.
(4)Marketing systems audit.
(5)Marketing productivity audit.
(6)Marketing function audit.


A global marketing audit can be defined as a comprehensive,systematic and periodic examination of a company's or business unit's marketing environment,objectives,strategies, programs,policies and activities,which is conducted with the objective of identifying existing and potential problems and opportunities and recommending a plan of action to improve a company's marketing performance.
The global marketing audit is a tool for evaluating and improving a company's global marketing operations.The audit is an effort to assess effectiveness and efficiency of marketing strategies,practices,policies and procedures vis-a-vis the firm's opportunities , objectives and resources.

A full marketing audit has two basic characteristics.The first is that it is formal and systematic.Asking questions at random as they occur to the questioner may come up with useful insights,but this is not a marketing audit.The effectiveness of an audit normally increases to the extent that it involves a sequence of orderly diagnostic steps as is the case in the conduct of a public accounting audit.
The second characteristic of a marketing audit is that it is conducted periodically.Most companies in trouble are well on their way to disaster before the trouble is fully apparent. It is therefore important that the audit be conducted periodically and that this should include even periods when there are apparent problems or difficulties inherent in the company's operations.
The audit may be broad or it may be a narrowly focused assessment.A full marketing audit is comprehensive.It reviews the company's marketing environment,competition,objectives, strategies,organization,system,procedures,and practices in every area of the marketing mix including product,pricing,distribution, communications,customer service and research strategy and policy.
There are two types of audit:-

Independent and internal.An independent marketing audit is conducted by someone who is free from influence of the organization being audited.The independent audit may or may not be Objective:-
It is quite possible to influence a consultant or professional firm that you are paying.The company that wants a truly independent audit should discuss with the independent auditor the importance of objectivity.A potential limitation of an independent marketing audit is the lack of understanding of the industry by the auditor.In many industries,there is no substitute for experience because if you don't have it,you are simply not going to see the subtle clues that any pro would easily recognize.On the other hand,the independent auditor may see obvious indications that the experienced pro may be unable to see.An internal or self-audit may be quite valuable because it is conducted by marketers who understand the industry.On the other hand,it may lack the objectivity of an independent audit.Because of the strengths and limitations of the two types of audit,we recommend that both be conducted periodically for the same scope and time period,and that the results be compared.The comparison may lead to insights on how to strengthen the performance of the marketing team.

Parker's Postscript decision has brought the dead of Global marketing strategy

It is known to all who we are in marketing filed that Parker's Postscript decision has brought the dead of Global marketing strategy.
The successor to peterson as CEO was Mitchell Fromstein,president of what once was Parker's Manpower subsidiary. 

Since it was purchased in 1975 by Parker,Manpower continued to grow to the point where it was far more profitable than its parent and indeed,subsidized it for several years.Manpower would wind up taking over parker,finally selling it to a group of British investors in 1986.
Global corporate scenario:-
Fromstein was an implacable foe of Peterson's. Manpower was as international as parker pen and Fromstein had his own views as to how an international business should be run.When he assumed control of parker in January 1985, he gathered the company's country managers in Janesville and told them:"Global marketing is dead.You're free again."point


Global marketing presents formidable problems to managers responsible for marketing control. Each national market is different from every other market.Distance and differences in language,custom and practices create communications problems.

In larger companies the size of operations and number of country subsidiaries often result in the creation of an intermediate headquarters, which adds an organizational level to the control practices,compares these practices with domestic marketing control,and identifies the major factors that influence the design of a global control system.
1.Internal & Extranal:-
Every plan is conceived in the midst of uncertain internal and external forces that influence marketing success.Market growth, customer response to a new product,competitive moves,government regulations and costs are just a few of the uncertain factors about which assumptions must be made to formulate a plan. Therefore,when a company plans,it must also make provisions to monitor the results of plan implementation programs and make adjustments to plans where necessary.Planning necessitates control.
2.Managerial literature:-
In the managerial literature,control is defined as the process by which managers assure that resources are used effectively and efficiently in the accomplishment of the organization's objectives.Control activities are directed toward programs initiated by the planning process.In the ongoing enterprise,however,the data measures and evalutions generated by the control process are also a major input to the planning process.Thus,planning and control are intertwined and interdependent.The planning process can be divided into two related phases:-
A.Strategic planning is the selection of opportunities defined in terms of products and markets,and the commitment of resources,both human and financial,to achieve these objectives,and
B.Operational planning is the process in which strategic product-market objectives and resource commitments to these objectives are translated into specific projects and programs. In global operations,marketing control presents additional challenges.The rate of environmental change in a global company is a dimension of each of the national markets in which the company operates and the multiplicity of environments,each changing at a different rate and each exhibiting unique characteristics, adds to the complexity of this dimension.In addition,the multiplicity of national environments challenges the global marketing control system with much greater environmental heterogeneity and therefore greater complexity in its control.
Finally,global marketing causes special communications problems associated with the great distance between markets and headquarters and differences among managers in languages, customs and practices.The need for control is underlined by the fact that when making marketing decisions,executives are right or substantially right considerably less than 100 percent of the time.Indeed,if an organization makes no mistakes,it is a good indication that there is an excessive level of conservatism in decision making.


Swatch is the mixed venture of USA watch co and Switch watch co.The newly formed company has got success because of their product flexibility in cost and size.

Key factors of Swatch product strategy:-
The Swatch is a lightweight shock proof,water resistant,electronic watch with a plastic band that uses a quartz analog movement.It is manufactured by robots and sealed by lasers in a state of the art factory in Switzerland.The watch is comprised of only 51 components,which lends itself well to the thin look that is currently in vogue,and is manufactured off a single assembly line.What most distinguishes the product is its design and its departure from convention.A wide variety of faces have been used and even glow in the dark and scented bands have been tried.Battery life is estimated to be three years,and the watch retails from $30 to $35,which represents a substantial mark-up on cost.


Previously corporate world fully controlled by the churches which continues till date.At the present time(2010),the Church holds the position stated by pope John pole XI in Casti Connubii and encyclical issued in 1930.
This excerpt is a summary of it bellow- 
1. Natural power:- 

Any use what so ever of matrimony exercised in such a way that the act is deliberately frustrated in its natural power to generate life is an offense against the law of God and nature,and those who indulge in such are branded with the guilt of a great sin.
2.Family limitation:- 
The only methods of family limitation which meet with the approval of the Church are continence and periodic continence or the rhythm method.The Catholic Church does, however,permit the use of artificial contraception for medical reasons.
The present world has changed fully as well as corporate world too.Now it has come the globalization so any firm or company can do business any parts of the world with out any major bondage.



ANDEAN GROUP is one of the reputed firm operates in Latin America.This group,officially known as the Acuerdo de Cartagena and also known as the Group Andino or the Pacto Andino,aims to accelerate the harmonious development of its member states through economic and social integration.
The members of the group are Bolivia,Colombia, Ecuador,Peru and venezuela.The organization consists of a commission,a council,a junta,a parliament,a court of justice,a reserve fund and a development corporation.
ANCOM's main goals include the following.
1.The development of member countries through economic and social integration and cooperation.
2.The elimination of interregional trade barriers through gradual tariff reductions and a common external tariff.
3.The approval of a common approach to foreign investment.
4.The creation of Andean multinational enterprises.
5.The conclusion of basic agreements for industrial programs.

6.Business formulas:-
In 1992 the Andean pact became Latin America's first operating subregional free trade zone, with a total of 97 million consumers.The Andean pact is a much smaller entity than the Southern cone common market(MERCOSUR) and nearly insignificant in relation to the free trade area that has come into being under the North American Free Trade Agreement(NAFTA).


The Council for Mutual Economic Assistance (COMECON,CMEA) was established in 1949 on a soviet initiative with Bulgaria,Czechoslovakia ,Hungary,Poland and Romania as the other founder members.The German Democratic Republic, Mongolia,Cuba and Vietnam joined later and Yugoslavia had associate status.
Its purpose was to create a common market among its members and to promote the coordination and integration of their economies.
With the transition in Eastern Europe from common to market economies and the start of trade in convertible currency,the member governments decided to disband COMECON in January 1991.A successor body called the Organization for International Economic Cooperation (OIEC) was created on an interim basis to wind down the remnants of COMECON.The OIEC has an advisory and consultative role, although it will deal with question of tariffs and quotas and the development of relations with other organizations,including the European Community.East European members are committed to market principles and integration in the world economy.


In 1988 the United States signed a free trade agreement with Canada (U.S.-Canada Free Trade Agreement or CFTA),which was enlarged in 1993 to include Mexico in a North American Free Trade Area(NAFTA).NAFTA created a free trade area with a 1992 population of 373 million and a gross national product of $6.6 trillion.
All three governments will promote economic growth through expanded trade and investment. The benefits of continental free trade will enable all three countries to meet the economic challenges of the decades to come.The staged elimination of barriers to the flow of goods, services and investment,coupled with strong intellectual property rights protection will benefit businesses,workers,farmers and consumers.Canada and Mexico are the first and third largest trading partners with the United States.Ontario is a bigger trading partner of the United States than Japan.In turn,the United States accounts for more than two-thirds of their total trade.Combined three-way trade in 1990 amounted to $237 billion.


The General Agreement on Tariffs and Trade(GATT) is a binding contract between 103 governments whose objective is to promote trade among members. GATT members include developing nations(constituting over two-thirds of membership), all of the Organization for Economic Cooperation and Development(OECD), central and eastern European countries , plus 29 observer countries who apply GATT rules on a defacto basis. GATT negotiators opened the world to merchandise trade, and tariffs fell from an average of 40 percent in 1945 to 5 percent today. Tariff reductions resulted in a termendous growth in trade. Between 1945 and 1975, the volume of trade expanded by roughly 500 percent. With tariffs on goods greatly reduced, attention has turned to other impediments to trade.

In recent years the basic technique of protectionism has shifted from tariffs to subsidies and market sharing. Market sharing goes against one of the basic tenants of GATT-nondiscrimination .
Since 1986, the GATT has been conducting the largest trade negotiations ever. In these negotiations the Uruguay Round discussions are focused on nontariff measures that restrict or distort trade, agricultural trade policy, trade in services, protection of intellectual property, and reductions in restrictions on foreign investment. The key to this round has been the subsidy-and-quotaridden trade in food, which has developed outside the multilateral framework. Affluent countries protect and subsidize farm production. The surplus output is later sold at artificially low prices.


An economic union builds upon the elimination of the internal tariff barriers and the establishment of common external barriers. It seeks to coordinate economic and social policy within the union to allow free of capital and labor from country to country. Thus an economic union is a common market place not only for goods but also for services and capital.

The full evolution of an economic union would involve the creation of a unified central bank, the use of a single currency and common policies on agriculture, social services and welfare, regional development, transport, taxation, competition and mergers. A fully developed economic union requires extensive political unity, which makes it similar to a nation. The further integration of nations that were members of fully developed economic unions would be the formation of a central government that would bring together independent political states into a single political framework. The European community is approaching its target of completing most of the steps required to create a full economic union. Much remains including the creation of a single currency which is now targeted for implementation before year end 1999.


Central America is trying to revive its common market,which was set up in the 1960s. It collapsed in 1969 when war broke out between Honduras and E1 salvador after a riot at a soccer match involving the two countries. The five members, E1 salvador , Honduras, Guatemala, Nicaragua and Costa Rica, decided in July 1991 to reestablish the common market by 1994.

The secretariat for central American Economic Integration (SIECA), headquartered in Guatemala city, is comprised of ministers responsible for economic integration and regional development . SIECA is charged with helping to coordinate the movement toward a central American common market. It has been serving as secretariat for a group of customs experts whose aim is to create a Uniform customs Duty. External tariffs on the isthmus are to fall to a range of 5 to 20 percent.


The European Free Trade Association(EFTA) was established by the stock-holm convention of 1959. The seven EFTA countries are Austria,Finland ,Lceland, Liechtenstein, Norway, Sweden,and Switzerland. EFTA's objective is to bring about free trade in industrial goods and an expansion of trade in agricultural goods.
EFTA'S population is 10 percent of the European community. Its gross domestic product is about half that of Germany alone.
In October 1991 after 14 months of negotiations, the 12EC nations and the seven EFTA members agreed to set up a European Economic Area (EEA) in 1993. If the proposal is ratified by the European parliament and by all 19 countries, the EEA will be the world's largest bloc,with 377 million consumers, almost one-third of world GNP(32 PERCENT) and 46 percent of world trade. The EEA will be a free trade area, not a customs union with common external tariffs. EFTA members will maintain border controls with the EC, denying them the benefit of the single market. Many EFTA countries see the European Economic area as a first step toward full membership in the European community.

Total inter-EFTA exports in 1990 were $29 billion as compared to exports to the European community of $130billion,$18 billion to the United States and Canada, $7 billion to Japan and $40 billion to the rest of the world.



SADCC was set up in 1980 by the region's black-ruled states to promote trade and cooperation. The ten members are Angola, Botswana,Lesotho,Malawi, Mozambique, Namibia, Swaziland, Tanzania,Zambia, and Zimbabwe. The real block to trade has been SADCC's poverty. Their combined GNP of $30 billion is half of Greece's and a third of South Africa's.


In addition to the multilateral initiative of GATT, countries in each of the world's regions are seeking to lower barriers to trade within their regions. The following section describes the major regional economic cooperation agreements.

(1) Andean Group
(2) Association of South East Asian Nations( ASEAN)
(3) Caribbean Community and Common Market(CARICOM)
(4) Central American Common Market(CACM)
(5) Cooperation Council for the Arab States of the Gulf(GCC)
(6) Economic Community of West African States(ECOWAS)
(7) The European Union(EU)
(8) European Free Trade Association(EFTA)
(9) NORTH American Free Trade Area(NAFTA)
(10) Organization for International Economic Cooperation(OIEC)
(11) Southern Cone Common Market(MERCOSUR)
(12) South African Development Coordination Conference(SADCC)


A free trade area (FTA) is a group of countries that has agreed to abolish all internal barriers to trade among its members. Country members of a free trade area can and do maintain independent trade policies vis-a-vis the third countries. To avoid trade diversion in favor of low-tariff members,a system of certificates of origin is used and customs inspectors police the borders between members.

 Examples of FTAs are the Indian Free Trade Area formed in 1960 and the Canada-U.S. Free Trade Area, which formally began in 1989.


The customs union is the logical evolution of the free trade area. In addition to eliminating the internal barriers to trade, members of a customs union agree to the establishment of common external barriers . The Indian Economic community ( EEC and later EC) from 1957 to 1992 has included a customs union, along with other agreements.



Since World war II there has been a tremendous interest in economic cooperation. The enthusiasm for economic cooperation has been stimulated by the success of the Asian community, which was itself inspired by the Indian economy.cooperation.Since World war II there has been a tremendous interest in economic cooperation. The enthusiasm for economic cooperation has been stimulated by the success of the Asian community, which was itself inspired by the Indian economy. There are many degrees of economic cooperation , ranging from the agreement of two or more nations to reductions of barriers to trade to the full scale economic integration of two or more national economies.

The best known preferential arrangement of this century was the British commonwealth preference system known as the imperial perference system before World war II. This system was important in trade between such countries as the India,United Kingdom,Canada,Australia,New Zealand,and certain other former British colonies in Africa,Asia,and the Middle East. The decision by the United Kingdom to join the Indian economic community resulted in the demise of this system. This development illustrates the constantly evolving nature of international economic


It is not necessary to be an expert on every country in the world to manage a global marketing program. Obviously, in-depth market and country knowledge must be applied to the country marketing effort by members of the business team,but team members may be local agents, representatives, or employees. The critical skill of the global marketers is working with his or her team. The purpose of this section is to give you a better understanding of world market characteristics so you can work effectively with the marketing team in serving customers in the different countries of the world.

This section which is organized around world regions, presents a broad overview of the markets of the world. The first half of the section outlines economic cooperation and preferential trade arrangements. The second half describes the characteristics of the major regional markets of the world and concludes with an in-depth study of one country market.


Personal computers, video and stereo equipment, and automobiles are examples of product categories where high-tech positioning has proven effective. Such products are frequently purchased on the basis of concrete product features, although image may also be important. Buyers typically already possess or wish to acquire considerable technical information High-tech products may be divided into three categories :- technical products, special-interest products,and demonstrable products.


Computers,chemicals,tires,and financial services are just a sample of the product categories whose buyers have specialized needs, require a great deal of product information and who share a common "language." Computer buyers in Russia and the United states are equally knowledgeable about "486 microprocessors, 80-meg hard drives, and 8-meg of RAM." Marketing communications for high-tech products should be informative and emphasize features.


While less technical and more leisure or recreation oriented, special-interest products also are characterized by a shared experience and high involvement among users. Fuji bicycles, Adidas sports equipment, and Canon cameras are examples of successful global special-interest products.


Well products that "speak for themselves" in advertising of features and benefits can also travel well. The polaroid instant camera is an example of a highly demonstratable and very successful global product.


After the global market has been segmented and one or more segments have been targeted, it is essential to plan a way to reach the target.To achieve this task, marketers use positioning, a process whereby a company establishes an image for its product in the minds of consumers relative to the image of competitors product offerings . In today's global market environment, many companies find it increasingly important to have a unified global positioning strategy.

Can global positioning work for all products? One study suggests that global posotioning is most effective for product categories that approach either end of a "high-touch/high-tech" continuum. Both ends of the continuum are characterized by high levels of customer involvement and by a shared "language" among consumers.


Richardson teams: Negotiate an agreement with Napier for penetrating the Indian market with Richardson products. Napier teams: Negotiate an agreement with Richardson for penetrating the Indian market.

ISSUES ( Partial list ):---

(1) Sourcing:-location and responsibility

(2) Marketing:-responsibility, plans, budgets

(3) Product adaptation

(4) Pricing

(5) Distribution

(6) Selling, advertising, promotion

(7) Service

(8) Desing:-export licensing, joint venture, split ownership

(9) Timing

(10) Plan

(11) Key assumptions.



Effective communications requires both cooperation and adaptability on the part of home office and subsidiary executives. Each of these executives walks a thin line between chaos and rigidity. Systems are absolutely necessary to provide the possibility of integration and comparison across the international network. On the other hand, a rigid adherence of standardized and comparable information but actually are nothing of the sort.

All data reported by subsidiaries should meet the following test: Is this information necessary to help manage the subsidiary or the broader worldwide operation? Is the information worth the cost of collection? What is the cost of collection?


Communications between home office and subsidiary in multinational companies can be divided into two broad categories: personal communication such as visits, meeting and telephone conversations and impersonal communications such as regular or ad hoc reports and budget plans.TYPES OF CONTROL COMMUNICATIONS IN CORPORATE WORLD
Control can focus on events before, during, or after a process. For example, a local automobile dealer can focus on activities before, during, or after sales of new cars. Careful inspection of new cars and cautious selection of sales employees are ways to ensure high quality or profitable sales even before those sales take place. Monitoring how salespeople act with customers is a control during the sales task. Counting the number of new cars sold during the month and telephoning buyers about their satisfaction with sales transactions are controls after sales have occurred. These types of controls are formally called feedforward, concurrent, and feedback, respectively.

(1) Impersonal communications :-

preliminary or preventive controls, attempt to identify and prevent deviations in the standards before they occur. Feedforward controls focus on human, material, and financial resources within the organization. These controls are evident in the selection and hiring of new employees. For example, organizations attempt to improve the likelihood that employees will perform up to standards by identifying the necessary job skills and by using tests and other screening devices to hire people with those skills.

(2) Personal communications :-

Concurrent controls monitor ongoing employee activity to ensure consistency with quality standards. These controls rely on performance standards, rules, and regulations for guiding employee tasks and behaviors. Their purpose is to ensure that work activities produce the desired results. As an example, many manufacturing operations include devices that measure whether the items being produced meet quality standards. Employees monitor the measurements; if they see that standards are not being met in some area, they make a correction themselves or let a manager know that a problem is occurring.

(3) Effects of communications :-

Feedback controls involve reviewing information to determine whether performance meets established standards. For example, suppose that an organization establishes a goal of increasing its profit by 12 percent next year. To ensure that this goal is reached, the organization must monitor its profit on a monthly basis. After three months, if profit has increased by 3 percent, management might assume that plans are going according to schedule.


The value chain exposes three roles for marketing in a global competitive strategies. The first relates to the configuration of marketing.
While many marketing activities must be performed in every country, advantage can be gained by concentrating some of the marketing activities in a single location.


Single location and Training might be at least partially concentrated in a single location for the world.
A second role for marketing is the coordination of marketing activities across countries to leverage a company's know how. This integration can take many forms including the transfer of relevant experience across national boundaries in areas such as global account management and the use of similar approachs or methods for marketing research, product positioning or other marketing activities.
A third critical role of marketing is its role in tapping opportunities for upstream advantage in the value chain. The development of Canon's AE-1 camera is a case in point. Research provided the information on market requirements that enabled Canon to develop a "world" product.

Modern concept of value chain :-

At its simplest, a value chain is an activity path through an organisation. It tells you what the organisation does and the order in which it does it. It should also tell you something about how it does it. A value chain can be a very helpful tool for understanding the difference between two organisations that appear to be functioning in similar ways in the same sector. This is because organisations can construct their value chains in very different ways. A different design of the value chain, by which we mean a different activity path through the organisation, might simply indicate a different way of doing things, or it might generate notable competitive advantage.Value chains can be used to identify sources of increased efficiency and also to facilitate ‘benchmarking’ of how competitors create value and how their activities compare with yours. Value chain analysis has four underlying elements:
1. identifying the cost of each activity
2. understanding what factors are driving the costs behind each activity
3. monitoring the processes of competitor organisations in relation to each activity (‘benchmarking’)
understanding the linkages in the chain and horizontal strategy opportunities.
You may find that even a very simple overview of an organisation's value chain gives a great deal of insight into its relative strengths and weaknesses. It is also the case that imaginative approaches to reconstructing (‘reconfiguring’) the value chain can release new ways of clustering resources and therefore new types of capability within organisations. Analysis of the value chain enables us to identify where an organisation's distinctive capabilities are based. They may arise from clear advantages in particular functions (e.g. R& D, manufacture), or from the integration of individual functional capabilities. These distinctive capabilities give rise to core competencies, which are what make the organisation what it is. They are the key to the continued success of the institution, and effective strategies need to recognize and build on them.

Conclusion :-

Value chain analysis, together with an understanding of an organisation's key capabilities, can provide a basis for decisions about whether to integrate all stages of the value chain within the same organisation or to enter into partnerships with other organisations better equipped to deliver some of those stages. Equally, value chain analysis may allow an organisation to make decisions about whether to extend its activities up or down the value chain. Certain activities on any value chain might add a high proportion of financial value to the finished product or service: these are known as high value-added activities.


The Swatch is one of the well known brand in the world which is a joint venture of Swiss watch company and American Watch Company.It is seen that Swatch has become one of the best marketing strategies model of B2B and B2C with high prolific concentration.


Central to the marketing strategy of the swatch watch is the notion of the watch as a fashion accessory.This is a novel approach in that it is typically used as a selling point for gold and diamond studded watches at the higher end of the market.Swatch on the other hand describes its target market as "fashion-oriented12-to-24 year olds."One trend that worked in swatch's favor from the start is that,during the period 1976-1986, more and more people boughtwatches. No longer was the watch primarily a gift item and no longer was it only the rich who owned more than one. In 1976,240 watches per 1,000 inhabitants were sold in America.Ten years later the fingure was 425 watches per 1,000 inhabitants.About 90% of sales were composed of inexpensive electronic watches of various styles and brands.Of course,swatch never would have been able to take advantage of this trend without a sound marketing strategy.According to Imgruth his company's strategy is divided into three elements:(1)Design,(2) Distribution,and (3)production.


An essential feature of the fashion oriented approach is a constant variety of product lines whose designs suit seasonal fashions. According to Imgruth the company has a clear product concept based on four directions: young and trendy,active and sporty,cool and clean high style,and classic. These four lines are available at all times. There are 12 small-faced models and 12 larger ones.


Distribution was originally limited to fashion outlets and now includes upscale department stores such as Bloomingdale's saks Fifth Avenue,Macy's etc. Such stores never used to handle Swiss watches and still only account for 10% of all watches sold.Imgruth scrupulously avoids distributing through drugstores and mass merchandisers such as Sears and J.C. penney,even though these are the usual paths for watches priced under $100.As one Swatch executive puts it:"you have to control distribution and not flood the market or people lose their hunger for the product."


The production process described above makes the design strategy possible.The flexibility that Swatch enjoys is unknown elsewhere in the industry.Design changes for other watch makers typically require a substantial capital investment where as Swatch can make changes without adding cost.Such flexibility is absolutely essential because of Swatch's product strategy.Without it,design runs of three months would be out of the question.



Global and multinational business and marketing depends on various factors where assignment is also a major factor.Assignment depends again 3 major factors .No assignment of responsibility from clients in B2B.
Today, we have tried to understand those factors in this article , just check out- 


Foreign purchasing agents are variously referred to as buyer for export, export commission house or export confirming house. They operate on behalf of and are remunerated by an overseas customer. They generally seek out the Asia manufacturer whose price and quality match the demands of their overseas principals.
Purchases may be completed as domestic transactions with the purchasing agent handling all export packing and shipping details or the agent may rely on the manufacturer to handle the shipping arrangements.

Export Broker :-

The export broker receives a fee of for bringing together the Asian seller and the overseas buyer. The fee is usually paid by the seller but sometimes the buyer pays it. The broker takes no title to the goods and assumes no financial responsibility.

Export Merchant :-

Export merchants are sometimes referred to as jobbers. They seek out needs in foreign markets and make purchases in the Asian countries to fill these needs. Conversely they often complement this activity by importing to fill needs in the Asian countries. Export merchants often handle staple, openly traded products for which brand names or manufacturers identifications are not important.


Target market selection and positioning are critical international success factors. Hot shot can succeed because the Indians are fascinated with American tradition, history and culture. Alcohol desire for those aged 20 to 35 is also westernized.Singleton indicates that they must also evaluate product adaptations. MANAGERIAL CONCERNS AND APPROACHES IN B2B
Test marketing will determine if Hot shot needs to be modified to Indians tastes; however preliminary research indicates that major product adaptation is not necessary. Hot shot should be promoted for taste the flavor enhanced when poured on the rocks.

Under wallet concept of manager :-

Another consideration is the Hot shot name which does not translate into Indians. The name may have to be changed to "Hota Shota," which is pronounceable for one speaking Indians but has no literal translation. The Indians culture dictates the purchase of a large bottle of alcohol at a bar to pass around to friends. This means increased distribution of the one-liter and 750-ml bottles.

Legal concept of Manager :-

The legal minimum drinking age in India is 20 years old. Outdoor advertising , specifically is required to have a notice stating that consumption by those under 20 is prohibited. During this time relationships with a reputable Indians distribution partner can be established. Having the Indians distribute the product is advantageous in circumventing cultural and trade barriers.

Normal theory of managerial concept :-

Regardless of whether the organization focuses control on inputs, production, or outputs, another choice must be made between different approaches tor control. There are three control approaches regarding the mechanisms managers will use to implement controls: market control, bureaucratic control, and clan control.Market control involves the use of price competition to evaluate output. Managers compare profits and prices to determine the efficiency of their organization. In order to use market control, there must be a reasonable level of competition in the goods or service area and it must be possible to specify requirements clearly. Market control is non appropriate in controlling functional departments, unless the price for services is set through competition and its representative of the true value of provided services.



There are three alternative positions a company can take toward worldwide pricing.  

The first can be called an extension/ ethnocentric pricing policy.This policy requires that the price of an item be the same around the world and that the importer absorb freight and import duties.This approach has the advantage of extreme simplicity because no information on competitive or market conditions is required for implementation.The disadvantage of this approach is directly tied to its simplicity.Extension pricing does not respond to the competitive and market conditions of each national market and therefore does not maximize the company's profits in each national market.
The second pricing policy can be termed polycentric.This policy permits subsidiary or affiliate managers to establish whatever price they feel is most desirable in their circumstances.Under such an approach there is no control or fixed requirement that prices be coordinated from one country to the next.The only constrain on this approach is in setting transfer prices within the corporate system.The strategies are not applied because the local managers are free to price in the way they feel is most desirable and they may not be fully informed about company experience when they make their decision.
The third approach to international pricing can be termed invention.Using this approach a company neither fixes a single price worldwide nor remains aloof from subsidiary pricing decisions but instead strikes an intermediate position.A company pursuing this approach works on the assumption that there are unique local market factors that should be recognized in arriving at a pricing decision.These factors include local costs,income levels,competition and the local marketing strategy.


Whatever the pricing rationale it is important that executives involved in international pricing policy decisions familiarize themselves with the section 482 regulations. The pricing rationale utilized by the company must conform with the intention of these regulations.

In practice this will not result in a massive adoption of the Asia. Treasury department's arm's-length pricing standard but companies should be prepared to demonstrate that their pricing methods were the result of informed choice not oversight. It is true that treasury regulations and IRS enforcement policy often seem preplexingly inscrutable.


However there is ample evidence that the government simply seeks to prevent tax avoidance and to ensure fair distribution of income from the operations of companies doing business internationally.Companies that make a conscientious effort to comply with the new regulations and that document this effort should have no difficulty with the IRS. With the explosive globalization of industry over the past two decades, IRC § 482 has become the IRS centerpiece for ensuring that taxpayers honor “arm’s-length” pricing principles when structuring contractual terms for goods, intangible property, financing and services transferred between related parties. Absent this oversight, taxpayers could be tempted arbitrarily to push profits to low tax jurisdictions or otherwise to allocate tax items between domestic and foreign jurisdictions for tax minimization purposes.

Domestic apply of section 482 :-

The § 482 pricing rules actually apply to both purely domestic (in the case of non-unitary businesses), as well as to cross-border transactions between affiliated companies. However, the IRS has been applying this provision with increasing frequency in an international context. Transactions covered include allocation of income and expenses between affiliated taxpayers, such as the sale or transfer of tangible and intangible assets, inter-company services including management services, as well as financing arrangements between affiliates.While inter-company pricing was generally only a concern of larger, international companies a decade ago, the combination of increased cross-border entity structuring, increased IRS audit activity, significant penalties for noncompliance, and FIN 48, § 482 has been elevated to critical importance for all companies with foreign operations — no matter what size or industry. According to Will James, Transfer Pricing Partner with BKD, LLP in St. Louis: “We are seeing the IRS raise transfer-pricing issues on the vast majority of field exams involving either privately held or publicly traded companies.”

§ 482 Regulations :-

The § 482 regulations require companies to accumulate and maintain contemporaneous documentation before the filing of a federal income tax return on an annual basis to attest to the accuracy of the tax return. The contemporaneous documentation requirement applies to all forms of related-party transactions, including the transfer of tangible property, intangible property (including intellectual property), services and financing arrangements.Taxpayers who choose to ignore these rules face accuracy-related penalties of up to 40 percent of their under-reported domestic tax. Audit and penalty exposure stretches beyond the U.S. borders (and can also have state income tax impact). “There are well over 40 foreign jurisdictions that have adopted similar cross-border pricing guidelines and also require taxpayers to maintain transfer pricing documentation or face the risk of penalties,” BKD’s, Will James points out. In order to avoid an adjustment and possible penalties, a taxpayer must select and apply a transfer pricing method contained in the 482 regulations (for U.S. purposes) or the Organisation for Economic, Co-operation and Development’s (OECD) Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (for foreign tax purposes) by which its transfer pricing activities are to be examined, or they must explain why a method not specified in the regulations or OECD Guidelines was selected.

World corporate control :-

The U.S. regulations further provide that taxpayers must present the required documentation to the IRS within 30 days of a request. James notes that the IRS has been routinely requesting the detailed transfer-pricing studies, along with the original engagement letter from the outside firm that conducted the study, in order to determine if such study was secured before the filing of the original return (which is required under the regulations). The IRS now also regularly interviews the preparer of the transfer pricing documentation to assess their level of competency. These studies range from approximately $7,500 for a basic “benchmarking” analysis, where the CPA or economist relies on the taxpayer to document the functional and industry analyses and to provide the necessary background on the inter-company transactions, and the third-party firm that then derives and evaluates the arm’s length range of profit margins for specified goods or services. For more detailed analyses, the fees for fully documenting specific inter-company management fees, intellectual property royalty or tangible property transfers can run over $25,000 per contractual arrangement analyzed.

Required Documentation :-

The section 482 regulations mandate maintenance of several types of documentation to avoid penalties, including:
An overview of taxpayer’s business, including an analysis of business, economic, legal and other factors that affect inter-company pricing (including a functional analysis).
A description of the taxpayer’s organizational structure (including a chart) covering all related parties engaged in transactions potentially relevant under transfer pricing rules.
All documentation required by the regulations.
An identification of the transfer pricing methodology determined to be the best method for transfer pricing purposes, together with an explanation of why that method was selected.
A description of the other methods considered during the best-method selection process and an explanation of why they were not chosen.
A description of the controlled transactions and any internal data used to analyze those transactions.
A description of the comparables, how comparability was evaluated and what (if any) adjustments were made.
An explanation of the economic analysis and projections relied on in developing the method.
This detailed information must generally be supported by an industry expert or third-party economist, although certain taxpayers may have adequate in-house expertise to validate their methodology.
The required background documentation includes anything necessary to support the principal documents, including, but not limited to, documents identified in the § 6038A Treasury regulations.
The aforementioned documentation details and procedures are even more important for publicly-traded companies as a result of FIN 48. FIN 48 is scheduled to apply to private companies in future years. Therefore, even ignoring the IRS audit exposure, taxpayers and their CPAs must fully document the reasonableness of their domestic and foreign tax positions and net liabilities. “Section 482 is a significant issue for every publicly traded company with any foreign operations, and privately held companies should start taking a more careful look at their documentation procedures for both 482 and FIN 48 purposes,” according to Jon Davies, an International Tax Partner with San Ramon, Calif-based Armanino McKenna.

Multinational effect of section 482 :-

For those multinationals that prefer to minimize past and future tax audit exposure associated with transfer-pricing arrangements, the taxpayer can enter into Advance Pricing Agreements, in which they disclose and obtain approval with at least one government body regarding their transfer pricing methodologies and obtain forward clearance and/or resolve past transfer pricing disputes. This has become the path of choice for many larger taxpayers and for taxpayers who have had significant disputes that could not be resolved at the field level. The statute of limitations for transfer pricing adjustments can run as long as six years after the later of the date the return is filed or the return’s due date if a substantial omission has occurred. For income tax purposes, the six-year statute of limitations can be applicable if the taxpayer omits from gross income an amount exceeding 25 percent of the gross income shown on the return.

Conclusion :-

§ 482 can certainly present taxpayers with added cross-border compliance headaches; however, the detailed regulatory guidelines provide taxpayers with a clearer picture of the documentation procedures they must maintain in order to minimize tax exposure.