978-1259712357 Chapter 10

subject Type Homework Help
subject Pages 8
subject Words 3948
subject Authors Bruce Money, John Graham, Mary Gilly, Philip Cateora

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Chapter 10 Europe, Africa, and the Middle East
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Chapter 10 Europe, Africa, and the Middle East
Teaching Objectives
The two most important trends in international marketing today are the emerging markets discussed in
Chapter 9 and the creation and growing importance of the multinational regional market alliances. The
EU has continued to evolve despite serious wrangling among its members but more far reaching for the
next decades are the creation of NAFTA and its probable expansion, the serious discussion occurring
among Pacific Rim countries to create APEC, Asia-Pacific Economic Cooperation (discussed in Chapter
11). The overall objectives of this chapter are to explore the various patterns of multinational cooperation
and the strategic marketing implications of economic cooperation for marketing. The teaching objectives
are to:
1) To go over the reasons why economic integration makes sense.
2) Explore the patterns of multinational economic cooperation in different regions of the world the
Americas, Europe, Africa, and Middle East.
3) Review the history and current status of European cooperation from the early days of the
European Common Market to the EU and its expansion beyond Western Europe to include
Eastern Europe.
Comments and Suggestions
1. As a basis for a general discussion of economic cooperation we use the factors discussed in the
section “La Raison d’Etre” in the text. You might ask students to analyze either the EU or the CIS
using these criteria toward building a class discussion. The important point in this exercise is that not
all the factors are positive but any major weakness in any one factor must be offset by overwhelming
strength in the others. Many of the disagreements among members of the EU can be attributed to
differences in one factor or another between members.
2. We suggest ending the chapter on multinational market regions and market groups with a discussion
of future multinational market groups. This will provide an opportunity to challenge the students to
ponder several questions about free trade in a world that is divided into regional trade groups: What
will become of those countries not part of a regional trade group? What will Japan’s role be in Asia?
What are the implications if the U.S. enters into an agreement with the EU and also enters an
agreement with APEC? The questions are endless but relevant to trade over the coming decades. This
is a good way to end this part of the course before moving to the last section on developing marketing
strategies.
3. At this writing it is still unclear if the UK will leave the EU. Assuming it has a discussion of the
consequences of Brexit is most appropriate.
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Chapter 10 Europe, Africa, and the Middle East
Lecture Outline
Multinational Market Regions and Market Groups
I. Global PerspectiveMight Free Trade Bring Peace to the Middle East?
II. La Raison d’être
A. Economic Factors
B. Political Factors
C. Geographic Proximity
D. Cultural Factors
III. Patterns of Multinational Cooperation
A. Regional Cooperation Groups
B. Free-Trade Area
C. Custom Union
D. Common Market
E. Political Union
IV. Global Markets and Multinational Market Groups
V. Europe
A. European Integration
B. European Union
C. Eastern Europe and the Baltic States
D. The Commonwealth of Independent States
VI. Africa
VII. Middle East
VIII. Implications of Market Integration
1. Strategic Implications
2. Market Metrics
3. Marketing Mix Implications
Discussion Questions
1.
Define:
Multinational market regions
Free-trade area
European Parliament
Customs union
Single European Act
Common market
Political union
Maastricht treaty
Treaty of Amsterdam
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2. Elaborate on the problems and benefits for international marketers from multinational market groups.
A multinational market group has both problems and benefits for an international marketer, although
the benefits far exceed the disadvantages. A multinational market group (comprised of a number of
individual countries) has two important goals. The first of these is to limit and eventually eliminate
tariffs between member countries. The second is to agree to common external tariffs on all imports
3. Explain the political role of multinational market groups.
The political role of a multinational market group is of importance if such a market is to be
economically successful. This is a touchy subject because any nation has created throughout history a
sensitive image called national sovereignty, i.e., feelings, rights, and often imaginary national power.
4. Identify the factors on which one may judge the potential success or failure of a multinational market
group.
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Chapter 10 Europe, Africa, and the Middle East
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5. Explain the marketing implications of the factors contributing to the successful development of a
multinational marketing group.
There are at least four basic types of factors that must be favorable, and which must fit smoothly
together for any form of multinational market group to be successful: (1) economic, (2) political, (3)
social, and (4) geographic. Of these factors, the economic factor is primary. The foremost goal of any
6. Imagine that the United States was composed of many separate countries with individual trade
barriers. What marketing effects might one visualize?
7. Discuss the possible types of arrangements for regional economic integration.
There is usually considered to be four types of regional economic integration arrangements:
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Chapter 10 Europe, Africa, and the Middle East
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I. Free Trade Associations are the weakest forms of regional economic integration. Their key
function is to facilitate easier trading within their area. Each individual member-country keeps its
own external barriers against nonmembers, and there is no provision for free flow of labor and
before they joined the European Common Market.
III. A Common Market adds further elements to facilitate international trade that in effect makes it
become a common marketplace, not only for goods, but also for services (labor), and for capital.
It is to a far extent a unified economy lacking only political unity to become one state. The
objectives of a common market are: (1) the elimination of tariffs within the market, (2) a common
8. Differentiate between a free trade area and a common market. Explain the marketing implication of
the differences.
A free trade area and a common market have at least one common objective: to eliminate tariffs
within their respective boundaries. In addition, a common market has the far more fetching goals of a
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Chapter 10 Europe, Africa, and the Middle East
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© 2020 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not
authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated,
forwarded, distributed, or posted on a website, in whole or part.
All these additional trade facilitating arrangements in a common market make it easier and more
lucrative for the international marketer to operate effectively and with more profits and opportunity in
a larger, closer-tied unity.
9. It seems indeed obvious that the founders of the European Union intended it to be a true common
market; so much so that economic integration must obviously be supplemented by political
integration in order to accomplish these objectives completely. Discuss.
10. The European Commission, the Council of Ministers, and the Court of Justice of the EC have gained
power in the last decade. Comment.
As the European Union has become more economically interdependent, the Community’s institutions,
the Commission, the Council of Ministers, and the Court of Justice, have gained in their influence
11. Select any three countries which might have some logical basis for establishing a multinational
market organization and illustrate their compatibility as a region trade group. Identify the various
problems which would be encountered in forming multinational market groups of such countries.
Individual research (sample below).
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Chapter 10 Europe, Africa, and the Middle East
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© 2020 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not
authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated,
forwarded, distributed, or posted on a website, in whole or part.
d. Mexico would become a recreation resort for North Americans and would perhaps specialize in
that area, making a decent income as the result of the free flow of capital from the North in such
investments.
e. Not relevant to an arbitrary example as this; in reality Canada as a member of the British
Commonwealth, could not engage in any such collaboration as this one with the United States
and Mexico without losing her privileges in the United Kingdom.
12. U. S. exports to the European Union are expected to decline in future years. What marketing actions
may a company take to counteract such changes?
13. “Because they are dynamic and because they have great growth possibilities, the multinational
markets are likely to be especially rough-and-tumble for the external business.” Discuss.
14. Differentiate between a full customs union and a political union.
A full customs union would reduce or eliminate internal duties and establish a common external
15. Why have African nations had such difficulty in forming effective economic unions?
2. Government turnover.
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