On Freedom and International Marketing, Part 1: Dimensions of Freedom

This is one of the published series on the linkages between freedom and international marketing.

You may ask what freedom has to do with international marketing. Freedom is about options. If there is no alternative, there is no freedom. A true alternative provides the opportunity to make a decision, to exercise virtue. In the blaze of the klieg lights, it is easy to make the ‘‘right’’ decision. That’s not an exercise in virtue, because real alternatives are effectively removed. The true selection among alternatives takes place in the darkness of night when nobody is looking.

The focus and aim of international marketing is on crossing borders. The goal is to provide more than one choice for customers, letting them pick from a selection of options in order to maximize their satisfaction. International marketing does so in all comers of the globe, the glamorous ones as well as in the small and remote ones where the efforts are not seen by others. By operating both in the limelight and also well outside of it, international marketing offers the freedom to exercise virtue both to the seller and the buyer—be it in decisions of supplying or purchasing, pricing or selecting.

Another key dimension of freedom is not to confine, allowing people to go outside of the box. As a concept, freedom knows no international boundaries. But national borders usually are the box where business and government find their limits. Such borders are a mere point of transition for international marketing. The discipline thrives on understanding of how to successfully cross national borders, on coping with the differences once the crossing is done, and on profitably reconciling any conflicts.

France Calls for a ‘Rebalancing’ of the World Economy

BY TYREL SCHLOTE

Last week French Finance Minister Michel Sapin spoke out against the United States’ dollar’s standing as the world’s reserve currency. Upset with a $9 billion fine leveled by the U.S. against French bank BNP Paribas for helping nations like Sudan and Cuba avoid U.S. sanctions, Sapin called for a “rebalancing” of currencies used to make global payments. Translation: The dollar has to go.

The Financial Times reported that it’s been nearly 50 years since Valéry Giscard d’Estaing, then France’s finance minister, spoke out against the dollar’s position as the reserve currency, calling it an “exorbitant privilege.” Since then, the dollar has been attacked and besmirched time and time again. As John Connally, treasury secretary for Richard Nixon, once said about the dollar, it is “our currency, but your problem.” Indeed, the world is getting sick of the problem.

No one can doubt the U.S. dollar’s dominance in the world today. After Sapin’s comments, financial writers quickly pointed out that no currencies currently exist that can compete with the dollar. Thus they have no choice but to continue to use the dollar to finance international transactions. “They may not like it,” the Financial Times reported, “but it is not clear what France and other critics can do to alter the status quo.”

As U.S. foreign policy continues to alienate its allies, nations beginning to establish regional alliances to protect themselves. This applies not only militarily, but also financially. One of the most recent regional economic alliances is between Brazil, Russia, India, China and South Africa (BRICS). Investment group Goldman Sachs speculated back in 2003 that by 2050, these five nations would be wealthier than most of the current major economic powers.

Read the whole article at Trumpet.com

How Emerging Markets Will Turn The World Economy on Its Head (Infographic)

Despite weak economic growth in the United States and Western Europe over the past several years, the world economy is on course for strong growth over the next 40 years. In fact, projections indicate that global GDP could rise from $72 trillion in 2010 to $380 trillion by 2050. This infographic examines which regions are expected to drive that growth, and why emerging economies will have the biggest role to play.

Read more http://prafulla.net/interesting-contents/world-interesting-contents/how-emerging-markets-will-turn-the-world-economy-on-its-head-infographic/

Yes Virginia, the Ham Is Chinese (Part 4)

The emerging middle class in China represents enormous opportunity not only for Smithfield but also for many American companies.  For companies like General Motors, Procter & Gamble, Yum Brands, and Caterpillar, China is where the growth is. Coca Cola has described China as “the commercial opportunity of the 21st century”.  In 2013, KFC, McDonald’s, and Starbucks will reportedly each open one new restaurant every day in China. But, such market expansion must be a two-way street.  For more American firms to be able to have access to the Chinese marketplace, Chinese firms must be allowed and encouraged to compete in the United States.

Previous investment attempts by Chinese companies have not always gone smoothly. A big obstacle has been that many deals have touched on  national security sensitivity.  The Committee on Foreign Investment in the United States (CFIUS), is a U.S. inter-agency government panel that reviews foreign deals for national security issues.  In 2005, Cnooc tried to buy Unocal but ran into insurmountable U.S. political opposition and retreated from the deal.  In 2011, China’s Huawei had attempted to acquire the U.S. technology company 3Leaf Systems but withdrew after CFIUS stipulated restrictions. In 2012, a CFIUS review of an acquisition of Oregon wind farms by Ralls Corp, owned in turn by executives of the Chinese Sany Group, collapsed, since some wind farm properties were located near a sensitive U.S. naval facility. Even the Cnooc acquisition of Canada’s Nexen had to accommodate concerns raised by CFIUS over U.S. operations.

While Chinese deals for energy, technology, and infrastructure businesses are likely to draw serious scrutiny by CFIUS, consumer goods businesses are a different matter.  These deals will be far less sensitive.

For our and their investment benefit, Chinese companies should focus on companies that are heavily dependent on consumer choice and preference like Smithfield.  Will American customers continue to prefer these brands after a foreign acquisition?  If the brands continue to pursue the marketing discipline of providing great value and pleasure, the answer is likely to be a resounding “yes”.

This article is the final part of a series written by Michael Czinkota and Charles Skuba. Read part 3 here.  Guest writer Charles Skuba teaches international business and marketing at Georgetown University. He served in the George W. Bush Administration in trade policy positions in the U.S. Department of Commerce.