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n Europe. 10 Marketing: Real People, Real Decisions The Global Marketing Environment ? The economic environment will influence the potential for doing business on an international basis. Indicators of economic health are: ? Standard of living: an indicator of the average quality and quantity of goods and services consumed in a country. ? Gross domestic product: the total dollar value of goods and services that a nations produces in a year. ? Economic infrastructure: the quality of a country’s distribution, financial, and munications systems. Figure 11 Marketing: Real People, Real Decisions Levels of Economic Development ? Less developed country (LDC): a country at the earliest stage of economic development. Its economic base is agricultural, standards of living and literacy rates are low. Potential sources of wealth are natural resources, if they can be developed with outside help. ? Developing country: a country in which the economy is shifting its emphasis from agriculture to industry. Approximately 77% of the world’s population live in developing countries. ? Developed country: a country that boasts sophisticated marketing systems, strong private enterprise, and bountiful market potential for many goods and services. 12 Marketing: Real People, Real Decisions The Political and Legal Environment ? Economic sanctions: trade prohibitions imposed by one country against another. Usually done for political reasons. ? Nationalization: a domestic government’s takeover of a foreign pany for its assets with some reimbursement, though often not for the full value. This is a the risk of direct investment in a developing country, particularly if the political situation is unstable. ? Expropriation: a domestic government’s seizure of a foreign pany’s assets without any pensation. ? Local content rules: a form of protectionism stipulating that a certain proportion of a product must consist of ponents supplied by industries in the host country. 13 Marketing: Real People, Real Decisions The Cultural Environment ? Cultural values: a society’s deeply held beliefs about right and wrong ways to live. Companies need to be sensitive to how other cultures perceive their products and promotional strategies. ? Collectivist culture: a culture in which people subordinate their personal goals to those of a stable munity. Ie. Japanese culture. ? Individualist culture: a culture in which people tend to attach more importance to personal goals than to those of the larger munity. ? Freedom and independence have long been cornerstones of North American culture. 14 Marketing: Real People, Real Decisions The Cultural Environment (continued) ? Norms: the specific rules dictating what is right or wrong, acceptable or unacceptable. Shaking right hands on introduction is a norm of social interaction in most cultures. ? Custom: a norm handed down from the past that controls basic behaviors, such as having supper at 5:30 P