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Econmic Environemnt

The objectives of this chapter are:

· To describe and demonstrate the importance of the "economic" environment factor in planning and carrying out global marketing
· To show the importance of the "economic" factor in global marketing

· To describe and give an understanding of the major world regional economic blocs with particular emphasis on developing countries

Structure Of The Chapter
The chapter starts off with a review of the global economy, the composition of world trade and the World Trade Institutions. Regionalism is a major phenomenon of the late 80s and early 90s and so the chapter describes in detail a number of major regional economic blocs. Very important in any discussion on economic factors is the size of market, and more specifically, the market ability to purchase, which depends on levels of income. The chapter finishes by looking at the nature of economic activity including the stages of market development, urbanisation and infrastructure as important precursors to the degree of economic activity.

Note that a comprehensive case study covering the "environmental" aspects of global marketing occurs at the end of chapter four.

Overview
In the past fifty years the global economy has changed rapidly. Particularly marked has been the development of world economic integration and standardised products. Coca Cola, Nissan and Marlboro cigarettes are examples of products which serve nearly every market. Generally there have been four major changes:

· capital movements rather than trade have become the driving force of the global economy
· production has become "uncoupled" from employment

· primary products have become "uncoupled" from the industrial economy and,

· the world economy is in control - individual nations are not, despite the large world economic share of the USA and Japan.

Taking each of these changes in turn, world trade is about some US$ 3 trillion, however, capital movements are much higher. The London...