les r. dlabay james calvert scott

Les R. Dlabay

James Calvert Scott

00 Biz in Global EconFM B 12/14/04 3:03 PM Page I

International Business 3e

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HOW TO USE THIS BOOKENGAGE STUDENT INTEREST

UNIT 5

Global Marketing and ConsumerBehavior

Developing Goods and Servicesfor Global Markets

Global Pricing and DistributionStrategies

Global Promotional Strategies

MARKETING IN AGLOBAL ECONOMY

CHAPTER

16171819

IF YOU WERE THEREAs your four-wheel-drive truck

struggles up the bank of yetanother river crossing, the moun-tain village of Bocay is just aroundthe next bend in the narrow road.From here, you will begin the 70-mile canoe trip down the Río deBocay to the Sumu village.

You see the village stretchingalong the bank of a muddy river.Its 1,800 people live in two-roomboxlike houses along the road.The walls are wood, the roofs aretin, and the floors are dirt. Thereis no plumbing, but there is talk ofhaving electricity in a few months.A family shares some of its riceand beans with you and offersyou a place to sleep on the floor.Your anthropology classes did notprepare you emotionally for thisculture that is so different fromyour own.

The 1,800 Sumus who live infive villages along the Río deBocay are having a difficult timesurviving. Their bamboo huts con-tain just a few pots and maybesome rice and beans. They wearsecondhand clothes from NorthAmerica. However, the Sumus arein the process of setting up acooperative business in each vil-lage. The Sumu will make craftsfrom the wood found in the forest,and the villagers will cooperativelysell these products in marketssuch as Bocay.

Comodoro Rivadavia

Neuquen

Barreiras

Cachimbo

Cuiaba

Porto Velho

Valdivia

Antofagasta

Concepcion

Talara

Trujillo

Rosario

Belem

Belo Horizonte

Campinas

Curitiba

Fortaleza

Goiania

Manaus

Porto Alegre

Recife

Rio De Janeiro

Salvador

Sao Paulo

Sao Goncalo

Buenos Aires

Asuncion

Lima

La Paz

Sucre

Brasilia

Santiago

Bogota

Havana

Quito

Port Stanley

o City

Montevideo

CaracasGeorgetown

Paramaribo

CUBA

PANAMA

EL SALVADORGUATEMALA

BELIZEHONDURAS

NICARAGUA

COSTA RICA

JAMAICA

HAITI

DOM. REP.

ARGENTINA

BOLIVIA

COLOMBIA

VENEZUELA

PERU

BRAZIL

FRENCH GUIANA

SURINAME

GUYANA

CHILE

ECUADOR

PARAGUAY

URUGUAY

FALKLAND ISLANDS

SOUTH GEORGIA ISLAND

ATLANTICOCEAN

REGIONAL PROFILEREGIONAL PROFILECENTRAL AND SOUTH AMERICA

COUNTRY PROFILE/CENTRAL AND SOUTH AMERICA

Monetary

Unemploy- Life Literacy Country Population GDP Exports Imports

Unit

Inflation ment Expectancy Rategrowth $ per

thousands rate % $billions capita $billions percent percent years percent

Antigua and 72 0.69 0.67 10,000 0.4 0.46 East Caribbean Dollar 0.4 11 71.31 89BarbudaArgentina 38,428 1.17 392 10,200 26.7 20.3 Peso 41 21.5 75.48 97.1Bahamas, The 295 1.13 5 16,800 0.61 1.77 Bahamian Dollar 1.8 6.9 65.71 95.6Barbados 270 0.35 4 14,500 0.29 1.03 Barbadian Dollar -0.6 10 71.84 97.4Belize 256 2.06 0.83 3,250 0.21 0.4 Belizean Dollar 1.9 9.1 67.36 94.1Bolivia 8,808 1.89 21.4 2,600 1.29 1.49 Boliviano 2 7.6 64.78 87.2Brazil 178,470 1.24 1,340 7,400 58.2 57.7 Real 8.3 6.4 71.13 86.4Chile 15,805 1.23 153 10,000 18.5 16.4 Chilean Peso 2.5 9.2 76.35 96.2Colombia 44,222 1.59 255 6,300 12.8 12.3 Colombian Peso 6.2 17.4 71.14 92.5Costa Rica 4,173 1.93 31.9 8,500 4.91 6.12 Costa Rican Colon 9.1 6.3 76.43 96Cuba 11,300 0.27 25.9 2,300 1.8 4.8 Cuban Peso 7.1 4.1 76.8 97Dominica 70 0.29 0.26 3,700 0.5 0.13 East Caribbean Dollar 1 23 74.12 94Dominican 8,745 1.49 50 5,800 5.33 8.78 Dominican Peso 5.3 14.5 67.96 84.7RepublicEcuador 13,003 1.49 39.6 3,000 4.86 5.33 U.S. Dollar 12.5 7.7 71.89 92.5El Salvador 6,515 1.55 28.4 4,600 2.9 4.81 U.S. Dollar 3.8 10 70.62 80.2Grenada 89 -0.26 0.42 4,750 0.85 0.22 East Caribbean Dollar 2.8 12.5 64.52 98Guatemala 12,347 2.55 48.3 3,700 2.87 5.14 Quetzal 8.1 7.5 65.23 70.6Guyana 765 0.24 2.5 3,600 0.5 0.54 Guyanese Dollar 4.7 9.1 63.09 98.8Haiti 8,326 1.32 12 1,700 0.3 0.64 Gourde 11.9 NA 51.61 52.9Honduras 6,941 2.34 17 2,600 1.93 2.81 Lempira 7.7 28 66.65 76.2Jamaica 2,651 0.92 9.8 3,700 1.6 3.1 Jamaican Dollar 7 15.4 75.85 87.9Nicaragua 5,466 2.43 12.3 2,500 0.6 1.63 Gold Cordoba 3.7 24 69.68 67.5Panama 3,120 1.84 16.9 5,900 5.88 6.71 Balboa 1.1 16 72.32 92.6Paraguay 5,878 2.37 26.2 4,600 2.41 2.95 Guarani 10.5 18.2 74.4 94Peru 27,167 1.5 132 4,800 7.11 7.2 Nuevo 0.2 9.4 70.88 90.9

SolSaint Kitts and 39 -0.3 0.34 8,700 0.06 0.17 East Caribbean Dollar 1.7 4.5 71.57 97NevisSaint Lucia 149 0.78 0.7 4,400 0.06 0.31 East Caribbean Dollar 3 16.5 73.08 67Saint Vincent 116 0.58 0.34 2,900 0.05 0.14 East Caribbean Dollar -0.4 22 73.08 96and the Grenadines São Tomé and 155 0.8 1.5 3,500 0.01 0.02 Dobra 9 N/A 66.28 79.3Príncipe Suriname 436 0.71 1.48 3,500 0.44 0.3 Surinamese Guilder 17 17 69.23 93Trinidad and 1,303 0.34 10.6 9,000 2.26 3 Trinidad and 4.3 10.8 69.59 98.6Tobago Tobago DollarUruguay 3 415 0 72 31 9 200 2 15 2 92 Peso Uruguayo 14 1 19 4 75 87 98

REGIONAL PROFILE/CENTRAL AND SOUTH AMERICA

REGIONAL PROFILEDiscusses the general historical, cultural, social, andeconomic conditions in the various regions around theworld.

IF YOU WERE THERE Describesthe life of an ordinary person livingin the highlighted region.

COUNTRY PROFILEPresents key economicand social data abouteach country in theregion.

00 Biz in Global EconFM B 12/14/04 3:03 PM Page iv

17-1

17-2

17-3

Global Product Planning

Developing and Researching Products

An International Product Strategy

Chapter 17DEVELOPING GOODSAND SERVICES FORGLOBAL MARKETS

©Paul Hilton/ EPA/ Landov

445

Global Strategy for Barbie

The Barbie doll was introduced in the United States in 1959, and 351,000were sold at $3 each. Since then, over 1 billion Barbies have been sold.While Mattel is assured of new young U.S. consumers each year, the com-pany also looks to markets in other countries for Barbie sales.

The first Barbie dolls were manufactured in Japan in the late 1950s. Inthe late 1970s, Mattel started distributing the dolls in Japan by creating alimited joint venture with the Bandai Company. The first Barbies sold inJapan had dark eyes. Later, the company began marketing its blue-eyedBarbie throughout Asia.

When Barbie was introduced in the Czech Republic, she wore traditionalCzech clothing of a black vest and red tights under a yellow and blackskirt. When first available, more than 1,000 dolls were sold a day. People inPrague stood in line for hours to pay from $5 to $20 for dolls and acces-sories. The average monthly salary of a skilled worker was about $130.

Today Barbie dolls and related items are sold in over 150 countries. Inrecent years, about 35 percent of Mattel’s sales were outside of the UnitedStates. In addition to the company’s global success, Mattel is using tech-nology to expand its product line and marketing efforts. Mattel allows girlsto go online to design a friend for Barbie. In addition to choosing skin tone,eye color, hair color, clothes, accessories, and name, customers receive acomputer-generated paragraph about the doll’s “personality.”

Think Critically1. What factors may have influenced Mattel’s decision to sell Barbie dolls

in other countries?2. What factors may have influenced Mattel’s decision to introduce a dif-

ferent style of Barbie doll in Japan initially? 3. Go to the Mattel web site to obtain additional information about the

company’s international operations. Prepare a one-page summary ofyour findings.

� Describe sources ofproduct opportunitiesfor international mar-keting.

� Identify categories ofconsumer productsand the importance ofproduct lines.

� Explain how servicesare marketed.

GLOBAL PRODUCT PLANNING17-1

GOALS

INTERNATIONAL PRODUCT OPPORTUNITIES

Every day you see advertisements for clothing, food, motor vehicles, finan-cial services, Internet sites, and other consumer goods and services. It

sometimes seems as though everyone has something to sell. When you applyfor a job, you also are selling your talents and abilities. The product offeringsof global companies are the foundation of international business and foreigntrade.

A product is a marketplace offering (good or service) that satisfies a needor want. Marketing’s major goal is to satisfy needs that have not been met.This can be accomplished in one of four ways: a new product, an improvedproduct, an existing product with a new use, or an existing product sold in anew market.

New Product An organization’s marketing activities may start with amarketplace offering that did not previously exist. For example, FederalExpress pioneered overnight delivery services. Now, several companies areinvolved in this industry.

Improved Product Sometimes a product is on the market for severalyears, but it may no longer be as popular with consumers. When this hap-pens, a company may introduce variations, such as new flavors of a foodproduct. Also, technology may result in improved versions of an item.

446

Chapter 17 DEVELOPING GOODS AND SERVICES FOR GLOBAL MARKETS

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Existing Product with a New Use When a company wants toexpand its sales, it may attempt to find new uses for a product that has beenon the market for years. Various VV kitchen storage containers have been adapt-ed to store tools and supplies for a home workshop or office.

Existing Product Sold in a New Market In the late 1970s andearly 1980s, when fewer babies were born in the U.S., Johnson BabyShampoo was advertised as being mild for adults who wanted to shampooevery day. yy Selling existing products in new markets is a significant part ofinternational business. Soft drinks, fast foods, and hundreds of other prod-ucts that originated in one country are now sold in the global marketplace.

MARKETING PRODUCTS AROUND THE WORLD

Each day people around the world buy and use thousands of differentproducts. A student in Brazil buys a home computer, rr while a person in

Egypt purchases a bottled soft drink.

❙❙ CONSUMER PRODUCT CATEGORIES AAThe many items sold in the global market can be classified as conveniencegoods, shopping goods, or specialty goods, as shown in Figure 17-1.

Convenience Goods You YY probably buy low-cost items on a regular basiswithout thinking much about them. Convenience vv goods are inexpensive itemsthat require little shopping effort. Examples EE include snacks, soft drinks, personalcare products, and school supplies. Marketing for convenience goods involvesoffering an item in many locations. For example, candy bars are sold in foodstores, movie theaters, gas stations, and vending machines.

Shopping Goods Some products (such as clothing, furniture, cameras,televisions, and home appliances) are purchased only after consumers take

447

TYPES OF CONSUMER PRODUCTS

Shopping Goods Specialty GoodsConvenience Goods

Figure 17-1 The items boughtby people around the world canbe classified as conveniencegoods, shopping goods, or spe-cialty goods.

What are four ways a company can satisfy the consumer’s needs that havenot been met?

WORK AS

A GROUP

17-1 GLOBAL PRODUCT PLANNING

GLOBALFOCUSIntroducesreal-worldexamples ofcompaniesengaged ininternationalbusiness activities.

WORK AS A GROUPStimulates group discussion

and cooperative learning.

CHECKPOINT Short questionswithin lesson to assist with read-ing and to assure students aregrasping concepts.

GOALSBegin eachlesson andoffer anoverview.

00 Biz in Global EconFM B 12/14/04 3:04 PM Page v

SPECIAL FEATURES ENHANCE LEARNING

While Japan trailed other countries in the use of theInternet, consumers in that country were making

use of e-commerce through convenience stores. Onlineshoppers are able to buy a late-night snack of seaweed-covered rice balls with mayonnaise or chocolate chipmochi (rice cakes) from their local combini—the Japanesename for convenience store.

7-Eleven Japan had an agreement with a softwarecompany and other companies to sell programs, videos,books, and other products over the Internet. Japanese

consumers can choose from one of the more than 10,0007-Eleven stores in Japan and have the merchandise deliv-ered to their home.

Think Critically1. Why might customers buy online?2. What are the benefits of selling online for conven-

ience stores?3. Find web sites that allow consumers to buy food

online.

Japanese Convenience Stores Go Online

THE EVAPORATING E-MAILMESSAGE

Jason Pierson was frustrated. He hadwaited impatiently for 72 hours—threefull working days—for a reply to hisurgent request for information fromthe Nairobi, Kenya, office. At midnightlocal time, he telephoned his Kenyancounterpart.

“Why haven’t you responded to mye-mail message? I sent it three daysago. I need the information now.”

“What e-mail message are youtalking about, sir? I haven’t receivedany e-mails for four days. The last

one I got from you was about twoweeks ago.”

“But I sent it three days ago. It’surgent.”

“Mr. Pierson, you’ve got to realizethat Kenya is a developing country.Yes, we have e-mail, but it doesn’talways work. The connections to theInternet aren’t very good, I’m afraid.Sometimes our power goes out. Wehave no backup power system. Whenthat happens, we lose everything.”

Think Critically1. Why did Jason Pierson place his

call to Nairobi at midnight histime?

2. Why did Jason Pierson expect aprompt response to his e-mailmessage?

3. What did Jason Pierson fail tounderstand about the use of e-mail in developing countries?

SELLING LUXURY ITEMS INLESS DEVELOPED ECONOMIESWhen a company enters a newmarket in a developing economy,consumers are attracted to the newproducts. However, many people inthese new markets may not be ableto afford the items sold by themultinational company.

A fast-food company or cosmeticdistributor may start selling its prod-ucts in a country with a very lowincome per household. The avail-ability of these new products cancreate very high demand. People

have been known to wait in line forhours to buy a fast-food meal oranother item that costs severaldays’ pay. They are willing to makethis sacrifice to obtain an item notpreviously available.

Think Critically1. What are potential benefits and

drawbacks of selling products incountries with very low levels ofincome?

2. Use the three guidelines for eth-ical analysis to examine theabove situation.

E-COMMERCE IN ACTION Analyzesthe technological needs and concernsof businesses in a global context.

COMMUNICATION ACROSS BORDERS Explains the importance of

communication as tool for conductinginternational business.

REGIONAL PERSPECTIVE Provides in-depth analysis of cultural, social, or

historical conditions in the various regions around the world.

A QUESTION OFETHICS Challengesstudents to analyzethe ethical implicationsof certain global business scenarios.

HISTORY:UNIONS IN THEUNITED KINGDOMIn the United Kingdom in 1979, theConservative Party formed a newgovernment under the leadership ofPrime Minister Margaret Thatcher.Mrs. Thatcher believed in a freemarket economy with as little gov-ernment intervention or involvementas possible. She also thought thatlabor unions were preventing theUnited Kingdom from achievingeconomic success.

When Prime Minister MargaretThatcher took office, more than half

of the workforce were union mem-bers who were closely affiliated withthe major opposition political party,the Labour Party. In the dozenyears that she governed, a series oflaws designed to reduce the sub-stantial power and influence ofunions in British society werepassed.

Many elements of the new lawsin Britain were borrowed from theUnited States, where labor laws aremuch less open to abuse. Varioustypes of strikes were outlawed, therole of union leaders was reduced,and workers were given the oppor-tunity to stop having a union repre-sent them or to change unions.As a result, union membership inthe United Kingdom has fallen

dramatically, and strikes, whichwere relatively commonplace, occurmuch less frequently now than inthe past.

Think Critically1. Why did Margaret Thatcher

oppose the unions in the UnitedKingdom?

2. Why was Margaret Thatcherable to radically change thelabor laws in the UnitedKingdom?

3. How do you think the changesin the labor laws benefited theBritish economy?

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GLOBAL BUSINESS EXAMPLE Provides casestudies related to international business conceptsas they are presented in the lessons.

SPECIAL FEATURES ENHANCE LEARNING

E-COMMERCE IN ACTION Analyzesthe technological needs and concernsof businesses in a global context.

00 Biz in Global EconFM B 12/14/04 3:04 PM Page vi

NET BOOKMARK Provides online activities for students on the Xtra! Web Site.

WINNING EDGE Helps students prepare for DECA, BPA, and

FBLA competitive events.

TEAM PROJECT Provides an opportunity for studentsto work as a team to better understand cross-culturalbusiness activities.

GLOBALCROSS-CULTURAL TEAM PROJECT

GLOBALCROSS-CULTURAL TEAM PROJECT

UNIT 5

522

Plan International Marketing ActivitiesDecisions regarding products, pricing, promotion, and distribution may be some ofthe most difficult international business activities. Marketing is commonly influ-enced by the cultural values and social trends in a country. The use of cross-cultur-al teams can help an organization better adapt its marketing plans to the con-sumers in diverse societies.

GOALTo analyze influences on marketing activities in a region of the world.

ACTIVITIESWorking in teams of 3 to 6 students, select a geographic region you will rep-resent—Africa, Asia, Europe, Latin America, the Middle East, or NorthAmerica.1. To obtain marketing information from countries in your region, try to talk to peo-

ple who have lived in or visited the area.View products, packages, labels, andadvertising from the region. Some of these items may be available in localstores or online. Finally, library sources can be of value.

2. Identify products unique to your geographic region. What factors influence thedemand for these goods and services?

3. List examples of customs, traditions, and cultural behavior that affect consumerbuying in this region.

4. Research pricing activities in the region. What influences the amount people arewilling and able to pay for various items? To what extent are prices negotiatedfor various purchases?

5. Describe the common promotional activities in your region. How do these com-pare with advertising and sales promotions in other areas of the world?

6. Global Business Decision Your team has been selected to advise an interna-tional organization that plans to distribute low-cost clothing in various regions ofthe world. What types of transportation modes would be most effective in yourregion? How would the distribution costs in your region compare with those inother geographic areas? What other factors would need to be considered?

TEAM SKILL Resolving Cross-Cultural Team ConflictDifferences of opinion are inevitable in almost every team situation. What are somecommon areas of team conflict that might arise in your region? How are conflictscommonly resolved in that geographic area?

PRESENTCreate a display, using product samples, labels, packages, ads, foreign currency,and other items, to communicate marketing activities in your region.

Marketing Management Role Play

You are the business administrator of a large U.S. hospital. Technology hasimproved maintaining files for the thousands of patients who have used yourhospital. Your position requires you to make decisions that improve the profitabili-ty of the hospital. Record keeping has become increasingly expensive in theUnited States, making it attractive to look at less expensive international marketsfor outsourcing the job. Outsourcing involves hiring an independent contractor toperform a business function for a company. India has quickly risen as a leader in

Extemporaneous Speaking

Success in the business world depends on strong communication skills and theability to make decisions within a limited time frame. Extemporaneous speakingprovides you with the opportunity to analyze a situation or topic for a shortamount of time and then present a speech to actual business leaders who deter-mine the effectiveness of the communication.

Emerging Business Issues

Emerging Business Issues is a team event that involves 2-3 members.Interdependence in a global economy has both positive and negative implica-tions. International trade has increased sales for agricultural products, technolo-gy, and automobiles. International trade involves a system of give/take betweentrade partners.

Political unrest, economic conditions, cultural differences, and trade barriersinfluence international trade. NAFTA (North American Free Trade Agreement)was passed with the intention of strengthening international trade among NorthAmerican countries. This policy has received praise from proponents and criti-cism from opponents.

During election years much attention is given to international trade. Issuesrange from outsourcing of jobs to financial benefits of expanded markets. NAFTAis an agreement that has positive and negative arguments. You are assigned toresearch the NAFTA agreement to determine the pros or cons for the agree-ment. Your presentation should be so thorough that the audience will make achoice to defend/oppose the NAFTA agreement. The best presentation shouldinclude facts to support your position. Your presentation must include facts thatsupport the position you draw.

Your assignment requires you to conduct research about NAFTA. Be pre-pared to list the pros and cons of this policy. Use 4” by 6” note cards to recordyour findings about NAFTA.

Your team will draw either “pros” or “cons” fifteen minutes before your presen-tation. The team has fifteen minutes to put together the final 5-minute presenta-tion After the 5-minute presentation team members must be prepared for five

intlbizxtra.swlearning.com

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466

Chapter 17 ASSESSMENTCHAPTER SUMMARCHAPTER SUMMARYY

17-1 GLOBAL PRODUCT PLANNING The sources of product opportunities for international marketing are newproducts, improved products, new uses for existing products, and existingproducts in new markets.

The categories of consumer products are convenience goods, shoppinggoods, and specialty goods. A product line provides an assortment of itemsavailable for sale to varied target markets.

Services are marketed with an emphasis on personalization, as they areusually produced as they are consumed.

17-2 DEVELOPING AND RESEARCHING PRODUCTSThe steps in the new product development process are (1) generating prod-uct ideas, (2) evaluating product ideas, (3) researching product ideas, and(4) marketing product ideas. The steps in the marketing research processare (1) identify problem, (2) collect data, (3) analyze data, and (4) reportresults.

Data collection methods used in international marketing research includesecondary data and primary data (surveys, observations, and experiments).

17-3 AN INTERNATIONAL PRODUCT STRATEGYBrands used by companies are names, symbols, or designs that identify aproduct or service. Packaging is used to protect the product, to capture theattention of customers, and to make the product easy to use.

A global product strategy involves decisions about whether to offer a stan-dardized version or an adapted version of a good or service.

B

A

B

A

C

B

A

Read the Global Focus at the beginning of this chapter, and answer the fol-lowing questions.

1. In what ways does Mattel use both a global product approach and aninternational product approach?

2. How might Mattel use technology and joint ventures for continued suc-cess of its international operations?


467

REVIEW GLOBAL BUSINESS TERMSREVIEW GLOBAL BUSINESS TERMSMatch the terms listed with the definitions.

1. Data collected by watching and recordingshopping behaviors.

2. Large-scale surveys used to collect numer-ic data that are often used to study con-sumers.

3. Products purchased after consumers com-pare brands and stores.

4. A standardized item that is offered in thesame form in all countries in which it issold.

5. An assortment of closely related productsdesigned to meet the varied needs of tar-get customers.

6. A directed discussion with 8 to 12 people.

7. The stages a good or service goes throughfrom the time it is introduced until it istaken off the market.

8. Inexpensive items that require little shop-ping effort.

9. A customized product adapted to the cul-ture, tastes, and social trends of a country.

10. The type of data collection that involves astatistical comparison of two or more very similar situations.

11. Open-ended interview questions that allow researchers to obtain commentsfrom consumers about their attitudes and behaviors.

12. The name, symbol, or design that identifies a product.

13. Unique products that consumers make a special effort to obtain.

14. An experimental research study that measures the likely success of a newproduct or service.

15. The orderly collection and analysis of data that is used to obtain specificmarketing information.

MAKE GLOBAL BUSINESS DECISIONSMAKE GLOBAL BUSINESS DECISIONS16. Why do stores and online retailers have larger product lines than in the

past?

17. Name some services that have increased in importance for our economy inrecent years.

a. brand

b. convenience goods

c. experiment

d. focus group

e. global product

f. international product

g. marketing research

h. observationalresearch

i. product life cycle(PLC)

j. product line

k. qualitative research

l. quantitative research

m. shopping goods

n. speciality goods

o. test market

468

Chapter 17 ASSESSMENT18. List some ideas that could be the basis for new products in our society.

19. Create some examples of topics for international marketing research stud-ies that would be interesting to investigate.

20. When may qualitative research be preferred to quantitative research for amarketing research study?

21. What makes certain brands popular and easy to remember?

22. Does packaging cost too much for certain products? Find examples ofproducts with packaging that could be made less expensive.

23. Why do some items go through the stages of the product life cycle fasterthan others?

24. Create a list of products that may be sold anywhere in the world withoutmajor changes being made. What determines whether an item is a globalproduct or an international product?

GLOBAL CONNECTIONSGLOBAL CONNECTIONS25. GEOGRAPHY Describe geographic factors that might influence whether

a company could sell its product as it is in other countries or if they wouldhave to adapt it.

26. COMMUNICATIONS Conduct a survey of the products people buy with-out extensive comparison shopping. How important is place of purchase,price, and brand for these items?

27. HISTORY Talk to older people about products that are no longer on themarket. What factors might have influenced the decline of these items?

28. CULTURAL STUDIES Collect advertisements, labels, and packagesfrom products made in other countries. How would you describe the market-ing approach for these items?

29. RESEARCH Find examples of secondary data in the library and on theInternet that could help a company with its international marketing activities.Describe how the information could be of value for preparing a global mar-keting plan.

30. VISUAL ART Prepare a poster or bulletin board display with examples ofproducts or services in the various stages of the product life cycle. Suggestmarketing activities that would be appropriate for one item in each stage ofthe cycle.

31. CAREER PLANNING Select a good or service. Describe the jobs thatwould be required to make the product available to consumers in anothercountry.

32. TECHNOLOGY Use the Internet to locate online resources for data col-lection and analysis. Prepare a description of each of the resources youfind.

CHAPTER ASSESSMENT ContainsChapter Summary, Global Refocus,

Review Global Business Terms, Make Global Business Decisions,

and Global Connections.

XTRA! QUIZPREP Providesan online chapter reviewwith immediate feedback.

ASSESSMENT AND REVIEW

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REVIEW GLOBAL BUSINESS TERMSREVIEW GLOBAL BUSINESS TERMSDefine each of the following terms.

1. brand 3. global product

2. product life cycle (PLC) 4. international product

REVIEW GLOBAL BUSINESS CONCEPTS REVIEW GLOBAL BUSINESS CONCEPTS 5. What purpose does packaging serve?

6. What are the stages of the product life cycle?

7. How does a global product differ from an international product?

SOLSOLVE GLOBAL BUSINESS PROBLEMSVE GLOBAL BUSINESS PROBLEMSMost packaged products sold in the United States and almost all products inother countries use the metric system for weights and liquid measurements. Thefollowing is an approximate reference for converting to metric measurements.

When you know: Multiply by: To find:

ounces (oz) 28.35 grams (g)

pounds (lb) 0.45 kilograms (kg)

pints (pt) 0.47 liters (l)

quarts (qt) 0.95 liters (l)

gallons (gal) 3.79 liters (l)

8. A 14-ounce package of spaghetti would weigh about grams.

9. Six pounds of cheese would weigh about kilograms.

10. Eight pints of fruit juice is equal to about liters.

11. Three quart bottles of soft drinks contain about liters.

12. Estimate how many gallons are equal to 12 liters. Then check your answerwith a calculator. How accurate was your estimate?

THINK CRITICALLTHINK CRITICALLYY13. Locate examples of famous brands not associated with packaged products.

14. Explain why different advertising would be needed in different stages of theproduct life cycle.

15. Why do companies often take legal action against others who try to use thesame brand name?

MAKE CONNECTIONSMAKE CONNECTIONS16. TECHNOLOGY What types of technology have improved packaging for

consumers and the environment?

17. CULTURAL STUDIES How might a nation’s customs or traditions affectthe brand names used in a country?

17-3 AN INTERNATIONAL PRODUCT STRATEGY


469

PRODUCT PLANNING FOR INTERNATIONAL MARKETINGDevelop a marketing strategy based on the company and country you havebeen using in this continuing project, or create a new idea for your business inthe same or a different country. Make use of previously collected information,and do additional research. This phase of your business plan should includethe following components.1. A description of the product (good or service), including characteristics and

benefits of the item.2. A description of the target market. Who would be the main buyers and

users of the product? What are their demographic characteristics? Whatare their social attitudes and cultural behaviors?

3. A description of how the product might need to be adapted to accommo-date social, cultural, or legal differences.

4. A description of what research activities could the company do to betterunderstand its potential customers and the marketplace.

5. A description of branding and packaging ideas that could be used for thisitem.

Prepare a written summary or present a short oral report (two or three min-utes) to communicate your main findings.

THE GLOBAL

ENTREPRENEURENTREPRENEURCREATING AN INTERNATIONAL BUSINESS PLAN

©Getty Images/PhotoDisc

THE GLOBAL ENTREPRENEURPresents students with an ongoing

project that emphasizes data collection and analysis in the

creation of an international business plan.

XTRA! STUDY TOOLS Providesan interactive review of every lessonwith games such as Beat the Clock,First Things First, Labeler, Scenario,Sort it Out, and Test YourKnowledge.

END-OF-LESSON ACTIVITIESReview Global Business TermsAssess knowledge of key lessonterms. Review Global BusinessConcepts Review comprehensionof important lesson concepts. Think Critically Provides opportunity to apply concepts.Make Connections Provides connections to other disciplines.

IS INTEGRAL AND ONGOING


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THE WORLD OFINTERNATIONAL BUSINESS 2Regional Profile North America 3

GLOBAL CROSS-CULTURAL TEAM PROJECTCompare International Business Environments 110

WINNING EDGE DECAInternational Business Plan Event 111

Chapter 1 WE LIVE IN A GLOBAL ECONOMY 6

GLOBAL FOCUS Global Golden Arches 71.1 THE FOUNDATION OF INTERNATIONAL BUSINESS 81.2 INTERNATIONAL BUSINESS BASICS 14

ASSESSMENT AND REVIEWCheckpoint 9, 10, 12, 15, 18, 19Global Business Terms 13, 21Global Business Concepts 13, 21Global Business Problems 13, 21Think Critically 13, 21Make Connections 13, 21Chapter Review 22–24

SPECIAL FEATURESA Question of Ethics 17E-Commerce in Action 12Global Business Example 9, 15Net Bookmark 10Regional Perspective 20The Global Entrepreneur 25

Chapter 2 OUR GLOBAL ECONOMY 26

GLOBAL FOCUS An Economic Plan for Mexico 272.1 ECONOMICS AND DECISION MAKING 282.2 BASICS OF ECONOMICS 322.3 ECONOMIC SYSTEMS 362.4 ACHIEVING ECONOMIC DEVELOPMENT 412.5 RESOURCES SATISFY NEEDS 45

ASSESSMENT AND REVIEWCheckpoint 28, 30, 34, 37, 39, 41, 43, 45, 50Global Business Terms 31, 35, 40, 44, 51Global Business Concepts 31, 35, 40, 44, 51Global Business Problems 31, 35, 40, 44, 51Think Critically 31, 35, 40, 44, 51Make Connections 31, 35, 40, 44, 51Chapter Review 52–54

SPECIAL FEATURESCommunication Across Borders 34E-Commerce in Action 46Global Business Example 37, 39, 42Net Bookmark 50Regional Perspective 49The Global Entrepreneur 55

UNIT 1

TABLE OF CONTENTS

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Chapter 4 GOVERNMENT AND GLOBAL BUSINESS 86

GLOBAL FOCUS U.S. Department of Agriculture Promotes the Food Exports 874.1 POLITICS AND GLOBAL BUSINESS 884.2 HOW GOVERNMENT DISCOURAGES GLOBAL

BUSINESS 934.3 HOW GOVERNMENT ENCOURAGES GLOBAL

BUSINESS 100

ASSESSMENT AND REVIEWCheckpoint 89, 91, 95, 97, 98, 101, 102, 104Global Business Terms 92, 99, 105Global Business Concepts 92, 99, 105Global Business Problems 92, 99, 105Think Critically 92, 99, 105Make Connections 92, 99, 105Chapter Review 106–108

SPECIAL FEATURESA Question of Ethics 103E-Commerce in Action 104Global Business Example 89, 94, 97Net Bookmark 95Regional Perspective 90The Global Entrepreneur 109

Chapter 3 CULTURAL INFLUENCES ON GLOBALBUSINESS 56

GLOBAL FOCUS Walt Disney Company Adjusts to France 573.1 CULTURE AROUND THE WORLD 583.2 CULTURE AND SOCIAL ORGANIZATIONS 633.3 COMMUNICATION ACROSS CULTURES 683.4 VALUES AROUND THE WORLD 76

ASSESSMENT AND REVIEWCheckpoint 59, 61, 64, 66, 70, 71, 74, 78, 80Global Business Terms 62, 67, 75, 81Global Business Concepts 62, 67, 75, 81Global Business Problems 62, 67, 75, 81Think Critically 62, 67, 75, 81Make Connections 62, 67, 75, 81Chapter Review 82–84

SPECIAL FEATURESA Question of Ethics 64Communication Across Borders 74Global Business Example 59, 70, 78Net Bookmark 65Regional Perspective 79The Global Entrepreneur 85

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Chapter 6 IMPORTING, EXPORTING, ANDTRADE RELATIONS 142

GLOBAL FOCUS The Scoop on Ice Cream Exports 1436.1 IMPORTING PROCEDURES 1446.2 EXPORTING PROCEDURES 1496.3 IMPORTANCE OF TRADE RELATIONS 1566.4 THE NATURE OF COMPETITION 162

ASSESSMENT AND REVIEWCheckpoint 145, 147, 153, 154, 157, 160,

164, 166Global Business Terms 148, 155, 161, 167Global Business Concepts 148, 155, 161, 167Global Business Problems 148, 155, 161, 167Think Critically 148, 155, 161, 167Make Connections 148, 155, 161, 167Chapter Review 168–170

SPECIAL FEATURESE-Commerce in Action 150Communication Across Borders 163Global Business Example 146, 152, 159Net Bookmark 158Regional Perspective 147The Global Entrepreneur 171

UNIT 2

TABLE OF CONTENTS

ORGANIZING FOR INTERNATIONAL BUSINESS 112REGIONAL PROFILE ASIA-PACIFIC RIM 113

GLOBAL CROSS-CULTURAL TEAM PROJECTOrganize International Business Activities 250

WINNING EDGE BPAExtemporaneous Speaking 251

Chapter 5 STRUCTURES OF INTERNATIONAL BUSINESS ORGANIZATIONS 118

GLOBAL FOCUS Mitsubishi: From Trading Company to MultinationalCorporation 1195.1 METHODS OF BUSINESS OWNERSHIP 1205.2 OPERATIONS OF GLOBAL BUSINESSES 1265.3 STARTING GLOBAL BUSINESS ACTIVITIES 132

ASSESSMENT AND REVIEWCheckpoint 121, 122, 124, 127, 130, 134, 136Global Business Terms 125, 131, 137Global Business Concepts 125, 131, 137Global Business Problems 125, 131, 137Think Critically 125, 131, 137Make Connections 125, 131, 137Chapter Review 138–141


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Chapter 7 FOREIGN EXCHANGE AND INTERNATIONAL FINANCE 172

GLOBAL FOCUS An Unexpected Currency for Ukraine 1737.1 MONEY SYSTEMS AROUND THE WORLD 1747.2 FOREIGN EXCHANGE AND CURRENCY CONTROLS 1817.3 CURRENCY TRANSACTIONS BETWEEN NATIONS 187

ASSESSMENT AND REVIEWCheckpoint 176, 179, 184, 185, 189, 192Global Business Terms 180, 184, 186, 193Global Business Concepts 180, 184, 186, 193Global Business Problems 180, 184, 186, 193Think Critically 180, 184, 186, 193Make Connections 180, 184, 186, 193Chapter Review 194–196

SPECIAL FEATURESA Question of Ethics 176E-Commerce in Action 190Global Business Example 182, 183, 185Net Bookmark 184Regional Perspective 192The Global Entrepreneur 197

Chapter 8 LEGAL AGREEMENTS AROUND THE WORLD 198

GLOBAL FOCUS Trademarks, Brand Names, and International Trade 1998.1 INTERNATIONAL LEGAL SYSTEMS AND LIABILITY 2008.2 PROPERTY AND CONTRACTS 2068.3 RESOVLING LEGAL DIFFERENCES 213


SPECIAL FEATURESA Question of Ethics 208Communication Across Borders 211Global Business Example 204, 214Net Bookmark 216Regional Perspective 218The Global Entrepreneur 223

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TABLE OF CONTENTS

MANAGING IN A GLOBAL ENVIRONMENT 252REGIONAL PROFILE EUROPE 253

GLOBAL CROSS-CULTURAL TEAM PROJECTManage International Business Operations 362

WINNING EDGE DECAMarketing Management Role Play 363

Chapter 10 MANAGEMENT PRINCIPLES IN ACTION 258

GLOBAL FOCUSVirtual Corporations—Here Today and Gone Tomorrow 25910.1 MANAGERS AND CULTURAL DIFFERENCES 26010.2 MANAGEMENT FUNCTIONS AND ORGANIZATION 26610.3 THE CHANGING PROCESS OF MANAGEMENT 273



Chapter 9 GLOBAL ENTREPRENEURSHIP ANDSMALL BUSINESS MANAGEMENT 224

GLOBAL FOCUS A Real Chief Executive 2259.1 ENTREPRENUERIAL ENTERPRISES 2269.2 THE BUSINESS PLAN AND SELF-EMPLOYMENT 2339.3 OPERATING AN ENTREPRENEURIAL ENTERPRISE 239


SPECIAL FEATURESCommunication Across Borders 244E-Commerce in Action 229Global Business Example 234, 243Net Bookmark 231Regional Perspective 237The Global Entrepreneur 249

UNIT 3

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Chapter 11 HUMAN RESOURCES MANAGEMENT 284

GLOBAL FOCUS I Want to Go Home 28511.1 FOUNDATIONS OF HUMAN RESOURCES

MANAGEMENT 28611.2 SELECTING AND TRAINING STAFF 29311.3 MAXIMIZATION OF HUMAN RESOURCES 29911.4 RETAINING HUMAN RESOURCES 306

ASSESSMENT AND REVIEWCheckpoint 287, 291, 293, 294, 297, 300, 302,

304, 307, 309, 310Global Business Terms 292, 298, 311Global Business Concepts 292, 298, 305, 311Global Business Problems 292, 298, 305, 311Think Critically 292, 298, 305, 311Make Connections 292, 298, 305, 311Chapter Review 312–314

SPECIAL FEATURESA Question of Ethics 307Global Business Example 294, 301, 303Net Bookmark 304Regional Perspective 297The Global Entrepreneur 315

Chapter 12 INTERNATIONAL CAREER PLANNING 316

GLOBAL FOCUS A Global Business Career 31712.1 SEARCHING FOR YOUR FIRST JOB 31812.2 APPLYING FOR A JOB 32512.3 OBTAINING FUTURE JOBS 332


333, 336Global Business Terms 324, 331Global Business Concepts 324, 331, 337Global Business Problems 324, 331, 337Think Critically 324, 331, 337Make Connections 324, 331, 337Chapter Review 338–340


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Chapter 13 ORGANIZED LABOR 342

GLOBAL FOCUS Solidarity in Poland 34313.1 MILESTONES OF THE LABOR MOVEMENT 34413.2 UNIONS IN THE WORKPLACE TODAY 351



INFORMATION AND PRODUCTION SYSTEMS FOR GLOBAL BUSINESS 364REGIONAL PROFILE Africa 365

GLOBAL CROSS-CULTURAL TEAM PROJECTImplement International Business Operations 410

WINNING EDGE BPAHuman Resource Management 411

Chapter 14 INFORMATION NEEDS FOR GLOBAL BUSINESS ACTIVITIES 370

GLOBAL FOCUS ISIS LTD Designs Major Information Systems 37114.1 CREATING GLOBAL INFORMATION SYSTEMS 37214.2 GLOBAL INFORMATION SYSTEMS CHALLENGES 379


SPECIAL FEATURESA Question of Ethics 380Communication Across Borders 375Global Business Example 373, 384Net Bookmark 380Regional Perspective 377The Global Entrepreneur 389

UNIT 4

TABLE OF CONTENTS

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Chapter 15 PRODUCTION SYSTEMS FOR GLOBAL BUSINESS 390

GLOBAL FOCUSMauritania’s Riches From the Sea 39115.1 GLOBAL PRODUCTION METHODS 39215.2 EXPANDING PRODUCTIVE ACTIVITIES 399



MARKETING IN A GLOBAL ECONOMY 412REGIONAL PROFILE Central and South America 413

GLOBAL CROSS-CULTURAL TEAM PROJECTPlan International Marketing Activities 522

WINNING EDGE FBLAEmerging Business Issues 523

Chapter 16 GLOBAL MARKETING AND CONSUMER BEHAVIOR 418

GLOBAL FOCUS Breakfast in Britain 41916.1 MARKETING AROUND THE WORLD 42016.2 THE MARKETING MIX AND THE MARKETING PLAN 42616.3 PLANNING GLOBAL MARKETING ACTIVITIES 432

ASSESSMENT AND REVIEWCheckpoint 421, 424, 428, 430, 433, 435, 438Global Business Terms 425, 431, 439Global Business Concepts 425, 431, 439Global Business Problems 425, 431, 439Think Critically 425, 431, 439Make Connections 425, 431, 439Chapter Review 440-442


UNIT 5

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Chapter 17 DEVELOPING GOODS AND SERVICES FOR GLOBAL MARKETS 444

GLOBAL FOCUSGlobal Strategy for Barbie 44517.1 GLOBAL PRODUCT PLANNING 44617.2 DEVELOPING AND RESEARCHING PRODUCTS 45217.3 AN INTERNATIONAL PRODUCT STRATEGY 460


464, 465Global Business Terms 451, 459, 465Global Business Concepts 451, 459, 465Global Business Problems 451, 459, 465Think Critically 451, 459, 465Make Connections 451, 459, 465Chapter Review 466–468

SPECIAL FEATURESCommunication Across Borders 450E-Commerce in Action 463Global Business Example 448, 454, 461Net Bookmark 461Regional Perspective 464The Global Entrepreneur 469

Chapter 18 GLOBAL PRICING AND DISTRIBUTION STRATEGIES 470

GLOBAL FOCUSToys”R”Us in Japan 47118.1 INTERNATIONAL PRICING ACTIVITIES 47218.2 GLOBAL DISTRIBUTION ACTIVITIES 47918.3 MOVING GOODS AROUND THE WORLD 487


489, 492Global Business Terms 478, 486Global Business Concepts 478, 486, 493Global Business Problems 478, 486, 493Think Critically 478, 486, 493Make Connections 478, 486, 493Chapter Review 494–496


TABLE OF CONTENTS

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Chapter 19 GLOBAL PROMOTIONAL STRATEGIES 498

GLOBAL FOCUSUnilever: An Advertising Giant 49919.1 GLOBAL COMMUNICATIONS AND PROMOTIONS 50019.2 PLANNING GLOBAL ADVERTISING 50519.3 GLOBAL SELLING AND SALES PROMOTIONS 511

ASSESSMENT AND REVIEWCheckpoint 501, 503, 508, 509, 514, 516Global Business Terms 504, 510, 516Global Business Concepts 504, 510, 516Global Business Problems 504, 510, 516Think Critically 504, 510, 516Make Connections 504, 510, 516Chapter Review 518–520

SPECIAL FEATURESA Question of Ethics 503E-Commerce in Action 508Global Business Example 513Net Bookmark 507Regional Perspective 516The Global Entrepreneur 521

GLOBAL FINANCIAL MANAGEMENT 524REGIONAL PROFILE Near and Middle East 525

GLOBAL CROSS-CULTURAL TEAM PROJECTFinance International Business Operations 584

WINNING EDGE FBLAMultimedia Presentation 585

Chapter 20 GLOBAL FINANCIAL ACTIVITIES 530

GLOBAL FOCUS Koor Industries, ltd. 53120.1 FINANCING GLOBAL BUSINESS OPERATIONS 53220.2 GLOBAL FINANCIAL MARKETS 53920.3 INTERNATIONAL FINANCIAL MARKETS 54420.4 ANALYZING INTERNATIONAL INVESTMENTS 550


551, 553, 554Global Business Terms 538, 543, 549, 555Global Business Concepts 538, 543, 549, 555Global Business Problems 538, 543, 549, 555Think Critically 538, 543, 549, 555Make Connections 538, 543, 549, 555Chapter Review 556–558

SPECIAL FEATURESCommunication Across Borders 548E-Commerce in Action 537Global Business Example 535, 541, 545, 554Net Bookmark 541Regional Perspective 546The Global Entrepreneur 559

UNIT 6

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Chapter 21 MANAGING INTERNATIONAL BUSINESS RISK 560

GLOBAL FOCUS Lloyd’s of London 56121.1 GLOBAL RISK MANAGEMENT 56221.2 INTERNATIONAL INSURANCE 56921.3 REDUCING GLOBAL RISKS 574

ASSESSMENT AND REVIEWCheckpoint 564, 567, 570, 572, 576, 578Global Business Terms 568, 573, 579Global Business Concepts 568, 573, 579Global Business Problems 568, 573, 579Think Critically 568, 573, 579

Make Connections 568, 573, 579Chapter Review 580–582


MAPS 586

GLOSSARY 598

INDEX 604

TABLE OF CONTENTS

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1

REVIEWERS

Monica CaillouetInstructorEast Ascension High SchoolGonzales, LA

Susan CowartTeacher, Business and TechnologyCentennial High SchoolRoswell, GA

Lyn DominguezFinance/Social Studies TeacherHigh School of Economics and FinanceNew York, NY

Arlene GibsonAssistant Director, Instructional Support andAccountabilityDetroit Public SchoolsDetroit, MI

Brian S. HorwitzInternational Brand ManagerUnileverLondon, England

Gretchen HorwitzSenior ManagerDeloitte & Touche LLPLondon, England

Georgia KlautzerCurriculum Chair Business and Vocational EdBusiness Marketing TeacherFt. Zumwalt School DistrictSt. Peters, MO

Carol KontchogulianBusiness TeacherWilliamsville North High SchoolWilliamsville, NY

Rhonda MatthewsTeacher, Business DepartmentEast Ascension High SchoolGonzales, LA

Sherry J. RobertsAssistant ProfessorUniversity of Central ArkansasConway, AR

Daniel L. SmithInternational Business/Economics TeacherSandy Creek High SchoolTyrone, GA

ABOUT THE AUTHORS

Les R. Dlabay, Ed.D., is a Professor of Business in the Department of Economics and Businessat Lake Forest College in Illinois. The courses he teaches include Cultural Perspectives ofInternational Business, Global Marketing, Latin American Global Business, and Asia BusinessCulture and Trade Relations. Dr. Dlabay has presented teacher workshops and seminars in over20 states, and has taught more than 30 different courses in high school, community college,university, teacher preparation, and adult education programs. He has also served asInternational Business editor for Business Education Forum, published by the National BusinessEducation Association, and helped develop the National Curriculum Standards for InternationalBusiness. Dr. Dlabay’s “hobbies” include a cereal package collection (from over 100 countries)and paper currency from 200 countries, which are used to teach about economic, cultural, andpolitical aspects of foreign business environments.

James Calvert Scott, Ph.D., is a professor in the Department of Business Information Systemsat Utah State University. He three times served as a visiting professor at the Bristol BusinessSchool, University of the West of England, Bristol. He earned his B.A. from Boise State Universityand his Ed.M. and Ph.D. from Oregon State University. He completed postdoctoral work ininternational business at the University of South Carolina at Columbia. An award-winningresearcher, he has authored more than 175 publications. Active in business education-relatedorganizations, he has served as editor for The Delta Pi Epsilon Journal and for two NationalBusiness Education Association yearbooks.

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We Live in a Global Economy

Our Global Economy

Cultural Influences on GlobalBusiness

Government and PoliticalInfluences on Global Business

UNIT 1THE WORLD OF

INTERNATIONALBUSINESS

CHAPTER

01_Biz_in_Global_Econ 12/14/04 10:36 AM Page 2

IF YOU WERE THEREThe year is 1392, 100 yearsbefore the arrival of Columbus.You are a sixteen-year-oldAztec woman, and it is yourwedding day. Your city has apopulation of 100,000 and sitson the site of present-dayMexico City. Your father is amerchant. Your mother cares forthe house and the younger chil-dren. Your older brother recentlyfinished school and is trainingfor a military career.

The homes in your neighbor-hood are adobe, and each hasa courtyard containing a saunathat is surrounded by beautifulflowers. The man whom you areabout to marry designs streets,canals, and irrigation systemsfor the city. This evening, burn-ing pine branches will light theway as an older woman carriesyou on her back to yourgroom’s house. While you sitbefore the hearth, your part-ner’s tunic will be tied to yourblouse as a symbol of theunion.

The First North Americans

The vast land that we now call North America was discovered and settled bypeople who probably migrated to Alaska from Asia. Over a period of 30,000

years, more groups arrived and gradually built a variety of civilizations in thisWestern Hemisphere. The Aztec example above is just one Native American cul-ture in which you could have been born. You also could have lived among the Leni-Lenape of the eastern woodlands or on the plains with the Arapaho. You mighthave raised a family in the great complexes built by the Anasazi in cliffs near theGrand Canyon. Hundreds of cultural groups were spread throughout the conti-nent—each with its own unique language, religion, government, and customs.

90˚W

30˚W

45W

60˚W

75˚W105˚W

120˚W

135˚W

150˚W

30˚N30˚N

15˚N15˚N

45˚N45˚N

60˚N60˚N

Bear Lake

Brandon

Dawson Creek

Fort Chipewyan

Kingston

Moosonee

North Battleford

Red Deer

Sudbury

Swift Current

Thunder Bay

Trois-rivieres

CucutaPuntarenas

Nanortalik

Coban

Quezaltenango

Siglufjordhur

Anchorage

Buffalo

Casper

Cedar City

Chattanooga

Chico

Dodge City

Duluth

Ely

Eureka

Grand Forks

Grand Junction

Hot Springs

Ironwood

Lafayette

Laredo

Mankato

Medford Miles City

Missoula

Monterey

Owensboro

Poplar Bluff

Pueblo

Pullman

Reno

San Jose

Santa Maria

Sarasota

Sheridan

Sioux City

Sioux Falls

Temple

Toledo

Tucson

Tulsa

Twin Falls

Wichita Falls

Williston

Winfield

Boa Vista

Amos

Baker Lake

Churchill

Corner Brook

Flin Flon

Fort McMurray

Grande Prairie

Inukjuak

Kamloops

Kelowna

Labrador City

Lethbridge

Moncton

North Bay

Port Radium

Prince Albert

Prince George

Prince Rupert

Rankin Inlet

Saskatoon

Sydney

Thompson

Timmins

Trail

Tuktoyaktuk

MonteriaLiberia

Ikateq

Puerto LempiraSan Pedro Sula

Bluefields

Matagalpa

Rivas

David

Lerwick

Albany

Albany

Albuquerque

Bakersfield

Bangor

Big Spring

Billings

Bisbee

Bishop

Bowling Green

Bradford

Brunswick

Butte

CarlsbadCharleston

Colorado Springs

Corpus Christi

Durango

El Paso

Elko

Fairbanks

Fargo

Flagstaff

Fort Collins

Fort Yukon

Fresno

Gallup

Galveston

Great Falls

Green Bay

Greenville

GreenvilleHuntsville

Idaho Falls

Iron Mountain

Key West

Klamath Falls

Las Vegas

Macon

Marble Canyon

Marinette

Marquette

Minot

Natchez

Needles

Nome

Norfolk

Oshkosh

Palm SpringsParsons

Pendleton

Pensacola

Provo

Rapid CityRedding

Roanoke

Roswell

San Bernardino

Savannah

Scottsbluff

Scottsdale

Shreveport

St. Joseph

Wabash

Waco

Wichita

Ciudad Bolivar

CumanaMaturin

Puerto AyacuchoSan Cristobal

Barrow

Cordova

Valdez

Barranquilla

Baltimore

Birmingham

BoulderChicago

Houston

Los Angeles Louisville

Memphis

Milwaukee

Minneapolis

Philadelphia

Portland

San Antonio

San Diego

San Francisco

St. Louis

Tampa

Barquisimeto

Belize City

Calgary

Montreal

Vancouver

Medellin

Torshavn

Buffalo

Charlotte

Cleveland

Dallas

Detroit

Jacksonville

Kansas City

Miami

New Orleans

New York

Norfolk

Oakland

Omaha

Orlando

Rochester

Seattle

SpokaneVancouver

West Palm Beach

Maracaibo Valencia

Charlottetown

Fredericton

Toronto

Chilpancingo

Guadalajara

Oaxaca

Saltillo

Tepic

Toluca

Tuxtla Gutierrez

Baton Rouge

Concord

Madison

Topeka

Edmonton

Halifax

Quebec

Regina

St. John'sVictoria

Whitehorse

Winnipeg

Yellowknife

Campeche

Chetumal

Chihuahua

Ciudad Victoria

Colima

Culiacan

Durango

Hermosillo

La Paz

Leon

Merida

Mexicali

Monterrey

Puebla

Queretaro

San Luis Potosi

Villahermosa

Zacatecas

Albany

Atlanta

Augusta

Austin

BismarckBoise

BostonCarson City

Charleston

Cheyenne

Columbia

ColumbusDenverDes Moines

Frankfort

Harrisburg

Hartford

Helena

Indianapolis

Jackson

Juneau

Lansing

Lincoln

Little Rock

Montgomery

Montpelier

NashvilleOklahoma City

Olympia

Phoenix Raleigh

Richmond

Sacramento

Salem

Salt Lake City

Santa Fe

Springfield

St. Paul

Tallahassee

Trenton

Ottawa

San Salvador

Nuuk(Godthab)

Guatemala

Port-au-Prince

Managua

Kingstown

Nassau

Belmopan

Bogota

San Jose

Havana

Santo Domingo

Tegucigalpa

Reykjavik

Kingston

Mexico City

Willemstad

Panama

San Juan

Castries

Washington D. C.

Caracas

GREENLAND ICELAND

U. S. A.

CANADA

MEXICO

THEBAHAMAS

CUBA

PANAMA

BELIZE

GUATEMALA

EL SALVADOR

HONDURAS

NICARAGUA

COSTA RICA

JAMAICA

HAITIDOM. REP.

COLOMBIA

VENEZUELA

BRAZIL

Axel HeibergIsland

Baffin Island

BanksIsland

Bermuda Islands

Devon Island

EllesmereIsland

Faroe Islands

G r e a t e r A n t i l l e s

Guadalupe

Hispaniola

KodiakIsland

L e s s e r A n t i l l e s

Long Island

Melville Island

Newfoundland

Nova

Scotia

Patrick Island

Prince of WalesIsland

Puerto Rico

QueenCharlotte

Islands

Queen Elizabeth

Islands

SaintLawrence

Island

Shetland Islands

Sverdrup Islands

Trinidad

Vancouver Island

Victoria Island

Great Bear Lake

Great SaltLake

Great Slave Lake

L. Nicaragua

Lake Athabasca

L. Erie

L. Huron

L. M

ichi

gan

Lake Nipigon

Lake Oahe

L. Ontario

LakeSakakawea

L. Superior

LakeWinnipeg

Smallwood Res.

Arkansas R.

Arkansas R.

Athabasca RiverChurchill R

Colorado R

iver

Col

orad

o R

.

Colorado R.

Columbia R.

Col

umbi

a R

.

Macken

zie R.

Mac

kenz

ie R

.

Mississippi

Mis

siss

ippi

R.

Missouri R.

Missouri R.

Nelson River

Ohio R.

Peace River

Platte River

Rio G

rande

Rio Grande

Rio

Mag

dale

na

Rio Orinoco

Rio Orin

oco

Saskatchewan River

Snake R

.

St Lawre

nce R.

Yukon R.

Yukon R.

Yukon R

.

Baffin Bay

Beaufort Sea

BeringSea

C a r i b b e a n S e a

Chukchi SeaGreenland Sea

Gulfof

Alaska

G u l f

o f

M e x i c o

Hudson Bay Labrador Sea

Norwegian Sea

Bering Strait

Davis Strait

DenmarkStrait

Golfo de C

alifornia

Gulf ofSt. Lawrence

Gulf ofTehuantepec

Hudson Strait

UngavaBay

ARCTICOCEAN

P A C I F I C

O C E A N

A T L A N T I C

O C E A N

REGIONAL PROFILEREGIONAL PROFILENORTH AMERICA


The Norwegians explored North America in the tenth and eleventh centuries, butthey had little effect on the native cultures. Explorers and settlers from Spain, Britain,France, Holland, and Sweden arrived in great numbers during the sixteenth and seven-teenth centuries, bringing with them cultures that conflicted with those they met. Thenative population decreased quickly as a result of battles and the diseases carried bythe newcomers. And so began a great cultural transformation—a destructive and cre-

ative process that continues today. Soldiers, farm-ers, trappers, artisans, and merchants came fromEurope to help build colonies for their mothercountries. Some came to escape religious andpolitical persecution, while others came to sharetheir religion.

Struggles for IndependenceWars were fought to establish control over thesevaluable lands that held great resources. In 1810,a priest named Miguel Hidalgo y Costilla set offthe Mexican War of Independence from Spain.Poor natives and mestizos (of mixed native andEuropean ancestry) fought the war. AlthoughMiguel Hidalgo y Costilla soon died, anotherpriest, José María Morelos y Pavón, continued tolead the movement that led to independence in1813. Morelos was captured and shot, but Mexicoeventually formed a republic in 1824.

The French lost control of Canada to the Britishin 1763, but the French heritage is still evidentthroughout Canada and most especially in theprovince of Quebec. Over the next 100 yearsunder the British Crown, the Canadian assembliesgradually won power without a war. In 1867, theDominion of Canada was established, and in1931, Canada became a completely independentnation.

The United States won its independence fromBritain through a treaty signed in 1783. Immigrantscame to the new country from all over the world.Some stayed in the eastern cities and worked inthe textile mills, while many others headed westwith wagon trains hoping to build a new life inKentucky, Ohio, California, and all the territories inbetween.

SlaveryThe economies of the West Indies and the south-

ern United States depended on labor that was supplied by the violent importation ofAfricans to be used as slaves.

Olaudah, an Ibo man, describes his trip to North America in 1756: “The shrieks ofthe women and the groans of the dying rendered it a scene of horror almost inconceiv-able. . . I began to hope that death would soon put an end to my miseries.”

Colonial America thrived on this slave labor. By 1860, the South was producingthree-quarters of the world’s supply of cotton.

Immigrants Build the EconomyAfter the Civil War, Chinese, Japanese, Mexican, Irish, German, and Italian immigrantsjoined former slaves and Union and Confederate veterans to work in factories and

THE WORLD OF INTERNATIONAL BUSINESSUNIT 1

©Getty Images/PhotoDisc


COUNTRY PROFILE/NORTH AMERICA

fields. Together they created the world’s most powerful industrial economy.Canada’s earliest immigrants came from France, England, Ireland, and

Scotland. In the twentieth century, Russians, Ukrainians, and Germans wereattracted to the western prairies. As in the United States, more recent immigrantsto Canada are Asian and Latin American.

North America TodayCanada’s 3.8 million square miles of territory is second in size only to Russia.The majority of the country’s 31 million people are concentrated near its southernborder with the United States. The cold northlands hold exquisite natural environ-ments but few inhabitants. Canada’s abundance of natural resources and manu-facturing industries have produced a high standard of living for most of its people.Its service industries create most new jobs. Mexico is the largest Spanish-speak-ing country in the world. Its population is growing by about 2 percent each year.Since 1950, land reform and a growing manufacturing base have increasedincomes for a large number of Mexicans. Many, however, still live in extremepoverty. And it is these people who often attempt to cross illegally into the UnitedStates with the hope of finding work.

Mexico’s economic growth has centered on its silver, industrial minerals, andpetroleum. The country’s white beaches and Aztec ruins attract tourists from allover the world.

All of the nations of continental North America and the West Indies have devel-oped unique cultures that combine the diverse richness of Native Americans,Europeans, Africans, and Asians. Although conflicts still exist, the future of thesesocieties depends upon the mutual appreciation of this diversity.

Think Critically1. Which Native Americans once had communities where you live?2. Why do you think Columbus receives most of the credit for “discovering” North

America?3. How do you think the geographic features of the United States influenced the

settlement of the West?4. How do you think Canada has influenced the culture of the United States and

vice versa?

Monetary

Unemploy- Life Literacy Country Population GDP Exports Imports

Unit

Inflation ment Expectancy Rate

growth $ per thousands rate $billions capita $billions percent percent years percent

Canada 31,510 0.77% 923.0 29,400 268.0 226.5 dollar 2.2 7.6 79.8 97.0Mexico 103,457 2.10% 920.0 9,000 158.4 168.4 peso 6.4 3.0 72.3 92.2United States 294,043 1.03% 10,082.0 36,300 722.0 1150.0 dollar 1.6 5.8 77.1 97.0

REGIONAL PROFILE/NORTH AMERICA


les r. dlabay james calvert scott

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