Chapter 4 Social and Cultural Environments

1. Chapter 4Social and Cultural Environments

2. Preferential Trade Agreements • Many countries seek to lower barriers to trade within their regions • Free Trade Areas • Customs Unions • Common Market • Economic Unions

3. 1. Free Trade Areas • Two or more countries agree to abolish all internal barriers to trade amongst themselves • It is the second stage of economic integration • Countries continue independent trade policies with countries outside agreement

4. 2. Customs Unions • Evolution of Free Trade Area • Includes the elimination of internal barriers to trade (as in FTA) AND • Establishes common external barriers to trade

5. 3. Common Market • Includes the elimination of internal barriers to trade (as in free trade area) AND • Establishes common external barriers to trade (as in customs union) AND • Allows for the free movement of factors of production, such as labor, capital, and information

6. 4. Economic Unions • Includes the elimination of internal barriers to trade (as in free trade area) AND • Establishes common external barriers to trade (as in customs union) AND • Allows for the free movement of factors of production, such as labor, capital, and information (as in common market) AND • Coordinates and harmonizes economic and social policy within the union

7. Economic Unions • Full evolution of economic union • creation of unified central bank • use of single currency • common policies on issues ranging from agriculture to taxation • requires extensive political unity

8. Economic Integration in the Americas • The North American Free Trade Agreement (NAFTA) created the world’s largest free market. • 390 million U.S., Canadian, and Mexican consumers • The three countries have pursued different trade policies with non-members (for example, Mexico has signed FTAs with more than 40 countries in 12 agreements), making the possibility of creating a customs union hard to accomplish

9. EU

10. Is the world all the same?

11. World Hunger Facts • Worldwide, over 800 million people (one in seven) are undernourished • Don’t get enough calories each day • Susceptible to illness • Unable to lead productive lives

12. World Hunger Facts • Over 20,000 people die each day due to causes related to undernutrition • ¾ of these are children under the age of 5 • About 6 million/year http://news.bbc.co.uk/olmedia/1555000/images/_1556880_baby150.jpg

13. Undernutrition and Child Death ftp://ftp.fao.org/docrep/fao/008/a0200e/a0199e.pdf

14. Common Scenario • Mother • Poorly educated • Food is scarce • Several children • Youngest child • undernourished • Disease resistance low • Drinks unsanitary water • Develops diarrhea • Loses interest in eating

15. Common Scenario • Mother removes solids from child’s diet • Not enough nourishment to fight disease • Diarrhea continues • Mother removes liquids • Dehydration • Death

16. Causes of Hunger • Poverty • 2.8 billion people earn less than $2/day

17. Causes of Hunger • Extreme Poverty • 1.2 Billion people earn less than $1/day • 75% of these live in rural areas • many unable to own land • Worst in Sub-Saharan Africa

18. World Hunger Map www.feedingminds.org/ img/map_world.jpg

20. Sub-Saharan Africa

21. WFP

22. What else?

24. Global summary of the HIV/AIDS epidemic, December 2003 Number of people living with HIV/AIDS Total 37.8 millionAdults 35.7 millionWomen 17.0 million Children under 15 years 2.1 million People newly infected with HIV in 2003 Total 4.8 millionAdults 4.1 million Children under 15 years 630 000 AIDS deaths in 2003 Total 2.9 millionAdults 2.4 million Children under 15 years 490 000

26. % HIV prevalence, adult (15-49) Estimated number of people living with HIV and adult HIV prevalence Global HIV epidemic, 1990‒2005* HIV epidemic in sub-Saharan Africa, 1985‒2005* Number of people living with HIV (millions) % HIV prevalence, adult (15‒49) Number of people living with HIV (millions) % HIV prevalence, adult (15‒49) 50 5.0 30 15.0 12.5 25 40 4.0 20 10.0 30 3.0 7.5 15 20 2.0 5.0 10 10 1.0 2.5 5 0 0.0 0 0.0 1990 1995 2000 2005 1985 1990 1995 2000 2005 Number of people living with HIV This bar indicates the range around the estimate *Even though the HIV prevalence rates have stabilized in sub-Saharan Africa, the actual number of people infected continues to grow Because of population growth. Applying the same prevalence rate to a growing population will result in increasing numbers of people living with HIV

27. A global view of HIV infection 38.6 million people [33.4‒46.0 million] living with HIV, 2005

28. Estimated Prevalence of HIV Infection and Number of People Living with HIV Infection or AIDS, End of 2001 Field, M. G. N Engl J Med 2004;351:117-120

30. 1983 1985 1987 1989 1991 1993 1995 Rapid HIV spread among IDUsPrevalence quickly rising to 40% or more 80 Myanmar 60 HIVprevalence (%) Manipur&Yunnan Edinburgh 40 Ho Chi Minh City Bangkok 20 Odessa

31. HIV/AIDS

32. At the same time in other countries… • Other health problems related to nutrition…

34. meanwhile, as worldwide hunger rates drop, obesity age June 2002. Agency for Healthcare Research and Quality and the Centers for Disease Control. http://www.ahrq.gov/ppip/activity.htm

35. Who are western countries?Who are third world countries? • Family size? • Life expectancy?

36. Hans Rosling • Hans Rosling is professor of international health at Sweden's world-renowned Karolinska Institute, and founder of Gapminder, a non-profit that brings vital global data to life. With the drama and urgency of a sportscaster, he debunks a few myths about the "developing" world. (Recorded February, 2006 in Monterey, CA.)

37. Task of Global Marketers • Study and understand the country cultures in which they will be doing business • Incorporate this understanding into the marketing planning process

38. Introduction “It is not just speaking a common language. It is sharing a culture and understanding friendships in the same way” Juan Villanonga – Former Chairman of Telefonica

39. Society, Culture, and Global Consumer Culture • Culture – Ways of living, built up by a group of human beings, that are transmitted from one generation to another • Culture is acted out in social institutions • Culture has both conscious and unconscious values, ideas and attitudes • Culture is both material and nonmaterial

40. Society, Culture, and Global Consumer Culture “Culture is the collective programming of the mind that distinguishes the members of one category of people from those of another.” - Geert Hofstede

41. Society, Culture, and Global Consumer Culture • Global consumer cultures are emerging • Persons who share meaningful sets of consumption-related symbols • Pop culture; coffee culture; fast-food culture • Primary the product of an interconnected world

42. Attitudes, Beliefs and Values • Attitudes - learned tendency to respond in a consistent way to a given object or entity • Belief - an organized pattern of knowledge that an individual holds to be true about the world • Value - enduring belief or feeling that a specific mode of conduct is personally or socially preferable to another mode of conduct

43. Case: Who will go to Saudi Arabia? Two senior vice presidents, Robert , VP of international sales, and Kate, VP of personnel, disagree on whom to send to Saudi Arabia to negotiate the sale of two major computer installations worth approximately 35$ million. CC company has an excellent products and enjoys a good reputation in the area. With effective negotiation they are certain they can make a profitable sale. There are two candidates for the job, Jane and Bill.

44. Jane: MBA degree, 6 years’ international experience with CC company, has successfully negotiated two major sales to firms in Norway and Sweden. Bill: has an excellent reputation and has a broad understanding of the product line just as Jane. His only international experience was two years ago ,when he accompanied a senior executive to Japan to help negotiate a major sale, and he did a crucial role in the negotiation..

45. Religion Religion is one important source of society’s beliefs, attitudes, and values. The world’s major religions include: Buddhism, Hinduism, Islam, Judaism, and Christianity.

50. JC Penny 1928