Elaborate on the problems and benefits for international marketers from multinational market groups.

International marketing 10- Multinational market regions and market groups

Multinational market region-those groups of countries that seek mutual economic benefit from reducing intraregional trade and tariffs benefits (the main motive is economic).

1) Define:

-United States-Canada Free Trade Agreement- CFTA was designed to eliminate all trade barriers between two countries. The CFTA created a single, continental, commercial market for all goods and most cervices. It provides only for elimination of tariffs and other trade barriers. After Mexico was joined and CFTA became the model after which NAFTA was designed.

-COMECON- Council for Mutual Economic Assistance

-Harmonization -the most essential requirements for protection of health, safety, the environment, and product standards

-Single European Act reciprocity- the agreement designed to finally remove all barriers to trade and make the European Community a single internal market.

-NAFTA- North American Free Trade Agreement (Canada, US and Mexico).

-Mercosur- Southern Cone Common Market is the newest common-market agreement in Latin America (Argentina, Brazil Paraguay and Uruguay).

-AFTA- ASEAN (The Association of Southeast Asian Nations- multinational trade group in Asia)

-CEA- Chinese Economic Area (Hong Kong, Taiwan, and the coastal provinces of Southern China).

-EU- European Union.

-CEFTA- Central European Free Trade Area

Elaborate on the problems and benefits for international marketers from multinational market groups.

Multinational market region-those groups of countries that seek mutual economic benefit from reducing intraregional trade and tariffs benefits (the main motive is economic).

Multinational marker group is the form of large market that provides potentially significant market opportunities for international businesses. The more similar are the cultures, the more likely a market are to succeed because members understand the outlook and viewpoints of their colleagues. Benefits:

- Economic integration creates large mass markets for the marketer. Large markets are particularly important to businesses accustomed to mass production and mass distribution because of economies on scale and marketing efficiencies that can be achieved. In highly competitive markets, the benefits derived (полученный) from enhanced (улучшенной) efficiencies are often passed along as lower prices, which lead to increased purchasing power.

- The choice of buyer increases

- Elimination of borders conducts to equalization of the prices

- Most multinational groups have coordinated programs to foster economic growth as part of their cooperative effort. Such programs work to the advantage of marketers by increasing purchasing power, improving regional infrastructure, and fostering (способствовать) economic development.

Problems:

- The quantity of brands decreases

-In an integrated Europe, US multinationals may have an initial advantage over expanded European firms because US businesses are more experienced in marketing to large, diverse markets and are accustomed to looking at Europe as one market. But however there is a problem for other countries.

- Local preferences certainly spell troubles for the exporter located outside the market (when Greece joined the EC, imports from other EC countries increased while those from USA decreased. Many US exporters faced with the possible need to invest in Europe to protect their export markets in EC)

- Individual national markets with the same problems of language, customs, and instability will still confront international managers

- Many non-EC countries see such activities as creating a Fortress Europe, and, in effect, making marketing entry into a single European market more difficult than entering the member countries individually

3) Explain the political role of multinational market groups. Identify the factors on which one may judge the potential success or failure of multinational market group

Political amenability among countries is another basic requisite for development of a supranational market arrangement. Participating countries must have comparable aspirations and general compatibility before surrendering any part of their national sovereignty. State sovereignty is one of the most cherished possessions of any nation and is relinquished only for a promise of significant improvement of the national position through cooperation