Page 241 - Foundations of Marketing

208 Part 3 | Customer Behavior and E-Marketing

economies. Loans to companies in Mexico have been increasing, and as one of the world’s
largest oil producers, Mexico has the opportunity to increase investment in this profitable
commodity. Additionally, while China has taken much outsourcing business away from
Mexico, a turnaround may be approaching. With an increase in Chinese labor costs and the
high transportation costs of transporting goods between China and the United States, many
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U.S. businesses that outsource are looking toward Mexico as a less costly alternative.
Mexico’s membership in NAFTA links the United States and Canada with other Latin
American countries, providing additional opportunities to integrate trade among all the
nations in the Western Hemisphere. Indeed, efforts to create a free trade agreement among
the 34 nations of North and South America are under way. A related trade agreement—the
Dominican Republic–Central American Free Trade Agreement (CAFTA-DR)—among Costa
Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United
States has also been ratified in all those countries except Costa Rica. The United States exports
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$ 20 billion to the CAFTA-DR countries annually.
The European Union (EU)
European Union (EU)
An alliance that promotes trade The European Union (EU) , sometimes also referred to as the European Community or
among its member countries in Common Market , was established in 1958 to promote trade among its members, which initially
Europe included Belgium, France, Italy, West Germany, Luxembourg, and the Netherlands. In 1991,
East and West Germany united, and by 2013, the EU included the United Kingdom, Spain,
Denmark, Greece, Portugal, Ireland, Austria, Finland, Sweden, Cyprus, Poland, Hungary, the
Czech Republic, Slovenia, Estonia, Latvia, Lithuania, Slovakia, Malta, Romania, Bulgaria,
and Croatia. The Former Yugoslav Republic of Macedonia and Turkey are candidate countries
40
that hope to join the European Union in the near future.
The European Union consists of about half a billion consumers and has a combined GDP
41
of more than $ 15.5 trillion. To facilitate free trade among members, the EU is working
toward standardizing business regulations and requirements, import duties, and value-added
taxes; eliminating customs checks; and creating a standardized currency for use by all mem-
bers. Many European nations (Austria, Belgium, Finland, France, Germany, Ireland, Italy,
Luxembourg, the Netherlands, Portugal, Greece, and Spain) are linked to a common currency,
the euro , but several EU members have rejected the euro in their countries (e.g., Denmark,
Sweden, and the United Kingdom). Although the common currency may necessitate that mar-
keters modify their pricing strategies and subjects them to increased competition, it also frees
companies that sell products among European countries from the complexities of exchange
rates. The long-term goals are to eliminate all trade barriers within the EU, improve the eco-
nomic efficiency of the EU nations, and stimulate economic
growth, thus making the union’s economy more competi-
tive in global markets, particularly against Japan and other
Pacific Rim nations and North America. The advertisement
of the Delegation of the European Union to the United States
encourages businesses to connect with the European Union
through social media. Firms in the United States can con-
nect with the organization through their website, Twitter,
Facebook, Flickr, or YouTube. The ad promotes the benefits
Courtesy of European Union ket, consumers in the EU may become more homogeneous
of doing business in EU countries.
As the EU nations attempt to function as one large mar-

in their needs and wants. Marketers should be aware, how-
ever, that cultural differences among the nations may require

nation. Differences in tastes and preferences in these diverse
Doing Business in the European Union modifications in the marketing mix for customers in each
The Delegation of the European Union to the United States markets are significant for international marketers. But there
publicizes the availability of online information to encourage U.S. is evidence that such differences may be diminishing, espe-
companies to see opportunities in trading with its member nations. cially within the younger population that includes teenagers

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